Title Fraud

What is the fundamental issue?
In order to strengthen consumer protection and deter title fraud, the Government of Ontario passed Bill 152, the Ministry of Government Services Consumer Protection and Service Modernization Act in 2006.

Under the regulations of Bill 152, a real estate transaction required two lawyers from two different firms to effect transfer of title. REALTORS^® are concerned that this requirement will increase the costs of real estate transactions and potentially limit choice for legal services.

I’m a REALTOR^®. What does this mean to me?
A law that creates a two lawyer rule for land title transfers increases the costs of buying and selling real estate. The extra fees associated with a second lawyer are borne by the consumer. As such, property ownership will become more expensive and real estate transactions more complicated.

Legislative/Regulatory Status/Outlook
OREA acted in coordination with other interested organizations to ensure that certain exemptions were passed to allow for a single lawyer to appear on the land title deed.

In consultation with OREA, the Minister of Government Services approved the following exemptions under the two lawyer rule:

• Transfers to effect a change in legal tenure;
• Transfers to effect a severance of land;
• Transfers from an estate trustee, executor or administrator to a person who is beneficially entitled;
• Interfamily transfers, related-party transfers and transfers occurring in remote communities.

Since transfers are one of the main documents in title fraud, all other transfers of title will require two different lawyers, one for the transferor and one for the transferee.

OREA Position
While is supportive of goal to eradicate title fraud, OREA is opposed to the two lawyer rule for transfer of titles. OREA asserts that the two lawyer rule will increase the costs of real estate transactions.

OREA contends there is no evidence that having one lawyer representing both sides in a real estate transaction has resulted in an increase in title fraud. Therefore, the need to for two lawyers on a transfer of title is unnecessary

Last update: May 19, 2009