2 January 2012 Volume 8 Issue 1 Classifying mortgages next page [ + ] titleplus.ca Frauds are becoming more and more sophisticated. L AW PRO ’s Fraud Fact Sheet is a great resource that outlines common types of fraud, such as bad cheque fraud, identity theft fraud and value fraud. It includes tips on what to look out for, possible actions you can take if a transaction seems suspi- cious, and a summary of how to protect your clients against real estate fraud. Remember to inform LAWPRO of obvious frauds immediately, so that others can be made aware of them. You can send an e-mail to [email protected]. read the updated Fraud Fact Sheet from LAWPRO ® Fight fraud: 1-800 -410 -1013 2 Property Identification Numbers 3 Residential condominium application 5 Purchaser’s Waiver of Title Insurance 6 Reduced mortgage-only premiums
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2
January 2012Volume 8Issue 1
Classifying mortgages
next page [ + ]titleplus.ca
Frauds are becoming more and moresophisticated. LAWPRO’s Fraud Fact Sheet isa great resource that outlines commontypes of fraud, such as bad cheque fraud,identity theft fraud and value fraud. It includestips on what to look out for, possible actionsyou can take if a transaction seems suspi-cious, and a summary of how to protectyour clients against real estate fraud.
Remember to inform LAWPRO of obviousfrauds immediately, so that others can bemade aware of them. You can send an e-mail to [email protected].
More than ever before, lenders arepresenting a variety of financing optionsto borrowers. With each lender havingnumerous mortgage products available,it can sometimes be difficult to classifythe mortgage for the purposes ofobtaining a TitlePLUS policy.
When completing a TitlePLUS application,
you have the option of indicating whether
the mortgage type is Conventional
(including High Ratio), Collateral/Line
of Credit, or Construction loan.
As a rule, if the mortgage terms provide
for the possibility of more than one
advance under the mortgage, the
mortgage should be classified as a
Collateral/Line of Credit mortgage.
Where all or part of a mortgage
advance will be used for construction,
the mortgage should be entered as a
Construction loan. You will then be asked
to indicate whether you are sub-searching
title prior to any subsequent advances.
It is important that the mortgage be
classified correctly in the TitlePLUS
application to ensure that the appropriate
endorsements (for which the lender is
eligible) attach to the policy.1
If you require assistance in classifying a
mortgage when completing your
TitlePLUS application, please call the
TitlePLUS Customer Service Centre.
1 Where you have selected “Collateral/Line of Credit”or “Construction loan” as the mortgage type and theEndorsement for Collateral/Line of Credit Mortgagesor Construction Loan Endorsement is not attaching tothe draft TitlePLUS policy, please contact the TitlePLUSCustomer Service Centre to discuss options for eligibilityfor the endorsement or any additional lenderacknowledgments that must be obtained.
Classifying mortgages for TitlePLUS® purposes
Province Format
Alberta – LINC 1234 567 891 (numbers only, with spaces)or1234567891 (numbers only, with no spaces)
British Columbia – PID 123-456-789 (hyphens and numbers only, with no spaces)
New Brunswick – PID 00123456 (numbers only, with no spaces)If the PID is less than eight digits, add zeros preceding the PID for a total of eight digits
Nova Scotia – PID 12345678 (numbers only, with no spaces)
Ontario – PIN 12345-6789 (numbers only, with a hyphen)
Prince Edward Island – PID 123456 (numbers only, with no spaces)
Saskatchewan – Surface/Mineral Parcel No. 123456789 (numbers only, with no spaces)
Property Identification Numbers on
titleplus.lawyerdonedeal.comWhen completing a TitlePLUS purchase or mortgage-only application on titleplus.lawyerdonedeal.com, it is important that youenter the property identification number in the “Property No.” field in the following format:
If you do not enter the property number
in this format, you will get an error
message. If the property identification
number is not available, check the
“Property No. not assigned” box beside
the “Property No.” field.
To enter more than one property identi -
fication number, separate them by a
comma and a space.
By Lucy Barber, Underwriting Counsel, TitlePLUS
underwriting
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consultant’s corner
When dealing with TitlePLUS purchaseapplications for condominiums (that arenot part of the TitlePLUS New HomeProgram2), consider the following:
Status/Estoppel/Information Certificate (“Certificate”)Obtain and review a Certificate dated
no earlier than 60 days prior to closing.
If between 60 and 120 days have passed
since the date of the Certificate, you do
not need to order a new one if you can
obtain a verbal update on common
expenses and confirmation that nothing
else in the Certificate has changed.
Remember to make a note in your file
of the date, time, name and position of
the person giving you the update.
Any issues revealed in the Certificate
must be included in the Action/Issues
List. For a detailed list of items, please
see the Action/Issues List Tips.
Reciprocal/Cost Sharing AgreementsEnter any reciprocal or cost sharing agree-
ments in the Action/Issues List. Where the
agreement is between condominiums, an
inquiry as to the status of the agreement
is not required. Inquiry/Status letters are
Need help with your
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only required where one or more parties
are not condominiums.
Other AgreementsAgreements such as Insurance Trust
Agreements and Management Agree -
ments do not need to be included in
the Action/Issues List. However, you
should include Subdivision/Development
Agreements (“SDAs”) that appear on
title in the Action/Issues List. SDAs (or
agreements qualifying as SDAs for
TitlePLUS purposes3) will not appear as
exceptions to coverage in Schedule “A,”
but will appear in the TitlePLUS
Acknowledgment and Direction (which
should be signed by the purchaser).
By Nicky Kokologianakis,Consultant, TitlePLUS
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residentialcondominium application?
consultant’s corner cont’d
Restrictive covenants, by-laws and rulesThese do not need to be entered in the
application unless they are specific to
one or more of the units your client is
buying, or have implications that are
specific to one or more of these units.
EasementsEasements that affect only the common
elements/property do not need to be
included in the Action/Issues List.
However, easements that affect the
units should be included in the
Action/Issues List.
Transactions involving common elements condominiumsWhen your client is buying a Parcel of
Tied Land (“POTL”) with an interest in
a common elements condominium, a
Certificate for the common elements
condominium should be obtained.
When your client is buying a POTL, you
should advise the TitlePLUS Customer
Service Centre so that we can attach
the TitlePLUS Common Elements
Condominium Endorsement to the
policy. You can advise us of this by
requesting an “insure over” in your
application and indicating that the
property is a POTL with an interest
in a common elements condominium.
Other types of condominiumsVacant/bare land condominiums and
leasehold condominiums are also eligible
for TitlePLUS policies.
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Happy 15th Anniversary!The TitlePLUS program will reach anothermilestone in September of this year. Sinceinception in 1997, our mission remainsthe same: To be the recognized andvalued partner of the real estate lawyer,providing opportunities and support forthe business of practising real estate law.
Over the years, we have published
numerous articles and advertisements to
educate the public about home buying
and home ownership, the benefits of
title insurance, the dangers of fraud, and
the importance and value of consulting
you – their most trusted advisor.
We would like to take this opportunity
to thank you for your support, as well
as to congratulate the TitlePLUS staff for
their dedication and hard work, which
adds to the success of the program.
We look ahead with excitement to the
next 15 years of partnership. Watch
for more details related to our 15th
anniversary in the coming months.
If you require assistance with your
application, please call the TitlePLUS
Customer Service Centre or your
TitlePLUS area consultant. We are
always happy to help!
2 For more information, see the TitlePLUS New HomeProgram page on titleplus.ca.
3 For a list of TitlePLUS-qualifying SDAs ontitleplus.lawyerdonedeal.com, go to “Other TitleIssues” in the Action List and select the“Subdivision/Development Agreements” defect. InRealtiWeb®, go to “Other Title Issues” in the MasterIssues List and click on “Agreements” to open the“Subdivision/Development Agreements” subfolder.For TitlePLUS-qualifying SDAs, select the Action of“Acknowledgment and Direction” in theAction/Issues List.
® RealtiWeb is a registered trademark ofLawyerDoneDeal Corp. and is used under licence.
If your purchaser clients choose not to obtain title insurance,do you protect yourself from a potential claim by having yourclients sign a waiver?
The choices are the same across Canada: purchasers can
choose to either purchase a title insurance policy or rely on
the lawyer’s opinion on title. In order for clients to make an
informed decision in this regard, it is crucial that you discuss
title insurance with them. In fact, in Ontario the discussion is
so important that the Law Society of Upper Canada actually
mandates lawyers to have it.4
Unfortunately, when the clients choose to rely on their
lawyer’s opinion (i.e., they do not purchase title insurance),
lawyers do not always obtain the clients’ decision in writing.
Some clients later claim that their lawyer did not inform them
of the post-closing protections provided by a title insurance
policy. After seeing these E&O claims, LAWPRO developed
the Purchaser’s Waiver of Title Insurance, available under theResources tab on titleplus.ca.
If your clients opt out of title insurance, we encourage you
to use this waiver to document the discussion and yourclients’ awareness that they will not be receiving insurance
coverage for issues such as fraud or post-closing encroach-
ments onto the property.
4 Rule 2.02(10) of the Rules of Professional Conduct of the Law Society of UpperCanada requires lawyers to discuss title insurance with their clients and advise theclients that title insurance is not mandatory.
Protect yourself
with a Purchaser’sWaiver of TitleInsurance
Have you visited titleplus.ca recently?
The TitlePLUS website has a whole new look. A Toolspage listing province-specific documents, intuitive drop-downs menus, an Order a Policy button, and aPolicyholder Information tab are just a few of the great new features on the revamped website. Check it out!
AvoidAClaim blog
Visit LAWPRO’s AvoidAClaim blog to get breaking news on the latest frauds. The blog also features a “Confirmedfraud and fraudster names” page, broken down by area ofinterest. This blog is an RSS feed must-have.
Phone: 416-598-5899 or 1-800-410-1013Fax: 416-599-8341 or 1-800-286-7639e-mail: [email protected]
® Registered trademark of Lawyers’ Professional Indemnity Company (LAWPRO).The TitlePLUS policy is underwritten by Lawyers’ Professional Indemnity Company.Please refer to the specific TitlePLUS policy for full details, including actual terms and conditions.
As a reminder, several additionswere recently made to the stan-dard approved exceptions forRoyal Bank of Canada, Royal TrustCorporation of Canada and TheRoyal Trust Company. Read thehotsheet for more details.
2012 Ontario BarAssociation Institute– Real PropertyProgram
Attend the half-day Real PropertyProgram entitled “Condominiums,Clients and Closings: Handling a New Condo Purchase” onFebruary 9, 2012 in Toronto. Toregister online or to print a registration form, click here.
E-mail?
If you did not receive thisnewsletter via e-mail, please send your name and e-mailaddress to [email protected] andwe will send all future issues toyou via e-mail.
Reducedfor properties in Alberta, British Columbia,Manitoba, New Brunswick,Newfoundland &Labrador, Northwest Territories,Nova Scotia, Nunavut, Prince Edward Island, Saskatchewan and Yukon
It was your idea and we thought it was a really good one. We have introduced a newprice category for residential Mortgage-Only policies (with mortgage principal amountsof $100,000 and under) for a low premium of only $85.5 The base amount of ourexisting Mortgage-Only price category has increased from $500,000 to $750,000.This means that mortgage principal amounts between $500,000 and $750,000will also trigger reduced premiums.6
The new pricing applies to Mortgage-Only applications commenced on or after
January 18, 2012, for new or resale houses and condominiums, secondary homes,
cottages and vacant land intended for residential purposes. View the pricing sheetfor your province or territory.
5 Plus processing fee and applicable taxes.6 Mortgages over $750,000, up to a maximum of $2 million, are an additional $1.00 per $1,000 plus applicable taxes.
