Ontario homeowners who have purchased title insurance policies are the big winners in a Court of Appeal decision released last week.
When Paul and Stefanie MacDonald bought their Toronto home back in 2006, they arranged a title insurance policy with Chicago Title. Seven years later, they discovered that a load-bearing wall had been removed during renovations by a previous owner. Without the wall, the second floor of the structure was unsafe to use.
The City of Toronto issued an order to remedy an unsafe building under section 15 of the Building Code Act. The MacDonalds made a claim under their title insurance policy for the cost of installing a temporary support for the second floor and then permanent repairs to make the home structurally sound.
The MacDonalds’ title insurance policy provides coverage for a list of itemized risks if they affect title on or after the policy date, including expenses to repair the house because of any outstanding notice of violation. The policy also covers the owners if title is unmarketable, allowing another person to refuse to perform a purchase agreement.
Chicago Title refused to pay the claim on the basis that there was no coverage for the loss under the terms of the policy.