Confused about how Land Titles work in Alberta?
When you purchase or sell your home, a Transfer of Land is registered at the Alberta Land Titles Office and will show up on the Certificate of Title to the piece of property you bought or sold. If you took out a mortgage to finance your house, the bank will register the mortgage at Land Titles along with the Transfer of Land. When your lawyer registers these documents with the Land Titles office, they must pay a fee to do so. Sometimes the Land Titles system seems confusing, and often times it is. However, there is a good historical and legal reason for registering transfers of land, mortgages and other legal interests in land at a centralized land titles office.
The Torrens system vs. the Common Law system
The Province of Alberta uses a Torrens system of land registration as opposed to the common law system still in place in the UK and several other Canadian provinces. Under the Common Law system, deeds of the title are passed along from one owner to the next to create a “chain of title”. The difficulty with the Common Law system, which has been in place in some jurisdictions since medieval times, is that it comes with increased potential for people to challenge title validity. Without a central registration system, outstanding unknown interests could attach to title and interfere with the rights of a legitimate purchaser or seller of the land.
The Torrens title system differs from the Common Law method of tracing title in that it prioritizes registration of title in a centralized database. In Alberta, that database is the Alberta Land Titles Office. The benefit of the Torrens system is that it is considered an accurate and complete reflection of title and ownership does not need to be proven through a series of deeds. Furthermore, the Registrar of Titles, is, in principle, responsible for compensating those who lose title due to fraud or incomplete record-keeping by the registrar.
The Torrens system works because the land titles office ensures that only legally valid changes are made to certificates of title in Alberta. The land titles office does this by creating strict processes and procedures for registering transfers of land, mortgages, caveats and other encumbrances on the title. When you buy or sell a home, a reputable real estate lawyer will ensure that all registration requirements are met and that the property you are acquiring is free from non-permitted registrations and pre-existing restrictions on your ownership rights.