Title Search

A title search is a fundamental step in every Ontario real estate transaction. Before a buyer's lawyer can certify that a client is receiving good, marketable title to a property, they must examine the land registry records to trace ownership history and identify any claims against the property.

In Ontario, land titles are registered in one of two systems:

Land Titles System (LTS): The modern system that guarantees title — once a transfer is registered in the Land Titles system, the registered owner holds an indefeasible title guaranteed by the provincial government (with limited exceptions). The Land Titles Conversion Qualified (LTCQ) designation applies to most properties that were converted from the older Registry system.

Registry System (older properties): Properties in some rural or northern Ontario areas may still be registered under the older Registry system, where title is not guaranteed — the buyer must trace through historical deeds to establish a good chain of title.

Most Ontario urban properties are now registered in the Land Titles system through Teraview, the electronic land registry operated by Teranet. Electronic title searches are conducted by lawyers and title searchers through the Teraview system.

A complete title search for an Ontario property includes:

Parcel Register: The electronic record in Teraview showing the current owner(s), the legal description of the property, and all registered instruments affecting title — including: - Transfers (deeds) showing ownership history - Mortgages and charges registered against the property - Discharge of charges (confirming mortgages were paid off) - Easements and rights of way registered against the title - Restrictive covenants - Cautions and notices - Powers of sale proceedings - Court orders affecting title - Notices of claim under the Construction Act

PIN (Property Identification Number): Every property in Ontario's electronic land registry has a PIN that identifies the parcel. A title search starts with the PIN search of the Parcel Register.

Writs of Execution: The lawyer searches the Writ of Execution system to check whether any judgment creditors have registered writs against the current owner's name that could bind the property.

Property Tax Status: A tax certificate is obtained from the municipality confirming the amount of outstanding property taxes and whether any tax arrears exist that constitute a lien on the property.

Planning Act Compliance: For certain transactions, the title search includes verifying compliance with the Planning Act, R.S.O. 1990, c. P.13 — specifically Section 50, which requires that the conveyance of a lot created by subdivision or severance is valid.

PPSA Search (for commercial or business properties): If the property contains business assets or if there are fixtures involved, a search of the Personal Property Security Act (PPSA) register may be warranted.

When a buyer's lawyer identifies a problem or question arising from the title search, they raise it as a 'requisition' — a written demand to the seller's lawyer to resolve the issue before closing.

The agreement of purchase and sale specifies a 'requisition date' — a deadline by which the buyer must submit all title requisitions. This is a critical deadline. Under the standard OREA APS, if the buyer does not submit requisitions by the requisition date, certain types of objections are waived.

Common issues identified in title searches and resolved through the requisition process:

Undischarged mortgages: A mortgage from the seller's lender appears on title. The seller's lawyer must arrange a discharge at or before closing. This is the most common title issue in residential transactions and is routinely resolved.

Easements and rights of way: An easement (such as a utility easement along the rear of the lot) is registered on title. The buyer's lawyer reviews whether the easement affects the buyer's intended use of the property.

Restrictive covenants: A restriction on the use of the property (such as 'no commercial use' or 'no structure over one storey') registered on older properties. The buyer's lawyer reviews whether the restriction is still enforceable and whether the buyer's plans comply.

Planning Act breaches: Evidence of a subdivision or lot alteration that was not properly consented to under the Planning Act. These issues can make title unmarketable and may require an application to the Committee of Adjustment or a court order to resolve.

Construction Act liens: A contractor or subcontractor who has not been paid for work on the property may register a construction lien. The lien must be resolved (discharged or bonded off) before title can be transferred clear.

Executions against the owner's name: If a writ of execution is registered against a person with the same name as the registered owner, the seller's lawyer must confirm it is not the same person and provide a declaration or obtain a discharge.

In modern Ontario residential transactions, title insurance has largely replaced the need for a comprehensive historical title search in the Registry system and reduced the depth of the search required in the Land Titles system. However, title insurance does not eliminate the need for a title search — it supplements it.

A standard Ontario residential title search in the Land Titles system typically covers: - The current Parcel Register to identify all registered instruments - A tax certificate to confirm property tax status - Writ searches against the seller's and buyer's names - Planning Act searches (for some transactions)

Title insurance then covers known and unknown risks that might arise despite the search — encroachments identified after closing, fraud, zoning non-compliance, and other covered perils.

Without title insurance, a buyer's lawyer would need to conduct a more extensive search and obtain confirmations on a wider range of potential issues. With title insurance, the insurer accepts certain known risks (such as very old easements or minor encroachments not visible in the current search) on behalf of the owner.

Lawyers must exercise judgment about what additional searches are warranted based on the specific property and circumstances — title insurance does not eliminate the lawyer's professional responsibility to identify and requisition title issues.

The goal of the title search and requisition process is to ensure the buyer receives 'good and marketable title' to the property.

Good title: The seller actually owns the property and has the legal right to transfer it. Title is clear of any undisclosed encumbrances that would affect the buyer's ownership.

Marketable title: Title that a court would compel a buyer to accept — title that is not only legally valid but is also free from reasonable doubt. Even a technically valid title may be unmarketable if there are significant unresolved questions (e.g., an apparent Planning Act breach that may or may not be enforceable).

If the title search reveals a defect that cannot be resolved before closing, the buyer may: - Terminate the APS (if the defect qualifies as a title issue that cannot be resolved) - Accept the defect, possibly with a price reduction or holdback - Obtain enhanced title insurance coverage for the specific known defect - Seek a court declaration resolving the defect

The standard OREA APS provides that if a valid title objection cannot be resolved within 30 days of the requisition date, the buyer may terminate the agreement and receive their deposit back.

A buyer's lawyer conducting a title search on a Guelph residential property finds the Parcel Register is clean — no undischarged mortgages, no visible easements, and the seller appears to be the registered owner.

However, because the property was converted from the Registry system to Land Titles Conversion Qualified (LTCQ) in 2005, the lawyer also reviews available records for the pre-conversion period. A review of historical instruments reveals an unregistered easement granted in 1983 to the City of Guelph for a storm sewer running through the backyard of the property.

The lawyer raises a requisition requiring the seller to disclose the extent of the easement and whether it is still in use. The city confirms the storm sewer is active and the easement is valid. The easement is not registered on the current Parcel Register because LTCQ conversions sometimes do not carry forward all historical easements.

The buyer's lawyer obtains enhanced title insurance coverage for the unregistered easement and negotiates a modest price reduction reflecting the limitation on use of the rear yard. The transaction closes with full disclosure and the buyer is protected by the title insurance policy.