Avoid Nasty Surprises: Buy the correct insurance policy

correct insurance policy

Sylvia and Jay received an inheritance that finally allowed them to get into the Ontario housing market.  They purchased a legal duplex with the intention of renting out the second unit, to assist with cash flow.

Jay and Sylvia’s law firm overlooked the multi-unit property type on the agreement of purchase/sale and failed to complete the requisite off-title searches.  Three months after their closing, the new homeowners received a notice from the city. An outstanding municipal work order stated that the electrical work in the secondary unit was in violation of municipal building and electrical codes. The city issued an order to comply.

The Insureds submitted a claim to Chicago Title but unfortunately, it was denied. Their single-family dwelling policy did not afford coverage for outstanding works on a multi-unit property.

This nasty surprise could have been avoided had the law firm recognized the property type and conducted the required off title searches. An abatement in price or some sort of corrective action might have been negotiated before the sale was finalized.

Make certain you understand your clients’ future use of the property they are buying so there are no nasty surprises.  Off title searches are required when ordering a multi-unit policy. See Chicago Title’s Resource Library for Search Guidelines.  Off title searches add extra cost to the closing and give the purchaser a chance to take corrective action before it’s too late.

ORDER THE CORRECT TITLE INSURANCE POLICY FOR YOUR PROPERTY TYPE

When placing an order for a title insurance policy, it is important to select the correct property type in your conveyancing platform so that the Insured gets the correct coverage.

One of the most common errors that we see is a single-family dwelling policy ordered for a property with a basement apartment or multi-unit residence. Avoid nasty surprises and make sure to select the correct property type.

For more information on ordering the right policy for a property containing more than one unit, please refer to our information sheet.

Related Articles

S'il vous plaît soyez informé

Veuillez noter que le lundi 1ᵉʳ juillet 2024, nos bureaux seront fermés pour célébrer la fête du Canada. Les heures normales de travail reprendront le mardi 2 juillet 2024.

Please Be Advised

Please note that on Monday, July 1, 2024, our offices will be closed in celebration of Canada Day. Regular business hours will resume on Tuesday, July 2, 2024.

S'il vous plaît soyez informé | Please Be Advised

Veuillez noter que notre bureau du Québec sera fermé le lundi 24 juin 2024 à l’occasion de la Saint-Jean-Baptiste et nous reprendront nos activités le 25 juin 2024 à 9h HAE.

Please be advised that our Quebec office will be closed for Saint-Jean-Baptiste Day, our regular business hours will resume on June 25, 2024 at 9 am EDT.

Please Be Advised | S'il vous plaît soyez informé

Please be advised that our Quebec office will be closed for Saint-Jean-Baptiste Day, our regular business hours will resume on June 25, 2024 at 9 am EDT.

Veuillez noter que notre bureau du Québec sera fermé le lundi 24 juin 2024 à l’occasion de la Saint-Jean-Baptiste et nous reprendront nos activités le 25 juin 2024 à 9h HAE.

Search