I think everyone knows that our Alberta Land Titles Office is way behind. How far behind? An amazing 8-12 weeks! In other words, when a buyer's transfer of land goes in for registration on the closing day, the new title showing them as owners won't show up until 8-12 weeks in the future!
I get this question a lot. "Barry, how can you close deals if Land Titles is this far behind"? There are two ways that we overcome this registration lag so that buyers can get possession on the contract closing date and so that sellers can get paid on that same day.
The first way is for the buyer's and seller's lawyers to participate in a cooperative, Law Society-driven initiative called the 'Western Torrens Protocol.' These closings are referred to as 'Protocol' closings.
If everything is done aside from the registration, lenders will fund mortgages, and deals will close. This includes:
- the buyer's lawyer has prepared all the documentation;
- all the searches are clear, including a closing day search at the Land Titles Office; and
- everything is done to fund the mortgage.
The basis of the Protocol initiative is that once a buyer's lawyer has progressed to the stage as set out above, deals close 99.99% of the time. For the very odd transaction that has difficulties, both lawyers will do everything they can to correct the problems. If all else fails, the Law Society has a very big insurance policy to deal with the issue.
The second way to do closings in this busy, busy time is to purchase title insurance that has a 'Gap' coverage feature. Gap coverage says that if, after documents are submitted for registration, anything untoward turns up, then the title insurance policy deals with the issue.
That is how we can continue to close deals on time even though registration will be 8-12 weeks after the possession/closing day.
Cheers,
Barry
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