risks, if they affect your Title," with Title being defined by
the policy as "the ownership of your interest in the
One such covered risk was set forth as clause 11, which
Title is unmarketable, which allows another person to refuse to
perform a contract to purchase, to lease, or to make a mortgage
In 2013, seven years after purchasing their home, the MacDonalds
discovered that their house was literally falling down, or at least
the second floor of their home anyway. At that point, it became
apparent that the previous owner had conducted unapproved
renovations and had (unwisely) removed load bearing walls, without
having made provision to carry the existing load.
Needless to say, the previous owner had likewise neglected to
obtain a building permit. The City of Toronto then got involved and
issued an Order to Remedy an Unsafe Building. The MacDonalds then
looked to Chicago Title for title insurance coverage, but Chicago
Title (wrongly) refused to pay. The MacDonalds then hired an
insurance lawyer and brought suit to enforce their insurance
In a significant decision, the Court of Appeal recently decided
that Chicago Title's interpretation of its title insurance
policy was unreasonable, and that its policy did in fact provide
coverage for the building defects that rendered the MacDonalds'
property unmarketable. As such, the MacDonalds were able to show
their loss was covered by their title insurance policy, and collect
under the insurance policy they had purchased and paid premiums
As the MacDonald case illustrates, if you have purchased a home
with hidden structural defects, you may be entitled to collect
damages from the following parties:
Your title insurance company
Your Lawyer (if they did not
recommend or inform you about title insurance)
Your home inspector
Plus others, depending on your
If you have discovered substantial defects in your home or been
denied coverage by your insurance company for a loss, visit our
Property Insurance Claim Denials page.
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