Why get a survey if title insurance protects you
- the state of the property on the closing date
- that the purchaser legally obtains what they see on the land at the time of purchase, or will be compensated for its loss
Title insurance doesn’t tell you how far the house, pool, decks, garage and shed are from the lot lines – or if they are encroaching on the neighbour’s property.
Nor does title insurance protect the owner from damages resulting from boundary issues.
Nothing can replace a survey or provide as much information to the property owner about the extent of the title and it could save thousands of dollars of trouble down the road – title insurance or not.
“Using title insurance as a replacement for a survey would be like purchasing theft insurance and then leaving the car door unlocked with the keys under the floor mat – your car may not get stolen, but you increase the likelihood by acting in a careless manner. It does not seem to make sense for a purchaser of a property to willingly not investigate the risks inherent to the property simply because there is title insurance. Having title insurance replace, as oppose to augment, existing safeguards already in place in land conveyancing practice, seem likely to create further problems in the future.”
While title insurance may indemnify a party from defects in title, it does nothing to guarantee title or cure defects that could have been revealed by the work of a qualified land surveyor. Title insurance is not a substitute for due diligence – the kind of diligence reflected in a proper land survey.
Example: Building on the neighbour’s lot.
From Are Surveys Obsolete or the Most Important Document in the Transaction?, by Bob Aaron of Aaron and Aaron, Toronto.