New rules will require lawyers to report delays in mortgage discharges

New rules will require a BC lawyer to report to the Law Society the failure of a mortgagee to provide a registrable discharge of mortgage within 60 days of the closing date of the transaction: see Part 3, Division 9, comprising new Rules 3-88 and 3-89.

The new rules will also require a lawyer to report to the Law Society the failure of another lawyer or a notary to provide satisfactory evidence that he or she has filed a registrable discharge of mortgage as a pending application at the Land Title Office within that 60-day period. A lawyer has five business days to report, in a form to be prescribed by the Law Society, under the new rules.

The new rules apply to transactions that close on March 1, 2003 or later. Accordingly, the earliest that a need to file a report would arise is April 30, 2003, with the report due five business days thereafter. A reporting form will be available on the Law Society website by the end of March, and it is intended that lawyers will submit the form electronically.

In addition to ordinary mortgages, the new reporting rules apply to debentures and trust deeds containing a fixed charge on land or an interest in land.

These new provisions have been collectively termed the "30-30 rule" by the Law Society's Conveyancing Practices Task Force. This reflects the expectation that a financial institution would typically have 30 days after a mortgage repayment in which to issue a discharge, and the lawyer responsible for the discharge (usually the vendor's lawyer) would have a further 30 days to register the discharge.

Reports filed under the new rules are intended to provide the Law Society information on 1) the business processes of financial institutions and the practices of the profession, and whether certain institutions are unable to discharge mortgages within a particular timeframe, and 2) whether there are situations that require attention or intervention from the Law Society.

The Society will not draw adverse inferences against a lawyer by reason of his or her failure to obtain a discharge of a repaid mortgage from a financial institution, in the absence of evidence of a breach of undertaking or defalcation.

The Benchers passed Rules 3-88 and 3-89 on February 7, following the recommendations of the Conveyancing Practices Task Force. For background, see the November-December, 2002 Benchers' Bulletin and What's New on the Law Society website at

For more information on the rules, please contact David Newell, Corporate Secretary (