3 Jun, 2021

title insurance in bc


Title Insurance Policy: Why So Many Private Lenders Require It

British Columbia works on the modified Torrens Land Title System that “guarantees” your title and is, arguably, 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. To prevent any issues and inconveniences, most private and B-lenders currently require Title Insurance as part of their lending requisites. 

The province assurance fund also pays financial compensation in appropriate cases where the possibility of loss 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 In BC & Why You Might Consider Getting It

Title Insurance protects buyers and lenders in BC against a potential loss of title. These include, for example, ownership of the property you’re buying and/or problems with the title. Almost all private mortgage lenders require title insurance on all mortgages they do.


Example Of a Problem With a Title

A client purchases a home with a shared driveway. The home in question has no other access to the road system other than this driveway. Later, the homeowner finds out that the driveway has no right of way or easement for the title of his/her home, and the other homeowner will not grant this to them. 

In this case, Title Insurance can cover the lender and possibly the home purchaser.

Title Insurance might also cover you for construction done by the previous homeowner without permits, building bylaw infractions, land use, as well as setback problems. Even though there have been just a handful of fraud cases happening in BC in the past two decades, they do get media attention when they do. 


Are You Planning To Purchase Or Refinance a Home In BC?

Then consider getting Title Insurance, or talk to a Real Estate lawyer to better understand the benefit or other products for your particular transaction.

In BC, if an innocent homeowner is defrauded through a title transfer, and the fraudster who then takes out a mortgage or a home equity loan takes off with the money, then the lender now bears the risk of loss. This makes the small cost of Title Insurance worth it.

If you have any questions or would like to explore your lending options in detail, get in touch with us

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