The Mortgage Instructions Toolkit provides practical guidance for lawyers responding to lender requests in residential real estate transactions. This page addresses borrower identification requirements. 

The situation

Mortgage lender instructions require you to ensure good and marketable title to the mortgaged lands and alert the lender to any material fact that might affect its lending decision. One material fact relating to marketability is legal access to the property.

Legal access may be different from the route people and utilities take to get on the property. This “practical” access, if there is any, may not be “legal” access. And the opposite may be present – there may be legal access to the property without there being a practical way to access the property.

It is the responsibility of the surveyor to show how the surveyed property accesses the public right of way. Lawyers are not surveyors and should refrain from giving an express or implied opinion on access.

Sample lender instructions

You are to take all steps that would be taken by a careful and prudent solicitor on behalf of a client, including, without limitation advising us of any material fact known to you which might affect our decision to give the credit secured by the mortgage […]

Practice guidance

• Ask your client about access to the property as it exists from the client’s perspective.
• Check title and the survey to seek information about access. Is there an easement registered on title? Does the easement also encumber the burdened property? Is there a metes and bounds description of the easement providing access? Is there a shared driveway? Is it clear that the property abuts a public right of way and that any curb cut or limited access road permit has been obtained and is in effect? Is there any possibility of a strip or gore between the boundary line of the borrower’s property and the public road?
• Advise client about the benefits of a current survey, especially if you identify an access issue. Remember that lawyers do not have the professional expertise or responsibility to identify the location of access easements or access points. Surveyors do.
• Report to the lender about an access issue without giving an opinion on access. When you are providing an opinion on marketable title, make it clear you are addressing only “legal access.” Do not give an opinion regarding “practical access” or the location of access.  Your opinion on marketable title should take into account the information you have from the current survey. Do not stray into giving an opinion on what a more current accurate survey might show.

Title insurance

• Check the terms of title insurance with respect to legal access issues, generally one of the covered risks.
• Make sure the legal description of the property in the title insurance policy includes not only the fee simple real estate, but also the appurtenant access easement.

No title insurance

• When you are providing an opinion on marketable title:
  •  Make it clear that you are addressing only “legal access.”
  • Refrain from giving any opinion on “practical access” or the location of access.
  • Clarify that you are giving an opinion based on the survey that was completed on “x” date by “y” survey professional.
  • Decline to speculate on what an accurate current survey might show.

For further information on Easements and Rights of Way, Surveys or Title Insurance, please refer to the additional sections in this toolkit.