What is a Title Search? PPSA, Writs, Bank Act Searches & Off-Title Inquiries
A title search is not simply confirming who owns a property. In commercial real estate transactions, it involves searching multiple registries and databases to identify every claim, encumbrance, or restriction that could affect your ownership or your lender's security. Here is what each search means and why it matters.
What Is a Title Search?
A title search is a review of the public records relating to a property to determine: who currently holds legal title; what encumbrances (mortgages, liens, easements, restrictions) are registered against the property; and whether there are any defects in the chain of title. In Ontario, title to land is registered in the Ontario Land Registration System electronically accessible through Teraview.
In residential transactions, a title search is relatively contained. In commercial transactions, the due diligence is significantly more comprehensive and involves searches beyond the title register itself what lawyers call "off-title searches."
The Title Search: What Your Lawyer Reviews
A review of the registered title reveals:
- Current registered owner confirms the seller/transferor has the right to deal with the property
- Registered mortgages and charges all security interests in the property; must be discharged before clean title can be conveyed
- Easements and rights-of-way rights held by others to use part of the land
- Restrictive covenants use restrictions registered on title
- Notices and cautions flags of potential issues or pending claims
- Transfer history the chain of title going back the statutory period
Off-Title Searches
In commercial transactions (and many residential ones), a thorough due diligence review includes searches beyond the land registry. These are the major ones:
1. PPSA Search (Personal Property Security Act)
The Personal Property Security Act (PPSA) register records security interests in personal property not land, but movable assets: equipment, inventory, accounts receivable, and (importantly) certain fixtures that could be attached to real property. In a commercial real estate purchase, a PPSA search against the seller and current tenant identifies whether any creditor has a security interest in business assets on the property that could conflict with the buyer's or lender's interests.
In a commercial lending transaction, lenders typically register a General Security Agreement (GSA) under the PPSA in addition to taking a mortgage on title. A PPSA search confirms priority of competing security interests.
2. Writ Search
A writ of seizure and sale is a court order that, once registered in the Enforcement Office, can attach to real property owned by the judgment debtor. A writ search against the registered owner and, where applicable, corporate principals confirms whether any outstanding writs could affect the property or the owner's ability to convey clean title.
If a writ is found, it must either be discharged or arrangements must be made to have it removed from title before or on closing.
3. Bank Act Search
The Bank Act (federal) allows chartered banks to take security over certain types of property particularly agricultural goods, inventory, and equipment of manufacturers, wholesalers, and retailers without filing under the PPSA. This security is registered with the Bank of Canada. A Bank Act search confirms whether any bank has registered security over assets located at the property being purchased or financed.
Bank Act security can be a hidden issue in commercial acquisitions particularly of businesses with inventory or manufacturing assets.
4. Tax Certificate Search
A tax certificate confirms the status of property taxes, local improvement charges, and other municipal levies against the property. Outstanding property taxes are a charge on title they must be paid and cleared on closing. The tax certificate also reveals the current assessed value and any pending assessment adjustments.
5. Zoning and Compliance Search
A zoning search confirms the current zoning designation of the property and whether the intended use is permitted. A compliance search (or building compliance letter from the municipality) confirms whether the existing structures comply with current zoning by-laws and building requirements, and whether any orders or work orders are outstanding against the property.
6. Environmental Search
For commercial properties particularly industrial or mixed-use a search of provincial environmental databases (MOECC records) identifies whether the property has been subject to environmental spills, contamination notices, or regulatory orders. This is typically supplemented by a Phase I Environmental Site Assessment (ESA) and, if contamination is suspected, a Phase II ESA.
7. Execution (Sheriff's) Search
An execution search against the registered owner through the sheriff's office confirms whether any outstanding court judgments have been registered as executions against the property owner. Similar function to a writ search confirms there are no judgment creditors who could claim against the property.
8. Corporate Authority Search
Where the seller or borrower is a corporation, a corporate authority review confirms: the corporation is validly existing and in good standing; the individuals executing documents are authorized to do so; there are no insolvency proceedings (bankruptcy, CCAA) that would affect the transaction.
The Requisition Process
After completing the title and off-title searches, the buyer's lawyer will prepare a requisition letter a formal letter to the seller's lawyer identifying any title issues, encumbrances, or deficiencies that must be addressed before closing. The seller's lawyer must respond to each requisition and provide evidence that the issue has been resolved (e.g., a discharge of mortgage, a release of writ, a copy of the work order compliance letter).
The requisition process is a critical stage in any real estate transaction. Issues that cannot be resolved or that the seller is unwilling to address may give the buyer grounds to refuse to close.
Teraview and the Electronic Land Registry
In Ontario, all title searches and most registration transactions (conveyances, mortgages, discharges) are conducted electronically through Teraview, the electronic land registry system operated by Teranet. Only licensed lawyers and paralegals can access and transact through Teraview. This ensures that title documents are prepared and filed by qualified professionals and creates a reliable, searchable electronic record of all registered interests.