What Is a Title Defect?
A title defect is anything registered against a property — or missing from it — that clouds who actually owns it or limits what the owner can do with it. In BC real estate transactions, title defects are discovered through a title search conducted by the buyer lawyer before closing. What shows up on that search determines whether a deal closes cleanly or runs into trouble.
Common Types of Title Defects in BC
Liens and Charges
Construction liens, mortgage charges that were not properly discharged, CRA tax liens, and judgment creditor registrations are among the most common defects we see. These attach to the property and follow it — meaning a buyer could inherit someone else is debt if the defect is not cleared before closing.
Easements and Rights of Way
An easement gives a third party — a neighbour, utility company, or municipality — legal rights over part of the property. Not all easements are problematic, but undisclosed or unexpected ones can limit what a buyer can build, use, or access on the land.
Restrictive Covenants
A restrictive covenant is a registered restriction on how the land can be used. It might prohibit certain types of structures, limit density, or restrict commercial use. In our experience, buyers are sometimes surprised by covenants that were registered decades ago and have never been enforced — but remain legally binding.
Encroachments
A fence, garage, or structure that crosses a property line — either onto a neighbour property or encroaching from a neighbour onto the subject property — creates a defect that must be addressed before title transfers cleanly.
How We Resolve Title Defects
Resolution depends on the type of defect. Financial charges like liens and mortgages are typically discharged from sale proceeds at closing. Easements require negotiation or court applications if disputed. Encroachments may require a boundary agreement or adjustment. Restrictive covenants can sometimes be removed by application to the BC Supreme Court if they no longer serve a legitimate purpose.
In our experience, most defects can be resolved — but the earlier they are caught, the less they disrupt the timeline and the parties involved.
For Buyers: What to Watch For
Do not waive your subject conditions before your lawyer has reviewed title. A clean-looking listing can have charges registered that only show on a proper search. Title insurance is also worth considering — it protects against defects that are not discovered before closing and certain future risks.
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This article is for general informational purposes only and does not constitute legal advice. Reading this article or submitting our client intake form does not create a lawyer-client relationship. For guidance specific to your situation, please contact us directly to arrange a consultation.