Title Review And Adjacent Land Searches: The Importance Of Checking Neighbouring Lands For Easement Discrepancies

Overview

When reviewing title for a purchaser client, lawyers should examine adjacent lands not only for Planning Act (1990) compliance but also to identify title discrepancies that may affect their client’s future property.

For example, one parcel register may indicate that the land is held “together with” an easement, while the neighbouring parcel register does not correspondingly show that it is “subject to” that same easement. As a result, a purchaser may acquire a property without realizing that it either benefits from rights over neighbouring lands or is burdened by rights in favour of neighbouring owners. What may initially appear to be a technical discrepancy in title can therefore have significant practical consequences for the purchaser, as these rights may restrict how the property can be used or developed, or can impose ongoing obligations.

Courts have repeatedly emphasized that careful title review requires a thorough examination of neighbouring lands and related title records, and that purchasers’ counsel cannot always rely on the absence of an easement from the parcel register of the property being acquired to determine that no such easement exists. 

Case Law in Ontario

The Land Titles System is designed so that parties may rely on the parcel register without investigating beyond its recorded entries.¹ That protection, however, is not absolute.² Section 44 of the Land Titles Act (the “LTA”) provides that registered land remains subject to certain liabilities, including easements whether registered or not.³ Section 160 of the LTA further permits a person affected by an incorrect entry or omission to apply to the court for rectification of title.⁴

These provisions have been applied by Ontario courts in the following cases to protect easement rights where there were discrepancies between parcel registers: 

In the 923424 Ontario Limited v. 1695850 Ontario Inc. (2015) case, a right of way benefiting the dominant lands was reflected on the dominant parcel register but, due to an administrative error during conversion from the Registry System to the Land Titles System, was not reflected on the servient parcel register.⁵ The owner of the servient lands argued that it took title free and clear of the easement because its parcel register contained no reference to it.⁶

The Court, however, rejected the servient owner’s position.⁷ In doing so, the Court emphasized that a search of the dominant lands would have revealed the existence of the right of way and noted that such a search would have been undertaken in the circumstances of the case for Planning Act (1990) purposes.⁸ The Court held that the servient owner could not rely on the omission from its parcel register to defeat an otherwise valid easement and ordered rectification of title to reflect the right of way.⁹

More recent cases have applied the same principles.For example, in the Relaxmuskoka v. 2052219 Ontario Inc. (2017) and Macor v. Grama (2019) cases, easements remained registered on the dominant lands but were omitted or deleted from the servient lands due to administrative or registry errors.¹⁰ In both cases, the courts reaffirmed that easements are not extinguished simply by administrative or registry errors, and that the parcel register may be rectified to reflect existing rights of way over servient lands.¹¹

These decisions are a reminder that the absence of an easement from a property's parcel register does not necessarily end the inquiry as to whether that property has the benefit of a right of way or is burdened by one. A thorough title review requires examination of neighbouring lands and related title records. Where an easement appears on title to dominant or abutting lands, or would otherwise have been revealed through searches undertaken by a prudent purchaser in the circumstances, a purchaser will not be shielded from that interest merely because it was absent from the parcel register of the land acquired.

Accordingly, counsel should remain alert to discrepancies between parcel registers, legal descriptions, reference plans, and registered instruments that may reveal easement rights not otherwise apparent from the title of the property being acquired.

What If No Abutting Land Search Is Required?

Although in many transactions a search of the adjacent lands is required to confirm compliance with the Planning Act (1990), certain circumstances do not require this search, such as cases in which a whole lot on a registered plan of subdivision is being acquired. Although an adjacent lands search may not be required under the Planning Act (1990), based on the cases discussed above, that does not mean that no further title review of the adjacent properties should be undertaken.

Given the relatively modest cost of reviewing adjacent titles, purchasers’ counsel should recommend such searches even where they are not required for Planning Act (1990) purposes, particularly where: (i) there are only a limited number of abutting properties; and (ii) the purchaser's intended use of the property, including any proposed development or redevelopment, may be affected by unregistered easements. At a minimum, counsel should advise the purchaser of the potential risk of proceeding without those searches and document the purchaser's instructions.

Key Takeaways

The foregoing cases offer several takeaways for purchasers’ counsel when reviewing title:

• The absence of an easement from the parcel register of the property being acquired does not necessarily mean that no such easement exists.
• Searches of adjacent lands should not be viewed solely as a Planning Act exercise. Neighbouring titles and related title records may reveal easement rights or discrepancies that are not apparent from the title of the property being purchased. That said, title searches have their limits, as some easements may only be identified through physical inspection of the lands.

• Although this article discusses administrative errors, counsel and their clients should be mindful of section 44 of the LTA and its qualifications. Lands may be subject to various easements that are not readily apparent from title alone, including prescriptive easements, easements of necessity, unregistered easements, implied easements, and equitable easements.

Foonotes

1. McCormack v Ciampanelli, 2012 ONSC 1702 at para 47.

2. Ibid.

3. Land Titles Act, RSO 1990, c L.5., s 44. 

4. Ibid, s 160.

5. 923424 Ontario Limited v 1695850 Ontario Inc., 2015 ONSC 3343 at para 13.

6. Ibid at para 46.

7. Ibid.

8. Ibid at paras 46–51. 

9. Ibid at paras 46–53.

10. Relaxmuskoka v 2052219 Ontario Inc, 2017 ONSC 5131 at para 163 Relaxmuskoka. ; Macor v Grama, 2019 ONSC 6706 at para 17 Macor. .

11. Relaxmuskoka, supra note 10atparas 186–187; Macor, supra note 10 at para 44.