RESOURCES

“What’s in a name?” – a question that Shakespeare would have never penned if Romeo & Juliet was about Ontarian real estate transactions. When it comes down to real estate and transactions, well, a lot is in the name. A registered owner’s name and date of birth, as registered on the title, are used to verify the identity of the person or entity attempting to complete a transaction. We are yet to see the day when fingerprints, or some other kind of foolproof identification method will be used to verify a register owner’s identity. However, many new ID verification technologies have been introduced recently which use several different techniques to verify a register owner’s identity, minimizing risk of fraud.

Apart from verifying identity of the registered owners, another way in which the name matters in real estate transactions is when conducting a “Writs of Execution Search” or a “Name Search” in the Land Registry Office, which has jurisdiction over the subject property. This search is done for the seller’s name (usually by the buyer’s lawyer) and the borrower’s name in case of a mortgage transaction, including when mortgage is part of a purchase (this also is usually done by the buyer’s lawyer). The search will return a result with a list of “Writs of Execution” in which the debtor’s name matches the person or entity’s name for whom the search was done, or a “Clear Certificate” in case there were no similar names were found.

What is a Writ of Execution?

In simpler terms, a Writ of Execution is a document issued by a court or other statutory authority that authorizes the enforcement of a judgment. A judgement creditor (the party owed money) may file a Writ against a judgement debtor with the Sheriff of one or more counties or districts (usually the Sheriff of the jurisdiction within which the debtor’s assets are located). From the time it is filed and becomes effective, a Writ may encumber any land or interest in land presently owned or land that may be purchased in the future by the debtor in the jurisdiction in which the Writ has been filed.

For example, A (who owns property in Toronto) got sued by B for a certain amount of money owed, and B was able to get a judgment for that amount from the court. B can file a Writ with the Sheriff’s office which has jurisdiction over the City of Toronto. Now when A goes to sell his property in Toronto to C, the Writ will show up when C’s lawyer conducts a “Name Search” for A. Because this Writ encumbers A’s property, A cannot proceed to transfer title to C that is free and clear from encumbrances, which can jeopardize the transaction. Effectively, if the transaction is to proceed, A will have to pay off the judgment amount to the creditor before A can proceed with his transaction.

Practical Effects on Real Estate Transactions

In the event the Writs discovered during searches actually belong to the Seller/Mortgagor, the judgment will have to be paid in full prior to the closing or from the sale proceeds. In some instances, the creditor may also accept partial payments in consideration of agreeing to exempt the subject property from encumbrance.

Majority of the times, a Seller or a Mortgagor’s name will match with a debtor because of their names being similar. In such cases, the party with the similar name as the debtor can sign a statutory declaration under oath stating that they are not one and the same person as mentioned in the Writ. In the event the judgment amount is over $50,000.00, then the statutory declaration should also be accompanied by a letter from the creditor (or from the creditor’s lawyer) confirming that the party with the similar name is not one and the same as the debtor.

Generally, if the Seller/Mortgagor’s name matches with a debtor where judgment amount is less than $50,000.00, there are little to no chances of delay due to the Writs as the Seller/Mortgagor will most likely be willing to sign a statutory declaration. However, if the judgment amount is more than $50,000.00, it should be kept in mind that the creditor or their lawyer may need time to do their due diligence and issue a letter confirming that the Seller/Mortgagor is not the same as debtor. The creditor’s lawyer or the creditor may also charge a fee to issue the said letter. Therefore, it is vital that the search is done well in advance of the scheduled closing date in order to provide enough time for everyone involved to arrange everything by the closing date.

We, at Kormans LLP, make sure that we conduct our requisite searches as soon as possible to minimize any risk of delay. If you are contemplating a transaction as a Seller/Mortgagor in a populous jurisdiction (as the number of Writs filed can be higher in such jurisdictions and therefore, higher chances of names matching), for example, Toronto, Peel, etc., we suggest having a search conducted by your lawyer during the initial stages so that everything can be arranged by the scheduled closing date and ensuring your plans are not hindered by Writs. In case of a Seller, that would be some extra dollars spent, but are totally worth it in order to avoid last minute issues.

Please contact us at through phone at (905) 270-6660 or email Info@kormans.ca if you or one of your clients are contemplating completing a transaction soon. We will be more than happy to assist you with your questions about Writs of Execution or any other concerns related to real estate transactions.

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Yashkaran Singh is an Associate Lawyer at Kormans LLP. You can reach Yashkaran here: ysingh@kormans.ca.

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