Service standards loan taking

Condominiums

11. Holdbacks for Construction Loans

12. Surveys and Title Insurance

• 
  For some rural properties over 5 acres, the S&D Officer may accept a sketch plan drawn to scale by the account officer or the borrower.
  
• 
  Surveys are not required for registered condominium or strata lots, unless there is a bare land condominium or strata plan.
  
• 
  Surveys or title insurance are not required for vacant land unless BDC is financing a construction project, in which case the instructions herein relating to construction loans are applicable.
  

• 
  Where a survey/location certificate or status/estoppel certificate is required, title insurance from First Canadian Title Insurance Company or Stewart Title Guaranty Company or Chicago Title Insurance Company may be used instead at the borrower’s option and cost.
  
• 
  Please note that BDC does not accept title insurance in lieu of off-title searches, other than defects disclosed by a building location survey.
  
• 
  Title insurance may be available to protect against known title defects such as encroachments and BDC may be willing to accept this in a particular fact situation.
  
• 
  Please advise the S&D Officer in writing providing details of the title problem together with your opinion that the problem can be appropriately covered by title insurance and further written instructions will be provided. In any case where title insurance is used, we will expect you to be satisfied that the policy obtained covers the risk(s) to be insured (survey, known defects).
  
• 
  In all cases, should BDC be prepared to accept title insurance, we require that the policy be issued through First Canadian Title, Stewart Title or Chicago Title with BDC as the insured, for the amount of the mortgage and for a term equivalent to the life of the loan. BDC will only accept title insurance issued through First Canadian Title, Stewart Title or Chicago Title, as they provide a special readvanceable endorsement for BDC mortgages (see section below re: Subsequent Advances). Please do not request that another insurer provide the coverage.
  
• 
  CONSTRUCTION LOANS: Should the loan include a construction component, First Canadian Title, Stewart Title or Chicago Title must be notified so the appropriate construction endorsement can be added to the policy when it is issued. Title insurance is mandatory for all construction loans in Ontario where the project is equal to or greater than $1 million.
  

The Subsequent Loan Facilities Endorsement (see Schedule A for 04/10 revision – confirm with First Canadian that you have the current version) is deemed included in First Canadian Title Insurance when a new or existing readvanceable BDC mortgage form is used on an insured loan. Therefore, if making a supplementary loan relying on an existing readvanceable mortgage for which a First Canadian Title Insurance Company policy had been obtained as to an earlier loan, that policy can be used for the new loan although some modification and additional fee is required in some cases as follows:

1. 
   Where the total amount of the new loan and existing loan(s) are less than the existing policy amount:
   
   1. 
      no notice to First Canadian required;
      
   2. 
      you must follow the requirements of the Subsequent Loan Facilities Endorsement as to sub searches, prior charges and payment of taxes. No confirmation of these searches, etc. is sent to First Canadian but must be retained on your file.
      
2. 
   Where the total amount of new loan and existing loan(s) are greater than the existing policy amount:
   

1. 
   First Canadian is to be advised as to:
   
• 
  borrower;
  
• 
  policy number;
  
• 
  new insured amount (total amount of loans);
  
• 
  date of advance of new monies
  

2. 
   An additional fee will be required based on the difference between the cost of a new policy for the existing insured amount and a new policy for the new insured amount;
   

2. 
   You must follow the requirements of the Subsequent Loan Facilities Endorsement as to sub searches, prior charges and payment of taxes. Confirmation of these searches, etc. is sent to First Canadian as for a new policy;
   

500. 
     First Canadian will issue an amended policy where the amount of insurance will be increased and the date of policy brought forward.
     

The Subsequent Loan Facilities Endorsement (Special) 05/06/2008 revision (see Schedule B – confirm with Stewart Title that you have the current version) is deemed included in Stewart Title Insurance when a new or existing readvanceable BDC mortgage form is used on an insured loan. Therefore, if making a supplementary loan relying on an existing readvanceable mortgage for which a Stewart Title Insurance policy had been obtained as to an earlier loan, that policy can be used for the new loan although some modification and additional fee is required in some cases as follows:

1. 
   Where the total amount of the new loan and existing loan(s) are less than the existing policy amount:
   

1. 
   no notice to Stewart Title required;
   
2. 
   you must follow the requirements of the Subsequent Loan Facilities Endorsement (Special) as to sub searches, prior charges and payment of taxes. No confirmation of these searches, etc. is sent to Stewart Title but must be retained on your file.
   

2. 
   Where the total amount of new loan and existing loan(s) are greater than the existing policy amount:
   

1. 
   Stewart Title is to be advised as to:
   
• 
  borrower;
  
• 
  policy number;
  
• 
  new insured amount (total amount of loans);
  
• 
  date of advance of new monies
  

3. 
   You must follow the requirements of the Subsequent Loan Facilities Endorsement (Special) as to sub searches, prior charges and payment of taxes. Confirmation of these searches, etc. is sent to Stewart Title as for a new policy;
   
4. 
   Stewart Title will issue an amended policy where the amount of insurance will be increased and the date of policy brought forward.
   

The Subsequent Loan Facilities Endorsement (see Schedule C – confirm with Chicago Title that you have the current version) is deemed included in Chicago Title Insurance when a new or existing readvanceable BDC mortgage form is used on an insured loan. Therefore, if making a supplementary loan relying on an existing readvanceable mortgage for which a Chicago Title Insurance policy had been obtained as to an earlier loan, that policy can be used for the new loan although some modification and additional fee is required in some cases as follows:

1. 
   Where the total amount of the new loan and existing loan(s) are less than the existing policy amount:
   
   1. 
      no notice to Chicago Title required;
      
   2. 
      you must follow the requirements of the Subsequent Loan Facilities Endorsement as to sub searches, prior charges and payment of taxes. No confirmation of these searches, etc. is sent to Chicago Title but must be retained on your file.
      
2. 
   Where the total amount of new loan and existing loan(s) are greater than the existing policy amount:
   

1. 
   Chicago Title is to be advised as to:
   
• 
  borrower;
  
• 
  policy number;
  
• 
  new insured amount (total amount of loans);
  
• 
  date of advance of new monies
  

3. 
   You must follow the requirements of the Subsequent Loan Facilities Endorsement as to sub searches, prior charges and payment of taxes. Confirmation of these searches, etc. is sent to Chicago Title as for a new policy;
   
4. 
   Chicago Title will issue an amended policy where the amount of insurance will be increased and the date of policy brought forward.
   

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