Humber/Ontario Real Estate Course 3 Exam Practice

What could be covered under a new buyer's title insurance for a resale property?

1. Seller's unauthorized home extension

2. Buyer's failure to pay the insurance premium

3. Buyer's illness affecting mortgage payments

4. Failure to get right-of-way access over adjoining property

5. Problems with home zoning laws

6. Issues arising from previous property tax defaults

The correct answer is: Seller's unauthorized home extension

Title insurance is designed to protect buyers from various risks and issues that can arise related to the ownership of a property, particularly those that may not be discovered during a standard title search. One of the key protections offered by title insurance is against claims linked to the property's physical condition and any unauthorized changes made to it. When considering the possible coverages under a new buyer's title insurance for a resale property, the correct response involves issues like unauthorized home extensions. If a seller made alterations to the property—such as adding an extension without proper permission or permits—this can lead to disputes, legal problems, or even the requirement to remove the unauthorized structure. Title insurance helps protect the buyer from any liability or claims related to such issues that may arise after the purchase. Title insurance does not cover personal issues of the buyer, such as their failure to pay the insurance premium, health problems affecting mortgage payments, or complications arising from zoning laws or property tax defaults, as these are outside the scope of what title insurance protects against. Instead, title insurance focuses on risks associated with the title itself and the ownership of the property.