In the 1960s Bob Dylan wrote that times were changing. That has never been truer than with respect to how real estate transactions are being closed today in Ontario. The electronic registration of documents related to real estate transactions has begun in various regions of Ontario. It is a phenomenon that is forever changing the nature of real estate closings in this province.

Electronic registration is a paperless system in which documents pertaining to real estate transactions are created, submitted and recorded electronically. This system also allows a lawyer to search title records and register related documents electronically, without having to go to the local Land Registry Office in person. (“Title” is most easily defined as the right of ownership in real property.) The Province of Ontario used a software system called Teraview to develop “e-registration”.

The Province has been converting Ontario’s land registration records to electronic files slowly over the past several years to allow lawyers enough time to prepare for this drastic change in how transactions are closed. To date, millions of property records have been converted to allow for electronic searching and ultimately, electronic registration. Currently many areas of the province have made electronic registration a mandatory process to close real estate transactions.

With electronic registration, buyers and sellers no longer have to hand sign deeds, mortgages and other legal documents. Instead, they authorize their solicitor to apply signatures electronically on their behalf. Additionally, they authorize their lawyer to register pertinent documents from his or her desktop computer. In order to protect Ontario’s e-registration system from hackers, each user will be required to enter user identification and a password.

With e-registration, lawyers no longer prepare the necessary closing documents on paper. E-registration requires that these documents (i.e., deeds, mortgages and discharges) be created on the lawyer’s desktop computer. Information such as the municipal address and legal description of the property and current owners’ names that are specific to the transaction at hand are automatically taken from an electronic title database and pre-populated into the the closing documents. With electronic registration, lawyers for the seller and buyer must work together to create and where necessary, amend these documents.

Once the lawyers involved have completed and amended these documents, but not yet closed the transaction, they enter into an agreement that governs how the keys and funds are to be exchanged. Under this agreement, the keys and funds are not released until the electronically created documents have been registered. Once the vendor’s lawyer has received the funds, he or she releases the deed to the purchaser’s lawyer who in turn registers it, along with the mortgage (if applicable).

This is the first time anywhere that such a unique real estate registration system has been introduced. Homebuyers and sellers may want to ensure that their lawyer is equipped to practise in an electronic world if they are purchasing or selling real estate in an area where e-registration is mandatory.