Transfer of Title

A transfer of title is the final, legally operative step in an Ontario real estate transaction — the moment when ownership of the property formally changes from the seller to the buyer. Until the Transfer document is registered in the Ontario land registry, the seller remains the legal owner, even if all other closing steps have been completed.

In Ontario's electronic land registry (Teraview), the Transfer is an electronic document prepared and registered by the buyer's (and seller's) real estate lawyers on closing day. Registration is instantaneous — the moment the Transfer is electronically deposited in the registry, the buyer becomes the registered owner.

The Transfer must be in the form prescribed by the Land Titles Act and its regulations. Under the Land Registration Reform Act, R.S.O. 1990, c. L.4, and the Electronic Land Registration Services Act, 1991, S.O. 1991, c. 44, lawyers must use Teraview to prepare and register electronic documents.

Ontario's land registration system operates on the principle that registration creates and protects title — a buyer who registers their Transfer becomes the registered owner and is protected against competing claims by third parties who have not registered their interest.

The process of transferring title in a typical Ontario residential closing:

Before closing — title search and requisitions: The buyer's lawyer conducts the title search, identifies any issues with the seller's title, and sends requisitions to the seller's lawyer to resolve them. Common issues include undischarged mortgages, caveats, or questions about Planning Act compliance.

Document preparation: The buyer's lawyer prepares the electronic Transfer document in Teraview, entering the property identification number (PIN), the seller's name as transferor, the buyer's name as transferee, the tenancy type (joint tenancy or tenancy in common), and the consideration (purchase price). Ontario's Transfer form also requires certain statutory statements (e.g., whether the transferor is a non-resident of Canada for non-resident withholding tax purposes).

Signing and authorization: The seller's lawyer must authorize the Transfer document in Teraview using their electronic law office account. This is the electronic equivalent of the seller signing the deed.

Closing day registration: Once all funds are in place (purchase price received from buyer, mortgage payout confirmed), the buyer's lawyer electronically registers the Transfer through Teraview, simultaneously registering the new mortgage (charge). The land transfer tax is paid electronically at this point — the Teraview system calculates and deducts the tax automatically and transmits it to the Ministry of Finance.

Post-registration: The Parcel Register for the property is updated immediately to show the new owner. The seller's lawyer confirms registration and releases the net proceeds to the seller.

In Ontario real estate law, there is an important distinction between title, possession, and risk:

Title (legal ownership): Transfers when the Transfer document is registered in the land registry on closing day. This is the moment the buyer becomes the legal owner.

Possession: The right to physically occupy the property. The APS specifies when the buyer gets possession — typically at 6:00 PM on closing day. The buyer can take possession when the lawyer confirms registration and the seller's key is released.

Risk of loss: Under the standard OREA APS, risk of loss (damage to the property between the date of the offer and closing) passes to the buyer when the APS becomes binding (when all conditions are satisfied or waived). This is an important reason for buyers to arrange property insurance before the transaction becomes firm.

For practical purposes, these three events (registration, possession, risk) typically all occur on the same closing day, but they are legally distinct concepts.

Keys and access: Keys are traditionally held by the seller's real estate agent until registration is confirmed. Once the buyer's lawyer receives confirmation of the registered Transfer, they contact the seller's agent to release the keys.

When the seller of Ontario real property is a non-resident of Canada, the transaction involves special requirements under Section 116 of the Income Tax Act:

Withholding obligation: A buyer who purchases property from a non-resident vendor is required to withhold 25% of the purchase price (or the seller's net proceeds, in some circumstances) and remit it to the CRA, unless the seller provides a Section 116 clearance certificate.

Section 116 clearance certificate: A non-resident seller can apply to the CRA for a clearance certificate, which confirms that the capital gain on the sale has been (or will be) reported and taxes paid. If a clearance certificate is provided to the buyer, no withholding is required.

Practical process: The seller's lawyer must determine residency status. For non-residents, they apply to the CRA for the clearance certificate well before closing (it can take weeks to months to obtain). If the certificate is not available by closing, the buyer's lawyer is required to withhold the applicable portion of the purchase price and remit it to the CRA.

Transfer document declaration: The electronic Transfer document in Teraview includes fields where the transferor must declare their residency status. This declaration forms part of the official record.

For transactions involving non-resident sellers, engaging a lawyer experienced in cross-border real estate well before the closing date is essential to avoid withholding obligations that can hold up the release of sale proceeds.

Changes to the registered ownership of a property — adding or removing a co-owner — are effected by registering a new Transfer document in the land registry. These transactions are common but have important tax and legal implications:

Removing a deceased owner's name: When a joint tenant dies, a Survivorship Notice is registered to update the Parcel Register to show the surviving joint tenant as sole owner. No Transfer is required — the right of survivorship operates automatically.

Removing a name (inter vivos transfer): If one co-owner wants to transfer their share to the other (e.g., in a separation), a Transfer is registered. Land transfer tax may or may not apply depending on the circumstances (there is an exemption for transfers between spouses in certain situations).

Adding a name: Adding a co-owner (e.g., adding a spouse or child to title) requires a Transfer. Land transfer tax applies on the portion of the property being transferred, calculated on fair market value.

Estate freeze: Adding a parent to a property title as part of an estate freeze or planning exercise has potential land transfer tax, capital gains, and family law implications that must be analyzed before proceeding.

Mortgage consent: If there is an existing mortgage, adding or removing a name from title typically requires the lender's consent. Some mortgages have due-on-transfer clauses that make the full mortgage payable immediately on a transfer.

Sandra is purchasing a townhouse in Brampton for $745,000. Her real estate lawyer's closing day process:

7:30 AM — The mortgage lender confirms it has funded the mortgage advance. The funds arrive in the lawyer's trust account.

9:00 AM — The buyer provides the balance of the purchase price (down payment plus closing costs less the deposit already held) by wire transfer to the lawyer.

10:30 AM — The lawyer confirms receipt of all funds and pays the seller's lawyer's trust account by wire: $745,000 less the deposit already held by the seller's agent (which the seller's agent releases to the seller's lawyer).

11:00 AM — The seller's lawyer confirms receipt of the purchase price and authorizes the Transfer in Teraview.

11:15 AM — The buyer's lawyer registers the Transfer, the new first mortgage (charge), and pays Ontario land transfer tax ($10,350) electronically through Teraview. The Parcel Register is updated instantly. Sandra is now the registered owner.

11:30 AM — The buyer's lawyer emails Sandra and the real estate agents confirming registration. The seller's agent releases the keys. Sandra can take possession of her new home.