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

The situation

A lawyer’s duty to their lender client includes an outside of the land registry search for judgments (and perhaps personal property security interests) against the borrower or guarantor, when this requirement is included in the lender's instructions, or is required for an opinion of title or issuance of a title insurance policy without exception for unregistered judgments.

Sample lender instructions

We require that you make all relevant searches with respect to the property normally undertaken to protect our interests. In particular, we require you to search the appropriate registry office for any judgments which may be outstanding against any of the borrowers or guarantors.

Practice Guidance

• In jurisdictions where judgments must be registered in the land registry system to affect a borrower's title to a property, and have priority over a later mortgage, a land registry search for outstanding judgments will likely be sufficient, unless the lender's instructions require a search for all judgments.
• In jurisdictions that do not have a requirement that judgments be registered in the land registry to affect a borrower's title to a property, and have priority over the lender's mortgage, you will have to search all the relevant records to fulfill your duty to search for judgments.
• In responding to lender's instructions for a search for judgments (or all judgments), you should request that the instructions be modified to limit the search to the records that are relevant in your jurisdiction. For example, a lawyer closing a loan being made to an Ontario resident will want to clarify that no records of any judgments entered in any court sitting outside of Ontario were searched. Best practice is for the lawyers to specify the judgment records that were searched and to state that the results reflect a search of only the judgments indexed in the identified judgment records.

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