Title Searches & Title Insurance
Written by: Greg Cholkan, Lawyer
There are two important dates in a typical real estate transaction: the closing date, and the requisition date. Most people are familiar with the former, but may not fully understand the importance of the latter. Usually a week or so before closing, the requisition date is the deadline by which a purchaser’s lawyer can ask a seller’s lawyer to fix title deficiencies. What kind of problems can a thorough title search uncover?
The most common issues with rural properties are:
- Expired or Missing Easements: many cottage properties rely on deeded rights-of-way, meaning that private properties must be traversed as part of the access route; if these easements are expired or were never properly created in the first place, a private property owner may try and stop you from using the access route.
- Restrictive Covenants: these agreements registered on title restrict a property owner’s ability to take certain actions (usually some sort of building limitations); often times these covenants have expired and should be removed from title.
- Planning Act Issues: generally speaking, rural properties which abut merge when owned by the same parties; when this happens, property owners may lose their ability to legally subdivide parcels, and in some cases merger can also extinguish easement rights (which could cause acecss issues).
- Unregistered Utility Lines: unlike most easements, Ontario Hydro may enforce easement rights without having first registered the easement with the land registry office; in other words, if there are hydro lines on or under your property, the service provider will almost certainly have the right to enter onto the property and maintain its equipment.
Occasionally, a seller’s lawyer – whether rightly or wrongly – will refuse to fix a title deficiency. But all is not lost! Sometimes a title insurer can insure over the problem. Title insurance is a product used in most real estate transactions to protect purchasers from issues such as encroachments which would be revealed by an up-to-date survey. It also spares purchasers from the expense of off-title searches which would otherwise be required to obtain a lawyer’s opinion on title.
In the case of a problematic right of way, for example, a title insurer may not fix the problem – but may guarantee that where a servient owner tries to stop someone from using an access route, all legal costs associated to deal with the dispute will be covered by the insurer. While not an ideal remedy, it can certainly be a practical one.
Thorough title searches are extremely important so that any and all potential issues are disclosed to a purchaser. Buying real estate is a significant investment, and that investment should be protected.