Date: 14 Jan, 2021| Author: Fred Streiman

There is a highly exotic and often overlooked exemption to the necessity of probate in dealing with Real Estate.  It is formally known as the first dealings in land titles exemption. 

When the British Government assumed control of what would become the Province of Ontario, it began a relatively rudimentary system of land registration and title.  That was eventually formalized under the Ontario Registry Act.  It was inexact and required examining in detail paper records that were always not in perfect order.  It was highly contentious and error prone. 

Following the lead of Australia, a Torrens system was put in place.  That Torrens system in which ownership records of all of the properties in the Province of Ontario are digitized and are registered in a central computer system.  They are governed by the Land Titles Act.  Slowly over the course of many years, all Real Estate in Ontario has by and large been moved from being controlled by the Registry Act to the Land Titles Act. 

The Province in the equivalent of a get out of jail free card, granted those properties that have not been “dealt” with or transferred after being converted from the Registry to the Land Titles system a waiver of probate. 

However, what the government giveth, the government taketh away.  Generally this is only effective if there are no other significant assets of the estate.  Further if the estate had any debts, including any income tax that is simply triggered by the death of the testator, then all that can be done is title can be transferred in the absence of probate from the deceased into the names of the executors.  The executors realistically cannot sell or transfer the property to a third party purchaser because the registration into the names of the executors will state it is subject to debts of the estate.  There are few purchasers that are prepared to buy a property and then assume the debts of an estate.  There are some practical solutions such as pre-paying the tax well before it is due and owing, but unfortunately for many estates this exemption is not the panacea that one would have hoped for. 

Moral of the story.  Make sure your lawyer investigates this possibility and its ramifications.