This article is in response to an article titled “The Ins And Outs of Title Insurance: What’s Covered and What’s Not.”
Title Insurance is just as the article states; “it is an insurance policy on the title of a parcel of land”, but what about the extent of that parcel? How do you know what the extent of the parcel is and are you purchasing what you think you should be purchasing? Title Insurance does not confirm or insure this option. Only an up-to-date survey, prepared by an Ontario Land Surveyor (OLS) can confirm the extent of title and provide the client a two dimensional professionally drafted plan of the parcel being sought. To further explain this, two main components of any parcel of land to be purchased contains:
- a) quality of title, which is the Real Estate lawyer’s expertise, and
- b) extent of title, which is the professional surveyor’s expertise.
Given the inception of Title Insurance, the public has seemingly been misconceived that Title Insurance has replaced the up-to-date survey for the purpose of a real estate transaction. This misconception can be no further from the truth. Being two different products used for different purposes, both Title Insurance and an up-to-date survey have their place in the transaction of real property.
The “extent” option as provided by the professional surveyor is known as the “Surveyors Real Property Report” (SRPR). This plan will indicate the following that Title Insurance cannot provide:
- the location and description of all improvements located on the property, such as buildings, fences, hedges, retaining walls, wells, overhead wires and pools in relation to property limits
- the location and description of improvements that may be encroaching ‘onto’ or ‘off of’ the property such as a driveway or retaining wall in relation to property limits
- all dimensions, angular and linear, of the property under survey
- the location of all survey monuments placed or found
- the location and extent of any easements or rights-of-ways
- an accompanying survey report prepared by the OLS to the client
- a complete title search indicating current title interests of the subject parcel and all adjoining parcels and roads
You may ask; “Why is a survey required if I purchase “Title Insurance”? Simply put:
- Title Insurance protects against title related issues, not boundary extent issues
- Title insurance does not locate buildings and improvements in relation to property limits
- Title Insurance will not indicate if there is enough area, by law, to erect a future pool, shed or any additions to the dwelling
- Title Insurance will not indicate where to install fences along lot lines
- Title Insurance cannot move boundaries and does not indicate where easements or right-of-ways exist
- SRPR’s benefits purchasers in knowing what exactly they are purchasing and currency of all improvements and title
- SRPR’s benefits sellers by protection against future liabilities resulting from issues relating to boundaries and improvements
- SRPR’s benefits the legal professional in assuring their clients do not face issues after purchase
- SRPR’s benefits municipalities in compliance with bylaws and in planning and development processes
- SRPR’s benefits the Real Estate community by meeting legal obligations and having a visual representation of the property for sale
Simply put, Title Insurance is not a replacement for an up-to-date survey, nor is an up-to-date survey a replacement for Title Insurance. They both serve different functions when purchasing real property. Title Insurance is a reactive measure in the event a title issue exists and has the ability to provide financial compensation, whereas, purchasing an up-to-date survey is a proactive measure in knowing beforehand if any issues exist but also knowing the extent of the parcel by having a visually professionally drafted plan of what is being purchased. Both are considered important expenses when purchasing property and together they form a total package to protect the interests of the public.
By Roger Grose, O.L.S., O.L.I.P.
More information on this subject can be found on the Association of Ontario Land Surveyors web site: http://www.aols.org/boundaries/title-insurance