Do You Need Title Insurance for a Strata?

For city dwellers, even with rising prices a strata may be a more affordable option than a house.

It’s prudent to make sure you are covered from risks that can arise both during and after one of your largest purchases in life.

There’s a common misconception we often hear about: If survey coverage isn’t an issue (such as in the purchase of a condominium/strata property), title insurance isn’t of much value. While title insurance does include survey coverage, it isn’t the only reason—and may not even be the best reason—to get it. Title Insurance in Action In one claim, 4 days after closing on their strata property, a young couple receive a notice from the strata Board, informing them about a special assessment of over $30,000 that they now owe. The assessment was not mentioned in their Form B and Form F certificates. Having spent most of their savings on the strata, they are in a fix. Because the strata Board knew about the upcoming assessment and failed to disclose it, their claim is paid by title insurance, saving them from an expense they can’t afford.

There are also other instances where title insurance can save new owners from unexpected expenses and stress. Alteration without Permission Insured owners purchase a strata property that has the balcony closed-in as part of the interior living space. After closing, the strata Board discovers the alteration to the common property was done without its approval; the strata requires the new owners to remove the enclosure. In this case, title insurance would pay the costs of removing the enclosure and remediating the balcony area back to its original state as required by the strata corporation.

There’s a common misconception we often hear about: If survey coverage isn’t an issue (such as in the purchase of a condominium/strata property), title insurance isn’t of much value.

Whose Parking Spot is it Anyway? A couple buys a strata property; the Form B certificate indicates their parking spot is #37. They happily move in. When they go to park their car for the first time, someone else is in their spot. It turns out there was a mistake on the Form B certificate. Because the strata corporation is generally bound by the Form B, they must resolve this issue. In certain cases, that is not always done easily.

For instance, if there is no spare parking space to provide, these issues may end up in Court. With the coverage of the strata/condo endorsement, title insurance would cover the costs.

Title insurance is important for strata properties because it covers the following. •

Tax and Utility Arrears

If you are forced to pay the outstanding taxes and utilities of the previous owners

This coverage is especially relevant in Vancouver because it protects new owners against the Empty

Homes Tax

Fraud

If someone impersonates you to get a mortgage on your property or sell your house without your knowledge

Work Orders

If there were unknown outstanding work orders before the date of the policy

With title insurance for a home or strata, you are protected from the above risks and more. s This is for general information only. Property type needs to be specified to receive strata endorsements. For specific coverage, please refer to your title insurance policy. John Tracy has been legal counsel at FCT for 13 years.