Land Titles Office Update
On April 1, 2021, the Alberta Land Titles Office will implement a pending registration queue (PRQ). Priority of registrations is established as of the date of submission of documents, provided those documents are ultimately registered within the required period. Reliance on the PRQ is voluntary.
Documents are considered submitted once delivered to Land Titles and entered into the queue. They will be described as “received” in the PRQ on SPIN2. Rejected documents will be returned with a Notice of Deficiency and the parties will have 30 days to remedy any deficiencies while still maintaining priority on title, during which time the registration will be identified as “deficient”.
With this change, it will be very important that the information on your Document Registration Request (DRR) is accurate. Errors on the DRR could result in a loss of priority. There are also certain documents that will not show up in the PRQ and it is possible these documents could have priority on title once your submission is registered. An overview of the changes is available from Service Alberta.
Lawyers should carefully assess the risk of relying on the PRQ and, if their documents are returned with a deficiency, consider whether they will be able to address it within the 30-day time limit. Reliance on the PRQ is optional and lawyers may decline to rely on it.
Western Law Societies’ Conveyancing Protocol (Alberta)
The Law Society has received inquiries about the potential impact of the new PRQ on the Western Law Societies’ Conveyancing Protocol (Alberta). The Law Society and ALIA have confirmed that lawyers may continue to close real estate transactions using the Protocol, subject to some amendments. We anticipate that there will be fewer claims due to the guarantee of priority on submission, although it is still possible that intervening registrations may be filed between the time of obtaining a title search and the time documents are marked as received at Land Titles.
When the buyer’s lawyer obtains the required title search on the closing date, pending registrations will now be visible on title. As a result, ALIA will be amending its processes when assessing claims under the Protocol. Lawyers are still required to obtain a current title search, now showing the pending registrations as well as any existing registrations on title. Lawyers should treat pending registrations in the same way as existing registrations and identify which pending registrations will be permitted pending registrations and which will be non-permitted pending registrations. The lawyer should then obtain appropriate undertakings for the discharge of any non-permitted pending registrations.
In the event that a new intervening registration were to be filed after the lawyer obtained a title search, the issue would be addressed as a Protocol claim and there would be no deductible or surcharge. However, if the prior intervening registration was, or would have been, identified by obtaining a copy of the title search, any resulting claims will be assessed in the normal course as claims arising from the lawyer’s negligence and will be subject to deductibles and surcharges, in accordance with ALIA’s current Group Policy. This approach is consistent with the requirement in the Protocol that lawyers must continue to take all steps required to meet current conveyancing practice standards and the standards of a prudent real estate practitioner.
Lawyers should be diligent in fixing any deficiencies within the 30-day timeframe to do so. If a document has been rejected by Land Titles, it may be due to a mistake that also takes any possible claim outside of Protocol. It is unlikely that a lawyer would be able to rely on Protocol to deal with an intervening registration due to a failure to correct the deficiency within the 30-day limit.
Lawyers should address their closing procedures to adapt to the new process. For example, trust letters that have been used for Protocol closings should be reviewed and adapted to reflect the circumstances of each transaction and to minimize risk to clients.
The Law Society and ALIA will be reviewing the current wording of the Protocol to assess whether amendments are required to reflect new Land Titles processes.