When purchasing a new home, condo or investment property, perhaps the most important tasks your real estate lawyer will undertake is to conduct a title search of the new property. For the most part, this will be done through a computer program called Teraview used by real estate lawyers which allows access to a databank of all properties in Ontario and everything registered on title to those properties.
The first step will be to print off a parcel register – a list of everything which is registered on title to the property. The parcel register will always show the last transfer by which the current owner(s) acquired title to the property (and sometimes previous transfers as well). All existing mortgages will be shown on title. Besides the last transfer and current mortgages, there are many things which may be registered on title such as bylaws, restrictive covenants, notices, liens, leases, easements, agreements, etc. Your real estate lawyer should be reviewing everything registered on title to ensure it will not affect your interest in the property.
Some may think that if they are purchasing a new home, a title search may not be as important, however this is not the case. Recently, one of our clients was purchasing a subdivision home which was built less than ten years ago. Our title search revealed that there was a restrictive covenant registered on title which forbade the sale of the property without the consent of the City. We promptly notified the vendor’s lawyers that they would need to obtain this consent before the sale could move forward.
In the past, our title searches have revealed old easements and rights of way burdening the prospective property which our clients were not aware of. We have uncovered old liens which ought to have been removed from title years earlier which we ensured would not affect our clients’ title after the completion of the transaction. We have seen bylaws registered on title specific to the property being purchased which we made our clients aware of.
For more expensive homes and for any commercial, industrial or farm property, we always recommend our clients conduct a proper title search before even giving an offer to the vendors. Sometimes the title review will reveal potential problems that our clients decide is not worth inheriting.
Conducting a proper and thorough title search is not limited to only what is registered on title to the prospective property.
In most cases, reviewing the parcel register for your new home is not sufficient for a proper title search. Your real estate lawyer should review title to all adjacent properties to ensure that there have been no contraventions of Ontario’s Planning Act in the past and that your transaction does not contravene the Act.
There are a number of off-title searches which can and should be conducted as well. The most important of these is a search with the City’s tax department to ensure there are no outstanding realty taxes owing. If there are outstanding property taxes which are not properly dealt with prior to closing you may be liable to pay them.
The sad truth is that we have seen many instances where other lawyers do not conduct proper title searches. Sometimes, in the interest of saving money, the lawyers will not review all that is registered on title. Other times, the title search will be delegated to the lawyer’s secretary or clerk who do not have the appropriate education or experience to do this properly. Always ask your real estate lawyer whether they will personally be reviewing title to your new property.
At Davidzon Law we always take care to conduct a proper and thorough title review for all of our clients’ prospective properties. A lawyer will always be reviewing title and we never delegate this important task to others. If you are considering purchasing a property or have already committed to an agreement of purchase and sale, contact us at any time to discuss your options; we always strive to be your trusted real estate lawyers.
