Real Estate - Law Clerk Program PDF

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REAL ESTATE History - Divided the province into counties o Further subdivided into townships (200 acres?) § Surveyed and laid out into concessions • Surveyed into lots on the concessions Typical scenario o 14 concessions running from one side of the township to the other, each measuring 1.25 miles from front to rear o Each strip divided from the next by a public road allowance 66 feet in width. This is where the grid pattern comes from! CHAPTER 17: LEGAL DESCRIPTION OF LAND I. HOW TO FIND THE LEGAL DESCRIPTION *Assume you are acting for the purchaser (P) and dealing with property in the Land Registry system 1. Basic duty as a real estate lawyer is to ensure that the vendor has FULL TITLE a. Ensure title is free from i. Defects, and ii. Encumbrances iii. *other than those agreed to in the agreement of purchase and sale b. Note: entire point of hiring a real estate lawyer is to get their title opinion which is based upon a search of title 2. Receive an agreement of purchase and sale (see handout: agreement of purchase and sale) a. Must be in writing per the Statute of Frauds b. Para 8: Requisition Date i. Specifies the number of days from Date of Acceptance that you have to complete your search of the title and submit requisitions to vendor’s lawyer. You “requisition” documents from the other lawyer. ii. Requisition date is 1. Agreed upon between the parties, or 2. If not specified, then Section 4(b), Vendors and Purchasers Act governs which provides that the purchaser has 30 days within which to search title and submit requisitions ii. No remedy if you miss this date 3. Obtain LEGAL DESCRIPTION of the land (see handout: agreement of purchase and sale) – you need this in order to search for the title. a. Can be found i. On the deed, or ii. Have to get it from the municipal office b. If dealing with vacant or rural land i. Agreement for purchase and sale will describe land with reference to a lot # and concession # ii. In this case, can proceed directly to the land registry office and start your title search

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c. If dealing with residential property i. Likely that the property will be described by municipal address only, which is useless! 1. Need the LEGAL DESCRIPTION à lot + plan 2. Contact the solicitor for the vendor and request a legal description of the property for title searching purposes d. For lands under the Land Titles System, you will have to determine the parcel and section number to obtain the right parcel register CHAPTER 16 – SEARCHING TITLES II. SEARCHES UNDER THE REGISTRY SYSTEM With the lot and plan number in hand, you are ready to commence your search. 4. Once have the legal description/name, go to Land Registry Office and begin title search a. Note: For land designated under the automated recording and property mapping part of the Land Registration Reform Act, it will be necessary to determine the property identification number ("PIN"), which is similar to the parcel number system used in the Land Titles System. The land registry office has large and small-scale maps that are used for this purpose. b. Obtain abstract book for a concession or registered plan i. Example from handout: lot 2, plan 19 à Read through the plan 19 book and find out where lot 2 is. c. If searching entire lot i. Look at every instrument listed in relation to your specific lot (every instrument that is abstracted for the lot to understand how it affects the property) d. If searching part of the lot i. Ex. “part X, lot 2” ii. Check the thumbnail description set out in the right-hand column of the abstract to see which instruments affect your land iii. When looking at an abstract page (or parcel abstract, parcel – all referring to “the abstract”), if you doubt whether a certain instrument affects your land, then you pull it and investigate further 5. Look for the vendor’s name a. It is not sufficient just to make a "name search", i.e., to follow the chain by following the names back through the years (40 years). i. You must check any reference on the abstract to a description that could in any way affect the parcel you are searching. ii. This includes a deliberate search of the description of neighbouring lands that form part of the same lot as you are searching to make sure there is no encroachment. b. Follow the names in the chain of title, also checking for references on the abstract for any legal description that could in any way affect the lands that you are searching i. Pull every instrument that may possibly affect your land ii. Link the vendor’s name with the legal description à then you know you have the right lands that are subject to your purchase and sale c. Columns i. The registration number of the instrument; ii. its date of registration; iii. the type of instrument; iv. the grantor; v. the grantee;

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and an abbreviated description of the land affected by the instrument (this is where the thumbnail description is, and also gives you an idea as to what instruments affect the land) d. If the plan was registered more than 40 years ago, follow the abstract back at least 40 years prior to the closing date of your transaction Start with their name and go backwards i. Note: when searching older records, certain words mean the same thing. 1. Grant = deed = transfer 2. Charge = mortgage ii. SCC: have to go back 40 years, and not farther 1. In practice, if searching a registry title now in 2013 that means 40 years ago is 1973. Perhaps there is a deed in 1975 and the one before is in 1968. Only have to go back to the 1975 deed NOT the 1968 one. iii. Exception to the 40 years rule 1. If title certified under Certification of Titles Act (a “certificate” under instrument column) you need to go beyond the date shown in the certificate e. Your record is referred to as a solicitor’s abstract i. It is an abstract of the documents affecting the land your client is trying to purchase Why pull all instruments related to the land? - You have to actually examine the instrument to make sure that it is valid and that it does what it is supposed to do - Check spelling, dates of birth, proper signatures ß make sure that it is a valid document o Will have to deal with any inconsistencies. § Ex. some lady had her name spelled three different ways between maiden and married. This is an issue. - Remember – sometime an instrument that you pull will refer to other documents that are not in the abstract o Letter probate for an estate, or o Powers of attorney, or o Articles of amendment (maybe where company’s name has changed) § Registered in the GR – general register § Tricky because don't contain specific description of the land Cottage and Farm Land - Until recently much of this land had little value, little care was taken; it is also unfortunately true that much conveyancing in the country areas was done by persons without legal training. Little attention was paid to detail and, therefore, in many cases, descriptions make no sense at all. - Your search should specifically indicate or confirm whether the property has access to a public road either directly or through a right of way connecting the parcel with the nearest road allowance. o Right of way or an easement – have a right of travel over someone else’s land o DRAWING on the board. Township road at the top then there is a road through a farmer’s land that is an easement leading to all of the cottage properties on the lakefront § When the only access to the lot is a right of way, need to do a lot of inquiries § Ex. deed says “together with a right of way over (description of the lands here)” • Good if the farmer’s deed says that he owns his land “subject to” whatever easement • Check the deed to his property as an adjoining land search • IMPORTANT to make sure that no money changes hands for the use of a particular road – changing of money makes it contractual and no longer a prescriptive easement

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Need to confirm that when buying the lot have a set in stone right of way to the township road – otherwise no way to access the cottage ASK à Who maintains the road? Is there an arrangement between the cottagers? Does the city maintain? The farmer?

To avoid landlocked cottage: - If legal description includes description of road, this is now your property – you can interest in road too. - “subject to” - If does not include description of road – look for “together with a right to travel over and upon” – deeded right of way - If it is silent – search the title to the abiding lands – the lands of “adjoin” properties – hoping to find “subject to the right of others___ the legal description of the road…” – establish a right of way by prescription or by use – prescriptive easement – where property owner has used right of way for 20+ years, you have a right of way as a matter of law – get in touch with seller and their lawyer, find out how long they have used it and their predecessors in title – and you want documentary evidence by way of a sworn statement - if still nothing – is there a contractual agreement giving right to use the road – homeowner association agreement? Paying money for upkeep of the road? - Not preferred… you can make an application to court that the road is an access road as set out in the Road Access Act Adjoining Properties - If own adjoining properties under the same name (your name), they merge as a function of law o Merging happens when the title on two adjoining parcels of land is identical - Cannot sell land without proper severance and compliance with the planning act o If you improperly sever them without regard to the former requirements then you have a void title à Go to the right office however and sever properly! o Ex. mom and dad cleave off a piece of their land and sell it to someone but they didn't sever it properly. Someone wants to buy years down the road the piece that they cleaved off. Because it wasn't severed properly then the title to that land is void and the person that mom and dad originally sold to does NOT have good title 3 kinds of surveys - Building location survey –– survey of boundaries that you hire someone to do, showing the boundaries of property and where the buildings sit. Typically needed for mortgaging financing - Reference plan of survey – public document, registered in the land registration sysmte “r” in filing system – purpose is to describe or redescribe land – will sometimes show proposed divisions, like if you want to sell part of property, sometimes will show easements - Registered plan of subdivision – public document, registered, has a number, no “r” or designation at the registration office – show boundaries of functional lots – function is to subdivide land into lots Faulty descriptions - Wht is a bad description? No valid point of commencement… - Resurvey the land and deposit a reference plan. Basically, you redescribe the property. - Typically, these problems are fixed by the registrar. Many problems arising out of faulty descriptions are gradually being solved because most registrars are refusing to accept for registration documents that do not have proper descriptions. o Have a description that seems way to out of date and complex or vague, maybe a bad point of commencement – the registrar can demand that the lands be resurveyed and a reference survey deposited

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Registrar may want a reference plan to fix it up or you may see somewhere in the title that this was done

Mortgages - Discharged mortgage o Don't rely on this o Can rule it off and assume it WAS discharged - Outstanding mortgages o Notes on a mortgage that is still outstanding must clearly indicate all terms and privileges, unless you know it will be discharged o Where you find one on the title that is still outstanding § Pull a copy of it § Note the specifics (dates, amounts owing) for requisition letter because you will require that they be paid out and discharged from the title Statutory route of title - A deed under the Veteren’s Land Act - Good route of title and don't have to go back any further o “all conveyances from the director constitute new titles to the land conveyed and have the same and as full effect as grants from the crown as previously ungranted crown lands” § Same as a crown patent – the very first grant of land ever . Tax Deeds - No longer considered good routes of title Example - There is a mortgage for $110,000 in 1988 o Make sure it is paid or will be - Rogers lease (2001) o Is it assignable? Can I make money from it? o What is the payment? o They are probably leasing a piece of the land for a cell tower or something - Another one o Pull it and make sure - Also curious o When roll back see that there is a grant from the agricultural and rehabilitation directorate o Does this have to do with the statutory root of title? - Basically just figuring out whether or not things affect your land - There is an estate sale o Executrix conveying in two capacities as she is also probably the beneficiary o Would want to verify that was true o Look to the letters of probate in the GR o If she says she is the executrix but there is nothing saying that she has the authority to convey the property, would want to make sure that she did indeed have that authority back in 1988 when she conveyed *NOL = not our lands – doesn't affect us Automation of the Land Registry System

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Every parcel of land mapped and assigned a PIN (“property identification number”) and then converted by Teranet to Land Titles Conversion Qualified (LTCQ) Process o Teranet takes the property in question à maps it à create a parcel and assign it a PIN before actual conversion o The letter “R” following a PIN denotes that it is still in the registry system In a system of non-computerized property, the registrar does not police boundaries o When a property is converted to computer, it keeps track of everything § Picks up overlapping boundaries between properties and the like o A property with an issue gets a PIN but is not converted into Land Titles System if the problem is still outstanding All instruments and other registrations that affect the property identified in the PIN that were made prior to the date of the creation of the PIN, must be searched manually using the paper records of the land registry office as described earlier. All documents registered after the date of the PIN's creation are listed on the automated parcel and accessed via the PIN

Teranet à Converting everything to the Land Titles system - Why not convert land titles to registry? o Registry system governed by the Registry Act § The basic statutory provision governing legal descriptions for lands in the Registry system is contained in s. 25. o Under this system the government offers no statement of ownership of property or guarantee of title o Government warrants only that the register is properly created and that the documents are properly recorded against the register o Under the Registry System there is no authority to refuse the registration of documents complying with the prescribed forms o Also, anyone could access the registry system – not restricted – anyone could register anything as long as had the appropriate form III. SEARCHES UNDER LAND TITLES SYSTEM If the property is in the Land Titles system, your job will in some respects be much easier. Here you just make notes from the register as it stands or obtain a copy of the register. You must still obtain a copy of the plan and you must still examine mortgages and agreements to find out specific terms. But in theory you do not go back behind the current entries in the register. - Governed by the Land Titles Act o What Land Titles guarantees that Land Registry does not § The province guarantees ownership § No prescriptive rights or adverse possession can be obtained through length of occupation or use to a land titles property § If there is a problem with title to a piece of land and you rely on it à there is a fund that can pay out in relation to liability on land title • Ex. government has deep pocket if it turns out that they did not guarantee title properly o When look at a land titles parcel register, you can rely that listed owner IS actual owner and don't have to search back § HUGE DIFFERENCE compared to the 40 year search o Exceptions

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Boundaries or extent of land is not guaranteed à they don't police boundaries They don't guarantee property is free from Planning Act violations – search that the person selling doesn’t own another bordering property….see planning acct – you have to search adjoining properties even in land titles “Land titles parcel record can be relied upon in the subject only to the qualifiers listed on the parcel register and the exceptions in the legislation” right column – “C” = certified – the document can be relied on and guarantees are in play § §

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Land Registration Reform Act - Applied both to land registry and land titles system o Just the computerization/automation IV. AUTOMATED SEARCHING The gradual automation of all title records by Teranet has today reached the point where one can say that the method by which titles are searched has changed dramatically. It is no longer a function of attending at the applicable land registry office with pen and paper in hand and photocopier at the ready Instead, for properties that have been automated and especially for those properties converted into the LTCQ system, a solicitor's office is where the search is conducted and the pen, paper and photocopier have been replaced by the personal computer and printer - Licencing o Have to be licenced with Teranet to use their system. Must download all of the software – not accessed just by way of the internet o Allows TN to see who is accessing the system and determine the level of access each user should be given with a view to monitoring the system § Important when it comes to mortgage fraud – security measures o Two levels of access § 1. Title searches only § 2. Title searches and registration of documents • Only solicitors in good standing will be granted registration privileges o Valid removable storage device must be obtained by the registered person § Identifies the user to the system § Can only have one profile on the device - Noteworthy features o Can change the Land Registry Office of choice from your desk § Ability to search in any jurisdiction § Your default or home office searches are MUCH cheaper than the out of town offices, however o If hit the PIN à displays the parcel register - Need to pull every document of interest that affects your lands o Even if certified, still want to make sure people are properly named and that there are no deficiencies! - Note: guarantee ownership but not boundaries o The only thing that gets you out of worrying about planning act violations is the whole of a lot on a plan of subdivision o Otherwise, have to search adjacent lands to ensure no planning act problems POLARIS (Province Of Ontario Land Registration Information System)

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Each property given a PIN Only documents relating to that particular property to be recorded PINs categorized together in blocks – street patterns

V. EXECUTIONS You should search in the office of the sheriff of the county or judicial district for executions long before the closing date. There is nothing more frustrating than to go to closing and then search executions, and to have your closing delayed because at the last minute you discover executions that may affect your title. -

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“Writ of execution” o An execution filed with the sheriff creates a lien only against those lands owned by the person named in the execution at and after the time of filing. The lien binds the land from that time on, so it is essential that you do not close until you have removed that lienDo this type of search in the Sherriff’s office in either the country or judicial office that is relevant § Ex. someone sues me and I have a judgment against me for $100,000 o This is the same as being a mortgage on the property § A writ will b...