Recently, there have been headlines about identity theft, fraud and stealing homes. Title fraud occurs when the fraudster assumes the identity of the homeowner and then uses it to assume the title on the home, sell the property or obtain a mortgage on that property or other properties in the homeowner’s name.

Protecting personal information

Borrowers can take steps to protect themselves by safeguarding their personal information:

• Keep personal information in a safe place.
• Don’t give out personal information on the phone, through the mail or online unless the borrower has initiated contact.
• Give your Social Insurance Number (SIN) only when absolutely necessary. Ask if other identification can be used.
• Check with the land registry office to ensure that the title of your home is in your name.
• Consider purchasing title insurance.

Title insurance coverage

While borrowers can take preventative measures to protect their personal information, they can also look at title insurance which protects the homeowner from a number of risks, including:

• Someone trying to acquire the home through forgery or fraud;
• Minor errors in the legal description of the property;
• Unpaid utilities, mortgages, taxes, or condo maintenance fees;
• Removal of existing structures if they violate zoning laws;
• Legal claims by someone else on the property, such as property liens or construction liens from unpaid contractor bills;
• Protection from another person having interests on the property;

Example:

If the previous owner did not pay their contractor and there are construction liens on the property, title insurance would cover this. If a structure needs to be removed because it encroaches on a neighbour’s property, title insurance will cover the removal costs. 

Title insurance exclusions

The following issues are not covered by title insurance:

• Zoning bylaw violations from home renovations or additions that the title insurance policy holder is responsible for;
• Environmental hazards;
• Known title defects that we revealed before the homeowner bought the property;
• Wear and tear on the home and property, and;
• Risks and damages that would be covered by homeowner’s insurance.

While title insurance can’t protect a borrower from becoming a victim of fraud or title defect, it can protect them from many of the consequences and the resulting stress.

Independent Opinion

The views and opinions expressed in this publication are solely and independently those of the author and do not necessarily reflect the views and opinions of any person or organization in any way affiliated with the author including, without limitation, any current or past employers of the author. While reasonable effort was taken to ensure the information and analysis in this publication is accurate, it has been prepared solely for general informational purposes. Any opinions, projections, or forward-looking statements expressed herein are solely those of the author. There are no warranties or representations being provided with respect to the accuracy and completeness of the content in this publication. Nothing in this publication should be construed as providing professional advice including investment advice on the matters discussed. The author does not assume any liability arising from any form of reliance on this publication. Readers are cautioned to always seek independent professional advice from a qualified professional before making any investment decisions.