The Mortgage Instructions Toolkit provides practical guidance for lawyers responding to lender requests in residential real estate transactions. This page addresses a lawyer’s obligations when doing residential real estate work.

The situation

Handling a residential real estate transaction requires many different steps that commonly include an analysis of the issues and applicable law, title search, research on municipal matters, review of documents, including a survey, and interactions with the borrower client and the lender. Some of this paperwork is usually done by a paralegal or support staff under the direction of a lawyer. Some of this work must be done by the lawyer.

Clearly, legal advice may only be given by a lawyer. However, when working with support staff, there is a danger that the boundary between work that must be done by a lawyer and work that can be done by a non-lawyer becomes blurred.

When a lawyer allows support staff to conduct legal work that should only be performed by a lawyer, professional liability insurance will not be available to cover negligent acts or similar issues. Insurance covers work done by the lawyer and within the lawyer’s scope of work. Allowing other personnel to conduct a lawyer’s work may also erode lawyers’ mandates over time with courts or other regulatory bodies expanding the role of non-lawyers to perform legal tasks.

Sample sections from provincial acts governing the legal profession

Nova Scotia, Nova Scotia Legal Profession Act 2004, c. 28, s.1.​

16 (1) The practice of law is the application of legal principles and judgement with regard to the circumstances or objectives of a person that requires the knowledge and skill of a person trained in the law, and includes any of the following conduct on behalf of another:

(a) giving advice or counsel to persons about the persons legal rights or responsibilities or to the legal rights or responsibilities of others;

(b) selecting, drafting or completing legal documents or agreements that affect the legal rights or responsibilities of a person […] ​

Manitoba, The Legal Profession Act C.C.S.M. c. L107

Unauthorized practice of law

20(2) Except as permitted by or under this Act or another Act, no person shall

(a) carry on the practice of law […]

Activities deemed to be carrying on the practice of law

20(3) A person who does any of the following, directly or indirectly, for or in the expectation of a fee or reward is deemed to be carrying on the practice of law:

(a) draws, revises or settles any of the following documents:

(i) a document relating to real or personal property […]

(d) gives legal advice.

British Columbia, Legal Profession Act, SBC 1998, c 9

Definitions 1(1)... “practice of law” includes […]

(b) drawing, revising or settling […]

 (v) an instrument relating to real or personal estate that is intended, permitted or required to be registered, recorded or filed in a registry or other public office …

(e) giving legal advice

Practice guidance

• Handle the elements of a residential real estate transaction that constitute the practice of law yourself, including:
  • reviewing results of the title search
  • signing critical letters and reports, after reviewing them
  • reviewing all documents with legal effects
  • advising clients on legal issues.
• Instruct paralegals and support staff on what is required on a file. Supervise their work.
• In jurisdictions with an electronic filing system, keep your access codes to yourself. Your credentials to enter or change data in the land registry data base should not be shared with anyone.
• Be alert to the boundary between your work as a lawyer and the work of support staff. Do the work that a lawyer is supposed to do.
• Take the opportunity of meeting with your clients and help them understand the legal work that you are going to do or have done for them.                                                                                                                           

There are a number of topics in the Mortgage Instruction Toolkit that give practice guidance on how to handle matters that fall outside a lawyer’s scope of work including:

• building compliance issues
• easements and rights of way
• encroachments and other encumbrances
• private water supplies
• responsibility to “ensure” or “certify”
• septic tanks
• surveys

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