TThe Mortgage Instructions Toolkit provides practical guidance for lawyers responding to lender requests in residential real estate transactions. This page addresses opinions on title or title insurance.

THE SITUATION

Before title insurance, one of the tasks of a real estate lawyer was to provide an opinion to the lender and borrower that the title to the property was good and marketable. This required a complete due diligence review of title and other relevant documents. Now a lawyer’s review of title may be limited by the requirements of the title insurer. In this case, the lawyer is providing a limited title opinion to the title insurer for the purposes of obtaining the title insurance policy.

Lawyers must take care not to provide an opinion to a lender on a matter that is covered by a title insurance policy. They may incur unnecessary liability when title insurance is obtained and they nevertheless give an opinion on a matter that is covered by the applicable title insurance coverage in favour of a lender, and on which a full title review was not completed. 

PRACTICE GUIDANCE        

• When title insurance is in place and you are completing a report to the lender, do not provide an opinion on title. Instead, provide the details of the title insurance policy coverage to the extent necessary.
• When title insurance is being put in place and you are discussing title with your borrower client, provide information without saying or writing that it is your opinion. Use words like, “this is what the land registry records show…” instead of “it is my opinion that…”

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