In place of an up-to-date survey, Mr. and Mrs. A obtained TitlePLUS coverage two years ago for their purchase of an isolated rural property measuring 200 by 600 feet, on which was built their dream home. This spring, a neighbour planning to build on an adjacent parcel of land obtained a survey, and then informed Mr. and Mrs. A that part of the As’ driveway was actually located on the neighbour’s property.
As part of its investigation of this claim, TitlePLUS explored the possibility that Mr. and Mrs. A could claim adverse possession of the land underneath their driveway. Subsequent investigation indicated that we would likely not be successful with this approach. Instead, TitlePLUS has paid to build a new driveway to the As’ home, and restore the land on which the driveway had been built. Total cost was just under $10,000.
The increased attention that municipalities (primarily outside Toronto) are paying to outstanding notices of violation such as open permits and lack of building permits has also prompted increased claims activity for TitlePLUS.
“These types of claims are often very time-consuming,” explains DJ Campbell, staff adjuster. “In the case of an open permit, we have to figure out why the permit was not closed – and for that we may have to hire engineers, investigators or other experts to help us determine the nature of the deficiency, and the cost to resolve it. If there has been misrepresentation on the part of the vendor, we have a subrogation interest to pursue, which again takes time and resources.”
Adding to the complexity, says Claims Examiner Rosanne Manson, is the fact that the standards and approaches to these outstand- ing violations by municipalities vary from one city or town to another. “Different municipalities have different requirements. So we first have to determine how that specific municipality handles that specific problem, and what they require to resolve it.”
Typical is a home in northern Ontario where the vendors had obtained a permit to construct a deck, but never had a final inspection completed on the finished deck. The permit remained as an “open” permit with the municipality. After our insureds purchased the property, the municipality issued an Order to Comply. Deficiences such as handrail requirements on the height of the deck, and an engineer’s report for the structure of the deck would have to be completed before the municipality would close the permit. Because the property was a whole of a lot, TitlePLUS did not require a building department search before the deal closed. The problem therefore was covered under our policy, and we paid to have the required work completed so that the permit could be closed.
A helping hand
While on the one hand TitlePLUS will take measures to recover costs via subrogated claims, at other times, it has gone to bat for insureds.
One such example involves the purchaser of a condominium unit who believed her purchase included use of a specific locker and parking space in the condo building. When the purchaser subsequently decided to sublet her parking space, she was informed by the condominium corporation that it was their responsibility to assign spaces, and that she in fact had no right to the specific parking space she believed to be hers.
TitlePLUS worked on behalf of the insured to resolve the dispute with the condominium corporation, pointing out that its Declaration did not reference the corporation’s exclusive right to assign spaces. The condominium corporation acknowledged the discrepancy, and the insured was granted use of both the specific locker and parking space. The corporation subsequently changed the wording of its Declaration to avoid this type of confusion in the future.
Having to decline coverage – because insureds turn to TitlePLUS for issues that clearly fall outside the scope of coverage – goes with the territory, says Manson.
One situation that she and Campbell handled recently involved an insured who asked TitlePLUS to replace the liner on his pool this spring, when it became apparent that the liner had not fared well through the winter. “The fact that they had used the pool all of last summer without any problem did not deter them from try- ing to make a claim,” said Campbell.
In another example a purchaser who complained that she detected a sewer-like smell whenever she did her laundry was advised to contact her public works department and a contractor to discuss her plumbing problems.Yet a third situation involved a couple who bought a home two years ago and, to their chagrin, were told this spring that they could not build the pool they wanted in their back yard because of zoning bylaws. “Absent specific knowledge of the insured’s intentions, title insurance does not provide com- pensation because an insured cannot build what they want on the land,” points out Manson.
“Moreover, situations such as this – where purchasers come to their lawyer with a binding agreement of purchase and sale, and fail to disclosure their plans for the property with the lawyer – fall outside the scope of our policy’s legal services coverage, because there was no error or omission made by the lawyer in question. What insureds typically fail to understand is that even if the lawyer had done a zoning bylaw inquiry, without a warranty in the agreement by the vendor as to the future use of the property, they had bound themselves to complete the transaction.”