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As a way to maintain the integrity of our local real estate bar and open the lines of communication to all real estate solicitors in our area, the CCLA Real Estate Lawyers Committee will publish monthly practice tips for your review, consideration and comment. Feedback and submissions on these tips can be sent to the CCLA Real Estate Lawyers Committee Vice-Chair, Michelle La Pierre.

 

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Title Insurance Requirements

Posted By Administration, October 18, 2016
When obtaining title insurance it is important to make sure you are referencing the most current title and off-title search requirements from the title insurance company. Title insurance companies frequently change their requirements and coverage.  Prior to determining what title and off-title searches you will undertake, it is prudent to download the most recent search requirements for each and every transaction and to compare them to the searches you are recommending to your client.  It is wise to print and date the search requirements and to append them to your file, so that you know years down the road what search requirements you were relying upon when ordering your searches and title insurance policy.

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Title Direction

Posted By Administration, July 12, 2016
The title direction is a document that is frequently used in real estate transactions but not always understood.  The document is needed when the purchaser listed on the agreement of purchase and sale is different from the party that will take title to the property on closing.  If the purchaser listed on the agreement of purchase and sale is the exact same party as the transferee on the transfer, then a title direction is NOT required. One common mistake made by lawyers is to have the transferee listed on the transfer sign the title direction. The title direction must be signed by the original purchaser named in the agreement of purchase and sale. It is the original purchaser that the vendor has a contractual relationship with and it is therefore the original purchaser who must direct how title to the property will be taken.   

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Searching Abutting Lands for Planning Act Purposes

Posted By CCLA Real Estate Lawyers Committee, January 20, 2015

When conducting a full search of title, there are many variables that determine the need for an abutting lands search. It is important to know these variables to ensure that a proper Planning Act (PA) search is conducted. For instance, if the property is LT absolute and was so at the time of automation, then confirmation that the PA has not been contravened is not certified up to the date of implementation and you may need to search the "paper” system for PA purposes. Or perhaps there is a by-law exempting the lands from subdivision control, but the by-law expired three years ago, making it necessary to determine there are no contraventions between the expiration date and the present.  

To conduct a proper abutting lands search, it is necessary to print the parcel register for each abutting property to determine whether the title you are searching merged with any other lands.  Conducting a search by the "name” field only is often insufficient as a slight spelling difference will not produce a "hit”, nor will you get a "hit” if the person no longer owns the property – meaning they could have bought and sold abutting lands in contravention of the PA and this situation would not be revealed by a name search alone.  Also, beware of changes in corporate names which may or may not be recorded on title.  In some cases, it might also be necessary to check "closed” parcels (or inactive PIN’s) to properly follow the chain of title on abutting properties. This is especially relevant for severed parcels; the timing of registration and Planning Act consents is crucial to compliance.  

Even if the PA statements are properly completed in the current transfer, it is still necessary to check abutting lands as the current owner could have obtained an interest in abutting lands since acquiring the subject lands, and as previously mentioned, a name search alone may not pick it up.  

To maintain the integrity of the Land Titles System and to maintain the value of Planning Act statements, it is necessary to conduct proper and thorough searches at all times. For further information on complete title searching, please refer to Ottawa E-Reg Practice Tips – version dated May 30, 2002.

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Joint Tenants vs. Tenants in Common

Posted By CCLA Real Estate Lawyers Committee, July 1, 2014
Updated: September 15, 2014

Early in a real estate transaction, the lawyer should advise their clients of the differences between Joint Tenants and Tenants in Common, as most clients do not know the differences and the effect on their transaction.  The differences should be clearly explained to the clients so that they are in a position to make an informed decision on how to take title.  The lawyer should never assume that the clients would prefer one over the other as all client situations can differ.  To avoid potential problems or claims, remember that communication is key, and allowing the clients to make an informed decision with as much information as possible is beneficial to all involved. Don’t forget to confirm the clients’ instructions regarding joint tenancy or tenants in common in your reporting letter!

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Property Taxes

Posted By CCLA Real Estate Lawyers Committee, June 2, 2014
Updated: June 16, 2014
The final property taxes for the City of Ottawa become due on June 19, 2014.  When preparing a sale file for your clients, it is important to remember that property taxes should be paid in full for all closings after that date.  Some clients may not receive their tax bills directly as they can be directed to their financial institutions for monthly payments.  Clients can contact the City of Ottawa directly in order to obtain their property tax information (total amount of property taxes for the year and amount paid to date) by calling 613-580-2444.  Further to our practice tip from November 2013, a lawyer can request cheques for tax arrears or payments in their direction re: funds on closing.

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Status Certificates

Posted By CCLA Real Estate Lawyers Committee, May 1, 2014
Updated: June 16, 2014

It is very important to review all Agreements of Purchase and Sale as soon as they arrive.  To ensure that a condition on the review of the Status Certificate is not missed, along with other conditions and important dates. 

It is important to note that the Condominium Corporation has ten (10) days from the date of request to prepare the Status Certificate, regardless of the conditional date on the Agreement of Purchase and Sale.  Consequently, the lawyer should order it as soon as possible to allow the maximum amount of time for receipt and review of the Status Certificate.  Once the Status Certificate is ready for pick-up, confirm with the Condominium Corporation or the Property Manager to whom the cheque should be made payable and where to pick up the Status Certificate, as this information may be different from the information used to order the Status Certificate.

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Spousal Interest

Posted By CCLA Real Estate Lawyers Committee, April 1, 2014
Updated: June 16, 2014
When dealing with real estate files, lawyers often find themselves asking clients about their spousal status, or more simply "are you married?”.  The fact is that a person’s spousal status has a great impact on a real estate transaction.  It may be that there is only one spouse on title, and therefore, only one person on the Agreement of Purchase and Sale, or only one spouse presenting themselves to remortgage the property.  It is important for lawyers to obtain the proper information from their clients in order to determine if a spousal consent is required or if independent legal advice is warranted.  It may also be worth expanding the sentence "are you married?” to "are you married to each other?”.  A "yes” response from both clients on the first question, may be a "no” response to the second.  More specific questions can help determine if there could be a spousal interest in a matrimonial home. 

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Utility Letters

Posted By CCLA Real Estate Lawyers Committee, March 3, 2014
Updated: June 16, 2014
It has been common practice for real estate solicitors to contact the utility companies prior to closing in order to advise them of an upcoming change in ownership of a property.  However, some utility companies are no longer accepting letters from law offices notifying them of these changes and are advising law offices that only requests made using their online forms will be processed.  This practice tip serves as a reminder to solicitors who are not completing the online forms to advise their clients at the outset of the retainer of their responsibility to contact the utility companies directly to notify them of the change of ownership and to schedule a meter reading, if required.  It is also important that lawyers review their standard retainer letter to ensure that it accurately reflects any change in practice.

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Transfer Documents

Posted By CCLA Real Estate Lawyers Committee, February 1, 2014
Updated: March 20, 2014
Once a new Reference Plan has been registered on title, solicitors need to ensure that the easements from the Reference Plan are included in any subsequent Transfer, and that such easements are described using the new Reference Plan (As in OC_________, being part…). If the easement is already described, and there is a new Reference Plan on title, verify to ensure that it is described correctly. If it is not described correctly, re-describe it according to the new Reference Plan. Surveyors will list on the Reference Plans which parts are affected by the easements.

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Registry Office Pre-Approvals

Posted By CCLA Real Estate Lawyers Committee, January 1, 2014
Updated: March 20, 2014

The Ottawa Real Estate Bar benefits from the fact that the Ottawa Registry Office is one of the few Registry Offices in the Province of Ontario to have an extensive process for pre-approvals. However, there is some overuse of the process which bogs down the Registry Office (R.O.) and the process itself. This month’s practice tip refers to the appropriate circumstances in which to use the pre-approval process to help ensure that this extensive service continues to be available to help all of us when difficult circumstances arise.

The pre-approval process is in place to help solicitors with questions and registrations which are more complex in nature, such as an Application General, parcelizations, complex estate documents and Court Orders. The pre-approval process should be avoided in cases of Discharges, Change of Name Applications, or other straightforward registrations, unless there are unusual circumstances which complicate the documents.

A further note, when the pre-approval process is used, please contact the R.O. once the document has been registered so that they may remove the query from the pre-approval drawer. This will shorten the time period for having the document certified and will assist the R.O. staff reduce the volume of paper in the pre-approval drawer.

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Undertakings

Posted By CCLA Real Estate Lawyers Committee, December 1, 2013
Updated: January 10, 2014

Personal undertakings are common in real estate transactions. Often times, when an issue cannot be resolved prior to closing, a personal undertaking is drafted and signed by one of the lawyers in the transaction in order to allow the transaction to close and the issue to be resolved after closing. However, hastily drafted undertakings can lead to bigger issues post-closing. The Law Society of Upper Canada’s Real Estate Practice Guide offers some practice tips with regards to giving or accepting undertakings on closing. Of particular interest is their suggestion for providing for contingencies. When drafting an undertaking for an obligation to occur following a certain event, it may be useful to provide in the undertaking what is to happen should said event not take place. In doing so, lawyers could avoid the stress of trying to fulfill an undertaking that can no longer be fulfilled or the confusion on how to proceed with such an undertaking.

Law Society of Upper Canada – Real Estate Practice Guide
http://www.lsuc.on.ca/WorkArea/DownloadAsset.aspx?id=2147491160

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Subsearch of Title Prior to Closing

Posted By CCLA Real Estate Lawyers Committee, November 1, 2013
Updated: January 10, 2014

When closing a real estate transaction, it is necessary to check the last registered instrument number (the "LRI”) on title prior to proceeding with registering the Transfer. The LRI should be the same as the one indicated in your title search of the property. When the LRI does not match your previous title search, a lawyer should examine an updated title abstract to verify what has been registered on title since their initial title search. If a lawyer only examines the document that is the new LRI, other instruments registered prior to this new instrument, such as a new mortgage on title, certificate of pending litigation, or construction lien, may be missed.

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Changing Title / Ownership

Posted By CCLA Real Estate Lawyers Committee, October 1, 2013
Updated: November 20, 2013
When receiving a client’s instructions to change title or ownership of a property and there is a registered mortgage on title, the lawyer should ensure written confirmation from the registered mortgagee has been obtained evidencing their consent to such changes prior to making any change to the title or the ownership of the property. Transferring title may be a triggering event requiring consent of the lender, failing which the borrower may be in breach of their mortgage, and the mortgage loan may become due and payable in full. In addition, if the lawyer also acted for the lender at the time of the original registration, there may be a duty for the lawyer to disclose the triggering event to the lender-client.

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Discharge of Institutional Mortgages

Posted By CCLA Real Estate Lawyers Committee, September 1, 2013
Updated: November 20, 2013

The practice tip this month concerns the responsibility of drafting and certifying cheques in a real estate transaction closing.

It is the responsibility of the seller’s lawyer to obtain a mortgage discharge statement from the mortgagee stating the balance required to obtain a discharge of the registered mortgage and to provide a copy of same to the purchaser’s lawyer. It is also the responsibility of the seller’s lawyer to provide a personal undertaking to obtain and register a discharge of the mortgage. The purchaser’s solicitor should be responsible for preparing and certifying a cheque payable to the seller’s mortgagee in accordance with the mortgage discharge statement provided.

By following this good practice, both parties are involved in ensuring that the registered mortgage is paid in full and ready to be discharged.

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Real Estate Commission Cheques

Posted By CCLA Real Estate Lawyers Committee, August 1, 2013
Updated: November 20, 2013
The practice tip this month is a reminder that in the Ottawa area, the vendor’s solicitor is responsible for preparing the real estate commission cheque in a sale transaction. The purchaser’s lawyer should only be responsible for preparing cheques required to discharge any mortgages or encumbrances on title and any tax arrears, with the balance of the amount due on closing payable to the vendor’s solicitor in trust.

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Documenting Joint Retainers

Posted By CCLA Real Estate Lawyers Committee, July 1, 2013
Updated: November 20, 2013

Most real estate transactions deal with multiple clients. In these cases, it is important to have a documented discussion with your clients to outline potential conflicts of a joint retainer, confidentiality and disclosure obligations before work on a file is commenced. The lawyer should confirm the consent to the joint retainer in writing to each client separately, or have the clients sign a joint retainer agreement or acknowledgement and consent to joint retainer at the outset of the retainer.

A sample joint retainer form is available on the Law Society of Upper Canada Website – Acknowledgement & Consent for Use in Real Estate.

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Teranet Closure Program Notice

Posted By CCLA Real Estate Lawyers Committee, June 1, 2013
Updated: November 20, 2013

The practice tip this month will be short and sweet as we all know this is the busiest time of year for real estate lawyers.

As most of you may know, the Closure program initiated by Teranet several years ago was decommissioned effective December, 2011. We have posted a copy of the notice from Teranet for your reference. It has been brought to the Committee’s attention that some financial institutions are still charging lawyers that were enrolled in the Closure program for the service. Don’t forget to contact your financial institution to ensure these service charges are stopped.

 Attached Files:
Teranet.pdf (28.18 KB)

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Remote Access to the Office

Posted By CCLA Real Estate Lawyers Committee, May 1, 2013
Updated: November 20, 2013

The Committee is committed to assisting real estate solicitors practising alone or in small firms find solutions for the dilemma that arises when they wish to take a holiday or be away from their offices for other reasons. We have posted the following two articles from the OBA dealing with a technological solution to being geographically separated from your office for a period of time that may provide some assistance in this regard.

 Attached Files:

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Mortgage Discharge Escalation Contact List for Real Estate Lawyers - Updated Feb 2013

Posted By CCLA Real Estate Lawyers Committee, April 1, 2013
Updated: November 20, 2013

The Law Society has recently distributed the updated Mortgage Discharge Escalation List. Please note the following:

In response to concerns raised through the Federation of Law Societies of Canada regarding delays in the delivery or registration of some mortgage discharges, the Canadian Bankers Association has provided law societies with a list of bank contacts for lawyers. The list is intended to provide assistance to lawyers in resolving delays on mortgages not discharged after 90 days.

You can access the updated contact list here.

The list does not include financial institutions that are not members of the Canadian Bankers Association.

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Estate Conveyancing

Posted By CCLA Real Estate Lawyers Committee, March 1, 2013
Updated: November 20, 2013
It has been brought to our attention that not all solicitors are aware that in specific circumstances it is possible to convey estate property without obtaining a Certificate of Appointment of Estate Trustee. When a property has been converted from Land Registry to Land Titles during the automation process and is the "first dealing” on the property since that automation, it is possible to convey that property without a Certificate of Appointment of Estate Trustee.The Director of Titles, Kate Murray has provided a detailed memo outlining the particular requirements of the Land Registrar to permit such conveyance to occur and that bulletin can be found on theMinistry's website.

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