There's been a lot of talk lately about a particular Stewart Title case. It's gotten so big that Stewart Title themselves have been faxing people offerring to discuss the matter. To me, it's damage control.

For those of you who aren't familiar with it, this is the situation basically: Purchaser buys a plot of land to build a house and registers it in the name of his mother. Purchaser finds an unregistered hydro easement and has to pay to remove it. Purchaser sues Stewart Title for the loss in profit due to the removal of the easement.

Registering one person on the property to hold it in trust for someone isn't new. Stewart Title has taken a somewhat technical position by stating that the registered owner did not suffer a loss since it was the beneficial owner that was responsible for the construction and that they weren't advised of the beneficial ownership. They have further stated that even if you purchase survey coverage, it does not excuse the solicitor from obtaining a survey.

I'm not the first person to be writing about this topic, and I'm not going to be the last. If this case goes to trial fully, authors and legal scholars will talk about it for years to come. What bothers me, however, is the route that Stewart Title has taken in its PR.

Don't get me wrong here. I use Stewart Title depending on the circumstance and their ordering system is very quick and easy. They've got friendly staff and have answered all my questions quite well. I actually agree that Stewart Title should not cover the claim, but for other reasons: Title insurers typically do not insure for future use nor did the policy (in this case) cover unregistered easements.

Stewart Title has taken a different approach in trying to raise what some may consider a superficial defence. I'm sure this won't be the last dissatisfied customer, because there will inevitably be someone else who thinks everything under the sun should be covered. They are now left to scramble and ensure that they have not lost customers while every other title insurer is capitalizing on this case and informing lawyers and purchasers that they do not need to be advised of beneficial owners.

With respect to surveys, I don't understand how they can sell coverage and say that a solicitor is still required to obtain one. It is like paying for a cheque to be certified but the bank will not honour the funds if the account holder's account does not have enough funds. The purchaser is buying a service, which cost is determined through underwriting, and the service should be expected.

Overall, although I won't stop using Stewart Title completely, I will likely consider other title insurers for future deals. If they ever read this article, I guess I'm not getting invited to the Christmas party, but I believe that Stewart Title has unnecessary dug itself into a marketing hole that it will need to work to recover from.