In many instances, banks and financial institutions require the borrowers to obtain a title insurance. However, this policy only protects the bank’s interest and insures against financial loss in the event of a defects in title to the property.
In British Columbia, title defects rarely happen. When a land title is transferred, the new owner can be assured that his/her title is “indefeasible” (meaning the title transfer cannot be defeated, revoked, or made void) under the Torrens system, as long as the owner acquires the interest in good faith and for value consideration.
However, there are other risks that the owner could face, and these risks can be reduced by purchasing a “owner” title insurance policy. For example, a homeowner’s policy can protect against loss due to the following:
Here’s another example. There are more and more strata properties (condos and townhomes) in the lower mainland. A owner’s policy can protect against losses due to matters unknown to the insured prior to closing, such as:
A bit about myself. I am a member of the British Columbia Notaries Public Society. I want to answer some of the most common questions that my clients have through my blog. Hope you find it useful.