Commercial Loan Policy of Title Insurance

Stewart Title’s Commercial Loan Policy of Title Insurance is obtained for a one-time premium at the time a mortgage is registered and is available for properties such as:

• Lands zoned commercial or industrial
• Residential buildings comprised of seven or more units
• Commercial condominium/strata units
• Commercial leasehold
• Vacant land
• Construction projects

The policy is effective from the date the mortgage is submitted for registration and the policy will remain in effect for as long as the insured mortgage remains on title. 

The amount of insurance for the commercial loan policy is equal to the principal amount of the insured mortgage.  The amount of insurance decreases by any amounts (other than legal fees and associated legal expenses) that we pay to cover a claim.

Policy Coverage

Stewart’s Commercial Loan Policy provides coverage for losses arising from many types of title and off-title related risks which impact the insured lender’s interest in the land.  Other than the post date of policy fraud coverage and any covered risks that specifically include post date of policy coverage, the covered risk giving rise to a claim must exist, but be unknown to the insured, at the date of policy.

Covered Title Risks

• Invalidity, unenforceability, or lack of priority of the insured mortgage upon the title to the land
• Someone else has an interest in the title
• Liens or encumbrances against the title
• Defects in title caused by:
  • forgery, fraud, undue influence, incompetency, incapacity or impersonation
  • a document affecting the title not being properly created, executed, or witnessed
  • a document not being properly registered
• Gap Coverage for intervening registrations arising in the period between the transaction closing date and when the insured lender’s interest is registered on title
• Lack of legal access to the land

Covered Off-Title Risks

• Adverse matters that would have been revealed by an up-to-date survey/Real Property Report of the land
• Work orders; open permits¹
• Zoning² issues including:
  • existing zoning by-laws not permitting the use of the land that existed as of the date of policy
• Non-compliance with zoning by-laws concerning:
  • area, width, depth of land as a building site for the structure
  • floor space & height of the structure
  • setbacks of a structure from the property line of the land
  • required number of parking spaces

¹A commercial lender endorsement containing coverage for these matters is attached without the need for a building/zoning search for transactions up to $50 million.

²A zoning endorsement is attached without the need for a zoning search for transactions up to $50 million.  The form of endorsement may vary depending on whether the land is developed, vacant or under construction.

Post Date of Policy Fraud Coverage

Up to a maximum dollar limit of liability of $5 million in the aggregate, commercial loan policies provide coverage for losses sustained by the insured lender by reason of forgery after date of policy of any assignment, release, discharge (partial or full), postponement or modification of the insured mortgage.  There is further coverage for loss sustained by the insured lender as a result of any defect in or lien or encumbrance on the title caused by forgery or impersonation occurring after the date of policy.

The coverage under this endorsement does not extend to any loss if the forgery or impersonation is caused by an employee, officer, director, partner, member, shareholder or agent of the insured lender.

Policy Exclusions/Exceptions

There are standard exclusions and exceptions from coverage contained in all commercial loan policies. These include but are not limited to:

• Matters known by, agreed to, or created by the insured
• Matters first occurring after the date of policy (other than the post date of policy fraud coverage and any covered risks that specifically include post date of policy coverage)
• Claims related to bankruptcy or insolvency as they relate to the insured transaction
• Environmental matters
• Physical/structural defects, even if these defects affect the value of the insured land

Commercial Endorsements

Stewart Title offers a variety of commercial endorsements at no additional cost that can be used to customize our policies to meet the unique requirements of each transaction. 

Contact us for additional information.

This website is intended to provide information that is of a general nature and is subject to modification. Coverage and requirements can vary depending on the nature of the transaction and location of the property involved. Please review your actual Stewart Title policy for full coverage details.