Canadian Bar Association (Nova Scotia) Program for Legal Assistants and Para Legals Real Problems/Real Solutions March 7, 2003 Notes on Selected Professional Standards Garth C. Gordon, Q.C., Taylor MacLellan Cochrane Kentville, Nova Scotia Prof Subject Intake Processing/Abstracting Reporting/Documenting Comment Std The Professional Standards are not iron-clad rules: "As with the initial version, professional judgment and common sense remain as touchstones for the use of these Standards. As was stated in the Preface to the first edition these standards cannot be expected to be an answer to every conceivable situation which a lawyer might find in conducting a real estate practice...professional judgment must always be exercised in problem solving and these practice standards are not intended as a substitute for the exercise of professional judgment. However, they have been developed to be a real guide to the expectations for real estate practice." The Professional Standards will be considered as one measure of a lawyer's performance in determining his or her liability if there is a claim. 1.1 Legislative Review 1.4 Conflict of Interest (Unrepresented Parties) Lawyer should inquire about nature of the parcel and its proposed use. Amend intake sheet to include these questions. Determine if any party is not represented. Lawyer to consider intended use, nature of parcel, legislative restrictions. Lawyer should advise unrepresented clients who lawyer is representing, that lawyer is not protecting their interests and recommend independent counsel. 1.5 Documentation Lawyer should meet clients personally and explain the effect of documents to clients. Lawyer must explain legislative restrictions to client and confirm client instructions prior to closing. See Standard 1.5. Lawyer should send letter to unrepresented party per Standard 1.5. Lawyer should document in writing advice, explanations, confirmation of explanations, restrictions on quiet use of the parcel, qualifications of title opinion and client instructions arising from Lawyer's advice or limiting retainer. Consider having client sign title report/letter documenting explanations and confirming client instructions before closing. Add pro forma letter to your precedent set. See schedule "1.4". This standard also deals with conflicts of interest arising from representation of more than one party Consider having client sign title report/letter documenting explanations and confirming client instructions before closing. Page 1 of 14
Prof Std 1.6 Rebuttable Presumptions 1.7 Matrimonial Property Act/Vital Statistics Act 2.2 Parcel Identification Subject Intake Processing/Abstracting Reporting/Documenting Comment Determine if the parcel contains a matrimonial home - refer to Schedule "1.7". If it does determine the spousal or registered domestic partner status of parties. If parties are separated ask if the parties will consent to the disposition. Is there a separation agreement, a marriage contract, a designation or an order releasing the parcel? 2.3 Access Determine access to the parcel. A lawyer should accept recitals, statements and descriptions of facts contained in title documents which are more than 20 years old as rebuttable presumptions of fact Ensure that any non-owning spouse consents to all dispositions of a matrimonial home unless the Grantor's Affidavit contains appropriate clauses evidencing a separation agreement, a marriage contract or a designation of another matrimonial home. Is there a registered order releasing the parcel? Existing precedents respecting matrimonial interests should continue to apply. Examine Property On-line information relating to parcel. Annotate PID and AAN on description. Confirm in abstract of title the nature of access to the parcel. If granted access ensure there is an abstract for the access. Lawyer should advise mappers of mapping errors. A lawyer must explain to the client any limitation associated with a private right of way and confirm the client's instructions prior to closing. Refer to Standard 1.5. Consider verifying recitals to an instrument in the Grantor's Affidavit to avoid the 20 year wait for the presumption to become effective. Consider the definition of "matrimonial home" under the Matrimonial Property Act as only dispositions of matrimonial homes are restricted by the Act. Refer to the Matrimonial Property Act excerpts in Schedule "1.7". Refer to Schedule "2.2" for a form of annotation in use in Kings County. Refer to Schedule "2.3" for process flow chart. Refer to the Nova Scotia Atlas for a rough check for public roads and ungranted Crown lands. Page 2 of 14
Prof Std 3.2 & 3.3 Subject Intake Processing/Abstracting Reporting/Documenting Comment Possessory Title & Prescriptive Rights Determine, if you can, on intake if you will be dealing with possessory interests, building encroachments or lasting improvements. See Schedule 3.2/3.3 for a sample initial advice to clients on these issues. Refer to Catherine Walker's paper cited under "Comments". 3.4 Mortgages For old unreleased mortgages check the Land Registration Act, s.40(1) - unrenewed security interests greater than 40 years old are not interests in parcels and s.115(8) (new s.24(2) of the Limitations of Actions Act) - no person claiming under a mortgage of land may...recover such land after 20 years have elapsed from the last registered maturity date etc. 3.5 Judgments Determine the commonly used names and "standard names" (see Standard 4.3) used by the parties. Conduct required searches for judgments against owners and purchasers. See Schedule "3.5" Aide Memoire for judgment searches. When qualifying an opinion of title to a client with respect to an interest that may be lost by the operation of the Land Registration Act, a lawyer must explain the qualifications to the client and confirm the client s instruction prior to closing. See Catherine S. Walker, Q.C., Adverse Possession and Prescriptive Rights - Old Doctrines in a New Environment, The Nova Scotia Barristers Society & The Real Estate Lawyers Association, Property, Practice in New Environments, February 21st, 2003 See Garth C. Gordon, Q.C., Judgments - This Won't Wait until LRA, Hits Your Area., The Nova Scotia Barristers Society & The Real Estate Lawyers Association, Property, Practice in New Environments, February 21st, 2003. Page 3 of 14
Prof Std Subject Intake Processing/Abstracting Reporting/Documenting Comment 3.10 Estates Ensure the personal representative has all required consents and proper authority etc. 3.12 Guardians Determine if any interest in the parcel will be conveyed by a minor child's guardian. 3.13 Corporations and Other Entities 4.1 Powers of Attorney Ensure the guardian has authority to convey. Refer to the Land Registration Act, s.83, for post-lra corporate execution of documents. A lawyer should ensure that the matrimonial status of the grantor pursuant to a power of attorney is reflected in the abstract of title. A lawyer should ensure that, in preparing the Grantor's affidavit for an attorney, it is based on the attorney s personal knowledge and belief. W. Mark Penfound, Q.C., How Is The New Probate Act Working with Respect To The Real Estate Provisions, The Nova Scotia Barristers Society & The Real Estate Lawyers Association, Property, Practice in New Environments, February 21st, 2003. See Pamela M. Stewart, Into The Great Wide Open... Current Issues In Family Law, The Canadian Bar Association (Nova Scotia) 12 th Annual Professional Conference, January 31, 2003 re guardianship of the property of minor children. Page 4 of 14
Prof Std 4.2 Proof of Execution of Instruments. Subject Intake Processing/Abstracting Reporting/Documenting Comment 4.3 Name Standard Determine the commonly used names and "standard names" (see Standard 4.3) used by the parties. Refer to Land Registration Act, ss.78-83 for post-lra registration document execution and proof of execution requirements. No seals will be required and, under s.83, corporate execution will be much simplified. Lawyers are encouraged to adopt the naming standards prescribed under the Personal Property Security Act General Regulations. When a lawyer identifies a party by the party s standard name for the first time in a title, the lawyer must, if the parcel is registered under Land Registration Act, link the party's standard name with the name used to identify the party in the last instrument in the chain of title when applicable 1, and should, if the parcel is not registered, make the linkage. See Garth C. Gordon, Q.C., Judgments - This Won't Wait until LRA, Hits Your Area, The Nova Scotia Barristers Society & The Real Estate Lawyers Association, Property, Practice in New Environments, February 21st, 2003. Refer to Schedule "4.3" U:\WPDATA\Secondary Sources\Papers - wpd\unpublished\new\81044.wpd Page 5 of 14
Schedules Schedule "1.4" Letter to unrepresented party. [Unrepresented Party Address, etc.] Dear [Name]: You have advised us that you are not represented by counsel in this matter. This letter confirms that we are acting for [Name of Client] and we are not protecting your interests. We recommend that you retain independent legal advice to assist you in this matter. Yours very truly, etc Schedule "1.7" Grantor's affidavit. Vital Statistics Act (Registered Domestic Partners) Section 54(2) of the Vital Statistics Act provides that: "Upon registration of a domestic-partner declaration, domestic partners, as between themselves and with respect to any person, have as of the date of the registration the same rights and obligations as... (g) a spouse under the Matrimonial Property Act;" Matrimonial Property Act sections: Section 2(d) "dwelling" includes a house, condominium, cottage, mobile home, trailer or boat occupied as a residence; Section 2(g) "spouse" means either of a man and woman who (i) (ii) (iii) are married to each other, are married to each other by a marriage that is voidable and has not been annulled by a declaration of nullity, or have gone through a form of marriage with each other, in good faith, that is void and are cohabiting or have cohabited within the preceding year, and for the purposes of an application under this Act includes a widow or widower. 1980, c.9, s.2. 3(1) In this Act, "matrimonial home" means the dwelling and real property occupied by a person and that person's spouse as their family residence and in which either or both of them have a property interest other than a leasehold interest. Note: If there is no matrimonial home on the property the disposing spouse or party may swear "The property conveyed by the within instrument has no 'dwelling' (defined in the Matrimonial Property Act to include "any house, condominium, cottage, mobile home, trailer or boat occupied as a residence") located on it." Page 6 of 14
(2) Where property that includes a matrimonial home is used for other than residential purposes, the matrimonial home only includes that portion of the property that can reasonably be regarded as necessary for the use and enjoyment of the family residence. (3) The ownership of a share or an interest in a share of a corporation entitling the owner to the occupation of a dwelling owned by the corporation is deemed to be an interest in the dwelling for the purposes of this Section. Note: A corporate officer may swear "Neither the ownership of a share or an interest in a share in the Organization entitles the owner to the occupation of a dwelling owned by the Organization and the property described in the within instrument has never been so occupied while the property has been owned by the Organization." (4) A person and the person's spouse may have more than one matrimonial home. 1980, c.9, s.3. Disposition of matrimonial home 8(1) Neither spouse shall dispose of or encumber any interest in a matrimonial home unless (a) the other spouse consents by signing the instrument of disposition or encumbrance, which consent shall not be unreasonably withheld; (b) the other spouse has released all rights to the matrimonial home by a separation agreement or marriage contract; (c) the proposed disposition or encumbrance is authorized by court order or an order has been made releasing the property as a matrimonial home; or (d) the property is not designated as a matrimonial home and an instrument designating another property as a matrimonial home of the spouses is registered and not cancelled. Disposition contrary to subsection (1) (2) Where a spouse disposes of or encumbers an interest in a matrimonial home contrary to subsection (1), the transaction may be set aside by the other spouse upon an application to the court unless the person holding the interest or encumbrance acquired it for valuable consideration, in good faith and without notice that the property was a matrimonial home. Affidavit respecting disposition (3) An affidavit of the person making a disposition or encumbrance verifying that (a) the person is not a spouse at the time of making the disposition or encumbrance; Note: The disposing spouse may swear "The Deponent is not a spouse and, with respect to the within property, the Deponent has no former domestic partner with the rights contemplated by section 55 of the Vital Statistics Act, or former spouse with rights under the Matrimonial Property Act." Page 7 of 14
(b) the property disposed of or encumbered has never been occupied by the person and the person's spouse as their matrimonial home; or Note: The disposing spouse may swear "The property described in the within instrument has never been occupied by me and my spouse [name] as our matrimonial home." (c) the spouse of that person has released all rights to the matrimonial home by a separation agreement, marriage contract or designation made pursuant to this Act, Note: The disposing spouse may swear "My spouse [name] released all [his][her] rights to the matrimonial home on the property described in the within instrument by a [separation agreement][marriage contract][designation] dated [date] made pursuant to this Act." is, unless the property is designated or the person to whom the disposition or encumbrance is made had notice to the contrary, deemed to be sufficient proof that the property is not a matrimonial home. 1980, c.9, s Schedule 2.2 Parcel Identification Annotation. REFERENCE INFORMATION Information contained herein is for reference purposes only. In the event of discrepancy, the metes and bounds description shall have precedence. Civic Address: [Civic Address] PID: [PID] Previous Registry Reference Book: [Book #] Page: [Page #] AAN: [AAN #] Schedule "2.3" - Access - See annexed table re access. Schedule 3.2/3.3 - Caution To Clients About Possessory Interests. See annexed information sheet. Schedule "3.5" - Judgments - See annexed Table/Aide Memoire for Judgment Searches. Schedule "4.2" Proof of Execution of Instruments. The Standard provides that a lawyer may simplify proof of a party s execution of an instrument for registration purposes by having the party acknowledge execution of the instrument in the Grantor s Affidavit. If an acknowledgment is made, the lawyer should modify the jurat of the affidavit so that the affidavit and the jurat will act as the certificate of execution or acknowledgment. For example an acknowledgement clause like the following may be used in the Grantor's Affidavit: "This acknowledgment is made pursuant to [s.31(a) of the Registry Act, R.S.N.S. 1989, c.392,][s.79(1) of the Land Registration Act] for the purpose of registering this instrument." with the following jurat: "I certify that on [date] the Deponent(s) came before me, made oath, and swore the Page 8 of 14
foregoing affidavit. I further certify that the Deponent(s) executed the instrument in my presence and that I signed the instrument as witness to such execution." A commissioner, etc. Schedule "4.3" Name Standards - refer to the annexed table. Page 9 of 14
Schedule 2.3 - Table - Access Page 10 of 14
Schedule 3.2/3.3 Possessory Interests - Table TMC LAW CAUTION TO CLIENTS ABOUT POSSESSORY INTERESTS, LASTING IMPROVEMENTS & ENCROACHMENTS UNDER THE LAND REGISTRATION ACT Revised February 15, 2003 1. The Province of Nova Scotia is implementing the Land Registration Act, "LRA", beginning in Colchester County in March 2003. After a test period there, the Government will implement the Act in the rest of the Province on a scheduled county by county basis. We expect the Act to come into effect in Kings County in late 2003. 2. LRA will greatly improve the process of land registration in Nova Scotia by replacing our existing system that has remained substantially the same since the 1750s. We have attached the Government's brochure "The New Land Registration System How does it affect land owners?" for your information. The brochure summarizes how LRA will make land ownership in Nova Scotia more secure and how LRA will simplify transfers of interests in land after parcels are first registered under it. 3. To accomplish certainty in ownership of land, possessory interests in land will receive new treatment under LRA. Generally speaking possessory interests are ones established by the physical use of a parcel over long periods of time (usually at least 20 years) without the registered owner's consent. Possessory interests include "squatter's rights" (occupation of land like an owner) and rights of way. 4. Possessory interests etc. under the Land Registration Act: a. LRA will recognize possessory owners' interests in parcels which registered owners can no longer recover by reason of the Statute of Limitations. Possessory owners may register these mature possessory titles under LRA if they do so before the registered owners register their interests in the same land. Unfortunately it may take a lawsuit to determine if the registered owners' interests are statute barred except in very clear circumstances. b. Easements that have been "used and enjoyed" will continue to be preserved by LRA. This continues the existing law. These easements seldom cause material problems. c. Possessory claims of up to twenty percent of an adjacent parcel may be acquired after LRA comes into effect to preserve the most common form of adverse possession - the "wandering boundary line". Purchasers should be clear where the boundaries of a parcel are before closing to protect themselves against these potential claims. d. There are special provisions to settle claims for "lasting improvements" on a parcel made by persons who, mistakenly, believed the area they improved was theirs. There are similar rules to settle claims about buildings that encroach on neighbouring parcels. In either situation a Court may make an order in one of the ways set out in LRA to settle the issue on terms the Court thinks are just. Page 11 of 14
e. When LRA comes into effect certain possessory rights including what are commonly called "squatters' rights" will be eliminated if the owners of those possessory interests do not i. obtain and register an agreement confirming their interest with the registered owner, ii. iii. register their possessory title under the new Act before the registered owners register their interest under the new Act, or obtain a court order confirming their ownership within prescribed time limits. 5. Owners must disclose possessory interests in a parcel when first registering a parcel under LRA. Owners must also notify possessory interest holders of the proposed registration. That notice will almost certainly result in the possessory interest holders bringing forth their claims for settlement before registration. The consequences of not bringing forward their claims - the possible loss of their interests - is too great for them not to take action. If purchasers do not deal with possessory interests before purchasing a parcel under the old registration system they will have to deal with them under LRA when it applies to the parcel. 6. The settlement of possessory interests can be an involved process which, for purchasers, is best left to their vendors. Purchasers can do this by having a surveyor inspect the parcel for them before closing. If the surveyor identifies any possessory interests that are not acceptable to the purchasers, the purchasers may require the vendors to resolve the issues before closing - at the vendors' cost. Simply put, purchasers should get current survey information before purchasing a parcel to avoid potentially costly problems arising from possessory interests. 7. "An ounce of prevention is worth a pound of cure". 8. Please ask TMC Law any questions you have about LRA. Page 12 of 14
Schedule "3.5" Table - LRA & PPSA Judgment Searches - Aide Memoire Procedure LRA PPSA Name in which Ownership interest is to be registered Name in which judgment is to be recorded Name under which judgment search is to be made - vendor Name under which judgment search is to be made - purchaser. Test for distinguishing names. Other means of comparing names Obtaining information about the judgment from the judgment creditor. Requiring judgment creditor to justify legacy (pre-lra) judgment in parcel register. No regulation. Recommended registration is "standard name" - (Professional Standard 4.3) No regulation. Recommended recording is "standard name" - (Professional Standard 4.3) Refer to Professional Standard 3.5 Judgments for parties whose names are to be searched. The names searched will be the names in which the party holds, or held, title as shown in the parcel register or in the instrument that last conveyed the fee simple - LRA, ss.5 & 66(8), Land Registration Administration Regulation, ss.2(2)(j), 18. Search for commonly used variations of given names - e.g. "B" for "Bob" if given name is "Robert". No regulation. Recommended searches will be under both "standard name" (Professional Standard 4.3) and under commonly used names. "materially different names", LRA, s.5, 66(8) for vendors and mortgagors. Identifying information recorded in the judgment roll and the parcel register under LRA, s.67(1), or otherwise, including birth date and address. N/A LRA, s.68 PPSA, s.19 LRA, s.63 Debtor's standard name - PPSA General Regulations, ss.42 Vendor's standard name - PPSA General Regulations, ss.11(2), 20. Purchaser's standard name - PPSA General Regulations, ss.11(2), 20. "seriously misleading", PPSA, ss.44(7)-(10) Identifying information in PPR including birth date and address. N/A Page 13 of 14
Schedule 4.3 Table - Nova Scotia PPSA Name Standards Summary (This is a summary only refer to the PPSA General Regulations, ss.20 & 21) Status of Individual Born in Canada with birth registered in Canada, s.20(5)(a) Born in Canada but birth not registered in Canada. s.20(5)(b) Naturalized Canadian citizen (i.e. not born in Canada but a Canadian citizen). s.20(5)(c) Not born in Canada and not a Canadian citizen. s.20(5)(d) Married Name/name change. s.20(5)(e) Both married name and previous name used. s.20(5)(f) Type of Enterprise Estate of Deceased Individual. s.21(4) Trade Union. s.21(5) Trustee acting for Named Trust. S.21(6) Trustee acting for Unnamed Trust. s.21(7) Trustee acting for Estate of a Bankrupt Individual. s.21(8) Trustee acting for Estate of a Bankrupt Enterprise. s.21(9) Partnership registered under the Partnership and Business Names Registration Act. s.21(10-12) Body Corporate. s.21(1)-(3) Other Enterprise. s.21(16)-(17) Documentary Source of Name Birth certificate 1 current Canadian passport; 2 if the debtor does not have a current Canadian passport, current Canadian social insurance card; 3 if the debtor does not have a current Canadian passport or SIN card, current foreign passport from jurisdiction of habitual residence. Canadian citizenship certificate 1 current Canadian visa; 2 if the debtor does not have a current Canadian visa, current foreign passport issued by jurisdiction where debtor habitually resides; 3 if the debtor does not have a current visa or current foreign passport, governmental birth certificate issued at debtor s birth place. Name adopted after marriage if recognized by jurisdiction of habitual residence/ name on name change certificate. Both previous name and married name registered as separate names Name Requirements Name of the deceased individual in the order of first name, first middle name if any and last name followed by the word estate. 1 name of the trade union; and 2 name of each person representing the trade union in the transaction giving rise to the registration. Name of trust as indicated in the document creating the trust followed by the word trust unless the name already contains that word. Name of at least one of the trustees, entered in the order of first name, middle name if any and last name, followed by the word trustee. Name of the trustee, entered in the order of first name, middle name if any and last name, followed by the word bankrupt. Name of bankrupt enterprise followed by the word bankrupt. Firm name of partnership as stated in the certificate registered under the Act. Check s.21(10-12) etc. The name of the body corporate. The name of the association, organization or enterprise etc. U:\WPDATA\Secondary Sources\Papers - wpd\unpublished\new\81044.wpd Page 14 of 14