Purchasing residential property in Nova Scotia often involves new terms and concepts. One of the most important is "title." Understanding title is key to understanding title insurance, which is a common part of real estate transactions in this province.
Many first-time homebuyers hear about title insurance from their real estate lawyer, lender, or real estate agent. Title insurance relates directly to the legal ownership of the property you are purchasing.
Before learning about title insurance, it is helpful to know what "title" actually means in the context of real estate, which we describe in greater detail below.
- What Is Title?
- What Is Title Insurance?
- Is Title Insurance Mandatory in Nova Scotia?
- What Title Insurance Covers for Nova Scotia Buyers
- Common Exclusions to Know Before You Buy
- Title Insurance Cost in Nova Scotia
- Lender Policy vs. Owner Policy
- How Title Fraud Happens and How Insurance Helps
- Risks in Nova Scotia That Make Coverage Valuable
- Why a Lawyer's Opinion on Title Still Matters
- Next Steps for Peace of Mind on Your Closing Day
- FAQs About Title Insurance Nova Scotia
What Is Title?
Title is the legal term for the right to own and control a property. Having title to a property means having the full legal right to use, sell, mortgage, or transfer that property.
A deed is the document that transfers title from one property owner to another. Title, however, is broader than just the deed—it includes all legal rights and interests attached to the property, such as the right to occupy, lease, or make changes to the land or buildings.
In Nova Scotia, a clear title confirms that there are no claims, liens, or disputes affecting the owner's rights to the property.
What Is Title Insurance?
Title insurance is a type of insurance policy that protects property owners and lenders against hidden problems with the ownership, or "title," of a property that existed before the date the insurance was purchased.
This insurance covers issues from the past, such as mistakes in public records, old unpaid debts attached to the property, or claims that someone else owns part of the property. It does not cover events or problems that happen after the policy is in place.
Key difference from other insurance: Title insurance provides backward-looking coverage for problems that already exist but haven't been discovered yet. Regular home insurance covers future events that might happen.
Is Title Insurance Mandatory in Nova Scotia?
Title insurance is not legally required when buying property in Nova Scotia. However, most mortgage lenders require buyers to have title insurance before they will provide financing.
It has become standard practice in most real estate transactions for title insurance to be included. Even when a buyer is not borrowing from a lender, many lawyers recommend title insurance as part of the closing process.
What Title Insurance Covers for Nova Scotia Buyers
Title insurance in Nova Scotia covers specific risks that relate to the ownership and legal status of a property. The policy addresses issues that existed before the purchase but were not discovered during the buying process.
Common coverage areas include:
- Unknown liens: If the previous owners have unpaid debts (such as property taxes, contractor bills, or utility charges), these outstanding items could become the new owner's responsibility
- Boundary or survey errors: Pre-existing mistakes in property lines, measurements, or legal descriptions can lead to title disputes with neighbours
- Unregistered easements or encroachments: Situations where a neighbour's structure crosses onto the property or where utility access rights aren't shown in public records
- Title fraud and forgery: Protection if someone falsely claims ownership of the property or if documents affecting the property's title have been forged
- Zoning or permit violations: Coverage when previous owners made changes to the property without the required permits or if the property doesn't meet zoning rules
Common Exclusions to Know Before You Buy
Title insurance policies in Nova Scotia have exclusions—specific situations or problems that the policy does not cover.
Standard exclusions to title insurance include:
- Known title defects: If a problem with the property's title is found and disclosed before the purchase, title insurance will not cover that issue
- Environmental issues: Problems such as soil contamination, hazardous materials, or environmental cleanup costs
- Indigenous land claims: Claims by Indigenous groups regarding land rights
- Matters not in public records: Issues that aren't discoverable through a standard title search, such as unrecorded liens or private agreements
Title Insurance Cost in Nova Scotia
Title insurance in Nova Scotia is paid for with a single payment at the time of purchase or refinancing. The cost typically ranges from $250 to $500, depending on the property value and type of policy.
Once paid, the policy remains in effect for as long as the owner has an interest in the property. There are no annual fees or renewal charges for this coverage.
Lender Policy vs. Owner Policy
Title insurance policies in Nova Scotia come in two types, each serving a different purpose:
A lender policy protects the financial institution that provides the mortgage, and its coverage ends when the mortgage is paid off. An owner policy protects the homebuyer for as long as they own the property.
How Title Fraud Happens and How Insurance Helps
Title fraud is a risk in Nova Scotia real estate. It involves someone using deception or forged documents to interfere with the legal ownership of a property.
Common fraud schemes include:
- Identity theft scams: Criminals use stolen personal information to pose as the property owner and sell or mortgage the property without the real owner's knowledge
- Fake discharges or mortgages: Forged documents claiming a mortgage has been paid off when it hasn't, or registering fraudulent new mortgages
- House-stealing schemes: Complete property transfer through identity theft and forged documents
Title insurance covers financial losses and legal costs if fraud results in problems with property ownership. The title insurance company works to defend the interests of the true owner and to restore their legal title.
Risks in Nova Scotia That Make Coverage Valuable
There are several risks specific to Nova Scotia that make title insurance particularly valuable to property owners:
Proximity to coastline: The proximity of your property to Nova Scotia's coastline can pose unique challenges. For instance, coastal erosion and storm damage can change property boundaries over time. Disputes sometimes occur regarding ownership of wharves, docks, or other waterfront structures.
Private road access rights: Rural parts of Nova Scotia often include properties accessed by private or shared roads. The legal right to use these roads may not be clearly recorded, which creates uncertainty about property access.
Historic deed gaps: Some properties have ownership records going back many years. Older properties may have missing, incomplete, or unclear documentation that can result in questions about legal ownership or boundaries.
Why a Lawyer's Opinion on Title Still Matters
Title insurance protects against certain risks that existed before the property was bought. However, it does not replace a lawyer's review of the title.
Namely, a lawyer conducts a detailed review of the property's title—first by searching public records and checking for anything that could affect ownership or use of the property. This review can identify problems such as liens, easements, or restrictive covenants that may not be covered by insurance.
LM Legal Solutions handles real estate transactions by reviewing title documents, explaining findings to buyers, and addressing any defects or issues that appear in the title search. This process helps clarify what title insurance covers and what it does not.
Next Steps for Peace of Mind on Your Closing Day
Title insurance in Nova Scotia addresses ownership risks that may not be obvious when buying a property. It protects against issues like unknown liens, boundary mistakes, and title fraud, but it does not cover every possible problem.
In Nova Scotia, title insurance is not a legal requirement, but lenders often require it for mortgage approval. Homebuyers can choose between a lender policy and an owner policy, or choose to purchase both.
A real estate lawyer reviews the title, explains what is covered by insurance, and addresses all issues before closing. To discuss the specifics of title insurance for your situation, contact LM Legal Solutions.
FAQs About Title Insurance Nova Scotia
Can I cancel my title insurance policy and get a refund?
Title insurance cannot be cancelled after it is issued because the policy covers events that happened before the date it was purchased.
Does title insurance cover condominiums differently than houses?
Title insurance for condominiums provides protection for the individual unit, such as issues with the unit's title or boundaries. Problems involving shared areas managed by the condominium corporation are not covered.
What happens if I discover a title problem after buying my home?
If you have title insurance and discover a covered problem, the first step is to contact the insurance company's claims department. They will investigate the issue and may cover legal costs or financial losses according to your policy terms.
Do I need both a survey and title insurance when buying property?
A survey shows exact property boundaries at a specific point in time, while title insurance provides ongoing protection against various title-related risks. Many buyers choose to obtain title insurance instead of ordering a new survey, as most lenders accept title insurance as an alternative.
