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Exploring the Value of Title Insurance for Rural Properties
In 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. 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 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.
Identity Theft: The Benefits of Title Insurance for Both Rural and Urban Properties: Claims Stories from Our Files Fraudulent Transfers by Family Member An individual who owned a significant number of mortgagefree commercial properties lived with his adult son. The son, who shared the same name as well as the same address as his father, impersonated his father and fraudulently transferred the commercial properties to co-conspirators. The son then paid his co-conspirators to obtain mortgages from private lenders. Upon discovering the frauds perpetrated by the son, the father initiated proceedings to have the mortgages declared invalid and removed from title. Many of the lenders in those mortgage transactions had obtained title insurance policies from Stewart Title. Stewart Title investigated the lenders’ claims. It was found that the mortgages were invalid and we paid the insureds’ losses suffered as a result. To date, Stewart Title has paid more than $2,500,000 to insured lenders that were victims of this individual’s frauds. Power of Attorney Forgery Using a forged Power of Attorney purportedly signed by his elderly mother, a son transferred his mother’s property from her name to his name and proceeded to mortgage the property without her knowledge or consent. The elderly woman discovered the fraud when mortgage enforcement notices were mailed to her home. The lender, who was insured by Stewart Title, made a claim under its policy. After determining that the Power of Attorney was a forgery, Stewart Title paid the insured lender the full amount owing on the mortgage, which amounted to over $65,000.
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