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Page 12 OctOber 30, 2017 • Law times www.lawtimesnews.com Title insurance adopted by real estate bar in Ontario BY DALE SMITH For Law Times T itle insurance in On- tario has been largely adopted by the real es- tate bar. Lawyers say it has changed the way they do some business, especially when it comes to re- ducing the amount of work that real estate transactions take. "It has made my life much simpler in terms of the process- ing of files, with that overriding protection that title insurance offers to my clients who are purchasing properties," says Jeffrey Cowan of Cowan Law in Toronto. "There are a lot less 'what ifs.'" Cowan says that while there is still a demand for off-title searching for real estate transac- tions, the volume of search work has been reduced, which means that the savings have been passed on to their clients. "It's a much more cost-effec- tive method of practising, be- cause it covers what are turning out to be quite expensive inqui- ries," says Cowan. "All of the off-title searches that we used to have to do in the old days are kind of moot, although we still do them if we're requested to do them or if we have any questions as to the title of the property and we feel it prudent to do so." While lawyers in the real estate process are there to ame- liorate risk, title insurance uses actuarial tables to cover over the known quantity of defect that occurs in aggregate volume, like any other insurance. Other benefits include pro- tection against back taxes that were attached to the property after sale, which the title insur- ance company would pay out and then they would chase the former owner instead of the law- yer needing to do so. It also extends to protection against mortgage fraud going forward, which lawyers say is an especially valuable service be- cause there is no "value add" that they can offer to protect against that eventuality. "Title insurance can do more than a lawyer," says Mark Mor- ris, co-founder of Axess Law Of- fices in Toronto. "It really does save lawyers from having to engage in certain types of litiga- tion." Morris cites an example of a mortgage discharge with which he was involved where a $759,000 cheque was lost by FedEx on the conveyor belt in Montreal. "The purchaser lawyer now has to theoretically go ahead and sue me," says Morris. "They don't need to with title insurance. That part of the pro- cess has been transferred over to another body that will deal with it, and the real estate lawyer who's focused on $300 or $400 net conveyances can move on with their life." Leslie Kirk, a sole practitio- ner in Ottawa, says that, in some cases, title insurance "compli- cates things." "The search requirements and the exact wording of the policies get changed every once in a while, so you don't know what's up with it. I personally find it difficult to keep up with," she says. But as much as title in- surance is seen as being a time saver and offering some protec- tions that lawyers can't, it doesn't necessarily fix problems. One example is survey pro- tection. In a boundary issue, title in- surance will pay to deal with the problem, but it may not fix the underlying issue. But it may be the more attrac- tive option because while a sur- vey could cost $2,000 to $3,000, the title insurance premium on a standard purchase transac- tion less than $500,000 would be closer to $300. That would not only include survey protection but also the tax protection and work order protection. Another example is around land being transferred from an estate and notations of "subject to debt" being attached to the title, many of which are artifacts of the conversion to land titles during the 1980s and 1990s. Where it used to be that the sellers' lawyers would have to clear the title before the sale, title insurance now offers protection from that issue and the nota- tions remain on the title. Multi-unit residential prop- erties don't fall within the pa- rameters of title insurance, while the title insurance process for commercial properties differs significantly from residential properties. Some American jurisdic- tions, such as Florida, no lon- ger use lawyers for conveyance, although it has been noted that they also have a different title registry system than On- tario and the fees they charge are largely the same as one would pay a lawyer for the same ser- vices, meaning that it's no more cost-effective. "What [title insurance com- panies] have discovered is that the only way to deal with their volume is to properly design workf lows that can accommo- date that volume," says Morris. "The moment you're starting to create workf lows for law, you are turning to other things that you can workf low as well." Morris says the entire legal conveyance operation is a work- f low process and title insurers doing tens of thousands of deals per month as opposed to a law- yer doing a handful will bring a measure of efficiency to the pro- cess that lawyers haven't been able to provide. "I think that's a net benefit to Ontarians as a whole," Morris says, but he notes that this will likely upset some lawyers. LT TITLE INSURANCE Jeffrey Cowan says title insurance 'has made my life much simpler in terms of the processing of files.' THE ULTIMATE SOURCE For Today's Legal Profession Canlawyer.lawtimes@tr.com | 416.609.3800 | 1.800.387.5164 Online bitly.com/CanLawyer-Subscription Free preview bitly.com/CanLawyer-FreePreview Subscribe today! ONE-YEAR SUBSCRIPTION INCLUDES: • 11 issues print and digital editions • FREE exclusive access to Canadian Lawyer digital edition archives • FREE weekly e-newsletter: Canadian Legal Newswire • Interactive & immersive feature-rich digital for desktop, laptop, tablet or smartphone Each issue of Canadian Lawyer is packed with unbiased in-depth case analyses, valuable strategies, expert insights, and a wealth of information that will allow readers to prepare for cases and effectively manage their practice. Untitled-1 1 2017-10-24 2:26 PM To learn more, call 1-800-410-1013 or visit titleplus.ca Just like our New Home Program New Condo Select is quick and easy Selected new condominium developments in Ontario qualify for an easy title insurance 1 application process. • Prepopulated underwriting • Streamlined searches • Saves time and money ® Registered trademark of Lawyers' Professional Indemnity Company. © 2017 Lawyers' Professional Indemnity Company Lawyers' Professional Indemnity Company (LAWPRO ® ), 250 Yonge Street, Suite 3101, P.O. Box 3, Toronto, ON M5B 2L7 1 The TitlePLUS policy is underwritten by Lawyers' Professional Indemnity Company (LAWPRO ® ). Please refer to the policy for full details, including actual terms and conditions. Untitled-3 1 2017-04-18 8:21 PM

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