Real Estate Claims, Title insurance & surveys...•GREAT COST SAVING (AT LEAST SHORT TERM!) •LACK...
Transcript of Real Estate Claims, Title insurance & surveys...•GREAT COST SAVING (AT LEAST SHORT TERM!) •LACK...
![Page 1: Real Estate Claims, Title insurance & surveys...•GREAT COST SAVING (AT LEAST SHORT TERM!) •LACK OF TIME BETWEEN OFFER AND CLOSING –REAL ESTATE AGENT EDUCATION REQUIRED •LACK](https://reader035.fdocuments.us/reader035/viewer/2022071217/604d20a3dbd99e320d1d29d2/html5/thumbnails/1.jpg)
Real Estate Claims, Title Insurance & SurveysAOLS
May 31, 2017
© 2017 Lawyers’ Professional Indemnity Company 1
REAL ESTATE CLAIMS,TITLE INSURANCE
& SURVEYSRAYMOND G LECLAIR
VICE PRESIDENT, PUBLIC AFFAIRS @ LAWPRO
MAY 31, 2017
AGENDA
• LAWYERS’ MALPRACTICE REAL ESTATE CLAIMS
• STATISTICS
• REASON FOR CLAIMS
• EVOLUTION & IMPACT OF TITLE INSURANCE
• ROLE OF SURVEYS/SURVEYORS
WHAT IS LAWPRO?
• FULL-FLEDGED LICENSED INSURANCE COMPANY
• INDEPENDENT AND DISTINCT FROM LAW SOCIETY OF UPPER
CANADA
• GOVERNED BY ONTARIO INSURANCE ACT, ONTARIO
CORPORATIONS ACT, AND OTHER APPLICABLE LEGISLATION
• INSURE OVER 26,000 ONTARIO PRACTITIONERS
• MANDATORY, EXCESS AND TITLE INSURANCE
• RISK MANAGEMENT & PRACTICE AIDS - PRACTICEPRO
LAWPRO CLAIMS BY AREA OF LAW (COUNT 2006-2016)
Litigation35%
Real Estate27%
Corporate8%
Wills/Estates8%
Family8%
Employment2%
IP2%
Construction Liens2%
Criminal2% Tax
2%
Other4%
LAWPRO CLAIMS BY AREA OF LAW (COST 2006-2016)
Litigation30%
Real Estate29%
Corporate15%
Wills/Estates8%
Family5%
Employment1%
IP1%
Construction Liens1%
Criminal1%
Tax4%
Other5%
‘GLOBAL’ DESCRIPTIONS OF LOSS(2006-16 BY COUNT)
Communication31%
Time Management19%
Inadequate Investigation
18%
Error of Law13%
Clerical7%
Conflict of Interest4%
Fraud2%
Other6%
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Real Estate Claims, Title Insurance & SurveysAOLS
May 31, 2017
© 2017 Lawyers’ Professional Indemnity Company 2
‘GLOBAL’ DESCRIPTIONS OF LOSS(2006-16 BY COST)
Communication33%
Time Management14%
Inadequate Investigation
17%
Error of Law17%
Clerical3%
Conflict of Interest8%
Fraud5%
Other3%
REPORTED CLAIM COUNT BY CAUSE OF LOSS BY FUND YEAR
REAL ESTATE CLAIMS (2006 TO 2016)
Communications41%
Time Management2%Inadequate Investigation
28%
Law6%
Clerical8%
Conflict of Interest5%
Fraud6%
Other4%
MALPRACTICE CLAIMS FACT SHEETS
HISTORY
• AVAILABLE IN THE UNITED STATES 100+ YEARS
DRIVEN BY:
• STATE OF TITLE INFORMATION AND DOCUMENTATION
• FIRE AND OTHER DESTRUCTIVE EVENTS
• LACK OF CENTRALIZATION OR ORGANISATION
• LENDER’S PREFERENCE FOR STANDARD TITLE GUARANTY FOR
SYNDICATION
HISTORY IN CANADA
• FIRST INSURER LICENSED ACROSS CANADA IN 1991
• TITLEPLUS COMMENCED OPERATIONS IN 1997
• GROWTH DRIVEN BY:
• ALTERNATIVE FOR SURVEY
• LESSER SEARCH REQUIREMENTS REDUCED OUT-OF-POCKET COSTS
FOR OFF-TITLE SEARCHES
• COMFORT WHEN SHORT TIMELINES PREVENT OBTAINING SEARCH
RESULTS
![Page 3: Real Estate Claims, Title insurance & surveys...•GREAT COST SAVING (AT LEAST SHORT TERM!) •LACK OF TIME BETWEEN OFFER AND CLOSING –REAL ESTATE AGENT EDUCATION REQUIRED •LACK](https://reader035.fdocuments.us/reader035/viewer/2022071217/604d20a3dbd99e320d1d29d2/html5/thumbnails/3.jpg)
Real Estate Claims, Title Insurance & SurveysAOLS
May 31, 2017
© 2017 Lawyers’ Professional Indemnity Company 3
• AN ALTERNATIVE METHOD OF ASSURING GOOD TITLE
• AN INSURANCE POLICY THAT PROVIDES PURCHASERS AND
MORTGAGE LENDERS WITH PROTECTION AGAINST
SPECIFIC TITLE RISKS
• RESIDENTIAL AND COMMERCIAL – ALSO EXISTING OWNER
WHAT IS TITLE INSURANCE?
(RESIDENTIAL / COMMERCIAL)
• DEFECTS IN TITLE ENUMERATED RISKS
• COMPLIANCE RISKS EXCLUSIONS
• ACCESS, OTHER RIGHTS & DEFECTS GENERAL TERMS AND
CONDITIONS
SCOPE OF COVERAGE
• RATIONALE FOR PURCHASE OF MANY TITLE INSURANCE POLICIES
• PURCHASER V. LENDER COVERAGE - WHY IS THERE A VARIANCE?
• NOW FRAUD IS AN IMPORTANT MOTIVATOR FOR GETTING TITLE
INSURANCE
SURVEY COVERAGE
• CLIENT’S POLICY AND NOT LAWYER’S POLICY
• EXPANDED COVERAGE (BEYOND LAWYER’S NEGLIGENCE)
FRAUD
THIRD PARTY ERRORS
SURVEY ISSUES
SPOUSES AND HEIRS
• FACILITATES CLOSINGS
HOW TITLE INSURANCE BENEFITS CLIENTS
• DIRECT CLAIMS AGAINST INSURER
NO NEED TO LOCATE AND SUE A LAWYER
NO CONCERNS ABOUT LAWYER’S E & O COVERAGE
• DUTY TO DEFEND
• COST SAVINGS
• ALTERNATIVE ACCOMMODATION COVERAGE
BENEFITS (CONT’D.)
WHY IS TITLEPLUS DIFFERENT?
• TWO INTEGRATED COMPONENTS
TITLE INSURANCE
LEGAL SERVICE COVERAGE: ERROR OR OMISSION BY LAWYER FOR
WHICH LIABILITY IS IMPOSED BY LAW
• SINGLE POLICY FOR BOTH PURCHASER AND LENDER
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Real Estate Claims, Title Insurance & SurveysAOLS
May 31, 2017
© 2017 Lawyers’ Professional Indemnity Company 4
SURVEY COVERAGE IN TITLEPLUS POLICY
• ONLY INSURES IF SUFFER ACTUAL LOSS
• DEFECTS IN TITLE
• ANYONE ELSE HAVING AN INTEREST IN YOUR LAND NOT DISCLOSED BY REGISTERED TITLE;
• ANY VIOLATION, VARIANCE OR ADVERSE CIRCUMSTANCE THAT WOULD HAVE BEEN
DISCLOSED BY AN UP-TO-DATE SURVEY;
• COMPLIANCE RISKS
• AN ORDER BY A COURT … AFTER POLICY DATE FORCING YOU TO REMEDY … BREACH OF
ZONING BY-LAW;
• ANY ENCROACHMENT OR SETBACK DEFICIENCY WHICH YOU ARE BEING FORCED TO
REMEDY BY A COURT …, EXCEPT FOR THOSE RELATING TO A FENCE OR BOUNDARY WALL;
TRENDS
• ORIGINAL AND CONTINUING ATTRACTION OF TITLE INSURANCE AS
“SUBSTITUTE” FOR SURVEY
• GREAT COST SAVING (AT LEAST SHORT TERM!)
• LACK OF TIME BETWEEN OFFER AND CLOSING – REAL ESTATE AGENT
EDUCATION REQUIRED
• LACK OF EDUCATION OR CONCERN BY PURCHASERS AS TO THE DIFFERENCE
• NOW SEEING CLAIMS BASED ON “NOT ADVISING” THE PURCHASER
TO GET A SURVEY
• TWO REALITIES:
• LAWYER DID NOT ADVISE
• LAWYER DID ADVISE BUT HAS NOTHING TO BACK UP THE ADVICE
TRENDS
• PUBLIC IS STARTING TO UNDERSTAND VALUE OF A SURVEY
• SMALL COST FOR INFORMATION TO AVOID POTENTIAL PROBLEM (MORE
EDUCATION NEEDED)
• PERCEPTION - MOST PURCHASE AND SALE CLOSE WITHOUT ANY PROBLEM
• DILEMMA - IF I KNOW ABOUT THE PROBLEM:
• WHAT CAN BE DONE ABOUT IT, TIME TO DO IT, WHO PAYS?
• HAVE NO TITLE INSURANCE COVERAGE!
• REPUTATIONAL RISK FOR LAWYERS
• ALLEGATION LAWYER DID NOT DO THEIR WORK!
YOUR MISSION (SHOULD YOU CHOOSE TO ACCEPT IT)
• NEED TO OVERCOME THE “UBER” ATTITUDE OF THE PUBLIC
• EDUCATION OF THE BENEFITS OF A SURVEY
• EDUCATION OF THE VALUE OF A SURVEY
• BETTER EQUIP LAWYERS & REAL ESTATE AGENTS TO SELL CLIENTS
ON BENEFITS OF SURVEY
• MAKE YOUR OLD SURVEYS AVAILABLE
• CONGRATULATIONS ON YOUR DIRECTORY – BUT NEED ALL OLD SURVEYS!
• IF SEE OLD SURVEY, MAY SEE NEED FOR A NEW SURVEY!
• NEED TO RECREATE THE NEED FOR A SURVEY
RESOURCES
• IS A REAL PROPERTY SURVEY STILL REQUIRED?
• HTTP://AVOIDACLAIM.COM/2017/IS-A-REAL-PROPERTY-SURVEY-STILL-REQUIRED/
• TITLE INSURANCE COVERAGE IS LIKE A BOX OF CHOCOLATES – NO TWO POLICIES
ARE THE SAME
• HTTP://WWW.PRACTICEPRO.CA/LAWPROMAG/TITLE_INSURANCE_DIFFERENT_POLICIES.PDF
• A FOOT IN THE DOOR: A CLASSROOM RESOURCE ON REAL ESTATE AND HOUSING
LAW IN ONTARIO
• HTTP://AVOIDACLAIM.COM/2015/A-FOOT-IN-THE-DOOR-A-CLASSROOM-RESOURCE-ON-
REAL-ESTATE-AND-HOUSING-LAW-IN-ONTARIO/
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Real Estate Claims, Title Insurance & SurveysAOLS
May 31, 2017
© 2017 Lawyers’ Professional Indemnity Company 5
Public Awareness Campaign
3 Videos
18 Matte Stories
2 Audio files
For information on how to add these to your website, contact [email protected]
http://www.titleplus.ca/real_simple_real_estate_guide/helpful_resources.html
QUESTIONS?
RAYMOND G LECLAIR, LL.B.
VICE PRESIDENT, PUBLIC AFFAIRS, LAWPRO
(416) 598-5890 OR 1-800-410-1013
WWW.PRACTICEPRO.CA AND WWW.LAWPRO.CA
BLOG: AVOIDACLAIM.COM;
LAWPRO IS ON LINKEDIN & FACEBOOK
TWITTER: @LAWPRO AND @PRACTICEPRO
CONNECT WITH ME:
• LINKEDIN: RAYMOND G LECLAIR
• TWITTER: RAYLECLAIR