A buyer client, David, is concerned about potential defects in title when purchasing a condominium unit in Ottawa. His salesperson, Sarah, explains the two primary ways to protect against such risks: retaining a lawyer to conduct a thorough title search and obtaining title insurance. Sarah should advise David that title insurance offers coverage for which of the following scenarios that a traditional title search might not uncover?

Question: A buyer client, David, is concerned about potential defects in title when purchasing a condominium unit in Ottawa. His salesperson, Sarah, explains the two primary ways to protect against such risks: retaining a lawyer to conduct a thorough title search and obtaining title insurance. Sarah should advise David that title insurance offers coverage for which of the following scenarios that a traditional title search might not uncover?

Answer options:

• Future changes to zoning bylaws impacting property use. ✅ Undisclosed existing liens or mortgages on title due to fraud or error in public records.
• Damage to the property caused by natural disasters after the purchase.
• Increases in property taxes after the transaction closes.

Correct answer: Undisclosed existing liens or mortgages on title due to fraud or error in public records.

Explanation: Title insurance provides protection against specific title defects that may not be apparent from a standard title search, such as fraud, forgery, or errors in public records, which could affect the ownership rights.