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The_Rural_Juror
11-10-2015, 09:52 AM
Does anyone have an opinion on the homeowner's title insurance outside of a purchase/sale? I did some reading on it, but am not sure if it's a cash grab.

spikerS
11-10-2015, 09:57 AM
I remember I opted in for it. While title fraud is not rampant, it is pretty scary. For a relatively small cost, and how easily a title could be transferred, I figured it was cheap peace of mind.

JRSC00LUDE
11-10-2015, 10:15 AM
Originally posted by spikerS
I remember I opted in for it. While title fraud is not rampant, it is pretty scary. For a relatively small cost, and how easily a title could be transferred, I figured it was cheap peace of mind.

How can a title be transferred "easily" without R.O. consent? Under the Torrens system, title fraud is exceptionally rare to my knowledge....nor would Title insurance protect you from that I don't believe, I don't think it's one of the assumed risks covered by it (but I may be incorrect). More clearly, the Torrens system already guarantees your title is indefeasible.

Title insurance is more around things that your Lawyer should already be taking care of - easements/encroachments, etc.

I would think it's a waste of money most of the time....especially if you're not buying it during a Transfer, what would be the point?

EDITS - I can no longer spell.....

KPHMPH
11-10-2015, 10:18 AM
If I remember correct title insurance can also be used for extra stuff on the property that doesn't have a permit.

Eg. A deck installed by the owner without a city permit, the city comes asking for permit and then tell you to rip the deck down.

Don't quote me on that but I remember having to do something similar back in the day when j sold a house.

JRSC00LUDE
11-10-2015, 10:40 AM
Originally posted by KPHMPH
If I remember correct title insurance can also be used for extra stuff on the property that doesn't have a permit.

Eg. A deck installed by the owner without a city permit, the city comes asking for permit and then tell you to rip the deck down.

Don't quote me on that but I remember having to do something similar back in the day when j sold a house.

Yes, it can cover you for improvements that fail to meet zoning requirements so a deck could fall under that umbrella.

The_Rural_Juror
11-10-2015, 11:39 AM
So does it make sense for someone who already owns the home with a real property report? Sounds like it is more for the purchaser to insure against the previous owner's screw ups.

Couldn't find much about the fraud angle.

JRSC00LUDE
11-10-2015, 01:08 PM
I just don't see how any benefit can be realized for something you already own, only something you're in the midst of purchasing.

I don't know what spikerS is talking about regarding the fraud angle, still haven't determined that. Am I missing something spikerS?

spikerS
11-10-2015, 03:50 PM
honestly, i am not exactly sure how to explain it. but when I mentioned it to my real estate lawyer when we were going over the mortgage details, that was one he told me to get, along with the life and accident insurance.

when I did some research on house title fraud, and how easy it seemed, I agreed with him.

spikerS
11-10-2015, 03:52 PM
basically, it boils down to mortgage fraud.


How does real estate fraud occur?

Real estate frauds take several forms, but a common denominator is that the fraudsters are sophisticated and thanks to modern technology, are armed with the appropriate documentation and necessary knowledge of the real estate process to enable them to perpetrate these major crimes.

The Basics...

Legal ownership in property is evidenced by the title to the property being placed into your name. You obtain title when the vendor of the property signs transfer documents (a deed) transferring the ownership of the property to you. Once this occurs, the government land registration records will reflect you as the owner and anyone searching those records will also recognize you as the owner.




A Typical Example...

A fraud artist obtains title to a property via a fraudulent transfer document (a deed).
The fraud artist goes to a bank and obtains the mortgage funds.
The mortgage is then registered against the property.
When the fraud artist does not make any mortgage payments, the lender will serve notice that it intends to sell the property, and the scheme is revealed to the legitimate owner when they receive the notice that the lender is trying to sell their property.

JRSC00LUDE
11-10-2015, 08:31 PM
I don't believe that type of fraud can happen in a Torrens based system which is what you have in Alberta, you do not have Deeds.

Your system isn't as sophisticated as Saskatchewan's, which is the one I'm obviously most familiar with, but the fundamental system is the same. Is there any history of that type of fraud occurring in Alberta?

Edit - where is that info. sourced from? It seems to confuse terms between the two systems.

Edit 2/3 - a bit of reading suggests it CAN happen there it seems, but it would be a result of not keeping your information current with the Registry, specifically your mailing address (which can become an issue for people with more than one property).

In our system, whenever a registration change occurs on a title notices are immediately issued to all R.O.'s, if a transfer of Title is registered notices are issued to the old and new addresses and Owners. Is Alberta the same? If so, the only way you can unknowingly fall victim to Title fraud is by not keeping your info. current I'd think. I guess it's best to weigh the cost of the insurance against the probability of it happening to you. Another factor to consider is it would only be an appealing fraud on a free and clear Title, it wouldn't be easy to register a mortgage against an already encumbered Title - especially if there's little equity.

nickyh
11-11-2015, 10:19 AM
When we renewed our mortgage the bank wanted our RPR, obviously in the time living here we had built a fence, added a shed etc.... from when our first RPR was done. We were closing on the refinance in less than a week so it would have been impossible to get a new RPR plus have it city stamped (we are non compliant on a few things on the property and knew we would have to apply for relaxations) so we just got the title insurance to save time and grey hairs dealing with the city.
I wish we had been told ahead of time everything that was required of us but whatever, it's done now.

I think it was around $500.

ExtraSlow
11-11-2015, 12:04 PM
How does title insurance help you if you are noncompliant? I'm confused.

EDIT: Knowingly noncompliant, if that matters.

nickyh
11-11-2015, 02:46 PM
I honestly have no idea, it was advised by the lawyers.

Our non-compliance stems from the air conditioning unit we have being on the wrong side of the house, it's not like we knowingly have an encroachment issue with fences etc.