LRC Reports

The Legal Consequences of a Temporary Land Title Office Shutdown (1995)

In British Columbia, registration is necessary in order to transfer ownership of land. Registration is also necessary in order to ensure that a charge, such as a mortgage, will have priority over subsequent dealings with the land. This is because British Columbia, like other western provinces, adopted the Torrens system for land registration. The purpose of the Torrens system is to provide certainty in dealings with land and to eliminate the need for exhaustive investigation into the ostensible owner’s title. The mechanism for achieving this is to make the registration conclusive in regard to legal ownership. Someone intending to buy land or lend money on the security of land can rely on the register to be satisfied that the person shown as the owner is indeed the true owner.

It follows that real estate transactions can only be completed properly when the Land Title Office is accepting and processing applications for registration in the usual manner and its records can be adequately searched to discover the status of titles. Fortunately, this is almost always the case on any given business day. However, computerization of the Land Title Office has given rise to expressions of concern about the continuity of registration functions and the preservation of records. In the case of Norfolk v Aikins, a computer shutdown in the Land Title Office that lasted for part of a day complicated an already troubled real estate transaction.

The Law Society’s Land Titles Computerization Committee urged the matter be reviewed by the Commission. It noted that standard contracts of purchase and sale of land, and solicitors’ undertakings given in connection with them, seldom provide for the contingency that a computer-related problem might interfere with completion of land sales. It also recognized that similar problems could arise from any disruption of operations in the Land Title Offices, regardless of the cause. Acting on the Committee’s recommendation, the Law Society requested the Commission to consider the matter.

In response to these invitations, the Commission added this project to review the legal consequences of a temporary interruption of Land Title Office operations.

Keywords: real; property; land; title; office; conveyance; transfer; completion; interruption; registration; search; temporary; shutdown; frustration; force majeure; computer; malfunction

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