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When you’re buying a property, you want to make sure that you’re getting exactly what you’re paying for—and that there are no hidden surprises (like faulty wiring or an illegal second kitchen). To protect yourself, you need to do your due diligence and get either title insurance or a real property report (or both!). But what’s the difference between the two, and which one is right for you? Let’s take a closer look.

Title Insurance

Title insurance is a type of insurance that protects the lender if the title to the property is challenged. It also covers costs if the title needs to be defended in court. If you’re taking out a mortgage to buy the property, your lender will likely require you to get title insurance.

One of the benefits of title insurance is that it can protect you even if there are problems with the title that you were unaware of at the time of purchase. For example, if it turns out that there was already a lien on the property when you bought it, or that someone else has a claim to ownership, title insurance will cover those expenses.

Another benefit is that title insurance is usually cheaper than a real property report—in some cases, as much as 50% cheaper. However, it’s important to keep in mind that title insurance only covers claims against the title; it doesn’t reveal any physical defects with the property itself. So, if there are any problems with the property itself (like mould or structural damage), you’re on your own.

Real Property Report

A real property report (also known as an RPR) is a survey of the property done by a qualified professional. The survey includes things like lot dimensions, information about any structures on the property, and easements or encroachments. It also shows any physical features of the land itself, such as slopes, ravines, or trees.

An RPR is also useful if there are any disputes about boundaries; especially if there’s been any recent work done on adjoining property (like a new fence). By having an RPR, you can be sure that your boundaries are accurate and up to date.

However, one downside of an RPR is that it can be expensive—costing anywhere from $500-$1,500 depending on the size and complexity of the property. It’s also important to keep in mind that an RPR focuses on physical features only; it won’t tell you anything about hidden liens or encumbrances on the property.

So, Which One Should You Get?

Conclusion:

If you’re buying a property with a mortgage, your lender will likely require you to get title insurance. However, depending on your specific needs and circumstances, getting just title insurance may not be enough—you may also need to get an RPR. An RPR can reveal potential physical defects with land or structures on it—issues that could end up costing you money down the road if they’re not discovered ahead of time. However, an RPR does have its drawbacks, namely its high cost and lack of focus on things like liens and encumbrances. Ultimately, whether to get an RPR along with your title insurance policy is a decision that should be made on a case-by-case basis in consultation with your real estate lawyer or another professional advisor.