Western Law Societies Conveyancing Protocol
The Western Law Societies Conveyancing Project was implemented in Manitoba and across Western Canada on February 15, 2001. The project is a joint initiative of the Law Societies of Manitoba, Saskatchewan, Alberta and British Columbia. Each law society has developed a real estate conveyancing practice guide (called a Protocol) that allows lawyers to:
- provide lenders with a standardized short form of Solicitor's Opinion;
- fund mortgage monies on the date of closing; and
- eliminate the lender's need for a building location certificate.
The project responds to the many changes in the residential real estate and conveyancing marketplace within which lawyers provide legal services to the public. The project's restructuring of residential real estate practice standards expedites the conveyancing processes for lenders, provides consumers with continued access to independent legal advice, and helps to preserve the integrity of the Torrens land registration system.
The purpose of the Law Society, as defined by The Legal Profession Act, is to uphold and protect the public interest in the delivery of legal services with competence, integrity and independence. In pursuit of this purpose, the Society establishes standards for the education, professional responsibility and competence of those practising law. The Law Society of Manitoba, in exercising its mandate to establish practice standards and to ensure the competent delivery of legal services, participated in the development and implementation of the Conveyancing Protocol.
The Protocol provides Manitoba lawyers and those in the three other Western Canadian Provinces with the tools necessary to continue to be active participants in the conveyancing marketplace. It is in the public interest that lawyers do so. A residential purchase is often the single largest investment of a lifetime. Lawyers provide information and broadly-based independent advice to clients to protect and assist with this important transaction. It is also in the public interest that the integrity of the Torrens system of land registration remain intact. Lawyer involvement in the conveyancing process has ensured that the Torrens system has been properly utilized and maintained. In a real estate conveyance, lawyers are required to register transactions that will accurately reflect the state of title. This has resulted in a land registry system that has widely been acknowledged as one of the most efficient, accurate and reliable land recording systems in the world.
While each law society has developed a real estate conveyancing Protocol that is tailored for use in that province and reflects jurisdictional law and procedure, all the Protocols are consistent in their fundamental purposes, which are:
- to allow for the release of mortgage proceeds and other
purchase funds on closing, for the mutual benefit of purchasers, vendors
- to encourage the continued exercise of due diligence by
purchasers, in survey matters;
- to enable lawyers to satisfy the unique security
requirements of lenders without obtaining a current building location
- to enable lawyers to issue a standardized short form Solicitor's Opinion to advise lenders that, in the lawyer's opinion, the mortgage can be funded.
The Protocol only applies to transactions or financings involving existing residential properties under the Torrens land titles system, including condominium units and multi-family dwellings containing four or fewer units. The Protocol does not apply to:
- properties the title to which has not been brought
under the provisions of The Real Property Act (Manitoba);
- properties newly-constructed or substantially renovated in
the immediately preceding 40-day period;
- transactions involving a plan of subdivision; and
- commercial properties, farm lands, or multi-family dwellings containing more than 4 units.
Where a purchase transaction does not involve mortgage financing, the Protocol closing procedure may still be used. In those circumstances, the Protocol provisions relating to the purchaser's mortgage or the requirements of the purchaser's mortgagee can simply be disregarded. The Protocol procedure may also be used on mortgage refinancings, in which case only those provisions relating to the mortgage or the mortgagee's requirements will apply.
The Protocol prescribes the essential conditions precedent to the issuance of a Solicitor's Protocol Opinion and the release of mortgage proceeds or other purchase funds before registration. Its focus is on practice and procedure, rather than on substantive law. It is not intended and should not be read as a comprehensive statement of the duties of a lawyer when acting on the purchase, mortgage or sale of residential real estate. All steps otherwise required to meet current conveyancing practice standards (except to the extent inconsistent with the Protocol) must still be taken.
In providing a Protocol Solicitor's Opinion, a lawyer is advising a lender that a current building location certificate need not be obtained. Mortgage proceeds and other purchase funds are also being released on closing. The existing professional liability insurance coverage afforded to all Manitoba lawyers will protect against two claims specific to a Protocol closing, namely:
- claims resulting from actual loss to a purchaser due to an
intervening registration that impairs the purchaser's title; and
- claims resulting from actual loss to a lender:
- due to an intervening registration that takes
priority over the mortgage; or
- due to a survey defect that was unknown at the date of advance but which would have been disclosed by an up-to-date building location certificate or zoning memorandum.
- due to an intervening registration that takes priority over the mortgage; or
In any of those occurrences, where a claim is paid by the lawyer's insurer:
- no deductible will be payable by the insured
- the payment will not be considered as a "paid claim" for purposes of future surcharges or graduated deductibles, provided that the lawyer has adhered to the practises prescribed by the Protocol.