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All about title searches

They say you can't judge a book by its cover, but when it comes to buying or selling land, title is exactly where you want to start.

Why? Because a title search determines beyond any doubt not only who owns the land and what can be done on it, but whether it has any skeletons in its closet, so to speak.

Through a title search, you can discover secrets involving anything from building liens to maintenance orders that can drain your bank account or delay or shut down a sale if they turn up as surprises at the wrong time.

Title searches -- usually conducted by lawyers or real estate agents as part of a house purchase or refinancing -- can be undertaken by homeowners themselves. But it's the rare consumer who does so.

And even individuals willing to hike to their local land title office, plunk down the approximate $12 fee, hand over a legal land description or urban street address and spend a few hours on the search (then wait one to three weeks for the application to be processed), will need a lawyer to finish off the process.

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That's because a title search does not reveal two essential pieces of information: whether there are unpaid taxes and other liens (beyond those defined below) against a property. Nor will it identify leases of less than three years, which can involve such nasty surprises as a furnace rental that would mean the furnace would be picked up shortly after you take over the property.

"The law is complicated and not really a do-it-yourself-thing," says Brian Bigras, general manager of the British Columbia Land Title Office in New Westminster. "It's more common to see people discharge their own mortgages. Even people who buy and sell homes without an agent usually hire a lawyer. Their fees are very competitive -- around $500 for a fund transfer -- and the title search is included in this."

Of the one million land title transactions Bigras and his staff of 120 process each year (they work on 17,000 at any given time), only a handful are initiated by private citizens.

What a title search will reveal
Still, it never hurts to know what your lawyer or real estate agent should be doing for you, and when a title search is necessary.

You need a title search in any of the following four situations: when you're buying or selling property, refinancing, taking out a secured loan against your home or applying for a building permit.

A title search reveals:

  • the name(s) of the legal owner(s) of the property and their occupation(s) at the time of purchase;
  • Whether joint tenancy is involved (it's good to know how many people you're dealing with!);
  • If a mortgage still exists (no small financial consideration);
  • Whether there are any "charges on title," as in the case of a woman owed child support who has put a financial lien against her ex-husband's property until he has paid. That means he can do nothing with his property until the outstanding amount is paid;
  • Easements and statutory rights-of-way (allowing people other than the owner access to a property -- for example, the right to install pipelines or telecommunication lines);
  • Building liens (as when a contractor who did work on the property hasn't been paid by the owner);
  • Mineral rights (in some cases, the government may own mineral rights on rural property that is privately owned. Think of the Beverly Hillbillies TV show, where oil began spurting from the backyard).

Luckily for Canada, we're on the Torrens System of title searches, developed in Australia in 1858 by Sir Robert Torrens. This means that despite some subtle differences between each province and territory, the federal government guarantees the certainty of information on both property ownership and "encumbrances against the land," as outlined above. This eliminates the costly court battles and title disputes often seen in the U.S.

The Torrens System -- widely considered the most advanced and safest in the world -- is why Canadian searches involve only a nominal fee, and land transfers are relatively simple.

"Conveyance lawyers are all online with the land title office," says Joe Wilder, managing partner at Wilder, Wilder and Langtry, a full-service law firm in Winnipeg. Thanks to the Torrens System, he says, "it doesn't take long to complete a search, and it is part of the legal work involved when you buy a house. We charge about $10."

Roger Howay, partner at Blake, Cassels & Graydon LLP in Vancouver, adds, "With the computerization of some of the land title systems in Canada in recent years, it is very easy for lawyers, real estate agents and others who deal in title-to-land to obtain searches of property very quickly and efficiently."

So, whether you're one of the few who opt to do it yourself, or you just want to sound intelligent when vetting what your legal and real estate advisers are up to, now you know what a title search is and how it can help rattle the bones of whatever skeletons may be lurking in the closet.

Pam Withers is a business journalist, business-book editor and author of several best-selling teen novels. Julie Burtinshaw is a researcher and novelist.

-- Posted: July 14, 2004
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