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Ontario|Real Estate LawBuying A Home 398 Title Insurance Title insurance is an option for home buyer's who seek additional protection when purchasing a home. Buyers can pay an insurance premium which will compensate them if there is a problem with the title including zoning problems or ownership issues. When they purchase title insurance, buyers will usually receive reduced legal and document searching costs. However, unlike some places in the United States, title insurance is not yet widely used in Ontario.
When you buy a home, you are essentially buying the legal ownership, or the "title", of a particular property. Lawyers perform a number of administrative searches to ensure that buyers do in fact receive full legal title when they purchase homes. As an alternative to conducting all of these searches, the Lawyers' Professional Indemnity Company created a type of title insurance called TitlePLUS for situations where there is little risk of any problems arising with the title to the property. The benefit of title insurance is the reduced cost for buyers arising from the elimination of a number of administrative searches.
Though title insurance provides protection for home buyers, there are two reasons why a lawyer is still required. First, title insurance policies can only be obtained through a lawyer, and not directly by buyers. Second, title insurance policies provide varying amounts of protection and coverage, and never cover all possible risks associated with buying a home. Generally, they only provide buyers with protection against risks such as zoning problems, major outstanding work orders against the property, and problems that a survey would reveal. TitlePLUS also protects against lawyer error.
The cost of title insurance may vary, but generally costs about $250. The cost of title insurance will be offset by reduced search fees. Your lawyer can provide you with more information about this option.
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