Showing posts tagged with: Claims

Multi-family endorsement helped a client save over $105,000!

07Sep

Multi-family endorsement helped a client save $105,000!

Multi-family endorsement helped a client save over $105,000!

It’s of utmost importance for lenders and lawyers to ask the right questions when closing a real estate transaction. This helps them ensure the right title insurance coverage for their clients.

For instance, it’s good to know if the property is a duplex, triplex or any type of plex. Does it include basement apartments? Is it a multi-family residence, and so on? If it is the latter, does it require the Multi-Family Endorsement to optimize the coverage afforded under the policy? This is how selecting the correct coverage for a multi-family residence could safeguard the Insureds and validate their claim in the future.

Claim Summary

In July 2018, the Insured acquired the title to their property in Ontario. The Insured was also issued the Owner’s Title Insurance Policy underwritten by the Company.

A year later, they received an Order to Comply from the City related to prior unpermitted construction and renovations resulting from an inspection in May 2019.

The Chicago Title Resolution

Chicago Title determined that the claim fell within the Policy’s Multi-Family Endorsement and accepted the claim. An engineer’s report was ordered, and the company decided to pay the maximum policy amount since there were many things to remedy. Though the policy amount was determined at $90K, the maximum insured amount was $180K. This was because the residential owner contains a standard provision to address the increase in the fair market value of the Land, which compensates an insured owner for a maximum of 200% of the Amount of Insurance for an Actual Loss because of a Covered Risk. Chicago Title obtained an appraisal that valued the property between $95K and $105K. We, therefore, paid the maximum amount of $105K.

Covered Risk

Title insurance protects the insured from losses due to forced removal or remedy existing structures or any part of them – other than boundary walls or fences – because the portion was built without obtaining a required building permit from the proper Governmental Authority.

Title insurance from Chicago Title can provide peace of mind with the knowledge that your client’s interests are fully protected.

To learn more, visit ctic.ca.

07Sep

Endorsements further enhance title insurance coverage!

by adminClaims

Endorsements further enhance title insurance coverage!

Title insurance policies for owners and lenders address many real estate closing needs. However, some property owners or lenders may require a unique endorsement to the standard title insurance policy to cover an identified risk. An endorsement helps so the transaction can close on time and provide coverage should the identified risk require future remedy.

Claim Summary:

In 2017, the Insured purchased a brand-new home from a builder in Quebec. Chicago Title issued an owner’s policy that included an Identified Risk – Enforced Removal Endorsement to cover the insured should the owner of the adjacent property require the enforced removal of part of the interlocking paving stone driveway encroached onto the neighbouring property.

Two years later, in 2019, the neighbouring property owner sent a letter to the Insured requiring the prompt removal of the interlocking paving stones encroaching onto his property.

The Chicago Title Resolution:

The Company accepted the Insured’s tender of defence. The claim was covered under the Identified Risk – Enforced Removal Endorsement included in the owner’s policy. The issue was settled smoothly, with Chicago Title paying out the amount of $2,299.50 to cover the cost of removing the encroachment.

Title insurance from Chicago Title can provide peace of mind with the knowledge that your client’s interests are fully protected.

To learn more visit ctic.ca.

Vigilant law firm spots and averts real estate email spoofing in time!

15Jul

Chicago Title Settles $102,000 in Unpaid Real Estate Taxes

by adminClaims

Chicago Title Settles $102,000 in Unpaid Real Estate Taxes

Managing and scaling a business is not for the faint-hearted. Each day is accompanied by challenges and surprises. One of the ways commercial property can be affected includes sudden expenses from compliance issues and losses due to fraud or identity theft. Sometimes, this could also encompass unpaid real estate taxes that are discovered after an assessment imposed on title by a governmental authority.

Reassessed Real Estate Property Tax Notification

This is precisely what happened with a commercial property owner recently. A commercial real estate lawyer conducted the standard due diligence that any prudent real estate solicitor would do on a purchase transaction. It was then the solicitor came across a Real Estate Tax Reassessment Notice. The Notice inadvertently indicated the basis of the reassessment was the real estate property taxes were too high, and in all probability, the purchaser would receive a refund. The solicitor took no further action, a Commercial Title Owner’s Policy was issued with no exception noted on Schedule B, and the transaction closed. A few months after closing, the insured received a Reassessment Notice relating to the unpaid real estate property taxes. The notice indicated the insured owed $102,000.00 in unpaid real estate taxes.

The Chicago Title resolution

Fortunately, the insured had a commercial owner’s title insurance policy, and he notified Chicago Title of the Reassessment Notice and filed a claim. Since the reassessment commenced prior to the Date of Policy, Chicago Title considered this a pre-existing lien. Chicago Title accepted this claim and paid $102,000 to clear the matter from the title.

A Commercial Title Insurance Owner’s and Loan Policy provides coverage for lien resulting in unpaid real estate property taxes or assessments imposed on title by a Quai-Governmental Authority on the date of closing.

Fortify your business with a commercial owner policy

It’s always a good idea to ensure that you have a commercial owner policy to provide coverage for issues like this. The small premium can pay huge dividends.

Take advantage of our comprehensive coverage solutions. To learn more, visit CTIC.ca

24Jun

Understanding Forced Removal Encroachment and How Title Insurance Helps

by adminClaims

Understanding Forced Removal Encroachment and How Title Insurance Helps

After spending months looking at houses, you have finally found your dream house. It meets all your needs and is within your budget. You are excited to proceed only to discover after you have purchased the property that a structure situated on the property is encroaching onto the neighbouring lands!

An encroachment is the projection of the actual building or a portion thereof including any improvements on the lands as of the date you purchased the property onto the land belonging to the adjacent property owner. This can include but is not limited to, a portion of the home, garage, shed or driveway encroaching onto the neighbouring lands.

As a homebuyer, can you proceed with the transaction if you become aware of an encroachment issue before you complete your transaction? Well, the short answer is you should consult with your lawyer/notary who can then liaise with your title insurer to determine whether there is any comfort or coverage available for the known defect. The title insurer will then explain the nature of the limited coverage available if any, and you can make an informed decision while instructing your lawyer/notary on how you wish to proceed.

In some instances, depending on the nature of the encroachment, no coverage may be possible for the issue. With title insurance, you may get a limited form of coverage or be able to close with the known defect, but without coverage. Read the following story to see how title insurance may provide coverage for an encroachment.

How Chicago Title Settled the Insured’s Endorsement Claim

An insured purchased a property that had an encroachment onto the neighbouring property. The purchaser was aware of the encroachment and it was noted as a known defect as it did not affect the marketability of the property. So Chicago Title issued an owner’s policy that covered the encroachment to the adjacent property (with an Identified Risk – Enforced Removal Endorsement) owned by the School Board.

Shortly after purchasing the property, the Insured reached out to the School Board to purchase part of the lot or to obtain a servitude to park or servitude for vehicular access.

The School Board sent an email refusing to sell a portion of the lot or to provide any servitude. They advised that they were open to a temporary servitude to allow the Insured to rectify the encroachment of the exterior cladding, the two Hydro-Quebec electrical meters and the two ventilation outlets.

Since the insured had a Chicago Title insurance policy with the Identified Risk – Enforced Removal Endorsement, we settled the claim by paying the cost of rectifying the encroachment.

Title insurance provides coverage from an actual loss suffered by the insured resulting from the forced removal of a structure encroaching on an adjoining property or a public utility easement.

In unique cases like this, the underwriter will consider the possible title insurance endorsements and exclusions from coverage and review the property comprehensively. This includes considering easements and servitudes, standard restrictions, the option to purchase or the right of first refusal and other reservations mentioned in the title commitment. It is important to review the policy issued for actual coverage and exclusions.

Title insurance helps and it’s an essential form of insurance. Chicago Title provides insureds with coverage for any actual loss suffered in relation to matters that are covered under the title insurance policy and are not otherwise excepted or excluded from coverage. For a competitive, one-time premium, an owner’s title insurance policy protects the purchaser or the existing owner from title issues, fraud and other title defects more specifically set out in the title insurance policy.

Title insurance from Chicago Title can help provide peace of mind with the knowledge that your client’s interests are fully protected. For more information, contact your Regional Manager today!

CTIC.ca

Chicago Title Insurance Solves Swapped Title Problem

24Jun

Chicago Title Insurance Solves Swapped Title Issue

by adminClaims

Chicago Title Insurance Solves Swapped Title Issue

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!

CTIC.ca

23Jun

Beware! Condo Owner Impersonations are on the Rise!

by adminClaims

BEWARE! CONDO OWNER IMPERSONATIONS ARE ON THE RISE!

In a shifting real estate market, criminals are always trying to take advantage and become increasingly sophisticated with their real estate scams, especially condo owner impersonations.

A fraudster impersonated the owner of a unit at the Montreal Canadians Tower, a condominium property in downtown Montreal, Quebec. The fraudster borrowed an amount of $358,995.98 CAD from a Private Lender, which was guaranteed by a first mortgage.

As part of this transaction, the Insured obtained a lender’s policy underwritten by Chicago Title Insurance Company. The fraudster provided a false ID to the notary who transacted the mortgage.

Chicago Title paid $358,995.98 to the insured lender and an additional $31,032.00 CAD in legal fees. The homeowner regained their unencumbered condo unit. Without title insurance, the end of the story would have been very different.

Stay one step ahead of fraudsters

At some point in your life, you will encounter fraudulent activities. It’s not a matter of if; it is only a matter of when. Fraudsters are an increasing threat worldwide, and it is not restricted to just the real estate industry. What is worrisome is that the criminals have improved their tactics. This is why you need to have a good understanding of how they work and how to spot fraud before it’s too late.

The good news? At Chicago Title, we are proactive at spotting fraud warning signs and at protecting our clients. We have made it our company mission to create processes and safeguard protocols to ensure a fair and accurate real estate transaction each time.

Choose wisely

We continue to increase awareness of fraud trends through educational resources that help lawyers, notaries, their staff and clients. Choose wisely and call us now for your free consultation.

We are here to help. For more information, contact your Regional Manager today!

CTIC.ca

Chicago Title Paid $62,000 to Discharge Construction Legal Hypothecs Against Condo Unit

09May

Chicago Title Paid $62,000 to Discharge Construction Legal Hypothec Against Condo Unit

by adminClaims

Chicago Title Paid $62,000 to Discharge Construction Legal Hypothec Against Condo Unit

In Quebec, Chicago Title insured almost all the owners of a condominium project. After taking possession, to the owners’ dismay, two Construction Legal Hypothec were registered on their titles. It was discovered that the developer had not paid two sub-contractors for their work during the construction of the condominium units.

Construction legal hypothec guarantees full payments to the parties involved in constructing the building.

To make matters worse, the developer declared bankruptcy after the sale. Chicago Title retained counsel to represent the insureds.

How Chicago Title Solved the Construction Legal Hypothec Issue

Chicago Title paid approx. $62K to the sub-contractors to obtain a discharge of their Construction Legal Hypothec against our insureds’ condominium units. It also paid the legal fees for the retained counsel.

Title insurance is an essential form of insurance that provides coverage for future claims or future losses. It safeguards the owner of any real estate property or the insured mortgage lender from title ownership discrepancies. It also protects against overall real estate fraud or the effect of events prior to the acquisition of the property.

Title Insurance from Chicago Title can provide peace of mind with the knowledge that your client’s interests are fully protected.

About Chicago Title:

Chicago Title Insurance Company Canada has proudly provided security for Canadian real estate transactions for over 70 years. We bring years of experience and specialized expertise to protect your real estate transactions. We take the time to understand your specific circumstances and offer customized solutions for each of them. To learn more, visit CTIC.ca

Our team is available for a no-obligation, free consultation. Get in touch with us today to safeguard your title and ensure a smooth transaction.

CTIC.ca

04May

Avoid Nasty Surprises: Buy the correct insurance policy

by adminClaims

Avoid Nasty Surprises: Buy the 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.

19Jan

Transaction Protection Endorsement saved a lawyer from financial damage

by adminCommercial

Transaction Protection Endorsement saved a lawyer from financial damage

A lawyer was saved from financial and reputational damage due to Chicago Title’s Transaction Protection Endorsement (TPE).

An insured property owner who was not a citizen or permanent resident purchased a property in St. Catherines/Greater Golden Horseshoe Region, Ontario. Due to his status as a foreign investor, his transaction was subject to an additional tax called a Non-Resident Speculation Tax (NRST), which is supposed to be paid at closing when the transfer gets registered. A Non‑Resident Speculation Tax (NRST), also called foreign buyers tax, “is a 15% tax on the purchase or acquisition of an interest in residential property located in the Greater Golden Horseshoe Region, Ontario, by individuals who are not citizens or permanent residents of Canada or by foreign corporations (foreign entities) and taxable trustees.”

However, the insured’s lawyer made a mistake and did not realize the property was within the area where NRST would apply. The insured got hit with a surprise bill a few months later, including several thousand additional interest and fees. The insured paid the principal soon as they learned of this error but submitted a claim to Chicago Title for the interest and costs.

The Chicago Title Resolution

Chicago Title accepted the Transaction Protection Endorsement (TPE) claim that protects the insured against actual loss sustained by the insured due to inadvertent transaction errors made by the lawyer or notary. While the insured remained responsible for the principle of the tax, Chicago title covered the interest and fees.

Transaction Protection Endorsement exists to protect the insured against the unpredictable. As a Notary or Lawyer, you are protected from financial and reputational damage when issues that may take you to court arise while acting on behalf of the purchaser and vendor in a real estate transaction.

Click on the link to learn more about Transaction Protection Endorsement: https://bit.ly/3qppHxp

someone trying to avoid blocks being expose to risk!

15Dec

Claim Story – Insured was exposed to risk due to inaccurate search results

by adminClaims

Claim Story – Insured was exposed to risk due to inaccurate search results

An Insured purchased a commercial property formerly used as a theatre. At the time of purchase, the property was in violation of fire codes. Insured purchased the property knowing about this issue and that he would be responsible for correcting it. Chicago Title issued an owner’s policy noting the issues on schedule along with our standard with a Government Response Endorsement. Post-closing during an inspection, the inspector found several new violations. The insured did not know about these violations when he bought the property and that left the insured exposed to risk!

Chicago Title accepted the insured’s claim who was exposed to risk

Since the new violations were not mentioned in the earlier notice that was available before the sale, Chicago Title accepted the claim under the Government Response Endorsement. We reimbursed the insured for the cost of remedying the new violations. The story would have been very different if the insured had purchased a GAP-only policy, leaving him exposed to risk. Gap coverage ends when the title is registered, and any issues like inaccurate search results that arise after the registration are not covered, but with Chicago Title’s title insurance policy, your clients get full coverage!

Find out more about our other commercial endorsements.

Watch the video to learn more.

1 2