When you buy a house, you should perform some due diligence inspections. You should inspect the physical house to see if everything is ok. You can do the same with the title. Lawyers and often Realtors can perform title inspections. This will reveal of there are any unusual registrations on the title. If there are, you and your lawyer should be satisfied they can be removed either before possession or as part of the transfer when you take title.
Other title defects include encroachments. Part of your neighbours’ buildings or fences may be built on your lot. While fence and tree lines often are built on the property limits, you’d be surprised to find out how often they are built too far over. In one case, a homeowner whose property was adjacent a church and cemetery found out that, due to a long held erroneous belief, that the church buried people in his back yard!
In the end, the church who owned the cemetery and homeowner swapped pieces of land and everything worked out, but it highlights the potential for title defects.
What can you do?
In the old days, buyers would hire a surveyor who would prepare a building location certificate (BLC) prior to possession. The buyer would then know where property starts and ends. Armed with the BLC, a buyer could obtain a zoning memorandum from the municipality which would ensure the property conformed to city or municipal bylaws.
Now, most buyers opt for title insurance instead. Title insurance covers most title defects (but not all!). They cost much less than BLC and policies are purchased at the time of buying (your lawyer will handle that).
If you’d like to learn more about the subject, read our article at
Regards, Philippe Richer LL.B. Président
