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Title Insurance

Understand how title insurance protects Canadian property buyers from legal defects, liens, and fraud after a real estate purchase.

Title Insurance
Escrow – Definition, Meaning, and Examples in Canadian Real Estate

May 22, 2025


What is Title Insurance?

Title insurance is a policy that protects property buyers and lenders against financial loss related to defects or issues with the legal ownership of a property.

Why Title Insurance Matters in Real Estate

In Canadian real estate, title insurance provides peace of mind by covering risks not always detectable through a title search. It protects against issues such as:

  • Undisclosed liens or encumbrances
  • Errors in public records or surveys
  • Title fraud or identity theft
  • Zoning or permit violations discovered after purchase
There are two main types:
     
  • Owner’s policy: protects the buyer’s interest in the property
  • Lender’s policy: protects the mortgage lender’s interest

Title insurance is often a one-time premium paid at closing. It complements, but does not replace, a thorough legal review and title search conducted by a real estate lawyer.

Understanding title insurance ensures that buyers are protected from unforeseen legal claims or defects that may threaten their ownership rights.

Example of Title Insurance

After closing, a buyer discovers a previously registered construction lien. Their title insurance covers the legal costs and settlement to clear the issue.

Key Takeaways

  • Protects against ownership-related risks.
  • Covers fraud, liens, and clerical errors.
  • Available for buyers and lenders.
  • One-time cost added at closing.
  • Complements lawyer due diligence.

Related Terms

  • Title Search
  • Lien
  • Encumbrance
  • Legal Liability
  • Real Estate Lawyer

Additional Terms

Budgeting

Budgeting in real estate refers to the process of forecasting and managing income and expenses associated with owning, operating, or developing a property.. more

Tenant Improvements

Tenant improvements refer to custom modifications or build-outs made to a leased space to suit the tenant’s operational needs, often negotiated as. more

Highest and Best Use

Highest and best use refers to the reasonably probable use of a property that results in the highest value, provided it is legally permissible,. more

Gross Lease

A gross lease is a commercial lease where the tenant pays a fixed rent, and the landlord covers most or all operating expenses such as property. more

Brownfield

A brownfield is a property that was previously used for industrial or commercial purposes and is now vacant or underused, often requiring. more

Record of Site Condition (RSC)

A Record of Site Condition (RSC) is a formal document filed with a provincial environmental authority certifying that a property meets required. more

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