May 6th - 2008

New rules for real estate lawyer representation

Two lawyers are now required for many real estate transactions involving a transfer of title following recent amendments to the Rules of Professional Conduct by the Law Society of Upper Canada (LSUC).

Two lawyers are now required for many real estate transactions involving a transfer of title following recent amendments to the Rules of Professional Conduct by the Law Society of Upper Canada (LSUC).
 
Following consultation with members of the real estate profession, LSUC’s Real Estate Issues Working Group (made up of real estate practitioners, members of the organized bar and the Law Society) recommended adding a rule requiring that an individual lawyer not act for both the transferor (seller) and the transferee (buyer) in a transfer of real property.
 
Under the new rule, the two lawyers in a transaction are allowed to practice in the same law firm so long as the general rules on conflicts of interest are observed.  There are also certain limited circumstances where one lawyer may represent both the parties as long as there is no violation of the conflicts of interest rule. For example:

  • a transfer where the seller and buyer are the same and the change is being made to effect a change in legal tenure;
  • a transfer being registered to give effect to a severance of land prior to the expiry of a consent under the Planning Act or pursuant to a municipal by-law;
  • a transfer from an estate trustee to a person who is beneficially entitled;
  • a transfer where the seller and buyer are spouses or common-law partners or are otherwise related persons as defined in section 251 of the Income Tax Act (Canada);
  • the lawyer practices law in a remote location where there are no other lawyers that either the seller or the buyer could retain for the transfer without undue inconvenience.

In addition no law statements will be required for transfers involving a government body including a municipality or for transfers of easements.
 
One other amendment also recently approved lets lawyers know that they assume complete professional responsibility for documents that they electronically sign using the e-reg™ system.
 
The amendments to the Rules of Professional Conduct took effect March 31, 2008.

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Ontario Real Estate Association

Jean-Adrien Delicano

Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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