Lenders don't want anyone to come along after the deal is done and dilute their security by claiming some kind of property right on the land. If it turns out title is not clear, the lender has a remedy against the lawyer or his insurer. The U.S. has had title insurance for years and it has only been introduced into Canada over the past five years. Title insurance is a new product available to consumers that can save you a bundle on closing costs. In many cases, title insurance may replace the costs of a lawyer doing a full title search on the property or paying for a new survey.
Title insurance replaces a lawyer's opinion on title.
The lawyer still does the searches but forwards it to the insurance company which takes full responsibility for clear title on the property. Lawyers continue to advise both buyers and sellers on the real estate contracts. Title insurance protects the client against unpredictable and undetectable issues such as forgery, fraud, missing heirs, restrictive covenants, work orders, major encroachments, legal rights of access and other title-related problems that could devalue your property or even make it impossible to sell in the future. Ask your lawyer about title insurance before you buy your home. Simply advise your lawyer that you're interested in knowing more about using title insurance in your purchase, and he or she will review how applicable title insurance is to your situation.