Focus on Real Property

By Allen Campbell and Paul Sampson
The Lawyers Weekly, Vol. 27, No. 32 (December 21, 2007)

Ready or not, mandatory e-submission of property-related documents is coming to Nova Scotia. It will challenge those lawyers and law firms who have yet to embrace the level of technology avail-able to today’s legal practitioners.

On Dec. 10, e-submission of eligible property-related documents will be mandatory in eight of Nova Scotia’s 18 counties, with the remainder to become mandatory over the course of the following four months.

E-submission in Nova Scotia involves completing an online form and attaching a scanned image of the document to be recorded. This differs from some jurisdictions that rely solely on prescribed forms and on standard terms for their electronic submission of documents, and where there is no scanning of the full text original documents.

Since 2005, Nova Scotia has been transitioning from the traditional paper-based system to an electronic land titles system. The two systems have been running concurrently since that time. Voluntary e-submission commenced province-wide in Nova Scotia on April 18, 2006. The system then allowed for the registration of land titles transfers, mortgages and releases. This accounted for the ability to e-submit 70 per cent of all property-related documents.

Service Nova Scotia and Municipal Relations, the department in charge of e-submissions, continually enhanced the system through consultations with submitting lawyers and real estate practitioners in general. This process led to the current system ability to e-submit 95 per cent of all property- related documents, including documents under the traditional registry of deeds system. As of November, there were 186 active e-submitters, from approximately 75 law firms, accounting for 31 per cent of documents recorded in 2007.

With the advent of this process in Nova Scotia comes greater mobility for the practice of real estate law. For instance, a lawyer in Cape Breton can now register a deed in Yarmouth as easily and immediately as a lawyer in Yarmouth. Lawyers no longer need to wait a day or more for couriers to deliver documents to another county.

Since such delays have been eliminated, the process reduces liability concerns regarding the priority of registrable interests. Such concerns were more common under the traditional registry of deeds system. However, lawyers must proceed with caution while conducting subsearches prior to closing to ensure both registry systems are searched.

Service Nova Scotia statistics show that e-submitted documents have a lower rejection rate than documents submitted within the traditional registry of deeds system. This greater efficiency benefits real estate practitioners as less time will be spent fixing human errors that more frequently occur with the current system.

E-submissions are another step toward greener business practices. Like many areas of law, real estate generates a high volume of paper documentation. Technology has allowed us to create multiple copies of documents with little additional effort. If used properly, e-submission’s new technological and procedural changes will take us closer to a paperless office.

With all the advantages to e-submission, there are also potential drawbacks. Mandatory e-submission means that electronic scanning equipment will be necessary for real property lawyers in Nova Scotia.

Though the equipment may be affordable for most practitioners, new technology and new processes mean time must be invested in training for both lawyers and their support staff. The steps of the e-submission process also require more work on the part of lawyers and staff than under the paper-based system. This is due in part to the need to both print and scan documents as well as the maintenance of a separate e-submission trust account by accounting personnel.

While the benefits to e-submission seem to surpass the drawbacks, there will no doubt be some difficult learning curves for many real property lawyers in Nova Scotia. The requirement for offices to update equipment and train staff may initially outweigh the economic benefit of decreased courier costs. However, everyone will benefit from increased efficiency with the processing of e-submitted documents.

Possible future changes such as the introduction of standard terms for mortgages would further in-crease the benefits to real estate practitioners. In the meantime, we will continue to look forward to the arrival of the paperless office.

Allen Campbell is an associate lawyer with BOYNECLARKE LLP in Dartmouth, Nova Scotia, practising exclusively in the area of Residential Real Estate. He was involved in the development of the e-submission pilot project in Halifax. Paul Sampson is an associate lawyer at the same firm, practising exclusively in the area of Residential Real Estate. He has extensive experience working with land title migrations under the Land Registration Act in Nova Scotia.