Law Society seeks information on title insurance
February 6, 2006
The Benchers of the Law Society have created a task force to obtain factual information about the practices of title insurance companies operating in British Columbia, particularly as they relate to preparing, executing and registering mortgages and discharges of mortgage. The task force will consider issues raised by the member resolutions passed at the Law Society’s 2005 Annual General Meeting, and the relationship of those issues to the Law Society’s statutory mandate. Ultimately, the Task Force will report to the Benchers on its findings and any resulting policy recommendations.
The task force comprises Ralston S. Alexander, QC (Life Bencher) as Chair, Leon Getz, QC (Bencher), A.J. (Bertie) McClean, QC, Warren Wilson, QC (Life Bencher), Neil Kornfeld, Charlene Loui-Ying, and Ian Smith (Director and Registrar of Land Titles). The resolutions passed at the 2005 AGM are set out below (see Resolutions 2 and 3). The task force invites submissions from lawyers who have direct experience with residential mortgage transactions involving title insurance or a title insurance company. The task force is particularly interested in information that bears on the matters described in the resolutions.Submissions must be received by the Law Society no later than February 28, 2006. The task force anticipates hearing oral submissions from selected persons on April 24, 2006. Please direct your written submission to:
Task Force on Title Insurance Issues
Attention: David Newell
Law Society of British Columbia
845 Cambie Street
Vancouver BC V6B 4Z9
Alternatively, you may email your submission to email@example.com.
Member resolutions passed at the 2005 Law Society Annual General Meetingrelating to title insurance
Resolution 2: Member resolution, submitted by Ronald Morin of Surrey, seconded by Peter Shrimpton of Whistler
WHEREAS it is increasingly the practice of financial institutions to have borrowers sign mortgage documents without the borrowers having the benefit of legal advice from lawyers or notaries public and this practice is contrary to the best interests of the public and, as well, may result in mortgages being found to be unenforceable in courts of law, RESOLVED:
1. That the Law Society create a Rule of Practice stating that no lawyer shall be a witness to any mortgage unless that lawyer provides comprehensive legal advice to the borrower or unless that lawyer has confirmation, in writing, from another lawyer or notary public that the borrower has had the benefit of comprehensive legal advice with respect to the mortgage in question before it is signed.<
2. That the Law Society lobby all financial institutions, their associations, regulating bodies and the Government of British Columbia to impress upon them the detrimental impact this practice is having on the public and as well the potential for mortgages to be found to be unenforceable.
Resolution 3: Member resolution, submitted by Ronald Morin of Surrey, seconded by Peter Shrimpton of Whistler
WHEREAS in British Columbia title insurance companies and specifically FCT Insurance Company Ltd. (dba First Canadian Title) and FNF Canada Company, a division of Fidelity National Financial Inc., in conjunction with financial institutions have developed practices for drawing, executing and registering residential mortgages without involving a lawyer or notary public acting on behalf of the borrower, resulting in many people, often unsophisticated borrowers, placing mortgages on their properties without fully understanding the legal implications of what they are doing, which is detrimental to the interests of borrowers and the public;AND WHEREAS title insurance companies have ignored processes established in British Columbia regarding the timely registration of Form B Mortgages and Form C Release documents at British Columbia Land Title Offices, including their practice of registering mortgages many weeks after financial institutions have provided mortgage funds to borrowers, and including their practice of not obtaining and registering discharges in a timely manner thereby creating uncertainty of the state of legal titles and additional expense to the public when further legal work is made necessary as a result, and these developments have had, and will continue to have significant negative consequences for the public and for the integrity of the Land Title Office Torrens System.AND WHEREAS the Law Society has determined that drawing mortgages for registration by FCT Insurance Company Ltd. (dba First Canadian Title) and FNF Canada Company, a division of Fidelity National Financial Inc., constitutes the unauthorized practice of law pursuant to the Legal Profession Act, RESOLVED:
1. That the Law Society shall take all reasonable measures to end these practices by title insurance companies, including, but not limited to:
a. Taking all necessary steps to prevent lawyers from facilitating such unauthorized practice of law and/or practices detrimental to the best interests of the public when lawyers witness mortgage documents that are prepared by and/or will be registered by FCT Insurance Company Ltd. (dba First Canadian Title) and/or FNF Canada Company, a division of Fidelity National Financial Inc., at the Land Title Office and,
b. Taking all necessary steps to have such unauthorized practice of law and/or practices detrimental to the best interests of the public terminated, including, but not limited to, action pursuant to the Legal Profession Act and lobbying the Government of British Columbia for legislation to prevent such practices.