Ontario Land Registration Systems
Ontario operates two land registration systems:
- Land Titles Act RSO 1990 c L.5 — the modern system, applies to the majority of Ontario land. Provides indefeasible title: a registered owner holds a title guaranteed by the province, free from most prior interests not registered on title. The state guarantees the register — a person deprived of an interest through fraud or error may claim compensation from the Land Titles Assurance Fund (s.57 LTA).
- Registry Act RSO 1990 c R.20 — the older system, applies to certain lands not yet converted to Land Titles. Registry Act title is not guaranteed by the province. A purchaser must search title back at least 40 years to establish a good root of title. Adverse possession claims are possible on Registry Act land.
Ontario has been converting Registry Act lands to Land Titles through the POLARIS (Province of Ontario Land Registration Information System) program. The conversion results in Land Titles Conversion Qualified (LTCQ) title — a lesser guarantee than Land Titles Absolute (LTA) or Land Titles Absolute Plus (LTAP). LTCQ title converts to LTA after 10 years without adverse claims.
Teraview and Electronic Registration
Since 1999, the Electronic Registration Act SO 1991 c 44 has permitted electronic registration of land transfers in Ontario. All registrations are now made electronically through Teraview — the Ministry of Government Services electronic land registration system. A law society-certified Teraview user (typically the purchaser's solicitor) registers the Transfer of Land Form 1, mortgage, and other instruments.
The electronic registration system requires solicitors to give an undertaking that they are authorized to register on behalf of their client and that the document is correct. The registrar no longer reviews instruments for correctness before registration.
Indefeasibility of Title — Land Titles Guarantee
Under the Land Titles system, a registered owner obtains indefeasible title subject only to the exceptions in s.44 LTA:
- Fraud by the registered owner themselves (a fraudster cannot claim indefeasible title)
- Rights of persons in actual occupation of the land (overriding interests)
- Short-term tenancies (up to three years)
- Public rights of way and highways
- Taxes and other charges that bind without registration
- Government expropriations and statutory charges
The Land Titles Act provides a fraud exception: if a registered owner obtained title through fraud, they do not have indefeasible title. However, a subsequent bona fide purchaser for value without notice of the fraud does obtain indefeasible title.
Lawrence v Maple Trust Co 2007 ONCA 74 addressed mortgage fraud in Ontario: a forged mortgage registered by a fraudster does not give the mortgagee an interest in the true owner's land — the fraudster had no title to mortgage.
Easements
An easement is a right to use another person's land (the servient tenement) for a specific purpose, for the benefit of the holder's land (the dominant tenement). Elements of a valid easement (from Re Ellenborough Park [1956] Ch 131):
- There must be a dominant and a servient tenement;
- The easement must accommodate and serve the dominant tenement — it must be reasonably necessary for the better enjoyment of the dominant land;
- The dominant and servient tenements must not be owned and occupied by the same person; and
- The right must be capable of forming the subject matter of a grant — it must be sufficiently definite.
Creation of Easements
Easements may be created by:
- Express grant or reservation: Created in a deed or transfer — most common method in Ontario. An express easement over Land Titles land must be registered to be enforceable against a subsequent purchaser (s.71 LTA).
- Implied grant — Wheeldon v Burrows (1879) LR 14 ChD 9: On a grant of part of land, there passes to the grantee all quasi-easements that were: (a) continuous and apparent; (b) necessary for the reasonable enjoyment of the land granted; and (c) actually used by the grantor for the benefit of the land granted at the time of the grant. The rule is based on the principle that a grantor cannot derogate from the grant.
- Implied necessity: Where land is completely landlocked without access to a public road, a way of necessity is implied in favour of the grantee (Nickerson v Barraclough [1981] Ch 426 — requires common origin of both parcels; not available for historical landlocking before common ownership).
- Prescription: Under the Limitations Act 2002, continuous use for 10+ years (without permission, without secrecy, without force) may give rise to prescriptive easement claims on Registry Act land. Land Titles land generally cannot be acquired by adverse possession or prescription under s.51 LTA. Ontario abolished common law prescription under Real Property Limitations ActRSO 1990 c L.15; claims must be based on the limitations period.
Extinguishment of Easements
Easements are extinguished by: (a) express release in writing; (b) unity of ownership (the same person acquires both dominant and servient tenement); (c) implied release through abandonment — non-use alone is insufficient, there must be clear intent to abandon; or (d) expiry if granted for a fixed term.
Restrictive Covenants
A restrictive covenant is a covenant by a land owner to restrict the use of their land for the benefit of neighbouring land. Rules for a restrictive covenant to run with the land (bind successors in title) follow Tulk v Moxhay (1848) 2 Ph 774 and London County Council v Allen [1914]:
- The covenant must be negative in substance (a restriction, not an obligation to spend money or do a positive act);
- The covenant must be for the benefit of land retained by the covenantee (not merely personal);
- The covenant must have been intended to bind successors; and
- On Land Titles land, the covenant must be registered on title to bind a purchaser.
Common Ontario restrictive covenants: no further subdivision; residential use only; no structures within set-back distances; architectural controls; prohibition on short-term rentals.
Modification and Discharge — s.61 Conveyancing and Law of Property Act
The Conveyancing and Law of Property Act RSO 1990 c C.34 s.61 permits the Superior Court to modify or discharge a restrictive covenant where: (a) by reason of changes in the character of the neighbourhood, the covenant ought to be deemed obsolete; (b) the covenant impedes reasonable use without practical benefit to others; (c) those entitled to the benefit have agreed expressly or impliedly to discharge; or (d) modification would not injure the persons entitled to enforce.
Adverse Possession on Registry Act Land
Adverse possession (or limitation of actions in respect of land) is governed by theReal Property Limitations Act RSO 1990 c L.15, which sets a 10-year period for actions to recover land. An adverse possessor who occupies land for 10+ years with the requisite quality of possession extinguishes the paper title holder's right to sue in ejectment.
Elements of adverse possession:
- Factual possession: The claimant must have had factual possession — dealing with the land as an occupying owner would, to the exclusion of the paper title owner (Powell v McFarlane (1977) 38 P & CR 452 adopted in Ontario)
- Intention to possess (animus possidendi): The claimant must have intended to possess the land as their own, not merely to use it temporarily or permissively
- Without consent: Possession with the permission of the owner is not adverse
- Continuity for 10 years: The period need not be uninterrupted if each possessor tacks their period of possession to the previous possessor's (provided the second possessor enters through the first)
Land Titles land is not subject to adverse possession: s.51 LTA prevents adverse possession of Land Titles land. On LTCQ land (converted within 10 years), adverse possession claims that predated the conversion may still be asserted in some circumstances.
Title Insurance in Ontario
Title insurance is now standard in Ontario real estate transactions for both residential and commercial properties. Major providers: FCT (First Canadian Title) and Stewart Title.
Title insurance typically covers:
- Title defects — gaps in the chain of title, forgery, fraud
- Zoning and by-law non-compliance existing at closing
- Survey defects and encroachments
- Outstanding work orders and building permits
- Liens and encumbrances not disclosed on title
- Forced removal of improvements encroaching onto neighbouring land
Title insurance does not typically cover: matters the insured knew about before closing; current zoning violations the insured created; environmental contamination; matters not disclosed by an accurate survey (for standard residential policies without survey endorsement); and future changes in zoning.
Ontario lawyers are required under LSO Rules of Professional Conduct to advise clients about the availability and advisability of title insurance as an alternative to traditional survey and title opinion coverage.
Land Transfer Tax
The Land Transfer Tax Act RSO 1990 c L.6 imposes LTT on transfers of Ontario land at the following rates (on the value of consideration):
- 0.5% on the first $55,000
- 1.0% from $55,000 to $250,000
- 1.5% from $250,000 to $400,000
- 2.0% from $400,000 to $2,000,000
- 2.5% above $2,000,000 (residential with single-family detached or semi-detached)
First-time homebuyers are entitled to a maximum $4,000 LTT rebate (LTTA s.2.1). Toronto imposes a Municipal Land Transfer Tax (MLTT) at equivalent rates, effectively doubling the tax for Toronto properties.