Amanda Magee
Exploring the Value of Title Insurance for Rural Properties
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n the summer issue, we looked at how title insurance protects owners of residential real estate and, in particular, those in urban areas. To recap, an owner’s policy protects against losses due to the following. • Title fraud such as the registration of a fraudulent mortgage on title (which is more of an issue on high-value, fast-closing urban properties) • Unmarketability of the insured land due to adverse matters that would be revealed by an up-todate survey • Real property tax or utility arrears, including the Vancouver Empty Homes Tax • Existing work orders or strata fee arrears • Forced removal by a governmental authority of a structure built without a required building permit • Zoning and setback noncompliance, including that of a strata complex While purchasers of rural properties enjoy the same coverage as urban buyers, there are issues specific to rural properties that are also covered by a title insurance policy.
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TABLE OF CONTENTS
Title Insurance in Action for Rural Properties: Claims Stories from Our Files Lack of Legal Access to the Property When a neighbour sold an adjacent property and the new owner had the property surveyed, it disclosed that the driveway our insureds used to access their property encroached onto the adjacent property. A survey of our insureds’ property confirmed that the driveway was not on their land and also revealed that their property abutted two difficult access areas: An undeveloped 80-footlong rock bluff and a roadway on a substantially different elevation than the insureds’ property. The insureds had legal access to their property but did not have actual access. After the neighbour demanded that our insureds remove the driveway, Stewart reimbursed the insureds for the cost to have one of the roadways developed so they could access their property.
Hidden Septic System After purchasing their home, our insureds noticed a lingering, pungent odour emanating from under an addition on the back of the house. On investigation, they discovered the addition was constructed without the previous owner obtaining a permit. The town issued an Order requiring the insureds to obtain a permit. Since the addition was illegally constructed on top of the septic system, the septic system had to be relocated. Stewart spent more than $130,000 The Society of Notaries Public of British Columbia
to demolish the addition, reconstruct it to building code standards, and install a new septic system located at an appropriate distance from the home. We also paid for alternative accommodation for our insureds during the remediation as it was unsafe for them to remain in the home.
A Title Insurance Policy Provides Security Both During and After the Real Estate Closing Process • Coverage is valid for the entire time the insured owns the property. • A one-time premium is payable at the time of closing. • The Owner Policy also protects anyone who inherits the property or the insured’s spouse or child if the property is transferred to their spouse or child for nominal consideration. • The insurable amount is the purchase price of the property and will increase as the value of the property increases up to a maximum of 200%. s This article is intended to provide information that is of a general nature. Please review your actual Stewart Title policy for full coverage details.
Amanda Magee is Director of Business Development for Stewart Title’s Western Canada Operations. Volume 27 Number 3 Fall 2018
