Land Registration: What's Old and What's New
The hot housing market of the last few years has created a strain on many areas which feed into the building of new homes or transfer of older homes. Have you tried to get a commitment out of a builder or building trade to have renovations done on your home? Have you been to the lumber supply store to check the price of materials? Have you asked your lawyer to close a deal on 7 days notice?
The lawyer's role in the real estate market has remained unchanged. Lawyers prepare or review Agreements of Purchase and Sale, assist clients in obtaining mortgages or paying them off, complete title searches and handle a large volume of documents which every purchase and sale generates. In addition, large amounts of monies are handled, brought in and disbursed and directed for payment of many stakeholders.
The lawyer's role has not changed much in many generations. But what has changed is the system of registration, and this change has been dramatic.
Since the 1800's, lawyers or their title searchers trampled off to the local registry office and searched the title to the property back 40 years. After conducting other searches and preparation of a myriad of documents the lawyers would eventually meet at the registry office, on closing day. Deeds and other documents would be exchanged, mortgages registered and that which is most important to the client, keys, would be passed on.
Starting in 1999, a new system has been gradually introduced throughout Ontario. Electronic registration, or e-reg, is a radical departure from the way in which land transfers have taken place in Ontario. For most of Ontario's history, documents were registered under the "registry system" which dates back to the 1800's. The Registry Office was a depository of documents which were registered, in the order of receipt by the registry office, recorded in large abstract books (by hand) and then made available to anyone who wished to search the title back the required 40 years.
Several decades ago, the land titles system was introduced in Ontario which existed side by side with the old registry system. Land titles is a guaranteed title in which the status of land is always current and a brief review of the abstract book indicates the owners and any encumbrances on title. Unfortunately this system has many qualifiers and is far from an absolute guaranteed title.
What e-reg has brought is the wholesale conversion of land registry offices into land title offices. Once converted, there is no going back and you must deal with land transfers under the land titles system. With the conversion, comes e-reg, in which all of the titles are "online". Title searches can be done from the lawyers office as well as the searching of liens which may apply to the property.
Not only do you not have to go to the Registry Office to search the title, you don't have to go there to close the deal. E-reg allows for the registration of a deed and a mortgage, once again, "online".
There is no formal exchange of a paper deed or registration of a paper mortgage. It is all done electronically with confirmations coming back by way of printed documents kept in the lawyers files.
A closing transaction still involves the exchange of other non registered documents. The lawyers fax or mail documents depending on their preference so as to obtain the assurances normally needed between a vendor and a purchaser.
E-reg does not solve the problem of the exchange of monies. Clients funds and mortgage money must all be processed, payouts made and funds transferred to the purchasers lawyer. The financial part of the transaction has not been streamlined and remains cumbersome.
E-reg is all around us. Norfolk County should go online in the next year or two. As with all transitions, nothing will be seamless or easy. But change is inevitable.
Should you have any questions for Ask A Lawyer, please direct them to the Simcoe Reformer or ask a lawyer of your choice.