Real Estate Law

There are two types of title insurance: lender’s title insurance and owner’s title insurance.

The lender’s title insurance protects the lender when the seller cannot legally transfer the title of ownership rights. Nearly all lenders require borrowers to obtain title insurance for mortgages and loans. If any issues arise related to the title of a property, including unrecorded liens, unrecorded access rights, and other defects, the lender’s title insurance compensates the lender only in the amount covered up the entire mortgage or loan amount.

Owner’s title insurance protects homeowners in case of defective title or fraud. It is not mandatory in BC, but it will cover homeowners if they own their property, and it will endure losses up to the maximum coverage provided in the policy. It may also cover most legal charges involved in restoring the title of your home.

– Ownership by another party.
– Flawed record.
– Forgery and fraud.
– Encroachments onto an adjoining property.
– Zoning and setback non-compliance.
– Property tax arrears.
– Violations of municipal by-laws.
– Unpaid strata assessments.
– Judgments, outstanding lawsuits, and liens against the property.
– Forced removal by a governmental authority of a structure built without a required building
permit.
– Legal status of any septic system.
– Gap coverage.

Title insurance costs vary based on various factors.

It depends on the location of the property, the insurance provider you choose, and the purchase price of your home.

A joint tenancy is a form of joint ownership by two or more parties holding property together simultaneously. There is no undivided share in the property for one of the owners. When one of the owners passes away, the deceased owner’s share will be passed to the surviving owner(s). The survivor(s) will continue to own the entire property, bypassing the probate process.

This form of joint ownership is most common for couples when buying a home. Joint tenancy’s main advantages include avoiding probate courts, sharing responsibility, and maintaining continuity.

Tenancy in common is another form of joint ownership of property where each owner owns a separate share of the property. When one of the tenants passes away, their share passes to their beneficiaries in accordance with their will or intestacy.

The benefit of tenancy in common is that each owner can act independently of the others and sell their ownership to an outside party. However, upon the death of a tenant in common, their share will pass through their estate and will not transfer automatically. When the property must go through probate, there will be tax implications on the transferred share of the deceased.

Alongside the two most common types of joint ownership, there is another option for ownership between three or more people buying a property together. The joint ownership of property can be a combination of joint tenancy and tenancy in common. With real estate prices increasing in recent years, more people are choosing this type of ownership. It is an option for two married couples to buy a house together.

When you acquire a property in Canada, you must pay the Property Transfer Tax (“PTT”) to the provincial government. The PTT is due at the time of property registration under your name. However, there are exemptions to PTT.

You can see a detailed list of the exemptions on the BC Government website here.

Are you unsure if you qualify for an exemption? Contact our office for further information; we will help determine if you qualify for any listed exemptions.

“There are two types of PTT, general PTT and additional PTT. The tax amount is calculated based on the property’s fair market value (FMV).

The general PTT:
– 1% of the FMV up to $200,000
– 2% of the FMV greater than $200,000 up to $2,000,000 – 3% of the FMV greater than $2,000,000
– Further 2% of the FMV greater than $3,000,000

If you are a foreign entity, additional PTT applies within specific areas of BC: – 20% of the FMV on your proportionate shares

For details regarding general and additional property transfer tax, please visit here.”

To qualify for the full or partial exemption First Time Home Buyers’ Exemption:

– The property’s fair market value must be less than $525,000.

– The property must be used as your primary residence.

– You must be a Canadian citizen or permanent resident.

– You must have lived in BC for 12 months immediately before the registration date of transferring
the property under your name.

– You must never have owned any property under your name anywhere else.
– You must never have received the First Time Home Buyer exemption or refund.

Resource: https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/exemptions/first-time-home-buyers

Are you unsure if you qualify? Contact our office, and we will be glad to assist you.