Guest Author: Nicole McLellan

Alberta’s real estate system is built on a strong foundation supported by the Torrens land titles system and the expertise of legal professionals. Even with this framework in place, RPR matters such as unknown encroachments, off-title risks, title fraud, and other hidden issues can surface after a transaction has closed, leaving buyers, lenders and even lawyers exposed to unexpected losses. This is where title insurance can play an important role.

What is title insurance?

Title insurance protects property owners and lenders against unexpected losses caused by unknown adverse matters that would be revealed by an RPR, including off-title risks such as tax arrears or other covered risks that existed at the time of purchase but were unknown to the insured. Coverage is available for both residential and commercial properties and, for a one-time premium, remains in place for as long as the insured retains an interest in the property.

Residential properties that can be insured include:

• Homes with up to six units
• Condominiums
• Vacation properties or cottages
• Vacant residential land
• Leasehold land, including properties on Indigenous or First Nation land
• Farmland with a residential house, subject to underwriting limits

Many commercial properties can be insured, including industrial land, multi-residential properties with seven or more units, office towers, shopping centres, commercial condominium units, commercial leaseholds, vacant land, energy sites, data centres, retirement homes, student housing, and more.

What does title insurance cover?

Coverage varies between residential and commercial policies, but title insurance protects against a broad range of issues affecting ownership, use, and marketability of title (as defined in the policy).

Common covered risks for residential transactions include:

• Gap coverage for title registrations made without the insured’s knowledge between closing and registration
• Another party claiming an interest in title
• Real property tax arrears from a prior owner
• Existing liens or other adverse interests on title
• Violations of municipal zoning by-laws
• Outstanding municipal work orders
• Encroachments onto neighbouring lands
• Unmarketability of the land which would allow a future purchaser to refuse to close a purchase transaction arising from matters that would have been disclosed by an up-to-date Real Property Report (RPR)
• Lack of legal access to the property
• Forgery or impersonation affecting title or mortgage documents
• Certain other title-related or off-title matters, subject to policy terms and exceptions

For Alberta practitioners, this can be particularly useful where an RPR is unavailable, outdated or where an RPR with evidence of municipal compliance cannot be obtained before closing.

Commercial transactions: From standard to complex

For smaller, standard commercial transactions (generally under $10 million), order requirements and coverage are typically straightforward, supporting an efficient and standardized approach for lawyers.

For larger and complex commercial transactions, coverage is typically tailored to reflect the specific nature, use and risks associated with the property. The policy coverage is supplemented through endorsements or customized underwriting to address transaction-specific concerns.

Additional benefits

In addition to the covered risks, title insurance also offers several practical advantages that can support lawyers and clients:

• Duty to defend — policies include a duty to defend the insured’s title in court proceedings arising from a covered claim, helping reduce stress and unexpected legal costs
• No-fault coverage — coverage applies to covered risks without the need to establish negligence, supporting a more efficient and straightforward claims process
• Reduced search requirements — in appropriate transactions, title insurance can streamline or replace certain off-title searches, simplifying workflow and saving time
• Inflation protection — residential owner policies include inflation protection up to 400% of the policy’s original coverage amount
• Peace of mind — provides an added layer of security for clients by protecting against unknown or undiscoverable covered risks

How does title insurance support the transaction in Alberta?

Title insurance has particular relevance in Alberta due to the way transactions are commonly handled. Lawyers often work within tight closing timelines, and RPR-related requirements can influence whether a deal is ready to close.

With title insurance, lawyers can better manage risk by addressing known defects or outstanding issues while also gaining protection against matters that may not be discovered through searches or other due diligence before closing.

A complement to Western Protocol

Western Protocol continues to play an important role in Alberta residential conveyancing. However, in many transactions, purchase and sale agreements limit flexibility on closing timelines and lawyers may not be able to satisfy all protocol requirements in advance, particularly where search results are delayed or no RPR is available. While protocol provides a structured approach to completing a transaction, it is inherently limited to matters that can be identified and addressed through available information.

This is why lawyers working within protocol may choose to incorporate title insurance as part of their overall file strategy. Used together, they support timely closings while addressing residual risks and providing added flexibility.

Title insurance does not replace the lawyer’s role, the land titles system or protocol. Rather, it provides an additional layer of protection for clients while supporting lawyers in managing timing constraints and bridging gaps where full compliance cannot be achieved before closing.

Title insurance coverage in action

These real-life claims recently covered in Alberta highlight an important point: many title-related problems are not caused by errors in the transaction itself. Some defects are hidden, some issues only become known later and some arise despite a carefully managed closing.

Non-Conforming Septic System | Grande Prairie

Upon receiving a governmental violation notice, our insureds discovered their septic system did not comply with the permit issued to the prior owners because the as-built nature of the home did not align with the approved permit. We arranged for the septic system to be brought into compliance.

Total Paid: $27,000

Notice of Security Interest | Calgary

After purchasing, our insured discovered a Notice of Security Interest registered against their property that had been missed in the title search at the time of closing. Stewart Title facilitated the discharge of the Notice to clear our insured’s title.

Total Paid: $5,000

Forced Removal of Encroachments | Wembley

Years after buying their home, our insureds were notified by the Municipality that their fence*, shed and wooden steps encroached on municipal land and had to be removed. We paid to relocate the structures within the property boundaries.

Total Paid: $6,000

Structure Built Without a Permit | Edmonton

While applying for renovation permits, our insureds learned that the prior owners had built a second‑level porch, retaining wall*, and basement walk‑out without permits. After the City confirmed these structures could not be permitted and were forcing their removal, Stewart Title compensated our insureds for the cost of removal and their related actual loss, calculated as the difference in land value with and without the structures.

Total Paid: $500,000

More claim stories available at stewart.ca/claims

A practical tool in Alberta conveyancing

For Alberta legal professionals, title insurance is best understood as part of a broader risk-management approach. It can help address certain hidden risks, support smoother closings, and provide protection for buyers and lenders when issues arise after the transaction is complete. In a province where conveyancing depends on strong legal processes and efficient closing practices, title insurance remains a practical complement to the existing framework.

Stewart Title is proud to support organizations such as LESA and the continuing education opportunities they provide to Alberta’s legal community. A strong focus on professional development helps strengthen the profession as a whole and contributes to informed, effective real estate practice across the province.

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Nicole McLellan is Senior Director of Residential Business Development & Lender Relations for Stewart Title’s Western Canada Operations.

[email protected]  |  stewart.ca

 

*Coverage for loss due to the forced removal of boundary walls or fences is limited to properties one acre or less, and to the actual loss in excess of the deductible amount equal to $450 and the maximum liability of $5,000.

 This article is intended to provide information that is of a general nature. For specific coverage details, view the actual policy issued. Each claim is reviewed on its own merits and based on the facts presented, and the terms of the issued policy. 07-2026/AB

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Thank you to Stewart Title for their sponsorship of our upcoming summer webinar, “Running Your First Real Estate File: Purchases” on August 26.