We are pleased to announce that our conveyancing application, Brief Convey™ will soon be available to all real estate legal professionals in Alberta.

In the coming weeks, Brief Convey™ will provide valuable time and cost saving tools to law offices, enabling legal professionals and their support staff to generate and complete the required documents needed to close real estate transactions and order title insurance from one intuitive application. Key components will include:

Built-In Functionality

Exceptions
With respect to the policy, a specific exception will be added to the owner policy in these cases, due to the greater risk of work being done without a permit and the possibility of outstanding final meter reading charges. The underwriting that will go into Schedule B of the owner's policy will state:

For Owners:

"Covered Title Risk 20(f) is expressly deleted from coverage. The Company assumes no liability for any matters falling within Covered Title Risk 20(f) of this Policy. There is also no coverage for loss or damage sustained as a result of any outstanding amounts owing resulting from final hydro meter reading charges."

For Lenders:

For lenders, there are no exceptions for permit issues unless a specific problem is found while conducting the required searches noted above. There are no exceptions for final meter readings.

If the property is currently being used as a grow-op, a policy cannot be issued. Further, if the searches noted above are not conducted, additional exceptions must be added to Schedule B of the owner policy for any matters that would have been revealed by those searches.

Court Orders
In some circumstances we have seen registered on title court orders indicating that the property has been forfeited to the Crown and, as such, a conveyance or mortgage of the property may not be valid. If it is discovered while reviewing your title search that there are unusual work orders or court orders, please contact Stewart Title prior to closing for an underwriting decision.

A Stewart Title underwriter can be of assistance any time you are acting on a former grow-op transaction.

Over the past several years Stewart Title has actively implemented various procedures and protocols to identify transactions that pose a greater risk due to possible title fraud, including fraud mitigation questions.

On each transaction you insure with Stewart Title, you are asked the fraud mitigation question of whether or not there has been a transfer or mortgage discharge registered within the past six months.

When insuring a mortgage where there will be a transfer for nominal consideration occurring immediately before the mortgage is registered, please answer "yes" when asked this fraud mitigation question.

Regardless of whether you are or another lawyer is registering the transfer, there will have been a transfer registered within six months of the registration of that mortgage, therefore triggering an underwriting review flag.

It is our goal is to identify situations where additional risk may be present, and appreciate your cooperation in helping to detect possible fraudulent transactions and thus, protecting the interests of your clients.

Enhanced Gap Coverage for Manitoba Residential Transactions

As of Monday, May 18, 2009, all Manitoba residential policies now feature a gap endorsement with enhanced coverage designed to address the specific needs of the real estate bar in Manitoba.

While our policies have always included gap coverage, the new Manitoba Gap Endorsement offers further defined and enhanced coverage. By choosing to insure your transactions with Stewart Title, your transactions can close quickly and efficiently because:

Trust conditions with respect to holding funds in trust until registration do not have to be imposed.

Lenders can advance mortgage funds prior to registration.

Purchasers can release purchase proceeds to the vendor upon receipt of executed documentation required to register the transfer of title. Keys and possession can be exchanged thereafter.

Documentation should be submitted for registration on or before the closing date.

Specific title risks covered in the Manitoba Gap Endorsement address the following issues and provide coverage for losses due to:

Intervening liens and encumbrances registered on title between the date of closing and the date of registration.

Rejection by the Land Titles Office of Manitoba of the transfer documents and/or mortgage, including for failure of a spouse to consent as required under the Homesteads Act and in the event that documents do not meet requirements for registration.

The vendor failing to cooperate to remedy a defect in the transfer OR in the case of a mortgage, the borrower refusing to cooperate to fix a defect in the mortgage that prevents registration. Costs, such as rejection fees, would be included in the computation of the loss.

Loss or damage for the matters outlined as Additional Risks in the endorsement where such Additional Risks were not agreed to by the insured and which first arise after the closing date, but before the registration date (i.e. during the gap period). (Work orders that first arise in the gap period are an example).

Waiver of Right of Subrogation
When ordering title insurance, the lawyer providing the title information for the policy order (generally the purchaser's lawyer) benefits from a waiver right of subrogation (except in cases of an intentional act or omission or gross negligence and/or any fraudulent act or omission) for claims paid under the policy. With respect to transactions where the Manitoba Gap Endorsement is obtained, Stewart Title now provides both the purchaser's lawyer and vendor's lawyer with an express written waiver of right of subrogation with respect to the trust conditions that are not imposed. Accordingly, except in cases of an intentional act or omission or gross negligence and/or any fraudulent act or omission, Stewart Title waives its right of subrogation for losses due to claims arising as a result of the lack of imposition of trust conditions to hold funds in trust until registration.

Since the endorsement is attached to your residential policies automatically, there is nothing additional that you need to do to when placing an order. Stewart Title will provide a confirmation of coverage package prior to the closing date which includes a copy of the endorsement and written waiver of subrogation letters. With respect to the waiver of right of subrogation letters, you have the option to forward a copy to the vendor's lawyer for his/her records. Otherwise they can be retained for your records.

* Please review the actual endorsement and waiver of right of subrogation provisions for full details.

Below are some claims stories from our recent files:

Corporate Mortgage Fraud
A legitimate corporate owner was impersonated by a fraudster who filed a forged notice of change, appointing himself as the director of the corporation. The fraudster then applied for a first mortgage on a previously mortgage-free property and the mortgage was insured through a Stewart Title lender policy. Shortly after closing, the mortgage went into default and the fraud was discovered when the insured lender initiated mortgage enforcement proceedings.

Resolution: Stewart Title paid $876,000, (the amount owed on the fraudulently obtained mortgage), in order to resolve the claim for the insured lender.

Missed Execution
The insured lender advanced a private third mortgage to a borrower. At the time of closing, the lawyer who acted for the insured lender inadvertently conducted an execution search in the wrong municipality, receiving a clear execution certificate against the borrower. Subsequently, when the insured lender commenced power of sale proceedings against the borrower, it was discovered that an execution against the borrower existed in priority to the registered mortgage.

Resolution: Stewart Title paid over $28,000, (the financial loss suffered by the insured lender as a result of the execution), which took priority over the insured lender's third mortgage.

Undischarged Line of Credit
Several months after the purchase of our insured homeowner's property was completed, it was discovered that the vendors' line of credit (registered on title as a mortgage) had not been discharged from title. After further review, it was found that although the required funds to pay out and close the existing line of credit had been forwarded to the financial institution, the bank had inadvertently failed to deactivate and discharge the vendors' line of credit. Upon discovering that they could still access the line of credit, the vendors proceeded to withdraw funds and run up the balance of the line of credit after the property had already been transferred to the insureds.

Resolution: Stewart Title retained a lawyer to review the matter. Following negotiations, the bank accepted responsibility for the error and the line of credit was discharged from title.

We are excited to announce Stewart Title's continued support of the Canadian Bar Association at this year's Canadian Legal Conference taking place from August 16 to 18 in Dublin, Ireland.

Our Sponsored Events Include:

Riverdance
Gaiety Theatre
Sunday, August 16, 2009

Young Lawyers Late Night Bash
Kobra Bar
Sunday, August 16, 2009

Our sponsorship commitment with the CBA builds on our history of supporting legal professionals through initiatives such as the development of programs and innovative information technologies. The Canadian Bar Association provides a range of tangible and intangible benefits to its 37,000 members and to the legal community at large; it is a leading provider of continuing legal education programs; and is a dominant voice in promoting the rule of law in Canada and around the world.

Working together, we continue to achieve our common goals in providing support to the legal community.

Stewart Title's Canadian operations were recently profiled in an issue of Exec Digital Canada. Click here to view the article in its entirety.