Real Estate

Ontario in the 1990s modernized its system of registering almost all of the land and its ownership within the province. It moved from a very ancient system commonly referred to as the Registry Act System to an electronic/digital system that is part of the Torrens Regime. The Torrens Regime is named after its inventor, Sir Robert Torrens who created what was then a revolutionary system in 1858, which quickly spread to North America.

The concept behind the Torrens System is that the government would keep the records of ownership of the various parcels of land across its jurisdiction and whatever was registered was guaranteed to be a truthful reflection of that ownership.

In contrast, the old Registry System has been referred to as a marketability/of/title system. Under that old system, the province would provide a place to deposit and register various title and ownership documents and citizens would simply rely upon their own search of those documents. The province promised nothing.

One can easily see how the Torrens System was far more reliable. If there is an error under the Torrens System, there is an insurance program to compensate those negatively affected. In no way however is that a replacement for title insurance, which is commonly purchased at the time that a property is bought. Title insurance which costs only a few hundred dollars, largely guarantees that if there is an error in the Torrens System for your property, any loss you suffer will be compensated for. An example is if the property lines as reflected in the survey are inaccurate. It is also a crucial tool in the event of the scourge of mortgage fraud.

In an interesting article by Jeffrey Lem, he points out that in contrast to Canada’s acceptance of Torrens,especially Ontario, our neighbours to the South have steadily marched backwards from Torrens to the far less reliable marketability of title system.

If any of our readers have ever had the misfortune or fortune to purchase property in the United States, this is often handled by title insurers rather than simply a real estate lawyer. It can be a very daunting process and far from straight forward.

Mr. Lem points out that realistically only two States within the United States regularly use Torrens. The vast majority of Americans are ensuring that some title searcher or real estate lawyer will have an opportunity to earn more money than they need to.

Ontario has almost 100% of its over six million parcels of land within the Torrens System. In Ontario, the Torrens System is governed by the Land Titles Act and that is the common reference to differentiating properties under the old act, namely The Registry Act.