Land registration goes back a long, long time in the legal history of Ontario. In fact, it goes back to about 1795 when Ontario was called Upper Canada. From that time forward until now, a lawyer in the province could represent both a vendor and a purchaser and could register a deed from one to the other. Although most real estate transactions typically involve two lawyers, for various reasons, there are a number of transactions where only one lawyer would normally be involved. Examples are transfers of property from a parent to a child, or between spouses, or from an estate trustee to a beneficiary, or from a personal owner to his or her corporation.
You may have read in the newspaper last year about frauds that have been committed in real estate transactions in the Toronto area. Unbeknownst to you, a fraud artist mortgages your property to the bank under a false power of attorney and takes off with the money. You discover the nefarious act accidentally but you still owe the money to the bank. You make an insurance claim against the one lawyer involved who acted for both sides, the bank and the “owner.” You also make a claim against the government’s title insurance fund.
Because of the growing number of frauds in real estate transactions and the claims being made by hoodwinked owners, the government is changing the land registration rules in Ontario. Only lawyers will now be able to register deeds transferring ownership. More importantly, for the first time since 1795, almost every real estate transaction transferring ownership will require, not one, but two lawyers. One lawyer must act for the vendor and the other lawyer must act for the purchaser. The government policy for this change is the belief that, having two lawyers involved in each transaction, will significantly reduce the occurrence of title fraud and claims against the government’s title insurance fund and the Law Society’s insurers.
Thus, virtually all real estate transactions which used to require only one lawyer will now require two lawyers, thereby doubling legal costs for the parties involved.