What does 'clear title' mean and do I always get it when I buy?

"Clear title" means the property comes to you free of mortgages, liens, court judgments, and other financial encumbrances — and free of any adverse claims to ownership. In a standard Ontario purchase agreement, the seller promises to deliver clear title to you on closing day. Most well-drafted agreements set out exactly what the buyer will and will not accept on title.

In practice, almost every property carries at least a few items registered on title — the seller's existing mortgage being the most common. That mortgage must be paid off from the sale proceeds and discharged on or after closing. Your lawyer coordinates this with the lender to make sure you receive clear title (or that the discharge will follow within a reasonable time after closing).

Other items that can cloud title — past liens, old mortgages that were never formally discharged even though the loan was paid, builders' liens, or judgments against former owners — also have to be resolved. If the seller cannot deliver clear title by the agreed closing date, your real estate lawyer may negotiate an extension, seek to have the defect resolved, or advise you on whether you have grounds to refuse to close or claim damages.