Title Insurance What Is It & Why So Many Private Lenders Require It.
British Columbia works on the modified Torrens land title system that “guarantees” your title. It is questionably one of the best systems for land registration. This system is very accurate in determining who the owner is and what registered charges are against the property. The province assurance fund also pays financial compensation in appropriate cases where the possibility of lose of title through fraud occurs.
This system has been in place for many years and is considered great for normal transactions.
What Is Title Insurance & Why You Might Consider Getting It.
Title Insurance insures buyers or lenders against potential loss of title (for example, ownership of the property you’re buying) &/or problems with the title. Almost all private mortgage lenders require title insurance on all mortgages they do.
Example of a Problem with Title: Client purchases a home with a shared driveway. The home in question has no other access to the road system without using this driveway. Later the home owner finds out that the driveway has no right of way or easement for the title of his/her home and the other home owner will not grant this to them. This is a case where title insurance can cover the lender & possible the home purchaser.
Very few mortgage fraud cases happen in BC in the past two decades but they do get quite a bit of media attention when they do. If an innocent home owner is defrauded through transfer of their title and the fraudster who then takes out a mortgage and takes off with the money, then the lender now bears the risk of loss. This makes the small cost of Title Insurance worth it for you in BC.
If you are considering the purchase or refinance of a home consider title insurance or talk to a Real Estate lawyer to better understand the benefit or other useful product for your particular transaction.