Title Insurance in Ontario: The Overlooked Protection Every Property Owner Should Know About

When buying a home in Ontario, most buyers focus on closing dates, home inspections, the agreement of purchase and sale, and securing financing. However, one crucial piece of protection often gets overlooked: title insurance.

This one-time investment can offer long-term protection from hidden legal and financial risks — making it an essential, yet frequently underestimated, part of the homebuying process.

What is Title Insurance?

Title insurance is a one-time premium insurance policy that protects property owners and mortgage lenders against certain losses relating to the legal ownership (title) of the property.

In simpler terms, it protects your right to legally possess and use your home, and covers risks that may not be discovered through traditional due diligence or public records searches before closing.

What Does Title Insurance Cover?

Once purchased, title insurance can help protect you against a variety of issues, including:

• Title defects or errors in public records
• Unpaid property taxes or liens left by previous owners
• Fraud or forgery, such as someone impersonating you to sell or mortgage your home
• Pre-existing zoning violations, where the property was built or renovated against zoning rules
• Encroachments or boundary issues that would have been revealed by a property survey
• Mistakes in legal descriptions or incorrect registrations on title

This coverage typically remains valid for as long as you own the property. Without it, you may be forced to bear the cost of resolving these issues on your own.

Lender’s vs. Owner’s Title Insurance

There are two primary types of title insurance:

1. Lender’s Title Insurance: Typically required by mortgage lenders, this policy protects the lender’s financial interest in the property.
2. Owner’s Title Insurance: This is optional, but highly recommended. This policy safeguards the homeowner’s interest by paying for monetary losses brought on by flaws in the title, court costs, or ownership disputes.

In Ontario, your real estate lawyer typically arranges title insurance during the closing process. Once purchased, the coverage remains valid for as long as you own the property.

Who Should Consider Title Insurance?

Many different types of people can benefit from title insurance. It gives homebuyers peace of mind against potential problems that may arise after closing. Existing homeowners also stand to benefit with a title insurance to protect against potential new risks. Commercial property owners can also use title insurance as protection against title issues that might compromise the functionality or worth of their commercial real estate.

In every instance, the price is minimal when weighed against the financial security it offers.

Is Title Insurance Mandatory in Ontario?

Title insurance is not a legal requirement in Ontario. However, the majority of lenders mandate a lender’s policy before approving a mortgage.

Though it’s not required, an owner’s policy is a worthwhile investment, especially in some cases. For instance, resale homes may carry risks like hidden liens, encroachments, or unpermitted renovations. In addition, title insurance also covers risks of purchases without a recent property survey.

In Ontario, your real estate lawyer typically arranges the policy on your behalf during the closing process.

Limitations of Title Insurance

While Title Insurance has its advantages, it’s also critical to know its limitations, as it doesn’t offer complete defence against all potential issues.

These include environmental issues like soil contamination, indigenous land claims, known title defects disclosed prior to purchase, and problems that arise after the policy is in effect.

Due to these limitations, obtaining legal counsel is essential. A real estate lawyer can review your policy, explain what is and what isn’t included, and assist in ensuring your property is adequately protected.

Does Title Insurance Replace a Property Survey?

Not entirely. While title insurance may protect against some issues a survey would uncover — like encroachments — it does not replace the value of an up-to-date property survey, especially if you plan renovations, fencing, or additions.

Does Coverage Continue After You Sell or Transfer the Property?

Coverage generally lasts for as long as you own the home. Some title insurers may extend protection to your spouse, estate, or heirs, depending on their terms. This is another reason to review your policy with your lawyer.

How Nihang Law Can Help

At Nihang Law, we aim to provide our clients with ease of mind and clarity throughout the purchasing process. We help clients secure their investments by:

• Conducting thorough title searches to uncover potential problems.
• Arranging title insurance policies tailored to each client’s needs.
• Reviewing and explaining policy terms so you fully understand your protection.

Whether you are buying a home, investing in commercial property, or seeking to protect your current ownership, Nihang Law ensures you are covered where it matters most.

Contact us today to protect your property and gain confidence in your investment.