Can I require my lawyer to sign off on title before closing?
Yes, as a term of the purchase agreement. A buyer can make closing depend on the buyer’s lawyer being satisfied with title to land the business owns. The seller must agree to the clause, and the registry search should be current close to closing.
Nothing stops a buyer from asking that the purchase agreement make closing conditional on the buyer’s lawyer being satisfied with title. The seller has to agree, so the condition is negotiated and then written in. It matters only when the business owns land or a building. If it leases its premises, ask your lawyer what to review instead.
What a title search shows
Each province keeps its own registry. In British Columbia, the Land Title and Survey Authority says a title search is a record generated from the land title register at a specific point in time. It says a title lists the registered owners, the legal description, the parcel identifier, and the charges, liens and interests registered against the title.
Why the date of the search matters
Because a search reflects one point in time, the condition should say when the lawyer’s review is done and whether a fresh search is run close to closing. Alberta shows why. The Government of Alberta says titles in its SPIN2 system have reflected interests pending registration since 1 April 2021, while ascii/text (non-PDF) titles continue to contain registered interests only. Ask your lawyer which kind of search is being relied on. The page on an unresolved lien on closing day covers a problem found late.
In Québec
The Civil Code of Québec says rights concerning an immovable are published in the land register, and rights concerning a movable and any other rights are published by registration in the register of personal and movable real rights. Publication lets a right be set up against third persons, determines its rank and, where the law so provides, gives it effect. A right registered in a register in regard to property is presumed known to any person acquiring or publishing a right in the same property. Ask your Québec advisor which register searches to run before closing.
Writing the condition
Say what satisfies the lawyer: no unexpected charges, or only those the buyer has agreed to take on. Say what the seller must do to clear any that appear and by when. State what happens if the item cannot be cleared. The related page on whether you need a lawyer to buy a business explains the lawyer’s role.
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Land Title and Survey Authority of British ColumbiaRegulatorSearch for a Title
- 02Government of AlbertaGovernmentLand titles – Overview
- 03Éditeur officiel du QuébecGovernmentCCQ-1991 - Civil Code of Québec
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