COVID-19 REAL ESTATE UPDATES
TLA is monitoring the LSO, MAG and other organizations for updates of particular interest to lawyers, regarding the COVID-19 outbreak. While we will provide news in the TLA Update and Friday Focus, all Real Estate Transactions information will be centralized on this page and accessible whenever you need it.
August 24, 2020
Meeting with Director of Titles
FOLA received lots of response to the announcement that the Land Registry Offices will be closing to the public this fall. Many of you expressed concerns regarding the process to be put in place and asked us to follow up with the Director of Titles.
FOLA is pleased to report that, very shortly after receiving their written expression of concern on behalf of the bar, the Director of Titles has agreed to meet with the FOLA Real Estate Representatives in a Zoom call. FOLA is working to confirm the date and time. If a designated real estate representative from a particular law association is not available to attend, an alternate may attend in their place.
Please confirm your interest in attending by sending an email to email@example.com with the subject line “DOT Meeting” and confirming which law association you represent.
Delivering Mortgage Discharge Payments by Wire
LawPRO has posted an up-to-date list of financial institutions that are accepting mortgage discharge payments by wire, including payment instructions. See LawPRO’s Avoid A Claim Blog here for further details.
Virtual Commissioning Beyond Covid
The provincial government has passed regulations under the Commissioners for Taking Affidavits Act to permit virtual commissioning permanently. O.Reg 431/20 came into force on August 1, 2020 and sets out the conditions under which an affidavit or declaration can be completed remotely.
The regulations include the following conditions:
- The oath or declaration is being administered by an electronic method of communication in which the person administering the oath or declaration and the deponent or declarant are able to see, hear and communicate with each other in real time throughout the entire transaction.
- The person administering the oath or declaration confirms the identity of the deponent or declarant.
- A modified version of the jurat or declaration is used that indicates,
- that the oath or declaration was administered in accordance with this Regulation, and
- the location of the person administering the oath or declaration and of the deponent or declarant at the time of the administering.
- In the case of a commissioner to whom section 5 of the Act applies, the information on the stamp required to be used under that section appears on or in the document being signed.
- The person administering the oath or declaration takes reasonable precautions in the execution of the person’s duties, including ensuring that the deponent or declarant understands what is being signed.
They also require every person who administers an oath or declaration remotely to keep a record of the transaction.
The regulations are brief and leave room for interpretation. The Law Society notes in its article on best practices for remote commissioning that it is “important for lawyers and paralegals to note that there is nothing in the Act or its Regulation that obliges a receiving party to accept a document that has been commissioned remotely”.
The following resources are also available on this topic:
- Ministry of the Attorney General Guide for Newly Appointed Commissioners for Taking Affidavits
- Law Society of Ontario Remote Commissioning Information Page
- Law Society of Ontario Best Practices for Remote Commissioning
- Law Society of Ontario Remote Commissioning Checklist
- LawPRO Avoid A Claim article New Rules for Virtual Signing and the Winding Down of Remote Signing of Wills and Powers of Attorney
Planning Act Emergency Period Suspension Calculator
Certain time periods under the Planning Act were suspended by Emergency Orders relating to Covid-19. All time suspensions regarding the Planning Act ended on June 22, 2020. Various provisions under the Planning Act were differently impacted by the suspension and LawPRO has prepared a chart to assist in calculating the impact of suspensions under the Planning Act. See LawPRO’s Avoid A Claim Blog here for further details.
Ongoing Government Consultations
The following provincial government consultations relating to real estate issues are currently on-going:
- Consultation on topics from the Auditor General Report on Tarion – comments due by August 24, 2020
- Consultation on the Real Estate and Business Brokers Act, 2002 (REBBA) re: Personal Real Estate Corporations (PERCs) and Use of Advertising Terms – comments due by September 8, 2020
- Consultation on the proposed amendments to O. Reg 188/08 under the Mortgage Brokers, Lenders and Administrators Act, 2006 re: the transfer of regulatory authority for syndicated mortgage investments – comments are due by September 21, 2020
Working Group – New Mentoring Survey Question
The Working Group on Lawyers and Real Estate has new survey question in their mentoring initiative – which can be found here. The Working Group launched this initiative to mentor real estate lawyers on best practices. Because the Working Group does not have the resources to individually mentor lawyers, the concept is to create survey questions about various aspects of the work in a real estate transaction and then provide a comment in response to the survey results. It is hoped that this will generate discussion about the practice, encourage ideas to be shared and create an atmosphere to suggest best practices to better serve our clients and possibly create more efficient practice.
The latest survey question, and responses from all past survey questions, can be found on the Working Group website here.
Free LSO CPD
The Law Society is having a Red Tag Sale on CPD programs from 2015-2017. Until September 7, 2020, you can view past programs for free.
Note the LSO’s reminder: Reading CPD materials alone does not qualify for CPD Hours. CPD Hours may be claimed for viewing archived webcasts, replays, or other on-demand or recorded program formats.
July 21, 2020
Consultation re: Virtual Commissioning Regulations
The Ministry of the Attorney General is accepting comments on its proposal to establish a regulatory framework that enables virtual acts of commissioning. The proposal was posted on July 14, 2020, and comments are due by July 22, 2020.
Further details are available here. The consultation window is very short, so we encourage anyone who is interested in providing comments to do so before the deadline.
Planning Act Amendments
FOLA regularly receives inquiries about the status of the Planning Act amendments brought forward by Doug Downey in a private members’ bill last year. The bill effectively died following second reading when Mr. Downey was appointed to cabinet as Attorney General. As we have previously reported, the draft amendments are now with the Ministry of Municipal Affairs and Housing and we have been encouraging the government to reintroduce them in a new bill.
Earlier this week FOLA participated in a Justice Sector Call with the Attorney General and had an opportunity to ask him about the status of these amendments. He is still very keen to see these amendments enacted, and suggested that letters of encouragement from lawyers to their local MPPs may be helpful. Contact information for all MPPs is available here.
Tarion is seeking input on 10 consumer protection initiatives, including the implementation of 8 of the Auditor General’s recommendations. Further details are available here .
Tarion has offered to set up an online meeting with the FOLA Real Estate representatives if there is interest. Alternatively, written submissions can be made through the Ontario Regulatory Registry here or by emailing firstname.lastname@example.org before August 24, 2020.
Tarion issued a bulletin on July 6, 2020 regarding the reinstatement of timelines and resumption of in-person inspections. The bulletin is available here.
If and when we receive further information of interest to the real estate bar, we will pass it along.
June 25, 2020
PAYMENT OF MORTGAGE DISCHARGES BY WIRE
Great news!! Further to our update of June 12, 2020 confirming that RBC has implemented a new protocol to allow lawyers to pay mortgage discharges by wire, we have been advised that other lenders will also accept a wire transfer for the payment of mortgage discharge amounts:
We understand that Scotiabank is also accepting payment of mortgage discharge funds by wire, but we have not received wire details/instructions.
We also encourage you speak with your own financial institution or those you regularly work with to determine if they will be making similar arrangements to avoid the need for someone to attend at the bank personally to provide discharge payments.
PAYMENT OF WIRE TRANSFER FEES
There has been considerable debate regarding the payment of bank fees to send or receive wire transfers. It is FOLA’s position that each lawyer should be responsible for the fees charged by their own bank with respect to sending or receiving wire transfers. FOLA’s position matches that of the Provincial Working Group on Lawyers and Real Estate.
If no consensus is reached by the bar, lawyers may have to negotiate with each other on every transaction, since the incoming wire fees vary from lawyer to lawyer and bank to bank. How would the purchaser’s lawyer know how much the vendor’s lawyer’s bank will charge for an incoming wire, if anything? Some lawyers have all incoming and outgoing wire fees included in their monthly account fees; others are required to pay a set amount to their bank for each wire transaction - and that set amount is not consistent among banks. We have heard of amounts ranging from $15 - $75 per wire.
This is no different from a purchaser’s lawyer couriering funds to the vendor’s lawyer where the purchaser’s lawyer pays for the delivery of the funds to the vendor’s lawyer. The full balance due is delivered to the vendor’s lawyer’s bank by wire, and the purchaser’s lawyer pays whatever charges may be applicable by their bank for the delivery to the vendor’s lawyer’s bank. If the vendor’s lawyer has an arrangement with their bank whereby fees are charged to them to receive a wire, that is the responsibility of the vendor’s lawyer. Such fees are, in our opinion, properly chargeable to a client as a disbursement.
REAL ESTATE LIAISON GROUP
Eldon Horner and Merredith MacLennan attended a meeting of the Law Society’s Real Estate Liaison Group earlier this week. The Real Estate Liaison Group is comprised of benchers and staff from the Law Society of Ontario, senior executives from LawPRO, and members of FOLA and the OBA to discuss and review issues of concern or relevance to the real estate bar.
The Group had planned to meet in February but rescheduled to March due to weather issues. The rescheduled March meeting was cancelled due to Covid. The recent meeting was held by video conference and provided an opportunity for the members to provide updates with respect to the state of real estate practice in light of the current conditions caused by Covid-19.
A further meeting is planned for later this summer when substantive issues can be discussed.
SUSPENSION OF LIMITATION PERIODS UNTIL SEPTEMBER
The Province of Ontario has extended the suspension of limitation periods and time periods in proceedings until September 11, 2020.
The extension does not affect matters under the Construction Act and court staff may accept for filing requisitions to note parties in default in construction lien actions. Parties affected by the time limits set out in the Construction Act, or its predecessor Construction Lien Act, should continue to operate within the timeframes specified in those statutes.
NEW ONTARIO LAND TRIBUNALS
The Ontario government announced this month it is combining the Local Planning Appeal Tribunal, Environmental Review Tribunal, Board of Negotiation, Conservation Review Board and Mining and Lands Tribunal via the Ontario Land Tribunals.
The Ontario government announced on June 17, 2020 the new combined tribunals are intended to “make it faster to resolve land use planning disputes”. Changes will take effect July 1, 2020. Further details are available here.
June 16, 2020
RBC Accepting Mortgage Discharges by Wire
Hurray! We understand that RBC has rolled out a new procedure for personal mortgage payout request effective June 15, 2020. We hope this means that FOLA's messaging to the banks has been working and that more banks will follow. Here are the RBC details:
Effective June 15 - to support COVID-19 physical distancing protocols, our Personal Mortgage and Homeline Plan Payout team is introducing a digital alternative to a cheque or draft.
Lawyers can now contact the Payout Statement Phone Team (1-800-974-1163) to send a wire payment instead of mailing/dropping-off a cheque or draft.
The Payout Statement Phone team will provide lawyers with a password protected e-mail using Secure Webmail with:
- Incoming wire instructions for Transit 08943 (excluding Quebec)
- Payout and discharge instructions
The lawyer will need to reply via secured e-mail with the following documents:
- Wire Confirmation
- Payout Statement
- Payout and discharge instructions (same letter that would normally accompany your cheque)
- Form C (British Columbia only)
FOLA had a very positive meeting with the Ministry of Attorney General and Ministry of Consumer and Government Services staff on June 10, 2020 regarding virtual commissioning and virtual notarization. A copy of the written submissions are available on the FOLA website here.
June 5, 2020
Real Estate Update
In an effort to keep real estate lawyers up to date with changes affecting their practice, we have further information to be shared:
Bill 190, COVID-19 Response and Reforms to Modernize Ontario Act, 2020 passed first, second and third reading and received Royal Assent on May 12, 2020. Schedule 4 includes amendments to the Commissioners for Taking Affidavits Act to permit remote commissioning, subject to regulations made under the Act.
The regulations are currently being drafted and the Federation of Ontario Law Associations (FOLA) Real Estate Co-Chairs will be participating in stakeholder consultations with the Ministry of the Attorney General on June 10, 2020.
Authorization for Virtual Meeting
Many lawyers are now meeting with clients remotely. To ensure that clients understand and consent to the risks associated with virtual meetings, FOLA obtaining clients’ written consent to video communications. A sample Authorization for Virtual Meeting can be found here .
Tarion Information Sessions for Lawyers
Tarion will be hosting two webinars for real estate lawyers next week, aimed at sharing information about how the provincial orders related to COVID-19 are impacting the new home warranty.
1. Real Estate Lawyer Webinar: Impacts of COVID-19 on the new home warranty. Thursday June 11, 2020 11:00 am - 12:30 pm
This webinar is ideal for lawyers who provide services to both new home vendors/builders and new home buyers. During this session, Tarion representatives will discuss:
- The emergency order that suspends all statutory timelines related to the warranty
- How Tarion is handing form submissions, repairs and inspections during this time
- Tarion’s advice for buyers on how to conduct the PDI safely in consideration of social distancing
- Potential delays that new home purchasers may be facing
At the end of the short presentation, there will be time for a question and answer session. You can register here .
2. Real Estate Lawyer Webinar: Understanding the Unavoidable Delay Process Thursday June 11, 2020 2:00 – 3:30 pm.
This webinar may be of interest to lawyers who represent new home vendors/builders. During this session, members of Tarion’s legal team will outline the steps that need to be taken for new home vendors/builders to use the unavoidable delay provisions of the addendum to gain relief from delays stemming from the COVID-19 pandemic. A question and answer session will follow the presentation.
You can register here .
Many lawyers are asking about the use of digitally signed documents. Some lawyers love them and want to use them exclusively during this pandemic and others will not accept documents signed digitally. Some lawyers also differentiate between documents signed digitally using platforms like Docusign and documents signed on a tablet in the party’s own handwriting.
The Law Society confirms that this is a substantive legal issue to be determined by the lawyer. (see the LSO FAQ on this topic here .)
FOLA is also not taking a position for or against the use of digital signatures, but cautions lawyers to confirm that documents signed in such a manner will be acceptable to the recipient(s) before using digital signing platforms for closing documents. Will the lenders, the other lawyer, CRA, etc. accept the document signed in this manner?
Communication is essential to prevent issues on closing.
A “Zombie Deed” is a transfer that is registered after an owner dies – not by the Estate Trustee, but purportedly by the owner themself. These situations arise when an A&D for the Transfer is signed by the owner, but before the Transfer is registered, the owner dies.
The Director of Titles has spoken out against “Zombie Deeds” in the past and the Courts have recently rendered a decision confirming that such transfers are improper. See the latest A Lot from the DOT here .
Please note: The information provided herein is of a general nature only and is not intended to provide legal advice.
April 20, 2020
Real Estate Update
Following our update last week, we have received further information to be shared with you. We have been diligently working with other stakeholders to seek clarification and effect positive changes for the benefit of real estate lawyers and their clients. We are very happy to be able to confirm some more progress in this regard.
On behalf of TLA we wish to express our gratitude to the Treasurer and senior staff at the LSO who have been actively engaged on many issues important to the public and to the bar during these challenging times. It is greatly appreciated.
More great news! We have been advised that MCAP and RMG have rescinded their restriction on lawyers acting on refinance transactions.
A notice sent out last week confirms that effective immediately, MCAP and RMG refinances may be closed through FCT, FNF or individual solicitors.
Electronic Funds Transfers
Most lenders still require certified cheques or bank drafts for mortgage discharge purposes, and with banks closing branches and reducing hours, discharging mortgages is becoming more and more challenging. We continue to work with other stakeholders in an effort to find alternate solutions.
We have been advised that some lenders are offering to debit the lawyer’s trust account directly by EFT to withdraw mortgage discharge funds. It is our understanding that this is not permitted under Law Society By-Law 9. The only external party authorized to debit a lawyer’s trust account is Teranet, and only from a special trust account set up under section 16 of By-Law 9. A lawyer can electronically transfer funds to a lender, provided that the lawyer complies with the By-Law 9 requirements for such transfers. By-Law 9 is available on the Law Society website.
We have also been asked whether third party EFT platforms for transferring closing funds have been approved by the Law Society, and as far as we know, the Law Society has not approved any. The latest statement from the Law Society on such platforms is here.
Planning Act notice provisions suspended
In response to questions about whether or not the Emergency Order freezing limitation periods applies to the notice provisions under the Planning Act, the government enacted Ontario Regulation 149/20 last week to clarify. O.Reg 149/20 suspends certain notice periods under the Planning Act until the COVID-19 emergency is terminated or disallowed. The Regulation is available here.
Further letters from the Director of Titles have been received.
A letter from the Director of Titles relating to registered mail for Land Titles Applications is available here.
A letter from the Director of Titles relating to Cautions is available here.
LDD Remote Signing Platform
As we previously advised, Lawyer Done Deal has launched a Remote Signing Platform which is available to all lawyers free of charge. It allows lawyers to post documents to clients, host virtual closing meetings and view client signing activity. More details about the platform can be found here. A short video regarding the new platform is now available on the OBA website.
April 15, 2020
Real Estate Update
Great news! We have been advised that at least two the major banks will now accept documents signed remotely.
Scotiabank has issued a statement to lawyers, which is also available in French, confirming that signing mortgage documents and identity verification can be done by video conference in certain circumstances. Lawyers who work with Scotiabank should have received the statement through either a posting on Telus Assyst or by email from FCT. Please review the statement to confirm the requirements for meeting with clients by videoconference on a transaction involving a Scotiabank mortgage.
Royal Bank of Canada has also issued a notice via Telus Assyst that video conference meetings to verify identity and sign documents are permitted in certain circumstances. A copy of the notice is available here. Please review the statement to confirm the requirements for meeting with clients by videoconference on a transaction involving a RBC mortgage.
We are very pleased to see these announcements and are hopeful that other lenders will follow suit.
The Director of Titles has provided further guidance relating to some specific questions he has received.
- See his letter of April 9, 2020 here relating to original signatures being required on plans and paper documents.
- See his letter of April 13, 2020 here relating to expropriations.
- See his letter of April 14, 2020 here relating to requests to expedite certification of parcelization transfers or PIN splits.
April 6, 2020
Real Estate Update
The situation is constantly evolving, and we are working to get you timely and accurate information as best we can.
LRO and Teraview
We are pleased to report there have been no new developments or changes.
Client ID Requirements
It is important to be mindful that you MUST continue to verify your client’s identity in accordance with ever changing rules. You must not only follow the LSO guidelines here, but you must also be sure to examine the instructions provided by your lender some of whom seem to be maintaining a position that ID verification must be “in person”.
The Law Society has confirmed that a driver’s licence that expired on or after March 1, 2020 can be used as valid ID. Further details are available on the Law Society’s website here.
Wire transfers are becoming more and more common as a way of exchanging funds on closing; however, we continue to hear reliable accounts of wire transfers being unable to be completed on the same day due to a variety of factors. The Federation of Ontario Law Assocations (FOLA) and others are working on encouraging the banks and credit unions to find a way to ensure timely completion of wire transfers. If you are intending to use a wire transfer you should have a discussion with the lawyer acting on the other side as to how a delay within the system will be handled.
Wire Transfer Fees
Some banks are charging a fee to send or receive a wire, and we have received questions from many lawyers about who is responsible for the payment of these fees. The simplest solution is for each lawyer to be responsible for the fees charged by their financial institution for sending or receiving a wire. There is no prescribed rule about this. Some lawyers have accounts where no such fees are payable. The fees themselves can vary from bank to bank. Wiring fees are disbursements incurred in connection with the transaction. We recommend that you confirm the expectation with the lawyer on the other side of the transaction prior to requesting or initiating a wire transfer, to avoid holding up closing once the funds have been received.
Wiring Funds for Discharges
This is not yet a possibility, but we are hearing of positive developments that MAY lead to such a service becoming available.
LDD Remote Signing Platform
Lawyer Done Deal has now launched a Remote Signing Portal which is available to all lawyers free of charge. It allows lawyers to post documents to clients, host virtual closing meetings and view client signing activity. You may wish to consider it as an option if you are engaging in remote signing.
More detail can be found here.
April 1st, 2020
Real Estate Update
LRO Notice to Clients
The provincial government has issued a Notice to Land Registration System Clients confirming that Teraview continues to run for both search and registration, OnLand continues to run for search and various request functions, and that the all land registry offices are scheduled to be open from Monday to Friday from 9:30am to 12:00pm.
The Notice can be found in English and French on FOLA's website here.
Law Society CPD
The replay of the Law Society free audio webcast from Friday, March 27 entitled “Your Real Estate Practice and the COVID-19 Pandemic: What You Need to Know Right Now” is now available. The link to the audio program is here and the link to the resource materials is here.
Lawyer Done Deal Remote Signing
Lawyer Done Deal has created a remote signing portal for lawyers where you can post documents to clients, host virtual closing meetings and view client signing activity, all while meeting social distancing and legal obligations. This portal is being offered free to all lawyers, whether or not you already have a LDD or RealtiWeb account.
They are also working on including a client verification element that will be Fintrac compliant. More information is available on the LDD website here.
Expiry of Drivers Licences and Passports
What happens if a client’s ID has recently expired or will expire this month? Renewals of passports and driver’s licences are currently suspended, so clients will not be able to get new ones while this pandemic continues.
The Ontario government has extended the validity and expiration date of driver’s licences and Ontario Photo Cards. See here for more details. We think this means that you should still be able to accept an Ontario driver’s licences as valid identification, even if the expiry date has passed.
Information on the Government of Canada Passport Services can be found here.
A new Tarion Advisory was published on March 26 in response to the Emergency Order passed by the provincial government suspending limitation periods. Tarion has suspended all warranty claim submission deadlines – the 30 day, year end, second year, major structural defect, delayed closing, financial loss and deposit claims deadlines have all been suspended. Once the Emergency Order has been lifted, homeowners will receive a reasonable extension to submit their forms. Tarion has also suspended timelines relating to builder repair periods, except for emergencies or health and safety issues.
The March 26, 2020 Tarion Advisory can be found here.
Letter to MCAP
FOLA’s letter of March 26, 2020 regarding MCAP’s recent decision to close all refinance transactions through either FCT or FNF is posted on their website here.
Working Group Fees, Disbursements & Taxes Calculator
Given the additional work that lawyers and their staff are doing in order to complete transactions during these challenging circumstances, many lawyers might be reviewing the amount of legal fees they are charging.
The Working Group on Lawyers and Real Estate has a Suggested Fee Schedule, which can be found here.
In addition, they have now added a Fees, Disbursements & Taxes Calculator on their website which can be accessed here.
This new calculator does many things, simply by answering a few questions.
Once you enter the value of the transaction, if you indicate your quoted fee, it will compare it to the suggested fee schedule, as a % of all costs and to the HST on the real estate agent's fees, which is great for marketing.
It will also:
- calculate the LTT
- calculate the MLTT (for Toronto properties)
- calculate the first-time homebuyer rebates for LTT & MLTT
- calculate the NRST (for GGH properties)
- estimate the disbursements (suggestions provided but fully editable on the disbursements tab)
- calculate for a purchase, a sale or a mortgage-only transaction
- provide a personalized 2-page printout of the summary and estimates disbursements, which can be reviewed with or emailed to clients
March 26, 2020
Real Estate Update
Law Society CPD
Our last update included a link to the Law Society free audio webcast on Friday, March 27 entitled “Your Real Estate Practice and the COVID-19 Pandemic: What You Need to Know Right Now”. We understand that the live program is now full. The Law Society is replaying the program on April 1, 2 and 3. See the LSO CPD calendar here for more details.
We have reached out to the Law Society for assistance and we understand that they are contacting the financial industry and federal and provincial politicians regarding the following concerns:
- Most banks are not accepting scanned documents for mortgage closings – and mortgage instructions require lawyers to be in the physical presence of borrowers, so even if we meet remotely, we need to be physically in the same room to sign the documents.
- Lenders are not allowing lawyers to wire mortgage discharge funds, even though many bank branches are closed and those that are open are working on reduced hours.
- Some lenders are now requiring all refinances to go through FCT or FNF, meaning borrowers will not have any legal representation.
There is a global pandemic with health and safety protocols to be followed. Remaining inflexible, requiring people to put themselves at risk and denying borrowers legal counsel is unconscionable.
We strongly urge lawyers to think about the title insurers they are working with – is your preferred title insurer actively lobbying banks and government to remove lawyers from the real estate transaction? Are they marketing their ability to perform legal services that you ordinarily provide? If so, the premiums you send them are funding these lobbying and marketing efforts.
There are title insurance companies, like TitlePLUS and Stewart Title, who are actively working to keep lawyers involved in real estate transactions, especially during these unprecedented times.
Section 10 of the Document Registration Agreement (reproduced below) requires original documents to be provided within 2 business days of closing. You may want to consider amending this to either eliminate the need to send originals or extend the time frame.
10. This Agreement (or any counterpart hereof), and any of the closing documents hereinbefore contemplated, may be exchanged by telefax or similar system reproducing the original, provided that all such documents have been properly executed by the appropriate parties. The party transmitting any such document(s) shall also provide the original executed version(s) of same to the recipient within 2 business days after the Closing Date, unless the recipient has indicated that he/she does not require such original copies.
Sending Closing Funds
Because many lawyers are now wiring purchase funds to the other lawyer whenever possible, a separate cheque is not being written to the mortgage lender for the discharge amount - the full balance is being delivered to the vendor’s lawyer with reliance on their undertaking to payout and discharge the mortgage.
The Law Society guidelines recommend a separate cheque payable to the lender for the discharge amount to protect against fraud - lawyers who receive the funds but don’t pass them along to the lender, and consequently never receive a discharge. You may be aware that there have been a few lawyers over the years who have gotten into some kind of trouble and who did this. It has been rare, but it has happened.
Given the current situation, there may be a greater risk of this happening if deals are not closing and people begin to feel desperate. Bills still need to be paid, and if there are fewer transactions closing, there may be a temptation to “borrow” the money sent for a discharge.
If you are sending the full balance due to the lawyer on closing, you may want to consider amending your closing procedure to request evidence that the funds have been forwarded to the lender.
Corporate Amalgamations and Amendments
We have been advised that the only ServiceOntario office accepting amalgamations or amendments for Ontario companies, which need to be filed in person at the counter, is the Bay Street office in Toronto.
Land Transfer Tax pre-payments
We have also been advised that the Ministry of Finance is also no longer accepting payment of Land Transfer Tax at the Oshawa office. Pre-payments of LTT were done when you didn’t want to include the consideration on the transfer but rather simply include a statement that LTT was pre-paid. For workarounds, you should contact the Ministry of Finance.
March 25, 2020
Update - Land Registry Offices/LSO Program
Teraview® and Land Registry Operations
You can expect some changes in the operation of the Land Registry Offices. We urge you to be patient, to explain to your clients the uncertainties and delays which may occur and to be prepared with tools like the Lawyer’s Delayed Closing Escrow Agreement prepared by the Working Group on Lawyers and Real Estate, which can be found here.
This is the unofficial information we have received:
- Teraview® and ONLand are still up and running and will continue to stay up during all normal hours!
- All physical Land Registry Offices have commenced reduced hours 9:30 to 12:30. If you need to do anything in paper you should verify the status of your local LRO.
- Some physical LROs (mostly in Eastern Ontario) are still closing ad hoc. For the moment there is no work-around, but efforts are ongoing. The situation is unpredictable at best so lawyers and clients should be prepared to adapt. The list of unanticipated LRO closings is growing, not shrinking. Unfortunately, there is no guarantee that non-convert deals will be registered.
- For the time being it seems the volume of registrations in Teraview® are up, but certification rates are down to a crawl. Starting tomorrow, March 26th we expect that the LRO’s will move to much more stringent social distancing so even lower certification rates will likely result.
Law Society Program
The Law Society is holding a free audio-only program on Friday, March 27 2020 from 12pm-2pm entitled Your Real Estate Practice and the COVID-19 Pandemic: What You Need to Know Right Now. You can register for the program here.
Please note: The information provided herein is of a general nature only and is not intended to provide legal advice.
March 20, 2020
Closing Real Estate Deals During a Pandemic and Basic Approach for remote Signing
Here is what we know:
1. Upcoming Law Society Webinar for Real Estate Lawyers
The Law Society is scheduling a free webinar for real estate lawyers for Friday, March 27 from 12:00pm to 2:00pm to address the issues that real estate lawyers are facing right now. Keep your eye out for further details.
2. There are no plans to shut down Teraview®
Several lawyers have reached out to let me know that their local Land Registry Office is closed. Apparently some small LROs and some co-located within ServiceOntario centres have, in fact, closed. However, I have been advised that notwithstanding these closures, it is still business as usual for land registration and documents can continue to be registered via Teraview®.
If your local LRO is closed, you will not be able to register any paper documents (e.g. Registry Act documents, certain Land Titles documents that must be submitted in paper, plans, etc.). They cannot be submitted via OnLand or sent to another LRO. Registration of paper documents in these LROs will not be accepted for registration or deposit until that LRO office reopens.
If an LRO has closed, there is no access to ROSCO computer terminals, and full-size white prints of plans will not be available through the LRO or Teraview®.
If you have a paper deal in an LRO that is closed, you will need to explore workarounds (e.g. title insurance gap coverage, escrow agreement, postponement, etc.).
3. Banks remain open and mortgages are funding
There don’t seem to be any bank closures, and mortgages continue to be funding. I have been advised that certain branches will be closing – in Ottawa we’ve been told that only bank in each zone will remain open. I don’t know how big a zone is, or how many zones there are, but I’m assuming that there will be delays in getting money to and from the bank if cheques or drafts are involved.
4. Tarion acknowledges that unavoidable delays are likely
Builders are sending out delay notices to purchasers. If you have upcoming purchases from a builder, check with your client to confirm if they have received a notice of delay.
Tarion issued an Advisory on Friday confirming that the builder repair period has been suspended until April 13, 2020, and that homeowners may refuse access and builders may refuse to perform after-sales services during the Covid-19 pandemic without penalty. All conciliations, inspections, common element meetings and other in-person meetings scheduled for the next month will also be postponed. The Tarion Advisory can be found here.
Tarion issued a further Advisory on March 16 regarding pre-delivery inspections and delayed closings, which can be found here and here.
5. Working remotely
Many lawyers and law firms are closing their offices and working remotely. My office gave all the lawyers and staff the option to work from home and equipped everyone with the tools to make this possible. (My partner had the foresight to purchase 25 chromebooks two weeks ago and then had vpn software installed on each of them.)
This week, however, we closed the office entirely as a precautionary measure to safeguard the wellbeing of our lawyers and staff. It was a difficult decision, because most people cannot work as efficiently from home. Fewer, smaller screens. No popping by a colleagues’ desk to ask a “quick” question. But it had to be done.
If you and/or your staff need to work remotely, here are some things to consider:
a) Use technology to your advantage.
If the other lawyers and staff in your office have laptops, tablets or phones with cameras and microphones, consider video conferencing with them from time to time.
There are several good video conferencing applications that will allow you to connect and collaborate with your colleagues and staff. Video conferences can yield better results than phone calls. Some video conferencing technology allow you to share your screen, so that you can collaborate more effectively. It can also make you feel less isolated.
You can also take advantage of text messaging or instant messaging to cut back on your email clog.
Send as much as you can by email. I know, I’ve mentioned email clog twice already and now I’m suggesting more email. But it is practical. Just remember that email is not secure, so you may want to encrypt certain documents before emailing them (Word, Excel and most PDF programs have encryption by password built into them – it’s simple to do. Just don’t send the password in an email – call the recipient with the password).
b) Think about your accounting needs.
My firm instituted a “wire transfer only” (or direct deposits for incoming funds) policy. We wanted to cut back on the need for paper cheques for two reasons – one, if the firm had to close and operate remotely, cheques become more difficult since two partners need to sign all trust cheques; and two, electronic banking means fewer hands touching the money and spreading germs. We set up a remote accounting office, within close proximity to two partners’ houses, so cheques can be printed, couriered to the partners for signature, and then sent to the recipient. It will definitely take more time than when we are down the hall from one another, but it works for those times when we can’t wire funds into the recipient’s account.
If you don’t have the ability to wire directly from your desktop, speak to your bank about getting it. It’s a game changer. Unfortunately, it might take a while at this point, as banks are likely working with reduced staff and high volumes right now.
c) Client meetings
Many law firms whose offices are still open are restricting access. Drop-ins are discouraged and client meetings are strictly by appointment only.
If you are meeting with clients in person, lawyers and clients should follow health authority recommendations – don’t shake hands, sit as far apart as possible, disinfect the space regularly, etc. When making the appointment and before meeting with them, ask your clients if they are experiencing any symptoms, if they have been in contact with someone who is sick, has tested positive for Covid-19 or if they are self-isolating for any reason. If the answer is yes, consider the health and safety of you and your staff and determine if the meeting can be postponed or conducted remotely.
Some lawyers are having clients place documents on a table or counter rather than handing them to another person directly. If your office has the technology, you can meet with clients remotely within your office. The clients can be in one meeting room and the lawyer in other, meeting by video or telephone to review the documents. The lawyer can go into the clients’ room to witness the signature from a healthy distance, and sign as witness or commission once the clients leave.
If you are meeting with clients remotely, review the Law Society’s Corporate Statement on Covid-19 that includes information on remotely identifying and verifying identity of clients and virtually commissioning documents. Be aware of your legal obligations and document your file well. Most title insurers are confirming coverage even for deals signed up remotely – check with your preferred title insurer for details.
You can also refer to the attached “Basic Approach for Remote Signing”, which includes a Video Conference Checklist.
6. Fraudsters love chaos
Be alert to fraud. The bad guys take advantage of vulnerable people and vulnerable situations. Keep your spidey senses on high alert. Some of the key red flags to watch out for are:
i) last minute changes in payment instructions
ii) instructions to send funds to unrelated third parties
iii) rush deals with new clients
iv) the sale or refinance of mortgage-free or vacant land
v) deals involving elderly or vulnerable individuals or people who are not receiving a benefit from a refinance transaction
vi) emails offering a covid antidote
7. Off title search results may not be available
Some off-title search results may be delayed and may not be available in time for your closing. Check with your title insurer to confirm if coverage is available. Understand what coverage will be available if the search result comes back following closing and reveals deficiencies. Communicate well with your client.
Be proactive. Be patient. Responses will take longer as more and more people work remotely and offices have fewer people available due to illness, quarantine, self-isolation, or childcare issues.
Deals will be more difficult to close. But we are all in this together. Encourage compassion and reasonableness. Consider how a court will be likely to respond to hardline responses to issues relating to or resulting from this pandemic.
Sid Troister sent out a great email bulletin yesterday, where he said “My unauthoritative advice is to make sure that when these decisions have to be made, you explain to your clients the options and implications fully, ensure sure that you have documented both the advice and options you gave your client and the instructions you received including sending them confirmation. Make sure that advice to clients is in plain language. You don’t want them saying that they did not understand because it was all too technical. As I say, deals may be much harder to complete these days so you need to have a good record of the steps taken to protect yourself and in so doing, you will also be protecting your client.”