Jun 16 | 2017

Title Insurance: What Every Homeowner Needs to Know

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Title Insurance: What every homeowner needs to knowYou combed through websites, apps, maybe even the papers and visited dozens of places until finally! You found the perfect house! Your biggest achievement, your biggest asset – how do you keep it safe? Or like in this case, how can you even make sure that it’s all yours?

Before you purchased your home, the property may have changed hands several times leaving room for mistakes like an incorrect survey, a non-existent permit or title-related issues. Even with a new build, somewhere along the way there may have been an error that could affect your ability to sell, mortgage, or lease your property in the future. These are the types of things that a title insurance policy can protect you against.

What exactly is title insurance?

Title insurance is a unique form of insurance. Unlike home insurance where you are insuring the structure and contents, title insurance protects you, the homeowner, against losses related to the title (ownership) and other defects relating to your property. Plus, it may cover fixing issues or legally defending your ownership, which can be very costly and stressful.

Do you automatically get a title insurance policy when you purchase property?

It’s a common misconception that homeowners automatically get a residential title insurance policy when buying property. While a lender policy is required on every purchase, a homeowner policy is not. It’s up to you to make sure that you have the protection available to you through title insurance.

Does the lender or loan policy cover you?

No, a lender aka loan policy covers lenders only  and protects their interests when it comes to priority and enforceability of your mortgage, title and survey defects, municipal issues and title fraud.

What does a homeowner title insurance policy cover?

A typical title insurance policy covers common issues that may have happened both before and after you’ve purchased your home. This is sometimes referred to as pre- and post-policy because the day you take ownership of your home is generally also the effective date of the policy.

The main areas of coverage in the Homeowner Policy are:

  • Fraud — a person fraudulently transfers your property without your knowledge or consent.
  • Forgery — someone forges your signature on a registered document, which allows them to sell or mortgage your property.
  • Encroachments — if a structure built by a previous owner sits outside the property’s boundaries or if a neighbour builds a structure that is partially on your property after you purchase your policy.
  • Lack of building permits — if a previous owner completed work to your property without the required building permits, you could be forced by your municipality to remove or fix the structure.
  • Duty to defend — if you have to protect and restore your title as a result of a covered title risk, FCT will pay for the legal fees and costs associated with it.

How much does a policy cost?

  • For a low one-time premium, you can ensure that you have the protection you need for as long as you own your home. Your lawyer can provide you with a quote within minutes.

Don’t put yourself at risk. For a free quote, visit fct.ca today!

This is provided as general information only. For further details regarding coverage, please review your policy.

 

May 31 | 2017

Does Your Client Really Need Title Insurance?

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Does your client need title insuranceThe topic of title insurance may come up when clients are purchasing a new property, and a common question is, “do I really need it?”

Well, title insurance in Canada has come a long way from when we first introduced it to the market over 25 years ago. It offers the best defense against title fraud, as well as survey and title issues/defects. It can also protect your clients from unexpected costs that may threaten their financial status.

For instance, Jason and June* finally found their dream home after years of saving and searching for the right property. Once financing was approved, they happily moved into their newly purchased home. Shortly after moving in, they received a notice from the city about outstanding tax and water utility charges amounting to over two thousand dollars. This was a very unwelcome surprise given their tight budget as first-time homebuyers. Luckily their lawyer had recommended they purchase a title insurance policy, which covered outstanding tax and utility bills. Because of their title insurance coverage, they were spared the extra expense when the claim was paid out by FCT.

Commercial property owners also benefit from protecting their multi-million dollar investments with title insurance as it covers issues like encroachments, zoning violations, unpaid taxes and utilities, etc. For example, a developer Jack*, purchased a golf course with plans to develop it into a larger golf course and resort. The municipality provided confirmation that the land could be developed for these purposes. Unfortunately, after closing, he was notified by the municipality that there was an error and the land was zoned as “open space/residential” and applying for re-zoning was not an option. As a result, the land could continue to be used as is but development plans could not proceed. Because FCT had insured the value of the land along with the approximate value with the improvements, Jack received a claim settlement for the loss in property value because of the zoning error. With the claim settled, he had the choice to use the property in keeping with current zoning, or sell the property without incurring a financial loss.

So does your client really need title insurance? You decide.

*Names have been changed to protect the privacy of our clients. This information is provided as general information only. For further details please review the subject policy.

Mar 7 | 2017

What You Need to Know About Real Estate Fraud

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Real estate and legal professionals need to stay vigilant as criminals are getting craftier with real estate fraud today. We take fraud seriously at FCT and strive to combat it at every step in the process. We have a certified fraud examiner on staff specializing in early detection and protection. We also underwrite for it in our policies, and we defend our clients who fall victim to it.

March is fraud prevention month, so we’ve included a round-up of the real-estate scams to look out for:

  • Title fraud and forgery: The ownership or title of a property is fraudulently changed or documents are forged to allow a fraudster to illegally sell or refinance the property.
  • Mortgage fraud: A mortgage is obtained from a lender under false pretenses. This is also known as application fraud.
  • Value fraud: A lender is led to believe a property is worth more than it really is through conceareal estate fraudlment or intentional misrepresentation of the property’s attributes and value.
  • Foreclosure Fraud: A homeowner in default on their mortgage is deceived into transferring their property title either in exchange for a loan or for assistance with their mortgage. The fraudster imposes payments that are not sustainable for the homeowner and they end up losing their property and equity along with it. The homeowner’s payments are not used to pay off the mortgage and the fraudster can resell or remortgage the home.
  • Shadow flipping: A realtor or investor sells the same property multiple times at increasing prices before the initial sale closing date. The initial seller ends up making less while the last buyer pays an inflated value for the property.

While you cannot prevent fraud from occurring, you can protect yourselves and your clients by carefully reviewing the details of all your deals and by following our recommended best practices.

The best way to protect against title fraud is to get both an owner and lender title insurance policy from FCT.

With a title insurance policy, owners can rest easy knowing their title will be defended in the event it is ever challenged* and they will be protected from other issues like survey and title defects. Lenders will be protected against losses associated with the priority and enforceability of the mortgage, title and survey defects, municipal issues as well as title fraud. Lawyers can rest easy knowing that all parties are protected and FCT has their back in the event of fraud.

Have you come across any fraudulent transactions lately? Tell us about it in the comments section below!

* Insurance by FCT Insurance Company Ltd. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request.  Some products/services may vary by province. Prices and products/services offered are subject to change without notice.

Jan 26 | 2017

Fraud is Alive and Well in B.C.

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Fraud in B.C.I am sure by now many of you have read the Fraud alert: Notices to the Profession published by the Law Society of B.C.  And for those of you who have not, click here for the link.

So as a legal professional, what can you do to protect yourself and your clients from the devastating effects of fraud?  In addition to the tips provided in the Law Society’s publication, as an expert in detecting and deterring fraudulent real estate transactions, FCT has compiled a list of best practices to assist in avoiding fraud:

1. Whether you are acting for a vendor or borrower, always insist that the balance of the proceeds are made payable to the registered owners after payment of secured creditors, taxes, legal fees, bank loans, credit cards, etc. and not to third parties. If the borrower or vendor owes money to a third party that does not appear to be related to this transaction, they can deposit the balance of the proceeds into their bank account and cut their own cheques. In most fraudulent transactions, funds are made payable to third parties, which allow the fraudsters to quickly negotiate the funds and disappear.

2. Be wary of very quick closings where you do not know or have never acted for your clients.  Most fraudsters go to solicitors/notaries who do not know them and hope to pull off the fraud quickly.

3. Question transactions being signed under Power of Attorney.  Why is the Power of Attorney being used and can you contact the Donor?  Review the Power of Attorney carefully.

4. Read your lender client’s mortgage instructions carefully and ensure you comply with their fraud requirements.

5. Get title insurance for both your lender and purchaser clients in order to protect them from the devastating effects of title fraud.

If you didn’t have the opportunity to attend one of our fraud seminars, you can still view it online and obtain CPD credits, by clicking here.

Have you come across any fraudulent transactions recently? Please share your stories with us.

Oct 31 | 2016

The FCT 25 Years $2,500 Giveaway Contest

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giveawayThe celebration continues…

Although our year-long 25th anniversary festivities are winding down, the party isn’t quite over yet. And trust me; FCT knows how to throw a party! In fact, we may have saved the best for last with the launch of our exciting new contest open to FCT customers across Canada (excluding Quebec)…

It’s incredible that 25 years have already passed since FCT pioneered the Canadian title insurance industry. So much has happened since — so much to be proud of and so much to commemorate. Because it wouldn’t be a proper celebration without those that have helped us achieve this important milestone, we’re giving you a chance to win one of five cash prizes of $2,500. It’s just another way for us to say “thank you”:  thank you for being there to support us over the last two and half decades with your honest feedback, partnership and support. As I said in an earlier blog Your voice. Our compass, we would not have been able to grow, evolve and succeed without you and we’re very grateful.

We invite you to enter The FCT 25 Years $2,500 Giveaway Contest by visiting FCTcelebrates25.ca. The contest ends November 9th.

I want to wish all those who enter good luck and would like to take this opportunity, once again, to thank you for being part of this amazing year-long event. It’s been so much fun celebrating with you!

We hope you will join us on our journey to our next milestone!

Jun 13 | 2016

Customized protection and complete satisfaction? We endorse that!

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title insuranceWe all know that title insurance helps to minimize the risk associated with commercial real estate and helps the closing process run smoothly— title insurance provides coverage you can’t get anywhere else.

And when it comes to coverage, FCT is committed to ensuring you receive the best and most comprehensive coverage available on the market today: we know that there is no such thing as one-size-fits-all, especially when it comes to complex commercial transactions. Plus, with our vast experience in supporting and protecting diverse commercial properties and transactions, you can trust FCT’s knowledgeable team to provide you with the personalized service you can rely on. We are committed to always finding a way to say “yes” to get you exactly what you need, when you need it.

In fact, we pride ourselves on being as flexible as possible when it comes to supporting your success. One way we do this is through specialized endorsements that allow us to address almost every imaginable situation and specialized need.

But what exactly is an endorsement?

Commercial title insurance is generally issued using a standard policy. However, certain situations and varying levels of complexity often call for additional or customized coverage. An endorsement is an attachment to an insurance policy that amends or adds to it, often adding coverage that was not part of the original contract. With market conditions always evolving, endorsements allow our policies to best reflect changing markets and customer needs without sacrificing trusted, established protection.

For a listing of the current commercial loan endorsements being offered, click here. Or if you’re more interested in owner endorsements, we’ve also got a lot to offer you.

You and your customers deserve the best in the business and that’s exactly what we are ready to offer. Have you got a complex commercial transaction to close? Let us know what kinds of challenges you’re facing by commenting below. Or better yet, call FCT — when we work together you can close with confidence.

May 12 | 2016

25 years and counting . . . Why FCT’s decades of experience matter to you

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16-187_FCT_Blog_Renzo_Exper_SquareAnyone working in this global marketplace knows that business today is characterized by relentless change. For a company to succeed, it needs to constantly adapt to stay relevant and innovative in order to add real value and meet customer needs.  After all, our success rests squarely on the shoulders of our customers’ success; customers we see as long-term, highly respected partners.

After more than two decades and thousands of commercial policies issued by our niche experts across the country, you can be rest assured FCT has your commercial needs covered. We’ve been listening to our customers since day one — listening so that we truly understand what they want in a partner. Our goal has always been to offer trusted solutions and support to help grow businesses and shape the future of the industry. And in this competitive insurance market, I can say without reservation that Experience Excellence® makes all the difference.

But why should our experience matter to you? I think that a quote I came across in an online marketing blog called Why “EXPERIENCE MATTERS” sums it up rather nicely:

“The nature of business is about constantly adapting to change and starting anew, but each time with deeper experience, greater knowledge, stronger relationships and more confidence.”

Although this particular blogger is writing about the benefits of experience in the world of marketing, the same holds true for any business, including the title insurance industry.

Having been a leader in the Canadian real estate industry since 1991, FCT is in a unique position to offer you unparalleled customized underwriting solutions. Plus, with experienced legal professionals on staff who combine in-depth title insurance knowledge together with years of hands-on real estate practice exposure, we can offer you a customer experience like no other in the industry. This experience and acumen equal confidence for you: confidence to move ahead with your commercial deal, regardless of the complexity, knowing you’re backed by a leader.

As we reflect on the last 25 years, can you think of a time when FCT provided you with a solution that closed a difficult deal? Feel free to comment below.

Apr 14 | 2016

FCT is your trusted partner in the fight against real estate fraud

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fraud alertReal estate fraud continues to be on the rise and unfortunately, commercial transactions are no exception. But with FCT in your corner, we can work together to stop fraud before it has a chance to create havoc and claim victims.

The experienced team at FCT employs various due diligence techniques to:

  • Spot suspicious activity (what we like to call “red flags”);
  • Report potential issues to all involved parties; and most importantly
  • Prevent fraudsters from scamming our partners out of their rightful investment.

In fact, it’s something our underwriting team does (and does very well!) on a daily basis, even during the height of the holiday rush . . . .

The naughty list

At the height of the holiday rush, FCT’s commercial division received a request for title insurance for a blanket mortgage in the amount of $2.6 million, spanning five vacant properties, all with titles free and clear (first red flag!). The transaction involved a private lender and a corporate owner.

As part of the request, FCT was provided a copy of the Corporate Profile and the Corporate Document List – everything looked okay.  However, after supporting identification for the borrower was received upon our request, our eagle-eyed underwriting team determined that one of the pieces of identification being used was invalid.

Feeling a bit uneasy about moving ahead with the file, FCT underwriting contacted the lender and the mortgage broker for more information. Years of experience and pure instinct told us that something was off. Our team then called the lawyer involved with a previous purchase of one of the lots — we were right! When compared, the two pieces of ID did not match and showed conflicting information.

For our underwriting team this was more than enough evidence to suspect fraud, especially with such a large deal. We declined to insure the deal and the lender pulled out as well. The real owner was contacted and their lawyer ultimately confirmed that the deal was a fraud.

What did we learn?

  • Bad things can happen to good people – secure your client’s investment with title insurance
  • Put FCT to work for your practice – it is always beneficial to have a second pair of highly skilled eyes on your file
  • Have confidence in our process – we’ve stopped $198 million in possible fraudulent transactions over the past 4 years and we know how to help protect you

Do you have any fraud stories you’d like to tell us about? Until next time, keep your eyes peeled and as Michael LeBlanc told us in his recent blog, trust your instincts.

Mar 4 | 2016

Lin vs. CIBC and the value of title insurance in British Columbia

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Blog_HomeOwner_Thumb_LockThe case of Lin vs. CIBC has been stirring up a fair bit of interest in the B.C. legal community recently, not only because of the precedent it set, but also due to the fact that according to the Lawyer Herald website, it has now grown into an $8 million fraud case.

This case is very important because it helps answer the question which innocent party bears the loss when mortgage funds are stolen.

According to the Herald, the trouble began in 2013 when Agatha Chung was hired by Hsui-Wen Lin and Min Sheng Tang to refinance a mortgage in the amount of $520,000. These funds were to be used to pay off their existing mortgage at a different institution as well as certain small unsecured debts, with the balance going to the borrowers. Lin and Tang applied for a loan from CIBC and the transactions were managed by CIBC’s lawyer along with Chung acting for the borrowers. However, once CIBC paid the funds to Chung, she vanished along with Lin and Tang’s money. What came next was to decide who actually held that loss: Lin and Tang or CIBC?

In the trial decision, Supreme Court Judge John Steeves ruled that CIBC’s mortgage was invalid, despite the fact that it was properly signed and registered.  The trial court decision was upheld by the B.C. Court of Appeal on December 18, 2015.  The Court of Appeal specifically upheld the ruling that CIBC’s mortgage was invalid on the basis that the borrowers received no consideration for the mortgage and that the money still belonged to CIBC at the time it was stolen.  For more on this case, you can read The Vancouver Sun article Notary fraud case causing legal waves in B.C. courts.  

The growing problem of real estate fraud

Through the course of my day as legal counsel at FCT, I see —first-hand — that fraud continues to be a growing problem in Canada. I can tell you that fraudsters come in all shapes and sizes and from all walks of life. And although it is not overly common for legal counsel to be involved in fraudulent transactions, it does happen, as in the case of Lin and Tang. While title insurance can’t protect you against becoming a victim of fraud, it can and does protect you after the fact by minimizing the financial impact and stress associated with this type of crime.  FCT’s lender policy covers, amongst other things, losses arising from “the invalidity or unenforceability of the insured mortgage upon the title” which is exactly what happened to CIBC in this case.

And it appears that the Law Society of British Columbia agrees.

A recent Practice Resource distributed by the Law Society of British Columbia in February of this year supports FCT’s view on the importance of title insurance during real estate transactions in British Columbia. In response to the Lin v. CIBC ruling, the Law Society recommends five points to safeguard lawyers and their lending clients, including point number four (4), which reads:

  1. Consider whether to recommend closing of certain transactions with title insurance or through some other mechanism, such as escrow, that will protect your client.

I can’t tell you how happy it makes me to see this in print! After years of promoting the benefits of title insurance across the country, it’s very rewarding to know that others in the Canadian legal community also see its value and are recommending it as an aid in the fight against fraud.

Speaking of fraud, as we enter Fraud Prevention Month, I invite you to take part in FCT’s fraud chat on Twitter taking place on March 31st, 2016 featuring our very own certified fraud examiner, Marie Taylor. Plus if you have any fraud tips or stories you’d like to share, please do so by commenting below.

Nov 23 | 2015

Understanding your title insurance coverage doesn’t have to be taxing

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Teresa Occhiuto Let me begin this post by introducing myself . . . my name is Teresa Occhiuto and I’ve been with FCT for over 16 years (wow, time flies!). In my current role as Senior Business Development Specialist, I focus on providing support to legal professionals in the Greater Toronto Area. I educate my customers on the value of residential title insurance and its role in building more successful businesses. I also try to ensure that lawyers understand the ways in which title insurance can help safeguard their reputation as well.

Say what you mean and mean what you say

Having spent many years in a law-office environment, I know how complicated the due diligence process can be. In my current role I enjoy taking the time to work one-on-one with lawyers to create efficiencies, specifically for purchase transactions. In doing so, I hope to help build a better, transparent experience for both my customer and their clients. I’ve always felt that it’s the quality and integrity of the service that separates the good from the great. Customers need to know that their business is valued and that you “say what you mean and mean what you say.”

A taxing discovery

Recently I discovered that one of my customers was ordering a tax verification service from a third party. He was doing this to satisfy his own due diligence, mandating that each transaction had the accompanying tax certificate. However, in the particulars of his third-party policy, there were a few red flags that actually jeopardized the exact protection he was trying to secure for his clients. In the fine print, his policy stated that if the deal had time constraints, this service would not be completed on time and would result in an exception being placed on the policy for property taxes.

The supposed “value-added” service he was paying extra for was ultimately putting both his clients and his reputation at risk by undermining coverage!

You can imagine how stressed he was, realizing the potential impact to his reputation had there been a claim. All along he had been paying extra for inferior coverage and support from the third party he thought had his best interest at heart.

In the end FCT’s title insurance provided a solution that saved him money and provided him with coverage he knew that he could rely on — transparent, comprehensive coverage he fully understood.

Because, after all, that’s my job. (A job I love, by the way!)

To learn more about how your FCT dedicated business development manager can help you make the most of your business while protecting your reputation, email us at info@fct.ca or add a comment below.