Many homebuyers in Ontario hear about title insurance when purchasing property, but few know what it truly means. Title insurance is a key way real-estate lawyers protect clients's interests during property transactions — and it has now become standard practice across Canada.
Title insurance protects property owners and lenders against certain losses related to defects or issues with the legal ownership (title) of real estate.
It covers risks such as:
With title insurance, the buyer and lender gain peace of mind that their legal ownership is protected.
The concept was introduced from the United States in the early 2000s. Before then, Ontario real-estate lawyers had to conduct full due diligence for each transaction — an extensive, time-consuming, and costly process to verify title.
As the property market accelerated, buyers and lenders demanded faster closings and stronger post-closing protection. Title insurance met those needs and was soon accepted by law societies across Canada.
When a transaction begins, the title insurer reviews the agreement of purchase and sale and the title search.
It then determines:
For example:
This approach streamlines the process, saving time and cost for both lawyer and client.
A lawyer's certification of title is limited to what can reasonably be discovered through investigation. Some defects, however, are hidden and may only appear after closing.
Title insurance provides contractual coverage — once issued, the insurer is legally bound to compensate for covered risks.
Note: Title insurance and legal certification both focus only on title-related issues. Unpaid utilities or other personal debts are not title defects and are therefore excluded.
Most homeowners lack an up-to-date property survey. Title insurers typically do not require one and still provide coverage for risks that might otherwise appear only on a new survey — saving time and money.
Modern real-estate deals close quickly — sometimes within a week. Without title insurance, such timelines would be nearly impossible.
Because title insurance reduces due-diligence requirements, buyers benefit from:
The Law Society of Ontario and the Financial Services Commission of Ontario (FSCO) have authorized several companies to provide title insurance to homebuyers and lenders:
TitlePlus is affiliated with the Law Society of Ontario.
First Canadian Title (FCT) — a subsidiary of First American Title (U.S.) — entered the Ontario market early and remains the largest provider. Most financial institutions accept FCT policies for mortgage lending.
Li & Partners' has maintained a long-term partnership with First Canadian Title (FCT). From 2014 to 2016, Li & Partners ranked among Top 25% nationwide in Canada — reaching 11th place in 2016.
Through this collaboration, Li & Partners helps clients and lenders secure title policies efficiently and close transactions smoothly.
As Canada's real-estate market continues to evolve, new developments in title protection and insurance may emerge. For now, title insurance remains an essential safeguard for both homebuyers and mortgage lenders.
Note: The information provided here is for general educational purposes and does not constitute legal advice. For legal matters specific to your situation, please consult a qualified lawyer with whom you have a solicitor-client relationship.
