This is the last post of this series on e-filing. Here are some final comments on Phase 2 and some personal thoughts on the e-filing process and implementation.
Phase 2 of mandatory e-filing will be effective next Monday, May 7. On that day, most documents and plans must be e-filed with limited exceptions. Certain types of applicants and applications will be exempt and can still be filed in paper form on and after May 7th – like documents executed (by at least one party) prior to May 7th, package submissions that include a document/plan that is not required to be e-filed, and certain types of filings made in-person or by mail by registered owners. The “temporary” exemptions for government/first nations entities, or utilities/telecommunications/oil and gas leases and rights of ways, and for filing paper discharges of mortgages and assignments of rents will continue for now. New exemptions include applications requiring preliminary inspection by the Land Title and Survey Authority of BC (“LTSA”) like a caveat or certificate of pending litigation, builders lien claims filed in-person or by mail by claimants, and forms/applications by strata corporations with 7 or fewer strata lots. Remember that the LTSA has not announced the mandatory e-filing date for survey plans requiring approving officer approval (e.g. subdivision plans), so you can continue to file these plans in paper form.
Here are some basic hints to remember about the Phase 2 requirements:
- There aren’t a lot of new electronic forms to be used in Phase 2. In Phase 1, users became familiar with the electronic Form A, B, C, Property Transfer Tax Act form, and Declaration (for making corrections or filing Strata Property Act Form F). In Phase 2, there is a specific electronic form for filing a claim of builders lien and two electronic forms for filing a survey plan, but otherwise most filings are made with multi-purpose filing forms – either using an electronic Form 17, Strata Property Act Filing form, or a Declaration – with supporting documents attached.
- Some of the electronic forms contain different language at the top relating to the subscriber’s representation, declaration or certification. If you are familiar with the language on an electronic Form A, B or C, do not assume that all electronic forms are the same. Subscribers should review the language on each electronic form and the relevant portions of the Land Title Act to ensure that they are in compliance when they apply a digital signature.
- In some cases, you will still need to obtain original paper documents to make your electronic filing and the subscriber will need these original documents in his/her possession before applying a digital signature. For Form 17s, refer to the LTSA’s Electronic Form 17 Help Guide.
- If you are e-filing survey plans, you need to understand how the electronic plans and forms differ from the paper plan process. Remember that there is a unique control number and it relates to the particular version of the electronic plan, and that the plan application form must contain signature blocks, approvals, etc. that previously would have been put on the paper plans. For more details on survey plans, see my prior post on e-filing survey plans.
- Communicate and coordinate so that everyone involved in a transaction knows what format is being used – electronic or paper – particularly a package submission involving a plan that can still be filed in paper. You cannot mix formats and you should avoid situations where, at the last minute, you are trying to split up package submissions that should be filed concurrently, simply to deal with mixed formats.
People are always asking whether they need to have and keep original paper documents. Under the Land Title Act, once an electronic instrument is fully registered, it is deemed to be the original, but that doesn’t fully answer the question. It’s not a simple “yes” or “no”. I would lean towards having and keeping the originals, but I know that others do not always share that view, so I’ve tried to summarize the circumstances you might want to consider in determining whether you need the “original”:
- Form A, B, C, Claim of Lien, and Plan Application – based on the requirements of these forms, as well as the Director of the LTSA, you are not required to have the original when you apply the digital signature or e-file it. In my view, even for these types of documents you should still consider the circumstances and whether you are comfortable applying a digital signature or completing a transaction without seeing an originally executed paper document. You might be comfortable in a typical conveyance, where practice has established that documents are e-filed without the original in hand, but you might be less comfortable where you are dealing with third parties directly, have little experience with a particular client or knowledge of its practices, arrangements are not confirmed by lawyer’s undertakings, or you have not been involved in preparing the electronic forms or the transaction before you are asked to apply a digital signature.
- Form 17, Strata Property Act Filing form, and Declaration – depending on the requirements of the LTSA, an original paper document may be required, be scanned and attached, and in the possession of the subscriber before applying the digital signature. You must comply and have originals at that time. Do you retain them? If you are later called upon to prove that you had an original and not a copy when you applied the digital signature, what evidence would you like to have? Obviously, the original document would be the best evidence and I would retain it. Or would it be acceptable to have a notation on your file or checklist that confirms the procedure you followed? Or would it be enough to have a covering letter to the client enclosing that original? I don’t know and I probably wouldn’t risk it unless the Law Society confirms the acceptable practice.
- If you have a computer failure or other system issue that affects your ability to e-file – meaning it’s your system and not the LTSA, BC Online or a general problem – then you can request that the Registrar exercise discretion to accept a paper document, but you are required to have the original. See section 7 of DR 06-11 “Director’s Requirements to File Land Title Forms Electronically”. It’s not for me to say whether the LTSA might relax this requirement in an onerous situation where you might be in default if you cannot file that day, but I believe the LTSA would still expect you to follow-up with the original paper documents for filing.
- After an electronic instrument is submitted for registration and before it is fully registered (on average, 6 business days), the Registrar can require that evidence be produced to confirm the proper execution of the document (see section 168.51, Land Title Act and Practice Bulletin No. 306). The Registrar can require “one or more” types of evidence, and this could be the original, a copy, or other satisfactory evidence like a statutory declaration. I think you need to either have the original for that period of time before full registration, or know where it is and that you can get it if required. If there is serious issue about the validity of the execution, it seems to me that the best evidence is going to be the original and, depending on the circumstances, you may not be comfortable giving a statutory declaration.
- Effective June 30, 2012, the LTSA will be eliminating older versions of the electronic form and, after June 30, 2012, older versions will only be accepted if the “true copy” (e.g. original paper copy) was executed before June 30, 2012. There are many circumstances where a document might be executed today with the intent that it not be filed until sometime in the future. If you prepare it in a particular version of the electronic form and the LTSA subsequently discontinues use of that version, you may not be able to e-file it. In that case, it’s my understanding that you would file the signed “true copy” (e.g. originally signed paper copy) in the manner required by Practice Bulletin No. 404, so you should keep that original.
- After the electronic instrument is fully registered, it is “conclusively deemed” to be the original. But note section 168.61(2) of the Land Title Act – “Except to the extent necessary to prove the authenticity of a signature or other writing, mark or impression, a true copy of an electronic instrument that contains an original signature or other writing, mark or impression is not admissible in court for any purpose.”. If there is an issue about the authenticity of the signature, it may be important to have access to the original paper document.
- For lawyers in British Columbia, The Law Society of BC has issued some guidelines about the retention of documents, including retaining originals when e-filing. But these are guidelines only and the Law Society cautions that you must consider the circumstances and exercise judgment when considering this issue. While in some circumstances, it may be acceptable to return the originals to the client, in other circumstances that may not be the right approach, in my view.
- When considering document retention rules of a professional organization, remember what your “file” is and that you are not only to keep electronic files, but also may need to keep paper documents.
In these posts I’ve tried to focus on the technical aspects of e-filing and give you constructive and practical information. I’ve kept my personal comments and views to a minimum. But, permit me to make some personal comments. They may reflect some of your thoughts or generate some useful discussion.
When the e-filing system was introduced, there were many stated objectives, including the objective of maintaining access for the public and not substantially changing the real estate practice. In my view, by imposing a requirement that most electronic forms must be digitally signed by a lawyer or notary before submission for registration, there has been an effect on access and a change in real estate practice. It has affected those without ready access to, or comfort with, lawyers and notaries, or who would like to file on their own or using a registry agent, and it has added cost in many instances. I understand that the digital signature requirement provides a measure of security and supports the integrity of the land title system, but it is too limiting and did not take into account that land documents have traditionally been executed in front of commissioners for taking affidavits, for example. The “temporary” exemptions now being permitted for government, public utilities, etc. are due to the difficulty these users have with the limited group of subscribers. This problem should have been anticipated and I question the fairness or rationale for granting these temporary exemptions and opening up the subscriber group only for some – when others have also been affected and have had to change their business practices, sometimes at additional cost.
It’s always bothered me that something as important as a transfer or mortgage of real property is e-filed in an electronic form that does not contain any written signatures, and the electronic form is altered to type in the particulars of execution after it is approved and paper copy executed. And, there is no requirement for the submitting party to have seen an originally signed document. On the other hand, other documents that may be considered fairly minor in comparison, must be originally signed and the original in the possession of the subscriber before the digital signature can be applied and are filed attached to a filing form. The inconsistency between the various forms and the process that must be followed for each does not make much sense to me.
As a subscriber, I have to say that there seemed to be very limited training or guidance about the obligations of the subscriber, how the digital signature should be installed, saved, applied, etc. When I look back, it seems like the role of the subscriber was minimized (which is surprising if the subscriber is central to the integrity of the system) and the emphasis was on what the subscriber needed to do to sign a Form A, B or C – not the additional obligations that exist on some of the other forms. A lot of subscribers are only now starting to appreciate that if they move beyond a Form A, B or C, they may have a greater obligation and the process may not be so simple.
With regard to whether you need originals, initially the view I heard most often was that you didn’t need them – the electronic instrument was conclusively deemed to be the original when it is registered – and you could return the originally signed paper document to the client. This aspect of the e-filing system and the requirements of professional organizations have not been clearly articulated and I think it has left some subscribers assuming that a digital signature can always be applied with only a photocopy in hand and not recognizing that there are circumstances where an originally signed paper copy of the electronic form is essential.
I’ve enjoyed doing these posts and I hope you have found this 8-part series useful. It will be very interesting to see where we are a year from now. Undoubtedly, there will be increasing automation and “business modernization” by the LTSA and government registries and entities – hopefully, there will be greater integration. Will some of the requirements for “original” supporting paper documents disappear? Will there still be LTSA staff involved in preliminary inspection and examination? If you can e-file in the evening or on weekends, will practice develop where closings occur outside of what we now consider regular business hours and those involved in the real estate process will have to consider staffing 7 days a week and in evenings? And, finally, will there be a decrease in fraud as a result of this new system – or a new problem?