Document background
The Gap Indemnity Agreement serves as a critical risk management tool in Canadian real estate and financial transactions. It is typically used when there is a timing gap between the closing of a transaction and the registration of relevant documents in the public registry system. This gap creates potential risks for purchasers, lenders, and other stakeholders, as intervening registrations or claims could affect their interests. The agreement is particularly relevant in provinces with electronic registration systems or in situations where immediate registration is not possible. A Gap Indemnity Agreement provides specific protection by having one party (usually the vendor or a title insurer) indemnify others against losses that might occur during this gap period. The document typically includes detailed definitions of covered risks, claim procedures, and enforcement mechanisms, all structured to comply with relevant provincial legislation and regulations.
