Title Fees and Title Insurance When Refinancing

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Title Fees When Refinancing a Mortgage in Quebec

Title fees are among the unavoidable costs of mortgage refinancing in Quebec. They ensure that the property offered as security to the new lender is free of any title defects and that the lender will obtain a valid first-rank position at the land registry. Although these fees are sometimes confused with general notary fees, they constitute a distinct category that deserves particular attention when calculating the total cost of a refinancing.

The Title Search in Quebec

In Quebec, the system of publication of real property rights relies on the land registry, maintained by the Bureau de la publicite des droits in accordance with the Civil Code of Quebec (articles 2969 to 2980 and following). The title search involves examining the complete property history to verify that the chain of title is uninterrupted and valid. The notary consults the immovable index, which contains all registrations affecting a given lot: mortgages, servitudes, rights of way, notices of exercise of hypothecary rights, seizures, and other charges.

Chain of Title: An uninterrupted succession of property transfers from the initial registration to the current owner. Each link in the chain must be legally valid for the title to be considered good. A break in the chain can create a title defect.

Title Insurance: Protection Against the Unexpected

Title insurance is a single-premium insurance policy that protects against risks related to title defects not detected during the search. In Quebec, the main providers are FCT (First Canadian Title), Stewart Title, and Chicago Title. Unlike CMHC mortgage insurance that protects the lender against borrower default, title insurance protects against defects in the property title itself.

Errors in the legal description of the property registered at the land registry.
Fraud or document forgery in prior transactions.
Mortgages, liens, or charges not cancelled and not detected during the search.
Undisclosed encroachments on the neighboring property or vice versa.
Procedural defects during a prior sale (e.g., sale without spousal consent when required under the CCQ's family patrimony rules).
Non-compliance with municipal zoning bylaws discovered after the refinancing.

When Does the Lender Require Title Insurance?

An increasing number of Canadian lenders require title insurance as a refinancing condition. This is particularly the case for federally regulated lenders overseen by OSFI, which must meet strict risk management standards. Monoline lenders such as First National and MCAP require it almost systematically. The Big 5 banks (RBC, TD, BMO, Scotia, CIBC) strongly recommend it and often include it in closing costs. Desjardins caisses and Banque Nationale have their own practices that vary by file.

Your AMF-certified mortgage broker can guide you toward the best choice regarding title insurance and integrate this cost into the overall profitability analysis of your refinancing. Remember that these fees, while modest individually, add to the other refinancing costs and must be included in your break-even calculation.

Frequently Asked Questions

What exactly is a title search?

A title search is a detailed examination of a property's ownership history at Quebec's land registry. The notary consults the immovable index to verify the chain of title, identify existing mortgages, servitudes, rights of way, and any other charges that may affect the property. This search is governed by articles 2934 and following of the Civil Code of Quebec.

Is title insurance mandatory in Quebec?

Title insurance is not legally mandatory in Quebec, but many lenders require it as a financing condition when refinancing. Even when not required, it may be recommended by the notary if minor irregularities are detected during the title search. The premium is a one-time payment, unlike CMHC mortgage insurance.

What are the typical title fee costs?

Title search fees performed by the notary are generally included in their refinancing fees ($500 to $1,500). Title insurance adds between $250 and $500 as a one-time premium. In total, title-related fees typically represent between $300 and $500 on top of the notary's base fees.

What does title insurance cover?

Title insurance covers title defects not detected during the search, such as errors in the legal description, title fraud, unregistered mortgages, undisclosed encroachments, procedural defects in a prior sale, and municipal compliance issues. Coverage remains in effect as long as you own the property or the loan exists.

Is the title insurance from my previous loan still valid?

Title insurance taken out during a previous purchase or refinancing generally protects only the original lender. When refinancing with a new lender, a new policy is usually required to protect the new mortgage creditor. Check with your notary whether the old policy can be transferred or updated.