property survey vs. title insurance

[GORDandJULIE]

Hi all,
I have run into the same situation a couple of times with different realtors and need some input. When I submit an offer with a clause to get a survey on the property, my own realtor tells me that if the vendor does not have a survey, then I can rely on title insurance if there is a problem. My feeling is that this is the easy way out, and I still do not have proper information on the property. My question is, if I don`t get a survey and later on a new neighbor gets one done and finds my garage or fence encroaches on their property, how will title insurance protect me and what would my options be at that time?

Thanks in advance,

Gord

 

[lilbuffet]

Im a newbie, but from what i know, a survey is essential

 

[GarthChapman]

Title insurance does not protect against known defects. You should always get a RPR (Survey) with a Compliance Stamp from the municipality. Always.

You can also buy Title Insurance as it protects against other issues that the Survey will not cover you for.

 

[BarryMcGuire]

For anyone who attended the REIN ACRE Weekend in Toronto, this topic was covered in my Focus on Ontario Due Diligence (pages 35-39).This is not limited to Ontario, but, in my opinion, applies nationwide when you are considering RPRs (Surveys) vs Title Insurance.Here is an excerpt from the book:
Conclusion: What To Do, How To Choose? Survey or Title Insurance, or Both?



The key things to understand are:

1. that surveys and title insurance are totally different products. Getting one does not provide or replace the benefits of the other.

2. Surveys reveal the actual location all buildings on the property in relation to the property boundaries. A survey should reveal improvements such as fences, decks, swimming pools, retaining walls, hot tubs, overhead wires easements and rights-of-way in favour of neighbours or utilities and confirm lot size and building coverage. A survey would have stopped the following buyer problems:

· Building a house on the wrong lot.
· A buyer who thought he was getting an adjoining garage and laneway but was entitled to neither.
· A buyer who built five feet of his new house on his neighbour`s property because he thought his lot was bigger than it really was.
· A buyer whose cottage was almost completely on Crown land .
· Cancelled renovation plans because of a sewer easement discovered after closing.

3. Title insurance provides lots of coverage in many circumstances but remember if something is in the wrong place title insurance only covers you if you are forced to move it.

4. Apart from an enforced removal, title insurance doesn`t pay for the embarrassment of owning the wrong property or that your buyer backs out of a sale at the last moment because you couldn`t give them good title or for the inconvenience of not closing on time or, after you buy , for a fence you install on your neighbour’s property because you didn`t know where your boundary was or for your inability to build your dream home because the lot is too small and you didn`t know that.

5. Title Insurance will but a survey won’t help you with lawyer mistakes, fraud, marketability problems and other issues not revealed by a survey.

The bottom line is that I strongly recommend you always obtain a survey certificate and seriously consider purchasing title insurance as a complementary product.

Hope this help,
Barry

 

[GORDandJULIE]

Thanks guys,
this information is very helpful. Garth, when you say known issues, are you referring to the seller knowing of a problem or the buyer knowing of a problem. Either way, I won`t do a deal with out getting a survey and title insurance.

Gord