Where Every Big Bank Stands On Wednesday's Interest Rate Announcement

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

Draw Schedule

A draw schedule is a payment plan used in construction financing that outlines when and how funds will be released to the builder or contractor as. more

Above Guideline Increase (AGI)

An AGI, or above guideline increase, is a rent increase above the standard annual guideline that landlords can apply for in specific circumstances.. more

Encumbrance

An encumbrance is a legal claim, liability, or restriction on a property’s title that may affect its use, transfer, or value.. more

Eminent Domain

Eminent domain is the government’s legal right to expropriate private property for public use, with fair compensation to the owner.. more

Development Charges (DCs)

Development charges (DCs) are fees imposed by municipalities on new developments to help fund infrastructure and services required due to growth.. more

Deed Restriction

A deed restriction is a condition written into a property’s deed that limits or prescribes how the property can be used, binding future owners until. more

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