The Document Registration Agreement (DRA)

In electronic closings, lawyers usually exchange documents, funds and keys prior to
closing and hold these items in escrow pending the electronic registration of documents.
The DRA is a standardized form of agreement entered into by the lawyers prior to
closing containing the terms of the escrow.

Lawyers who enter into DRAs incur professional obligations. The DRA contains
undertakings and the lawyer is obliged under the Rules to fulfill all undertakings given
and not to give undertakings that cannot be fulfilled.


Guideline 4 of the Electronic Registration Practice Guidelines gives lawyers guidance
regarding electronic closings and the DRA.

Lawyers may either sign the DRA as a separate document or subscribe to it as a
protocol. If the latter procedure is followed, the additional relevant information or
changes as required by the standard form DRA need to be provided.

COMPLIANCE WITH LAW STATEMENTS

The e-reg™ system permits lawyers to make compliance with law statements. These
statements are used in the place of filing paper copies of the evidence upon which the
statement is based.

Only a lawyer may sign for completeness any document containing a compliance
with law statement.

When making compliance with law statements lawyers should obtain and retain in their files
the evidence upon which compliance with law statements are based, or alternatively ensure
that publicly available information to fully support the statement is and remains available.
This may be particularly important where a claim is made against the lawyer in
consequence of any such statement.

PAYMENT OF LAND TRANSFER AND REGISTRATION FEES

A person who wishes to use the e-reg™ system will become a subscriber with Teranet
Inc. When documents are submitted for electronic registration, land transfer tax if
payable and registration fees are debited from an account designated by the account
holder. This account is known as the “electronic registration bank account” or “ERBA”. A
lawyer may designate either a general account or a special trust account as the lawyer’s
ERBA. Sections 15 -17 of By-Law 9 set out the procedure to be followed for the
payment of land transfer tax and registration fees from a special trust account. Payment
of land transfer tax and registration fees from a general account is treated the same as
any other client disbursement from a general account.

CONFLICT OF INTEREST SITUATIONS

Sometimes lawyers act for more than one party in a real estate transaction. There are
some practice situations where the Rules of Professional Conduct specifically prohibit a
lawyer from representing both sides in a real estate transaction. There are some
circumstances where although the lawyer is permitted to act for more than one party in
the transaction, it would not be prudent for the lawyer to do so.

ACTING FOR A PURCHASER AND A VENDOR IN A REAL ESTATE TRANSACTION

Effective March 31, 2008, the Rules of Professional Conduct were amended to provide that an individual lawyer cannot act for or otherwise represent both the transferor and the
transferee with respect to a transfer of title to real property except in certain limited defined circumstances. 

Provided that there is no violation of Rule 2.04, one lawyer may represent both the
transferor and the transferee in a transfer of title to real property in the following
circumstances:

• a transfer where the transferor and the transferee are one and the same and thetransfer is being made to effect a change in legal tenure ( Ontario Regulation 19/99, Land Registration Reform Act);
• a transfer where the transferor and the transferee are one and the same and the transfer is being made to effect a severance of land ( Ontario Regulation 19/99, Land Registration Reform Act) ;
• a transfer from an estate trustee, executor or administrator to a person who is beneficially entitled to a share in the estate (Ontario Regulation 19/99, Land Registration Reform Act); 
• a transfer where the transferor and the transferee are “related persons” as defined in section 251 of the Income Tax Act (Canada);
• a transfer where the lawyer practices law in a remote location where there are no other lawyers that either the transferor or the transferee could without undue inconvenience retain for the transfer.

 In addition, transfers involving a government body including a municipality or transfers
of easements do not require compliance with law statements.

In situations where the Rules permit an individual lawyer to act for both the transferor
and the transferee in the transfer of title to real property, the lawyer must ensure that he or she complies with Rule 2.04 on conflicts of interest including obligations with
respect to joint retainers. 

There is no requirement in the Rules that the lawyer for the transferee and the lawyer for the transferor be from separate law firms provided that there is no violation of Rule 2.04 on conflicts of interest. Where the lawyers for the transferor and the transferee practise in the same law firm, the retainer is a joint retainer.  In this regard the disclosure required under  Rule 2.04(6) must be made to both the transferor and the transferee and the clients’
consent to the joint retainer must be obtained.