The New Regime
On April 1st, 2021, amendments to the Land Titles Act came into effect that ushered in the new Pending Registration Queue (“PRQ”), altering how priority is determined for documents submitted to the Land Titles Office (“LTO”). Prior to April 1st, 2021, priority was determined based on the registration number generated at the time of registration. Going forward, priority will be determined based upon the timing of receipt of documents in the PRQ provided those documents are eventually registered on the Certificate of Title. Documents will continue to be examined for deficiencies by a LTO examiner prior to being registered, however, rejected documents will maintain their priority based on their spot in line in the PRQ so long as any deficiencies are remedied and they are resubmitted to the LTO within 30 days of receipt of a Notice of Deficiency (previously a Rejection Notice). The delay in registration of documents will likely remain relatively unchanged, however, documents will appear on the PRQ list within hours of submission. Currently, closing transactions by reliance on the PRQ is completely voluntary. It is important to note that time sensitive documents such as builders’ liens, will no longer skip the queue and will be registered in the order they are received with their priority determined by the PRQ. Also, Certificates of Title will now feature a PRQ section listing all pending registration in the PRQ, by priority, with both a generic label (i.e. “Caveat”) and contact information for the submitter.
DRR: Zero to Hero
The Document Registration Request (“DRR”), previously relegated to being a glorified cover sheet, now finds itself as a key player in the PRQ regime. Every DRR will now require a land ID and the LTO stresses that they will not compare the land ID on the DRR to lands referenced in the submitted document at the time of receipt. Thus, an error in a DRR’s land ID could result in that document losing priority. Consequently, DRR accuracy may now be the most important aspect of document submission. Whether a transaction is closing via the PRQ or not, it is strongly recommended that all DRR’s are prepared to ensure they are subject to the last registration reviewed or approved on title.
PRQ Listings and the Search for Information
For those who have pulled a Certificate of Title, only to find an unexpected encumbrance registered against it, it is almost reflexive to immediately pull a copy of the encumbrance to determine its nature and effect. As noted above, unfortunately, the PRQ will only give us a hint in the form of a generic label (i.e. “Caveat” or “Utility Right of Way”), and contact information for the submitter. It will not allow for viewing of the document until it is registered. As a result, it is easy to envision frantic calls between counsel, previously unacquainted, seeking last minute information on an unexpected PRQ listing (potentially, only to discover that the DRR has an incorrect land ID referenced), in an effort to get the deal closed on time.
Swan Song of Protocol?
The PRQ regime, while maintaining that is completely voluntary, may often find itself intruding upon the transactions of its not-so-distant cousin, the Conveyancing Protocol. For in the eyes of the Law Society, a pending registration is considered a normal registration that is waiting in line for its turn with an examiner at the LTO. Upon pulling a Certificate of Title prior to submitting documents, as required by the Conveyancing Protocol, all pending registrations must be examined and appropriate undertakings for the discharge of same be obtained. This despite the fact those registrations are “pending” and may never in fact be registered. It is not outside the realm of possibilities that meritless or defective registrations would appear in the PRQ, not being examined for weeks, and lawyer being required to seek undertakings, or otherwise deal with these questionable pending registrations as part of closing. It is also worth nothing that lawyer must act diligently to remedy any deficiencies in submitted documents within the aforementioned 30-day window. The Law Society has stated that failure to do so will result in a lawyer being unable to rely on the Conveyancing Protocol to deal with interviewing registrations.
In essence, the PRQ reduces the chances of a Conveyancing Protocol claim from what is often up to a few weeks (depending on the length of the registration queue at LTO at any given time), to mere hours between submission and entry in the PRQ. However, lawyers may have inadvertently traded the prospect of fewer Conveyancing Protocol claims for the reality of having to change pending registration submitters for undertakings to discharge.
Whether the PRQ regime will be the swan song of the Conveyancing Protocol remains to be seen. At the very least, we would expect the Law Society to amend the Conveyancing Protocol to dovetail with the PRQ. In the meantime, all lawyers acting for vendors should be carefully examining their trust letters.
As with any new regime the PRQ will be an adjustment for everyone. It has been touted as a means to expedite the closing of real estate transactions. That very well could be true in a landscape devoid of options such as the Conveyancing Protocol and title insurance. At first glance, the PRQ seems less of a welcome addition and more of an awkward newcomer who is more likely, at least initially, sow confusion rather than expediency.
For further information regarding the Pending Registration Queue, please contact Joel D. Murphy
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