Specifically, TitlePLUS Underwriting does not require a Building Department Work Order search where:

• the property is a new home, condominium, or whole of a lot on a registered plan (pursuant to the TitlePLUS definition), or
• the vendor gives a warranty to survive closing that there are no work orders, or
• a home inspection report has been done and the lawyer has been given a copy.¹

Explanation of "Whole of a lot" Waiver
It is sometimes suggested that there is a lack of a logical nexus between the "whole of a lot on a registered plan" concept (as defined for TitlePLUS purposes) and the waiver of the Building Department Work Order search. We can best explain it by suggesting that it is an "insurance risk" analysis.

As an underwriting assumption, LAWPRO® holds the view that where there has been some municipal review of the property that would include compliance with by-laws, there is a somewhat reduced risk of Building Department contraventions.

This has led us to link our "whole of a lot" waiver of the Building Department Work Order search to the following:

• Whole lots on registered plans of subdivision (or part lots where the municipality registered an exemption by-law for the original conveyances). There is a high level of municipal scrutiny of new subdivisions. Although it is theoretically possible that the day after occupancy the new owner could make some change to the property that creates a state of non-compliance, there is less risk on an aggregate basis for these properties than on a property that has never been through such a process. The TitlePLUS definition of "whole of a lot" is our best attempt to capture this concept;
• Properties that were the whole of a lot prior to an expropriation, road widening or road closing. The same rationale applies as described above regarding the "whole lot" concept, but we do not expect the expropriation to have created any compliance problem in itself. Based on our research, most municipal zoning by-laws have provisions effectively granting the equivalent of a minor variance in favour of the condition of the property post-expropriation, since any lack of apparent compliance would have been created by the expropriating authority, not the homeowner;
• Properties that have been the subject of a consent proceeding for a severance. Before granting the consent, most municipalities will do an overall review of the property in terms of by-law compliance. So, if the severance is going to create non-compliance in terms of setbacks or other requirements, either a condition will be imposed requiring resolution or a companion application will be granted for the applicable minor variance.

Why do a Building Department Search anyhow?
There are also occasions when it would be best to do a Building Department Work Order search, even though it is not required for TitlePLUS coverage.

Title insurance policies give the insurer a variety of choices upon receipt of a claim. One of those choices is to remove an offending structure and pay for the diminution in value to the property. We have seen claims where a deck or garage had to be removed to bring the property into compliance with municipal requirements. However, the property value was actually enhanced by the demolition (or at worst, not adversely affected). The client had a property which was compliant following handling of the claim by the title insurer, but missing a feature that he/she thought was being obtained through the purchase. So, we are well aware that it may not always be in the client's best interests that a title insurance policy be obtained without the lawyer doing the work order search.

Furthermore, lawyers should consider what position the title insurer will take if the lawyer does not do the work order search, but becomes aware of a problem after the requisition date. Although it seems remote, we have heard of several cases where the client became aware of a work order or other municipal non-compliance, by word of mouth, immediately before closing. In one case, we were advised that a title insurer refused to "insure over" the problem, although the lawyer had not done the search because he/she was intending to order title insurance. LAWPRO has a specific protocol to deal with this problem from a TitlePLUS perspective, but it should always be kept in mind whenever the lawyer is relying on a waiver of a search by a title insurer. Otherwise, it may be the lawyer's E&O policy that has to respond to an allegation that the requisitions were deficient.

Call TitlePLUS Customer Service to schedule a phone house call. Our staff will call you at the scheduled time and walk you through the TitlePLUS application step-by-step.

TitlePLUS Times updates real estate professionals about TitlePLUS developments and related changes in conveyancing. Comments and suggestions are welcome and should be forwarded to: