Recently, lawyers have had more and more recourse to what is called the title insurance, but this product still creates confusion. Certain lawyers, in particular in the United States, have recourse to this protection periodically to limit their responsibility because of their system of weak land registration. In Quebec, it is still used with parsimony. Besides, our system is much more reliable: our titles are checked and double-checked by the lawyers with each transaction and it is their professional responsibility to carry out the necessary corrective measures.
The title insurance is thus a damage insurance the purpose of which is to guarantee the titles of a property on a given date. The subscription for this type of insurance can prove to be an alternative or an interesting complementarity, especially in certain situations where the lawyer is not able to guarantee the quality of the titles completely, or when the solutions to correct them are found to be too complex or expensive. The cost of the insurance is generally calculated according to the purchase price of the residence.
What does it cover?
The cover of the insurance extends to everything that could possibly vitiate the document of title, which was present at the moment of the entry into force of the policy and which causes a damage to the policy-holder thereafter. It covers thus the problems which could occur for the whole duration when the person will be owner, but that will never correct definitively an existing problem. These problems can be as much irregularities on the level of the certificate of localization (or its absence) such as illegal sights, nonconformity with the local by-laws, encroachments of the grounds, as irregularities as far as the document of title is concerned which should be detected by the notary, such as non-erased mortgages, transfers of property that are not in conformity, or constraints that should have existed.
The insurance protects as much the purchaser of a property who subscribed to it, as the lending institution. Each one is respectively insured for the amount of the purchase and the amount of the mortgage held on the building by the financial institution.
Contrary to the impression that one could have, the recourse to this insurance does not replace at all the work which must be done by the notary. The notary will try to consolidate the weak links of the chain of titles by proceeding with the corrections or the authorizations necessary. The title insurer will not seek to know the chain of titles thoroughly, it is rather a question for him of being concerned with losses which could arise from the irregularities and of compensating, if necessary, the insured people. But if the notary does not correct it, the problem will always remain.
Its applications
It is generally the financial institution which asks for a certificate of up to date localization to validate the object of its warranty. Such a certificate costs approximately 1000$, so that certain people would rather decide to pay a title insurance, variable according to the price of the residence, but always being less expensive than to pay the land-surveyor-geometrician for the aforementioned certificate of localization. It can thus be interesting in the case of a mortgage refinancing, or when a certificate of localization is not appropriate yet, for example, if buildings are to be added to the land in a near future. A certificate of localization will thereafter be necessary to obtain the exact reality of the premises.
The title insurance has considerable advantageous applications, in particular the possibility of signing a real-estate transaction within the specified delay, in spite of the presence of certain problems as for the titles which would have to be regulated. A diligent inspector of titles will generally advise to carry out the correction necessary following the transaction with an aim of regularizing the situation, especially if the step can be carried out easily. It is all about an advantageous solution also when an important problem of titles is discovered or when the examination of the titles lets linger certain uncertainties for the lawyer who’s opinion, although an expert in real-estate law, is based on the analysis of the registers and the information collected by the land-surveyor-geometrician. The title insurance makes it possible to cover, moreover, certain things which cannot be controlled by the lawyer, such as for example: fraud, errors on the level of land surveying, acts not published in the registry office.
The title insurance offers a process of complaint and rather fast compensation for the policy-holder and decreases by this fact the prosecutions of responsibility against the lawyers. In addition, the Quebec real-estate titles, contrary to those of the remainder of North America, are good and are always cleaned by the lawyers, the certificates of localization contributing to this task. It should besides be understood that this is only about an insurance and that its presence does not rectify the problems, it represents only one additional protection. This being said, it is always more appropriate to have a clear document of title and a valid certificate of localization. To choose a title insurance with each transaction does nothing but indefinitely push back the problem and could end up making the task all the more difficult to the lawyers and affecting as much the quality of our foundations on land registration.
The title insurance is thus a damage insurance the purpose of which is to guarantee the titles of a property on a given date. The subscription for this type of insurance can prove to be an alternative or an interesting complementarity, especially in certain situations where the lawyer is not able to guarantee the quality of the titles completely, or when the solutions to correct them are found to be too complex or expensive. The cost of the insurance is generally calculated according to the purchase price of the residence.
What does it cover?
The cover of the insurance extends to everything that could possibly vitiate the document of title, which was present at the moment of the entry into force of the policy and which causes a damage to the policy-holder thereafter. It covers thus the problems which could occur for the whole duration when the person will be owner, but that will never correct definitively an existing problem. These problems can be as much irregularities on the level of the certificate of localization (or its absence) such as illegal sights, nonconformity with the local by-laws, encroachments of the grounds, as irregularities as far as the document of title is concerned which should be detected by the notary, such as non-erased mortgages, transfers of property that are not in conformity, or constraints that should have existed.
The insurance protects as much the purchaser of a property who subscribed to it, as the lending institution. Each one is respectively insured for the amount of the purchase and the amount of the mortgage held on the building by the financial institution.
Contrary to the impression that one could have, the recourse to this insurance does not replace at all the work which must be done by the notary. The notary will try to consolidate the weak links of the chain of titles by proceeding with the corrections or the authorizations necessary. The title insurer will not seek to know the chain of titles thoroughly, it is rather a question for him of being concerned with losses which could arise from the irregularities and of compensating, if necessary, the insured people. But if the notary does not correct it, the problem will always remain.
Its applications
It is generally the financial institution which asks for a certificate of up to date localization to validate the object of its warranty. Such a certificate costs approximately 1000$, so that certain people would rather decide to pay a title insurance, variable according to the price of the residence, but always being less expensive than to pay the land-surveyor-geometrician for the aforementioned certificate of localization. It can thus be interesting in the case of a mortgage refinancing, or when a certificate of localization is not appropriate yet, for example, if buildings are to be added to the land in a near future. A certificate of localization will thereafter be necessary to obtain the exact reality of the premises.
The title insurance has considerable advantageous applications, in particular the possibility of signing a real-estate transaction within the specified delay, in spite of the presence of certain problems as for the titles which would have to be regulated. A diligent inspector of titles will generally advise to carry out the correction necessary following the transaction with an aim of regularizing the situation, especially if the step can be carried out easily. It is all about an advantageous solution also when an important problem of titles is discovered or when the examination of the titles lets linger certain uncertainties for the lawyer who’s opinion, although an expert in real-estate law, is based on the analysis of the registers and the information collected by the land-surveyor-geometrician. The title insurance makes it possible to cover, moreover, certain things which cannot be controlled by the lawyer, such as for example: fraud, errors on the level of land surveying, acts not published in the registry office.
The title insurance offers a process of complaint and rather fast compensation for the policy-holder and decreases by this fact the prosecutions of responsibility against the lawyers. In addition, the Quebec real-estate titles, contrary to those of the remainder of North America, are good and are always cleaned by the lawyers, the certificates of localization contributing to this task. It should besides be understood that this is only about an insurance and that its presence does not rectify the problems, it represents only one additional protection. This being said, it is always more appropriate to have a clear document of title and a valid certificate of localization. To choose a title insurance with each transaction does nothing but indefinitely push back the problem and could end up making the task all the more difficult to the lawyers and affecting as much the quality of our foundations on land registration.