Ontario Real Estate Closing: Title Insurance, Trust Ledgers, and Requisitions

March 2026 · 14 min read

Ontario residential real estate transactions close through a highly standardized process involving title searching, requisitions, title insurance, trust accounting for closing funds, and electronic registration. Real estate practice is high-volume and deadline-driven — missing a closing date or mishandling trust funds are among the most common sources of solicitor negligence claims and LSO complaints. This guide covers the key components of a residential closing in Ontario.

1. The Agreement of Purchase and Sale

The Agreement of Purchase and Sale (APS) — typically on OREA standard forms — governs the transaction. Key provisions counsel must review:

• Closing date: Must be a day on which the land registry office is open and capable of receiving registrations. Statutory holidays and weekends can be problematic.
• Title requisition deadline: The standard OREA form requires the buyer to deliver all title objections by a specified requisition date — typically 30 days before closing. Objections not raised by this deadline are waived.
• Conditions: Financing, home inspection, and status certificate conditions must be satisfied or waived before the deal becomes firm.
• Chattels and fixtures: Items included and excluded must be clearly identified. Disputes over fixtures (window coverings, light fixtures, built-in appliances) are common.
• HST: Whether HST is included in the purchase price must be addressed — particularly in new home sales where the New Housing Rebate may apply.

2. Title Searching in Ontario

Ontario operates under the Land Titles Act, RSO 1990, c L.5 for most urban properties, and the Registry Act, RSO 1990, c R.20 for remaining registry system properties. Most Ontario properties have been converted to the Land Titles system.

Under Land Titles, the Parcel Register (accessed through Teraview) is the authoritative record. The buyer's lawyer searches the Parcel Register to identify:

• Current owner and chain of title
• Registered mortgages, charges, and encumbrances
• Easements and rights-of-way
• Restrictive covenants
• Executions (judgment liens) against the vendor or previous owners
• Utility company notices and municipal charges

Counsel must also search for:

• Municipal zoning compliance and building permits
• Conservation authority regulated area designations
• Environmental notices
• Property tax arrears
• Hydro, water, and sewer charges
• For condominiums: status certificate review

3. Requisitions

After the title search, the buyer's lawyer sends requisitions — written objections or inquiries — to the vendor's lawyer. A requisition may raise:

• Title defects: Registered encumbrances not contemplated by the APS (e.g., an unexpected easement or restrictive covenant).
• Executions: A judgment creditor's execution against the vendor that could attach to the property. The vendor must discharge the execution or satisfy the creditor before or on closing.
• Permit and bylaw compliance: Where additions, sheds, or renovations were completed without permits, the buyer may requisition that the vendor obtain building compliance or provide insurance coverage.
• Survey issues: Encroachments, fence line discrepancies, or survey inconsistencies discovered during the search.
• HST clearance: In commercial transactions, the vendor's HST compliance.

Responses to requisitions must be received before closing. Unresolved requisitions may be dealt with by: the vendor addressing the issue, title insurance covering the risk, or the buyer waiving the objection.

4. Title Insurance

Title insurance has become standard practice in Ontario residential real estate. Policies are issued by FCT (First Canadian Title), Stewart Title, or Chicago Title, covering both the lender and owner in separate policies. Title insurance provides coverage for:

Title insurance does not cover matters disclosed by the buyer's own search, known defects, or environmental contamination. It is a supplement to — not a replacement for — competent title searching.

Title insurance also covers many requisition issues without requiring the vendor to address them directly. This has accelerated closings significantly — issues that previously required weeks of negotiation can now be insured over in hours.

5. Statement of Adjustments

The Statement of Adjustments calculates the net closing payment by adjusting the purchase price for:

• Property taxes: Apportioned between vendor (pre-closing) and buyer (post-closing) based on the closing date. If taxes are not yet due, the vendor credits the buyer for taxes attributable to the ownership period.
• Prepaid utilities: Propane, oil, or prepaid water fees are adjusted as at closing.
• Rent (rental properties): Security deposits must be transferred to the buyer; rents prepaid by tenants are credited to the buyer.
• Deposits: The deposit paid under the APS is credited to the buyer against the purchase price.
• Mortgage assumption: If the buyer is assuming the vendor's mortgage, the outstanding principal is a credit to the vendor.

6. Trust Accounting for Real Estate Closings

Real estate closings involve large flows of client funds through trust — deposits, closing funds, mortgage advances, and proceeds. Ontario lawyers must comply with LSO By-Law 9 for all trust transactions.

The buyer's lawyer typically receives:

• Mortgage advance wire from the lender's solicitors
• Balance of purchase price from the buyer (certified cheque or wire)
• Title insurance premium collected from client

The buyer's lawyer disburses:

• Net proceeds to the vendor's solicitor (purchase price less adjustments)
• Land Transfer Tax (provincial and, in Toronto, municipal) to the government
• Title insurance premium to the insurer
• Teraview and registration fees
• Legal fees and disbursements

All trust transactions must be recorded same-day. Funds received by wire must be confirmed cleared before disbursing. The mandatory two-client trust ledger — one for the buyer and one for the lender (if separate) — must reconcile at all times.

The vendor's lawyer receives the net proceeds from the buyer's solicitor and disburses to: mortgage lender (discharge amount), judgment creditors (if any executions), and the vendor.

7. Electronic Registration — Teraview

Ontario real estate transactions are registered electronically through Teraview, the Land Registry Office's electronic registration system. Documents are prepared, reviewed, and "released" by the vendor's and buyer's counsel simultaneously — the release triggers registration.

The undertaking regime governs the closing: counsel exchange undertakings before the release. The standard lawyer-to-lawyer undertakings include:

• Vendor's counsel undertakes to discharge all mortgages from closing proceeds
• Vendor's counsel undertakes to pay out all executions from proceeds
• Buyer's counsel undertakes to register the transfer and mortgage
• Both undertake to account to each other for adjustments

Breach of an undertaking is a serious matter — a failure to discharge a mortgage from closing proceeds is actionable both as a professional obligation and through the Law Society complaints process.

8. Common Closing Problems

• Funds shortage: The buyer's lawyer receives less from the lender or buyer than required to close. Document the shortage, notify the client immediately, and do not release the documents until funds are confirmed.
• Last-minute lien: A construction lien is registered against the property after the title search but before closing. Title insurance covers this (gap coverage) — confirm with the insurer before releasing.
• Delayed mortgage advance: The lender's solicitor fails to wire funds in time for same-day closing. Communicate immediately with the lender's solicitor; if the closing will be missed, advise the vendor's counsel and consider a closing date extension.
• Title fraud: Identity fraud has become a significant risk in Ontario real estate, particularly in vacant land transactions. Know-your-client verification is essential — confirm identity documents in person or through a notarial confirmation for remote clients.
• New home HST: Whether the New Housing Rebate is assigned to the builder or claimed by the purchaser must be clarified before closing. CRA audits of new home HST claims are common.

Conclusion

Ontario residential real estate closings are high-stakes, deadline-driven transactions with zero margin for error in trust accounting or title registration. The combination of title insurance, electronic registration through Teraview, and standardized undertaking practice has made closings faster — but the compliance obligations for trust accounting, requisition management, and client identification have not diminished. Real estate lawyers who build rigorous systems around these processes protect their clients and their practices.