Imagine the house you have been living in does not belong to you! This happened to a townhome owner in Ontario recently, but luckily they had Chicago Title Insurance.
The Complication of Swapped Titles
The Insured purchased a new townhome in Brampton directly from the developer. Several years later, they received a letter from a lawyer who represented a neighbour in the townhome development. The letter informed them that the developer had made an error with some of the transfers of the townhomes, theirs included. Sadly, this meant the legal descriptions for the Insured’s townhome and the neighbour’s townhome got swapped. In other words, the Insureds had possession of the home they intended to purchase, but the legal description in their deed was that of their neighbour’s home and vice versa.
Resolution by Chicago Title:
Thankfully, the swapped title was not actively causing any loss or damage to our Insured but was causing issues for the neighbour. This issue would eventually cause a problem for the Insured when they decided to sell or refinance their home. Additionally, without the Insured’s cooperation in resolving the issue, the neighbour would be forced to file a legal action seeking a court order rectifying the legal descriptions.
Chicago Title Claims did not want to take a premature position on the basis that the Insured had not suffered a loss (that could trigger a duty to indemnify) or had not been sued (that could trigger a duty to defend). The Company instead decided to pay the legal and transaction fees involved in facilitating a deed swap between the insured and the neighbour. Fortunately, this resolved the neighbour’s problem and corrected the swapped title issue. Without title insurance, the insured could have suffered a significant legal bill rectifying the situation at a time when they had no time to spare.
Things to Know about Title Insurance:
Title insurance is an essential form of insurance that provides coverage for future claims or losses against the title. For a competitive, one-time premium, an owner’s title insurance policy protects the purchaser or the existing owner from suffering a loss due to swapped title issues, fraud and other title defects.
Title insurance from Chicago Title can provide peace of mind with the knowledge that your client’s interests are fully protected. For more information, contact your Regional Manager today!
