May 5th - 2009

Electronic registration means easier access, but more responsibility

Technology has dramatically changed the way that real estate transactions are processed and completed in Ontario.

Technology has dramatically changed the way that real estate transactions are processed and completed in Ontario. As the record keeping system for land registry information is converted from paper to electronic format in greater numbers of municipalities, most REALTORS® no longer need to set foot inside a Land Registry Office.

Indeed, the ability to obtain pertinent information regarding title and ownership of a property electronically over secure online connections has made life easier for REALTORS®. However, this ease of access to information has also led to greater responsibility for REALTORS® to ensure they have accurate information. “A number of years ago when REALTORS® couldn’t access the information unless they physically went to the Land Registry Office, REALTORS® rarely went,” says Lou Radomsky, real estate lawyer and OREA instructor. “It was difficult and required the expenditure of funds in order to verify information, such as who the owners of a property were. Today, with access through many boards and associations, discovering this information has become mandatory.”

The automation of Ontario’s Land Registry System began in the 1980s when the Ministry of Government Services (MGS) began building POLARIS® (Province of Ontario Land Registration Information System). POLARIS® consists of two databases: the title database with its abstracts of title information; and a database of maps that will eventually depict approximately 6 million land parcels in the province. According to the MGS web site, as of April 2008, automated records are available in 51 of the province's 54 land registry offices.

At the same time as the province is automating records, it is also converting parcels registered under the Registry System to the newer Land Titles system. Subject to certain exceptions, the requirement to search titles back 40 years at the time of a transaction is quickly disappearing. The automation of the records and conversion of the Registry system to Land Titles is being done by Teranet for the Ministry. MGS states that as of April 2008, 95 percent of the property records in Ontario are automated. Radomsky says this is good news, “Once electronic registration is available in a jurisdiction, access to the information becomes a mouse click away.”

What REALTORS® need to look for
Real estate salespeople and brokers’ activity in the Land Registry Office normally includes verification of current ownership details, confirmation of property details and mortgage information, and any unusual easements, restrictions, or covenants that run with the land. REALTORS® should have a proper understanding of the procedures and documentation established by the Land Registration Reform Act (LRRA) for searching current information in Land Registry Offices. This is because most activity involving salespeople and brokers relates to up-to-date registry records.

What is important is a watchful eye for inconsistencies, important restrictions on use, encumbrances, and other limiting conditions that might affect value and/or saleability. Armed with these facts, a REALTOR® can approach his or her client to determine potential problems that may affect the process of listing, marketing, and selling the property.

Here are a few of the items to consider when reviewing documents:

  • Watch out for inconsistencies, particularly concerning names and survey inconsistencies.
  • Make certain that legal descriptions are consistent with prior conveyances.
  • Carefully read the “habendum” in older deeds.
  • It outlines the restrictions, covenants, and conditions associated with the property.
  • Decide what type of interest is being conveyed (joint tenants, tenants-in-common, life interest, leasehold interest).
  • Read all attached documentation, as it may contain important restrictions or qualifiers.
  • In older deed forms, make certain all four covenants have been included (right to convey, right to quiet possession, owner agreement to execute documents as required, and no act to encumber). In the new Form A, these covenants do not appear but attach themselves to all conveyances by statutory provision.
  • Review all survey material carefully.
  • Review the Affidavit of Residence and Value of Consideration Form as it contains important sale and related information. Note: The price paid for the property may not be included on the Affidavit as the land transfer tax may be paid directly to the Ministry of Revenue.
  • Terms of mortgage should be noted.
  • All encumbrances require review to establish the status of current financing on the property.
  • Mortgage discharge details should be carefully reviewed.
  • When using a standard set of charge terms, such terms should be reviewed to note items including prepayment arrangements, assumption provisions, and unusual terms.
  • Carefully read any additional provisions included in the Charge/Mortgage of Land.
  • Be cautious of legal issues arising out of power of sale, foreclosure action, and assignment of rights.

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For more information contact

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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