Leasehold Title Insurance: Eviction - Sometimes it can be good for you!

Since the introduction of residential title insurance in Ontario, the market has grown to encompass commercial properties as well. Typically used to insure the fee simple interest of the property owner and its lender(s), one overlooked area continues to be that of tenants—especially in regards to ground leases where significant monies are at risk should the fee owner’s title be put into question or the permitted use under the lease be prevented. This Newsletter will explain what the Leasehold Title Insurance endorsement (“LTI”) is, when it should be considered and what it covers and does not cover.

LTI Historically

The LTI Endorsement has been around in the United States for close to 30 years but is relatively new to Canada. In Canada, the LTI Endorsement is based on the endorsement used by U.S. insurers, known as the Form 13 Leasehold Endorsement (for tenants) and the corresponding Form 13.1 one (for leasehold mortgagees). The LTI Endorsement merely modifi es/supplements the conditions and stipulations of the insurer’s fee simple Owner’s Policy such that title defects, encumbrances, liens, adverse claims, un-marketability and lack of access are typically still covered.

For the complete article view the document below.