BC Real Estate Investments
Title Insurance is Not a Replacement for a Certified Land Survey.
Purchasing property requires full knowledge of all relevant facts, potential liabilities and the inherent risks.
What are the risks of relying solely on title insurance rather than obtaining a certified land survey during a real estate transaction in BC?
A current certified survey can identify expensive problems to all interested parties who can then take appropriate action for their resolution.
Purchasers are often advised that the cost of a survey can be avoided by the purchase, at a lower cost, of title insurance. This is a common misunderstanding that fails to convey how a current survey uniquely protects purchasers and lenders, and can benefit sellers:
Disclosure of Encroachments Prior to Transaction
A survey provides a clear depiction of problems related to buildings or improvements extending over property lines or not conforming to municipal zoning setback requirements, which can create significant liabilties for purchasers and lenders if not identified prior to the transaction.
Incomplete Coverage and Hidden Costs
Title insurance requires separate policies to protect the owner and the lender. Often, it only protects the amount of the mortgage, leaving the cost of resolving other problems to the new owner.
Temporary Lender Protection
Where the policy is a lender policy, it is only in effect as long as that lender has an interest in the property.
The Benefits of a Building Location Survey
How does a Building Location Survey offer protection and value to purchasers, sellers and lenders in British Columbia?
Building Location Surveys result in legally recognized certificates, certified by a BCLS, that have been widely and commonly used to support real-estate transactions for over forty years in BC.
Visual Clarity & Accuracy
Building location certificates are based on an actual site inspection and measurements by qualified personnel. It provides a certified drawing of your property including all buildings, constructed improvements, easements, convenants, right of ways and other interest in relation to property boundaries.
Immediate Disclosure
Provides a clear depiction of any problems relating to encroachments or building locations that may need to be resolved before completing a purchase.
Long-term Planning Value
They retain a lasting usefulness to the property owner as both a record of the state of the property and as a planning tool for proposed construction, land use and lot subdivision.
British Columbia's Land Title System
How does British Columbia's Land Title System protect the public against Title and Mortgage fraud?
The Land Title system in BC guarantees title against fraud through a legislated publicly funded insurance program, known as the Assurance Fund.
What should you understand about title insurance before relying on it alone?
- Title fraud is exceedingly rare in British Columbia. In 2009, the BC Court of Appeal held that unless a mortgage is granted by the registered owner of a property, the mortgage is invalid and the owner's title will be returned to its original state.
- In BC, our land title system is based on a Torrens registry system that offers assured ownership through Indefeasible Title.
- Title insurance is a complex and non-standardized legal insurance policy that varies depending on the type and extent of coverage.
- It may not, except at an added cost, protect anything other than the value of the mortgage. The owner may still be responsible for the cost of resolving other problems after the transaction is complete.
A Building Location Certificate provides valuable full-disclosure to all parties involved in a transaction:
What does a Building Location Certificate offer to sellers?
- It provides a certified drawing showing the locations of buildings, improvements, easements, covenants, right of ways and other land interests in relation to property lines.
- It reduces the likelihood of last-minute transaction delays due to boundary disputes.
- It an effective marketing tool for a vendor that demonstrates the absence of unidentified issues such as encroachments.
What does a Building Location Certificate provide to purchasers?
- It provides valuable information including any potential liabilities or encumberances that may diminish the real estate value prior to comitting to the transaction.
- It confirms if buildings and constructed improvements meet local zoning with respect to setbacks and that they don't encroach onto neighbouring lands.
- It provides a planning tool for future land use.
What does a Building Location Certificate offer to lenders?
- It provides valuable information for a mortgagor about any potential liabilities associated with the real estate.
- It offers a certified document that confirms the property's state rather than simply insuring against the financial loss of an unidentified issue.
- It forms an integral part of a real estate transaction when provided to your lawyer or notary.
Invest in Full Disclosure
What is process of Full Disclosure recommended by the Association of British Columbia Land Surveyors?
The Association of British Columbia Land Surveyors encourages thorough due diligence by completing a proper title review and a building location survey prior to a real estate transaction. More information can be found here.