Requisition Date

In Ontario real estate transactions, a 'requisition' is a written objection or question raised by the buyer's lawyer about the seller's title to the property — typically arising from issues discovered in the title search. The requisition date is the contractual deadline in the agreement of purchase and sale (APS) by which all requisitions must be submitted.

The standard OREA APS contains a provision that reads (in substance): 'Provided that the title to the property is good and free from all registered restrictions, charges, liens, and encumbrances, except as otherwise specifically provided in this agreement, and save and except for [specified exceptions], the Buyer shall be allowed until [the requisition date] to examine the title to the property at the Buyer's own expense. If within that time any valid objection to title or to any outstanding work orders or deficiency notices affecting the property is made in writing to Seller, and which Seller is unable or unwilling to remove, remedy, or satisfy, then this agreement shall be null and void and all monies paid shall be returned.'

The requisition date is typically set 10 to 15 business days before the closing date in residential transactions — providing enough time for the seller's lawyer to address title issues raised by the buyer. In commercial transactions, the requisition period may be longer.

The requisition date is one of the most important and often most overlooked deadlines in a real estate transaction. The consequences of missing it are significant:

Waiver of title objections: If the buyer's lawyer fails to raise a valid title objection before the requisition date, that objection is generally waived. The buyer may be required to complete the purchase despite a title defect that the buyer had the opportunity to identify and raise.

Exceptions — fundamental defects: Ontario courts have distinguished between objections that go to the 'root of title' (fundamental defects that make title unmarketable) and minor or technical objections. Courts have held that even after the requisition date, a buyer can refuse to close if the title defect is so fundamental that the seller has no good title at all — not merely a deficiency that could have been raised as a requisition.

Good faith obligation: The requisition date mechanism does not allow sellers to hide title defects behind the requisition date clock — if the seller conceals a defect that the buyer could not reasonably have discovered by the requisition date, the buyer may be protected even after the date passes.

For these reasons, the buyer's lawyer must conduct the title search early enough to complete it thoroughly before the requisition date. In competitive markets where buyers rush to close, lawyers are sometimes retained late — and may not have sufficient time to complete a proper search before the requisition date.

Issues commonly raised as requisitions in Ontario real estate transactions include:

Undischarged mortgages: The most common requisition. An existing mortgage must be discharged from title at or before closing. The seller's lawyer provides a payout statement and confirms the discharge will be arranged.

Construction Act liens: If a contractor or subcontractor has registered a lien against the property for unpaid work, it must be resolved before title can pass clear. Options include payment, discharge, or bonding off the lien with security.

Planning Act violations: Evidence in the title search suggesting that a parcel was subdivided without the required consent under Section 50 of the Planning Act creates a requisition. These can be complex and time-consuming to resolve, requiring Committee of Adjustment certificates or court orders.

Easements and rights of way: Questions about the extent or status of registered easements — for example, whether an old utility easement is still operative and held by the current utility company.

Survey issues: Questions about whether the legal description in the title matches the actual property boundaries — common in older properties where boundaries have shifted or structures have been built over the years.

Outstanding work orders: Municipal or provincial work orders requiring remediation of a structure deficiency or zoning violation. The seller is typically required to have these cleared before closing.

Outstanding encumbrances: Any registered instrument on the Parcel Register that the seller's title search does not explain — cautions, notices, restraining orders, or instruments registered against the property whose status is unclear.

Once a buyer's lawyer raises a requisition, the seller has a limited time to respond and, where possible, resolve the issue:

Immediate response: The seller's lawyer should respond promptly to each requisition, either confirming the issue will be resolved before closing or explaining why the seller takes the position it is not a valid objection.

Resolution mechanisms: - For an undischarged mortgage: obtain a payout statement and arrange the discharge - For a Planning Act breach: obtain a certificate from the municipality or Committee of Adjustment, or provide a statutory declaration - For a writ of execution: provide a statutory declaration confirming it is a different person, or obtain a discharge - For a construction lien: arrange payment or provide a bond and certificate of action

When the seller cannot resolve a requisition: If the seller cannot or will not resolve a valid title objection raised before the requisition date, the APS typically provides that the agreement becomes null and void and all deposits are returned. The buyer is not required to accept a title defect — the whole purpose of the requisition date mechanism is to give the buyer the ability to exit if the seller cannot deliver clean title.

The 30-day period: The standard OREA APS gives the seller up to 30 days from the date of the requisition to resolve a valid title objection. If the issue is not resolved within 30 days, the buyer can elect to treat the agreement as null and void.

The requisition date operates differently in new construction and condominium purchases:

New construction from a builder: Builder agreements (typically using the Tarion-approved or builder's own APS form) often have limited requisition rights. The buyer's ability to object to title is frequently more restricted than in a resale transaction. Buyers purchasing from builders should ensure they understand the title objection provisions in the builder's agreement.

Condominium resale: For condominium resales using the OREA standard condo purchase and sale form, the requisition date applies to title objections. However, the status certificate review is a separate condition with its own 10-day period under the Condominium Act, 1998 — not governed by the requisition date provision.

Title insurance and the requisition date: Title insurance does not eliminate the requisition date obligation. The buyer's lawyer must still conduct a title search and raise requisitions for known defects — title insurance only covers risks that were not identified or that were disclosed to the insurer. A lawyer who relies on title insurance to skip proper title review and miss the requisition date is not meeting their professional standard of care.

Michael purchased a residential property in Hamilton under an APS with a requisition date of September 15 and a closing date of September 30.

Michael's real estate lawyer, who was hired late, did not complete the title search until September 17 — two days after the requisition date. The search revealed a registered Planning Act certificate from the municipality noting that a portion of the rear yard had been severed and sold 12 years earlier without proper Planning Act consent — meaning the current lot was potentially irregular and the title might be unmarketable.

Because the requisition date had already passed, Michael's lawyer faced a difficult question: could the Planning Act issue be raised as a requisition after the deadline?

The lawyer raised the issue in a letter to the seller's lawyer, arguing that the Planning Act defect was a 'root of title' issue that was not waived by missing the requisition date. The seller's lawyer initially disputed this position. After negotiations and a title company opinion, the parties agreed to a price adjustment to reflect the Planning Act irregularity, and the transaction closed with enhanced title insurance coverage.

This example illustrates two key points: (1) lawyers must conduct title searches and raise requisitions before the requisition date; and (2) even when the date is missed for fundamental defects, the outcome is uncertain and resolution is costly and stressful.