Title Searching in the Electronic Age
Throughout most of Ontario, the system of registering and recording deeds and mortgages and other title documents has been changed dramatically. Going back to the 1800's, our system of keeping track of these documents and title to properties was governed by the Registry Act. The modern age has brought us many changes to the system, not the least of which has been to how these documents are recorded. Electronic registration is in and registration of the old style paper deeds and mortgages is out. Or is it?
When converting to electronic registration, our system has been changed to be governed by the Land Titles Act. In theory the system is good and replaces the old requirement to search the title and adjoining properties back 40 years. The old system worked quite well and depended upon proper searches being done and opinions given by the lawyer as to the quality of title. The new system appears to be even better in that it eliminates the need for lengthy title searches and presents the quality of title on a single page retrieved from your computer.
If this sounds too good to be true, then of course it is.
Section 41 of the Land Titles Act sets out an extensive list of liabilities, rights and interests which are not guaranteed by the government title system. These include rights of way, rights over water and other easements. Possessory title is still an issue. Leases and construction liens may not appear. A public highway may cross all or part of the land and not be shown together with by-laws, consents to sever and other issues which can only be determined by a proper title search.
If this wasn't enough, the legal description of the property cannot necessarily be relied on. Old legal descriptions are simply referred to and may well be out of date, inaccurate or just plain wrong. Although the land titles system ends the concept of possessory title (or squatter's rights) these rights are not extinguished if they were perfected before the conversion to the Land Titles system.
The only way to be certain that your title is good is to do what we, as lawyers, have done for well over 100 years. Search the title.
The daunting task of converting our registry system to that of the land titles system meant a labourious task of reviewing each and every title manually. This could not be done by machines and humans make errors. Title holders are not protected from those errors which again is a reason why a title search is needed.
Surveys are a very valuable part of the process. Up to date surveys will reveal any differences between what the title documents show and what is actually possessed or described on the ground. Only a survey can demonstrate this and cause the title to be corrected. However, many transactions are done without the benefit of a survey due to cost. Title insurance is an acceptable alternative but only protects a buyer against economic loss and will not necessarily resolve any boundary disputes.
One would think that access to your property is a given. It is not. It may appear that the property we're buying has legal access to a public highway but the title to the property may reveal that this is not the case. The value of your property could be considerably diminished if you need to obtain someone's permission to go over their property to get to the road.