An easement is a property right that grants the possessor an interest in a neighbouring land. Most residences, especially those in metropolitan areas, come with easements. These documents establish the legal right of your neighbour to use your land for a specific purpose.
Easements such as a neighbour’s easement to use your driveway to reach their property may have a more direct influence on your day-to-day use of the property. But the real question is whether your insurance covers your easements – yes, it does!
Easements come in various forms, and the majority of them are recorded in the public documents of the country where the land is (in this case, Canada). Easements that have been recorded will be noted in your title report and covered by the title insurance policy — click here to insurance right away.
If a title firm overlooks a documented easement on property, it must compensate you and take appropriate measures to correct the error.
When an easement is not documented or goes unreported, it might cause complications for a later and potentially significant use of the land. In this article, we’ll spill all you need to know about property easements and how title insurance may protect your land from property easements.
What is a property easement?
An easement grants a person or a group the legal right to utilize another person’s property for a specific purpose. In layman’s terms, it is a legal arrangement in which the landowner retains title to a particular piece of land but grants another person or organization the right to use it for a predefined purpose.
A utility company, for instance, may have an easement on your land that provides them access to an electricity pole. Easements are controlled by property law, and anyone, including neighbours, government entities, and private parties, can be granted easements.
Public utilities, electrical lines, and cable TV are examples of common easements (though these are often underground). Note that the easement payments are given to the property owner. Easements can have a detrimental impact on property values because visible electricity lines, for example, might reduce a piece of land’s visual appeal.
How does an easement work?
A typical easement agreement calls for the payment of a nominal amount by the petitioner to the owner for the right to use the subject of an easement. It expresses an agreement between the owner of a property and another party—either a person or an organization.
An easement is a one-of-a-kind contract between the two parties concerned. Keep in mind that the property owner is granted the option to terminate the easement. Such easement agreements are occasionally transferred as part of a property transaction, so potential purchasers need to know about any easements on the property under consideration.
What is title insurance?
Title insurance is insurance coverage that protects the property from third-party claims that aren’t discovered during the first title search and occur after the sale. Note that a third party is someone who’s not the owner of the property. The title insurance policy will protect you from damages caused by title flaws, even if they existed before you bought your house.
Your mortgage lender will order a title search from a title firm before your home loan closes. A mortgage lender or buyer purchases title insurance to safeguard against financial losses resulting from earlier affairs that cast doubt on the legal ownership of the property. Unpaid property taxes, liens on the property, ownership conflicts, and easements are examples of these concerns.
Typically, the house buyer obtains title insurance from their bank, the buyer, or a home seller to protect themselves. Most purchasers will indeed do a title check before sealing the deal, but title insurance adds an extra layer of protection if any issues occur after the transaction.
What does title insurance cover?
A mortgage lender will have a title firm do a title search and check for any past disputes or claims against a property before closing.
It is also known as a title defect or cloud on the title. If you get title insurance, you become eligible for the following benefits:
Since a foreclosed property might be a riskier investment, some title warranties will not apply to it as they would to a new house. Before you agree to acquire a property, your real estate agent should complete their due diligence and check the property with a title firm, but some occurrences may be missing from the record.
If any difficulties surrounding earlier foreclosures develop after taking ownership of the residence, title insurance can shield you from financial culpability.
They are legal claims on assets used as security until a loan repayment or a dispute is resolved. Creditors or property services, such as banks, plumbers, and construction companies, who haven’t been paid for earlier services, may have title claims on your property that give them access to specific assets.
Title insurance will protect you from any financial obligations arising from liens that existed before you purchased the property.
Encroachments and easements
Title insurance can protect the buyer against difficulties that could reduce the property’s size or usage (and hence value). Repairs connected with removing various utility infrastructure or easements, which are rights allowing non-property owners to use a piece of land for a defined purpose, are covered by title insurance.
Forgeries and fraud
Title insurance can protect a homeowner or a lender from illegal transactions, such as any forgery in the title deed or lawful ownership of the property of an existing heir.
Some title insurers provide extra coverage, such as legal expenses for property disputes, structural damage, construction permit or zoning law violations, or the cost of house modifications.
Property easements are complicated real estate concerns with a long history. Their purpose is to safeguard property rights by ensuring that everyone enjoys their land and may get essential services, even if it affects neighbouring properties.
If you’re the owner of an easement right or a dominating tenement and wish to know your rights, begin with what the registered easement allows for.
However, you may also seek legal guidance or go for title insurance. Here the title insurance provider takes care of future claims like legal defence expenses. In a nutshell, title insurance safeguards your ownership of the property by protecting you from future claims.