What assurances of ownership are available to purchasers of real property (e.g., title insurance or title opinions)? What is the cost of obtaining such assurances?

 

Examination of title to immovable property is carried out by the lawyer acting for the purchaser, lessee or the grantees, and, in the event the acceptance of title to the property is recommended by the lawyer, it is not required to obtain title insurance. The lawyer recommends acceptance of title because the title comes up to the expected standard. There must generally be 30 to 35 years clear and unbroken chain of title up to the present owner.

In the event the lawyer considers that the title does not come up to the expected standard, he will consider whether it is a proper case in which to recommend acceptance of title on the strength of a Policy of Title Insurance.

A title insurance policy usually insures the assured, (subject to any exclusions from coverage or exceptions, conditions and stipulations contained in the policy) against loss or damage, not exceeding the amount of the insurance stated in the policy and costs, lawyers' fees and expenses, which the insurer is obliged to pay under the policy, sustained on incurred by the insured, by reason of :-
  1. the title to the property described in the policy being vested otherwise than as stated in the policy;
  2. any defect in or lien or encumbrance on such title,
  3. unmarketability attributable on a balance of probability to a defect in title, and
  4. lack of a right of access to and from the land described in the policy
The obtaining of title insurance does not remedy the defects or deficiencies in the title to the property. The benefit it affords is the payment of compensation in the event of loss.

The cost of obtaining the advice of a lawyer, will vary from tranasaction to transaction, depending on the aspects of the transaction, the complexity of the matter, the skill and specialised knowledge required, the time taken, the amount of work done and the value of the transaction.

Generally, the premium payable to obtain title insurance will be 0.5% to 0.75% of the insured amount. In addition to the premium, the assured is also required to bear the cost of investigating title to the property and all incidental expenses incurred by the insurer. These costs are inconsequential.