Sutton Secur Vs Title Insurance
One of the questions we have often been asked is, “What’s the difference between title insurance and Sutton Secur?” This is an excellent question and warrants explanation because the two are not the same, function differently, and offer coverage for unrelated issues.
What Is Title Insurance?
Title insurance is an insurance policy required by the lender or notary, that protects either the homeowner or the lender (depending on the policy) against challenges to the “title”, or right to ownership of a property. The policy provides coverage against losses due to title defects, even if the defects existed before the home was purchased.
It also provides coverage against losses due to “title defects”, or problems with the title which prevent free and clear ownership, such as rights of way, encroachments (from neighbouring properties), unpaid liens, etc.
Does Sutton Secur Replace Title Insurance?
Sutton Secur does not replace title insurance. While both offer coverage for real estate transactions, they differ in two principal ways:
1. Type of Coverage
Title insurance indemnifies the policy holder with monetary compensation in the case of a title defect. If you hold title insurance and need to make a claim, as long as the claim is approved, your insurance company will probably send you a cheque (or will send a cheque to your lender in the case that they are the policy holder).
In contrast, as a legal protection program, Sutton Secur offers coverage of up to $3,000 in legal fees. In the case of a dispute, a Sutton Secur certificate holder will have immediate access to a real estate attorney who will intervene to help bring the problem to resolution. There is no deductible to pay and no out-of-pocket lawyer fees (up to a maximum of $3,000, though disbursements like court stamps or bailiff fees are not included).
2. Issues Covered
While title insurance offers coverage only for title defects, the Sutton Secur program applies to a long list of potential problems that can arise before, during, or after a real estate transaction.
If I Have Title Insurance, Do I Need Sutton Secur?
The short answer is yes. Sutton Secur offers coverage for a long list of potential issues and problems that go beyond those merely related to the title of your property.
Your Sutton Secur certificate offers up to $3,000 in coverage that can be used to help bring any of the following issues to resolution:
Hidden defects are one of the most common issues that can arise following the purchase or sale of a home. Your Sutton Secur certificate can be used to help you oblige the seller to correct the problem or obtain compensation for the cost of repairs, renovations, or damages.
The most common hidden defects include:
- Cracked foundation
- Plumbing problems
- Heating or cooling problems
- Electrical or wiring problems
- Environmental issues (such as contaminated soil)
The Sutton Secur certificate is also valid to cover legal costs in the case of other issues that, although surprising, are often considered hidden defects under the law. If a violent death or suicide occurred in the home, and this was undisclosed by the seller, or if the home has ties to organized crime or has housed criminal activity, you may have legal recourse against the seller.
Should a dispute or conflict arise, your Sutton Secur coverage can help resolve issues such as the following:
- A conflict with neighbours
- A conflict dispute between landlord and tenant
- Issues relating to access to or limits of your property
- Passation of title
- Non-fulfillment of contractual obligations
- Refusal by contracting party
- Death of contracting party
- Financing for the property
It’s not uncommon to hear people say that in Quebec, we’re over-insured. But in the case of title insurance versus Sutton Secur, the two are mutually exclusive. Each offers a different kind of protection, and although Sutton Secur isn’t required by your lender (since it protects you as the buyer or seller), the coverage it offers can be of inestimable value for any real estate transaction if something goes wrong.