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[BUYING AND SELLING REAL ESTATE IN CANADA - ONTARIO]
It is imperative that the buyer's lawyer discuss the benefits and limitations of a title insurance policy with their client, including, but not limited to, whether the buyer has a knowledge of a title defect, their intended future use of the property and the usefulness of a current survey of the property. VI. RECORDING REAL ESTATE DOCUMENTS In Ontario, the Land Titles system has replaced the old Registry System, although approximately 30,000 properties have not yet been converted to Land Titles. The Land Title system is an electronic registry housing all private property ownership information in Ontario. It contains official records of title, deed, mortgage and other land documents. Under the Land Titles system, search results are certified by the government, with no requirement to look any further into prior registrations of the property, with certain exceptions. The Land Titles system provides a statement of title. Each separately owned piece of land is called a "parcel”, and each parcel has an assigned number or a "PIN". On closing, the transfer of the property is usually registered electronically by the buyer's lawyer, along with any related instruments such as a mortgage. VII. THE PLANNING ACT The purpose of the Planning Act is to regulate how land can be developed and used. Subdivisions are used to divide one large parcel of land into two or more smaller parcels for further development. Careful consideration must be given to the Planning Act in any conveyance as a violation can be fatal in that that no interest in land is created or passed. S. 50 of the Planning Act pertains to the subdivision of land and prohibits an owner from the sale, transfer or mortgage of a property if they
also retain an interest in the abutting lands, unless certain exemptions to the basic prohibition are met. A buyer's lawyer must search the chain of title and adjoining properties to ensure the owner does not own abutting lands, unless an exemption under the Planning Act applies. An important amendment was introduced with S.50(22) of the Planning Act in that there was an inclusion in the transfer document of optional statements by the seller and their solicitor and by the buyer's solicitor regarding compliance with the Planning Act . If these statements are completed on the transfer, any prior contraventions of the subdivision control provisions of the Planning Act , which otherwise would have voided the interest in land, are deemed to be no longer and never to have had this effect; in essence the violation is "cured." The requirement for Planning Act statements ought to be included as a required term in the agreement of purchase and sale as otherwise the statements are not compulsory. VIII. CONSTRUCTION LIENS AND WRITS Construction Liens are governed by the Construction Act . When work is performed or materials are supplied to the property, the party doing so, which can include contractors, and sub-contractors can place a construction lien on title against the property if they are not paid. A construction lien acts as an encumbrance to the title, giving aggrieved parties a right to be paid and a right to sue under the Construction Act . The buyer of the property may be liable to pay if the lien is not removed from title upon transfer.
ILN Real Estate Group – Buying and Selling Real Estate Series
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