Michael M. Sax
Barrister and Solicitor, Toronto
Real estate lawyers in the Province of Ontario, Canada have been legislated
to search and complete purchase, sale, mortgage, and other transactions
on-line. Electronic searching is already in place (with some limitations),
and electronic registration will be phased in as the final stage of a
three-step process to achieve the government's goal of a fully automated
land registration service. Currently being beta tested, the programme's
final implementation is expected to commence in 1999. The Land Registration
Reform Act, originally passed in 1984 and later amended to include electronic
registration in 1994, will ultimately see that all documents are created,
submitted, registered, filed and maintained in electronic form.
The software chosen to accomplish the goal, Teranet, operates like an
intranet or EDI plus e-mail for the real estate bar and its stakeholders.
Important issues facing business to business and consumer e-commerce have
been addressed by the programme's designers and initial testing has shown
the system to function well.
The legislative principles that were adopted in fashioning the system
appear to be a hybrid of concepts set out by the American Bar Association's
Digital Signature Guidelines, the ICC's Guidec, and UNICITRAL's Model
Law On Electronic Commerce, each of which represent a separate trend in
the push toward uniformity in global electronic transactions. It appears
this choice was made to avoid substantive changes in the existing doctrines
governing conveyances. Guidelines set out by the American Bar and the
ICC - and employed here - propose the use of trustworthy third parties
(in this case, lawyers) to signal the completion of transactions. The
system also requires that certain registered documents may only come from
lawyers, though other parties may be authorised to use the system.
What sorts of changes can be expected for real estate practitioners? It
may not mean the elimination of paper documentation entirely. Lengthy
documents are likely to be retained as evidence of instructions, as are
hard copies of any security given, such as guarantees. But relationships
between financial institutions, lawyers and their respective clients may
be forced to adapt as lenders are given access to the system and begin
carrying out more routine transactions.
Electronic registration should be arriving soon in most countries and
it raises the question of whether the removal of barriers (through agreements
such as NAFTA [chapter 12] and the WTO CATS) will one day bring with it
the possibility for lawyers in foreign jurisdictions to complete electronic
transactions with Ontario lawyers.