Property Owner Title and Conveyancing Across Canada
Canadian Conveyancing – Not As Simple As You Thought
Understanding the differences is crucial. People often move to Canada from countries sharing British legal heritage, or they move between provinces, and they assume everything works the same.
In the labyrinthine world of Canadian real estate, conveyancing—the legal transfer of property from seller to buyer—remains a critical yet often misunderstood component. While the fundamentals of conveyancing are consistent across the country, the nuances of how it is conducted in British Columbia (BC), Alberta, and Ontario reveal significant differences in efficiency, complexity, and legal safeguards. These variations not only shape the experience of buyers and sellers but also influence the broader real estate markets in these provinces.
A Common Process
1. Engageme Legal Representation
The process of buying or selling property in Canada ends with a crucial step: engaging a lawyer or notary. This initial contact sets the stage for the entire conveyancing process. Early engagement is not merely a formality but a strategic move to preempt delays and address potential complications before they escalate.
Once a buyer or seller commits to the services of a legal representative, a client file is opened. A formal engagement letter—often referred to as a retainer letter—is sometimes dispatched for review and execution. This document outlines the scope of services to be provided, clarifying what is included and, just as importantly, what is not. While not all lawyers or notaries issue such letters for straightforward transactions, their use can serve as a safeguard, ensuring both parties are aligned on expectations from the outset.
In a market where timing is everything, the early involvement of legal professionals is not just advisable—it is essential. It provides the breathing room needed to navigate the intricacies of property transactions, from title searches to document preparation, and ensures that the path to closing is as smooth as possible. For buyers and sellers alike, this first step is a small but significant investment in the success of their real estate journey.
2. Gather Required Client Information
In the next step, the lawyer will seek information from the client. This information is typically collected electronically by email or fillable web forms. The types of information will vary depending on whether the client is the buyer or seller in the transaction. For all transactions, the lawyer or notary will collect the following information:
Personal information about the client needed to prepare documents and required by the government for client verification purposes. This information includes full legal name, address, birth date, telephone number, and email address;
Request for copies of all contracts and amendments related to the transaction, if the real estate agent hasn’t already provided them
Contact information for client’s real estate agents.
When acting for a buyer, the lawyer or notary also needs to collect the following information from the client:
Whether or not the buyer will be obtaining financing, and if so, the name and contact information of their mortgage broker or lender;
Contact information for the client’s insurance provider; and
If there is more than one buyer, do they intend to be registered on title as joint tenants or tenants-in-common?
When acting for a seller, the lawyer or notary must also collect any mortgage or loan reference numbers if there are mortgages to be discharged at closing.
3. Due Diligence
The next step of the conveyancing process involves conducting searches and due diligence. Whether a lawyer or notary acts for a buyer or seller will determine the types of searches and due diligence they perform. Additionally, the location of the property, use of the property, and type of property will also dictate the types of searches and due diligence performed.
When acting for a buyer, the lawyer or notary will collect and perform the following basic searches and due diligence:
Title search and pulling charges from title.
Confirm if there are any property tax arrears or credits.
Strata Corporation Disclosures and Documentation (if it is a strata titled property);
Corporate searches (if the buyer or seller is a company).
Request a copy of the insurance binder from the insurance provider.
Request mortgage instructions from the lender.
Order title insurance (if required).
Perform a personal property registration search in the name of the seller.
When acting for a seller, the lawyer or notary will collect and perform the following basic searches and due diligence:
Title search.
Personal property registration search (if needed).
Request any payout statements required to clear title (such as mortgage payout statements and land tax deferment payout statements).
4. Preparation and Review of Closing Documents
The buyer’s lawyer or notary prepares the buyer’s closing documents (including any mortgage documents needed for financing if it is a residential mortgage with an institutional lender). They also prepare the closing documents for the seller, including the seller’s statement of adjustments.
The seller’s lawyer or notary prepares the seller’s order to pay and the documents needed to clear title, such as the discharges for any mortgages and personal property registrations. The seller’s lawyer or notary will also review the seller’s closing documents (as prepared by the buyer’s lawyer) to ensure they are accurate and reflect the terms of the Contract of Purchase and Sale.
5. Client Signing Appointment
The legal representatives will typically meet with their clients two to five business days prior to the completion date to explain and sign the closing documents.
6. Return of Documents
The seller’s lawyer or notary sends the signed closing documents to the buyer’s legal representative, who agrees not to use them until sufficient funds (including financing) are secured to complete the transaction. Notably, the buyer’s lawyer can register transfer documents before receiving mortgage funds, provided all funding conditions are met. These exchanges follow standard undertakings set by the Canadian Bar Association of British Columbia.
7. Registration and Closing
Once the buyer’s lawyer confirms all mortgage conditions are satisfied and holds the buyer’s closing funds, they register the transfer and mortgage documents electronically with the Land Title Office. The buyer’s lawyer then releases the net sale proceeds to the seller’s lawyer, who undertakes to clear any encumbrances. Finally, the buyer’s lawyer notifies the client and involved brokerages of the completed transaction.
How Conveyancing Varies Across the Country
British Columbia: The Torrens System and Indefeasible Title
BC’s conveyancing process is underpinned by the Torrens system, a land title regime that grants registered owners an “indefeasible title.” This system, which originated in 19th-century Australia, provides a state-guaranteed assurance of ownership, making BC’s land title system one of the most secure in the world. Once a title is registered, it is virtually immune to challenge, barring exceptional circumstances such as fraud or government expropriation.
One standout feature of BC’s system is its reliance on electronic filing and public registries, which streamline the process and reduce the risk of errors. Yet, as with any system, challenges remain. For instance, the Land Title Office’s review period for power of attorney agreements can introduce delays, potentially complicating closing timelines.
Alberta: A Hybrid Approach with Historical Baggage
Alberta’s land title system shares some similarities with BC’s, but it is not a pure Torrens system. While Alberta also employs a land titles registry, its system retains elements of the older “deeds registration” approach, which requires a more extensive examination of historical title records. This hybrid model can introduce complexities, particularly in rural areas or for properties with long and convoluted ownership histories.
The conveyancing process in Alberta follows a similar trajectory to BC’s, with lawyers or notaries handling title searches, due diligence, and document preparation. However, Alberta’s system places greater emphasis on historical title searches, which can uncover unregistered interests or claims that might not be immediately apparent. This additional layer of scrutiny can prolong the conveyancing process, particularly for older properties.
Another key difference lies in the role of title insurance. While title insurance is optional in BC, it is more commonly used in Alberta to mitigate risks associated with historical title issues. This reflects the less absolute nature of Alberta’s land title guarantees compared to BC’s indefeasible titles.
In Alberta, it’s possible for someone with a historic claim to the land to challenge your rights to the property title. While title insurance protects you from having to pay the legal fees and bear the financial burden of a challenge of ownership, going through a challenge is…often emotionally challenging.
Ontario: Complexity and Bureaucracy in a High-Stakes Market
Ontario’s conveyancing process is arguably the most complex of the three provinces, reflecting the sheer scale and diversity of its real estate market. Unlike BC’s Torrens system, Ontario operates under a land registration system that combines elements of the old registry system with the more modern land titles system. This dual system can create confusion and inefficiencies, particularly for properties that have not been converted to the land titles system.
In Ontario, the conveyancing process is heavily reliant on lawyers, who must navigate a labyrinth of municipal, provincial, and federal regulations. This includes ensuring compliance with zoning bylaws, environmental regulations, and tax requirements. The province’s high-stakes real estate market, particularly in cities like Toronto, further amplifies the pressure on conveyancers to deliver flawless transactions.
One notable feature of Ontario’s system is its reliance on title insurance, which is almost universally required by lenders. This reflects the greater risks associated with Ontario’s less centralized and more fragmented land registration system. While title insurance provides an additional layer of protection, it also adds to the overall cost of conveyancing.
Comparative Insights: Efficiency vs. Security
When comparing the three provinces, a clear trade-off emerges between efficiency and security. BC’s Torrens system offers unparalleled security and simplicity, thanks to its state-guaranteed titles and streamlined processes. However, this system can be rigid, with limited flexibility to address unique or unforeseen issues.
Alberta’s hybrid system strikes a middle ground, offering a balance between historical scrutiny and modern efficiency. However, the reliance on historical title searches can introduce delays and uncertainties, particularly for older properties.
Ontario’s system, by contrast, prioritizes flexibility and adaptability, reflecting the complexity of its real estate market. However, this comes at the cost of increased bureaucracy and higher transaction costs, particularly for buyers and sellers in urban centers.
Conclusion: The Role of Conveyancing in Shaping Real Estate Markets
The conveyancing process is more than just a legal formality; it is a cornerstone of property ownership, shaping the experiences of buyers, sellers, and professionals alike. For property owners, the system in British Columbia is the most efficient and secure.
Understanding the differences is crucial. People often move to Canada from countries sharing British legal heritage, or they move between provinces, and they assume everything works the same.
By appreciating the unique challenges and opportunities of each province’s conveyancing process, they can better serve their clients, anticipate potential issues, and contribute to smoother, more successful transactions. As Canada’s real estate markets continue to evolve, so too must the systems that underpin them, ensuring that they remain fit for purpose in an increasingly complex and dynamic landscape.
