Title Insurance Task Force recommendations approved

At their November meeting, the Benchers approved all six recommendations made by the Title Insurance Task Force, as set out in the report presented by task force chair Ralston Alexander, QC:

1. The Law Society should rigorously investigate through its established processes issues of unauthorized practice or professional misconduct that may arise out of “document preparation.”

2. The Law Society should investigate the extent to which title insurance companies or their service providers make the services of a lawyer available for a fee, contrary to the Legal Profession Act, and where necessary, should act on the result of that investigation.

3. The Law Society should examine, in concert with the Land Title and Survey Authority, if there is any additional regulation that can be undertaken by the Law Society to protect against any inappropriate filing practices of title insurance companies and/or their service providers. Significant negative consequences to the integrity of the land title system can follow from the manner in which title insurance companies provide document preparation services to the financial institutions.

4. The Law Society should, acting in the public interest, undertake an education program directed at educating the public about the value added by a lawyer’s participation in the mortgaging process, and directed at broadening both lawyer and public awareness of the Western Law Societies Conveyancing Protocol.

5. The Law Society should, to the extent it has not already done so, encourage the government to investigate the circumstances of the appointment of unqualified persons as commissioners for the purpose of witnessing mortgage documents to determine how they were made, to identify improprieties in the process and steps taken to prevent their recurrence.

6. The Law Society should include in the Professional Conduct Handbook a requirement that a lawyer witnessing the signature of an unrepresented mortgagor must sign and provide to the mortgagor a certificate stating that the lawyer has advised the mortgagor that he or she may obtain independent legal advice.

“The unanimous view of the task force is that title insurance is not a positive force in a Torrens system of land title registration,” Alexander said. “While the issue of title fraud has been much in the public eye in recent years, the task force considers that the publicity and attention has been out of proportion with the true extent of the problem in BC.”

“According to the Land Title and Survey Authority, the Land Title Assurance Fund has had only two claims related to fee simple property fraud in the past 17 years, despite processing approximately 13.5 million transactions in the same period.”

The Benchers established the Title Insurance Task Force following the Law Society’s 2005 Annual General Meeting, where member resolutions bearing on the title insurance industry were passed.

The task force’s mandate was to investigate the practices of title insurance companies, their affiliates and associated entities in BC, particularly in preparation, execution and registration of mortgages and discharges of mortgages, and then to report back to the Benchers with policy recommendations.