Examples of Claims
Legal services-related claims
The following are claims in which errors or omissions made by the lawyers in the process of closing the transactions led to losses on the part of the insured purchasers. These buyers received compensation for the errors made by the lawyers - and for their losses - because of the legal services coverage included in a TitlePLUS policy.
Purchaser takes title to the wrong condominium unit
After carefully inspecting a variety of condominium units in a new complex, the purchaser selected a lakeview unit, described in the purchase agreement alternately as unit 5321 and as unit 5, level 2. Neither the vendor, real estate agent nor purchaser knew that unit 5, level 2 was in fact unit 5531 and did not have a view of the lake. When the purchaser's lawyer reviewed the status certificate with his client, the client noted that the certificate actually referred to unit 5531; the lawyer assumed (incorrectly) that this number was in error. The insured took title to a unit which he had no intention of purchasing, and the unit he had intended to purchase was sold to another party.
The legal services provision in the TitlePLUS policy ensured that this buyer was covered for his loss; we negotiated a settlement with the condo buyer, to compensate for the difference between a unit with a view of the lake and one without such a view.
Buyer incurs extra costs because her instructions were not followed
The buyer of a condominium unit told her lawyer that she preferred to pay cash for the unit rather than incur the interest charges associated with a vendor take-back mortgage. Although the purchase agreement provided for this option, the buyer's lawyer did not follow through on these instructions. The buyer received a vendor take-back mortgage on closing.
The legal services provision in the TitlePLUS policy ensured that the buyer was compensated for her loss, to a total of about $9,000.
The following are claims in which the insureds received compensation for the title-related losses that were specifically covered by their TitlePLUS policy.
Title-related issues could include unpredictable and undetectable problems that could affect the ownership or marketability of a property, such as errors in information provided by a municipality or in a survey, forgery or fraud.
A building encroaches on a neighbour's land
Shortly after closing, buyers of a large rural property discovered that an addition on the home built by the vendor encroached 15 to 20 feet onto a neighbour's property. The vendor swore a statutory declaration that he had not made any structural alteration to the exterior of the building while he owned it. Even though a survey would have identified the encroachment, the purchasers obtained a TitlePLUS policy so that an up-to-date survey of the property would not be required.
The buyers of this property benefited from TitlePLUS coverage in two ways: First, they saved hundreds of dollars by buying a TitlePLUS policy instead of having to pay for a new property survey. Secondly, the title insurance provisions in the TitlePLUS policy provided coverage for certain encroachments or setback deficiencies.
In situations such as these where an encroachment is an issue, we have a number of options: we can purchase the property underneath the encroachment (and then apply for a severance of the property from the municipality involved), or pay for the removal of that portion of the building that encroaches on the neighbour's land and any decrease in the value of the property that results from the change to the building. In either case, all expenses up to the policy amount are borne by us.
Alice provided a $30,000 private mortgage to Carl which was secured by a property owned by Betty, the common-law spouse of Carl. Carl and a woman impersonating Betty signed the required documents at the office of the lawyer retained to act for them, then proceeded to forge Betty's signature on the mortgage cheque. When the first mortgage payment did not arrive, Alice contacted her lawyer, who in turn contacted Betty, only to learn that she had no knowledge of a mortgage having been registered against her property.
Luckily, Alice purchased a TitlePLUS mortgage lender-only policy to protect the mortgage loan she gave to Carl. As the broad title provisions of the TitlePLUS policy provide coverage for fraud and forged documents, we promptly compensated Alice for the full cost of the mortgage advanced.