Completing Your Real Estate Deal During COVID-19
COVID-19 has brought with it considerable uncertainty in various aspects of our daily lives, and the completion of real estate deals is no exception. Rest assured that we at BTM Lawyers LLP are ready and available to assist clients with their purchases, sales, refinances, and other real estate needs during this time.
The following summary provides answers to a few of the common questions that buyers, sellers, and real estate agents are currently facing. This is general information only, and subject to change as the situation evolves and regulatory changes are made. We recommend that you obtain legal advice to understand your rights and obligations, and to be aware of what options may become available to you during these unprecedented times.
Am I still able to complete my real estate deal or other land-related filings?
Yes. Land registration, legal, financial, and real estate services are all included on the Province’s list of essential services during the COVID-19 pandemic.
The operations of the Land Title and Survey Authority of British Columbia (LTSA) are continuing as usual at this time. Although front counters are closed to the general public until further notice, the LTSA’s online systems are still available to allow us to complete filings (including Claims of Builders Lien), register land title interests (including transmitting title to surviving joint tenants or executors), and search for land information. For the most up-to-date information about the LTSA’s operations, please visit LTSA.ca.
Our office remains open and we are still able to meet with clients to sign documents. However, we are taking various steps to maintain everyone’s health and safety, by adhering to the Provincial Health Officer’s social distancing recommendations, avoiding physical contact, sanitizing all surfaces, and wherever possible reviewing documents over the phone to limit appointments to signing only. We will continue to update our procedures in accordance with the latest guidelines from the LTSA and public health authorities.
Do you need to verify my identity in person?
When we provide legal services in respect of a financial transaction, our Law Society’s rules require that we verify your identity, and the source of money. In the context of COVID-19, we may be able to do so without an in-person meeting, in cases where we determine that our Law Society’s rules permit us to rely upon other verification methods, including verification by another person (for example, a real estate agent), or in unique circumstances, through the use of video-conference technology (provided that you can reasonably satisfy us that your government-issued identification is valid and current and that you are the same person as the image in the identification).
Can I execute documents remotely?
Due to COVID-19, some real estate clients may be apprehensive, unwilling, or unable to execute documents in person (for example, clients who are under quarantine or at a heightened risk of complications from COVID-19).
On March 20, 2020, approval was granted for the virtual commissioning of affidavits for use in Civil and Family proceedings. Unfortunately, as of the time of writing, this does not extend to the Land Title Act, and the Registrar of Land Titles (Registrar) does not currently permit remote or videoconference signing and witnessing of land title documents. Sections 42 to 48 of the Land Title Act require individuals who are signing an instrument to appear before a lawyer, notary, or other officer before whom an affidavit may be taken inside or outside BC. The Supreme Court of BC has previously held that in the context of the Land Title Act the words “appeared before” require a physical presence before the officer, and not an appearance by means of videoconferencing technology: First Canadian Title Insurance Company v. The Law Society of BC, 2004 BCSC 197.
As this situation is unprecedented and continuously evolving, it is possible that a legislative solution is on the horizon. Until then, there are some options to maintain social distancing measures and prevent the spread of COVID-19, while ensuring that you are still able to complete your real estate deal.
Firstly, for clients who are willing and able to safely attend in person, but may be apprehensive about doing so, instruments can be signed and witnessed contemporaneously in counterpart, with the client’s signature on a different page from that of the witnessing officer. This allows an execution copy of the land title document to be signed in the presence of, but at a safe distance from, the officer who would apply their signature to an identical execution copy. Taken together, the separate counterparts will satisfy the evidentiary requirements under Section 168.57 of the Land Title Act.
If you are unwilling or unable to safely attend in person, but have appointed someone to act on your behalf under a valid enduring Power of Attorney, that individual may be able to attend and sign in your place.
Alternately, in exceptional circumstances, the Registrar may accept an Affidavit of Execution sworn under Section 49 of the Land Title Act in lieu of an officer witnessing your signature. This would allow you to print and sign the instrument on your own, unwitnessed by an officer, while someone else who is acquainted with you and your signature (for example, a family member, close friend, or potentially one of our lawyers) attends before an officer to swear an affidavit explaining the circumstances which justified its use. If you happen to be under quarantine outside of BC, the Registrar routinely accepts out-of-province execution as a reason for the Affidavit of Execution to be used, without further justification. The latest LTSA guidance suggests that the Registrar will also accept an Affidavit of Execution for clients within BC who are unwilling or unable to attend before an officer because of concerns about social distancing and preventing COVID-19 transmission.
The COVID-19 pandemic creates a challenging legal environment for those involved in real estate transactions.
In times of uncertainty where the real estate market faces a potentially serious downturn, some buyers may be looking to get out of their contracts, while sellers will be concerned about their enforcement rights. Buyers should be weary about backing out of a deal, especially once subjects have been removed, because failing to complete with a binding Contract of Purchase and Sale in place may not only require you to forfeit your deposit (Tang v Zhang, 2013 BCCA 52), but also leave you on the hook for additional damages suffered by the seller if they decide to sue (Albrechtsen v Panaich, 2017 BCSC 1361). For example, if you walk away from your contract to buy a house for $1M, and the seller is subsequently forced to sell it for $800,000 due to a downturn in the market, you could be held liable for the $200,000 difference, plus additional costs incurred by the seller.
It is important that buyers, sellers, and real estate agents obtain sound and practical legal advice to navigate their rights and obligations. We can assist by reviewing your contract, handling your conveyance, and where necessary, negotiating extensions or pursuing litigation.
Please contact us at 604-937-1166 to get in touch with one of our real estate lawyers.