The following article, entitled “Material Possession of 7, Legal Possession of 9 – Conveyancing”, was originally published in the June/July 2021 edition of the Manitoba Bar Association (MBA) newsletter, Headnotes & Footnotes, and is being reproduced with the permission of the MBA.
If you are reading this Article, conveyancing is most certainly something that you do, have done, or are contemplating doing.
If you are conveying a condominium unit it is of imperative importance that the correct condominium unit be conveyed.
Importantly, the condominium unit that ought to be conveyed does not necessarily have the same legal number as the material number (civic address) attached to the material condominium unit.
In other words, the material number used for the civic address need not, and likely will not, be the same legal number used for the legal description.
By way of example, affixed to the material entrance door of a condominium unit is the material number 7, the number 7 is a plastic or steel number attached to the material door in the usual fashion, by either two screws or adhesive.
Notwithstanding the presence of the material number 7, a search of title upon the Record of the Property Registry produces the following legal description:
UNIT 9 CONDOMINIUM PLAN 5X3 WLTO TOGETHER WITH AN UNDIVIDED 0.8X8 % INTEREST IN THE COMMON ELEMENTS AS APPURTENANT THERETO SUBJECT TO ALL ENTRIES SET OUT ON THE TITLE OF WINNIPEG CONDOMINIUM CORPORATION NO. 1X3
How does a conveyancer know that legal condominium unit 9 is indeed the material condominium unit secured by the door to which material number 7 is attached?
The question above is of paramount importance to the conveyancer as the conveyancer must ensure the correct legal condominium unit is conveyed.
To answer that question one must review the condominium plan; the condominium plan is registered at and available from the Property Registry.
By reviewing the condominium plan, the conveyancer will be able to determine where the legal condominium unit is materially located, and upon making that determination the conveyancer should ensure, before a Transfer of Land is submitted for registration and prior to the closing of transaction, its client has identified the legal condominium unit upon the condominium plan (in our example, condominium unit number 9) as being the same legal condominium unit for which the material number is associated (in our example, material number 7).
In the not so perfect world……
The conveyancer’s client does not review the condominium plan and the conveyancer conveys legal condominium unit 7 pursuant to the accepted offer and notwithstanding that legal condominium unit 9 is the condominium unit that ought to be conveyed. In this outcome the buyer receives title to legal condominium unit 7, the civic address being material number 7 is upon the door to the condominium unit which the buyer has material possession of BUT the buyer is actually in material possession of legal condominium unit 9 pursuant to the condominium plan.
In the above example the wrong legal condominium unit has been conveyed.
Generally speaking, the immediate response that I receive to such scenario is, would not the conveyancer realize the name of the registered owner upon title to condominium unit 7 be different than the name of the seller upon the accepted offer to purchase?
Sadly, the name of the registered owner for legal condominium unit 7 may match the name of the seller upon the accepted offer to purchase as a previous conveyancer may have conveyed the wrong unit to the seller.
We should also consider the same scenario where the condominium plan is reviewed prior to closing and it is determined that legal condominium unit 9 (not legal 7) is actually the legal condominium unit for material number 7; there are several possible outcomes:
- A search of legal condominium unit 9 reveals the registered owner being a completely unrelated party to the transaction, perhaps an unknown party or perhaps the seller’s neighbor who “lives across the hall“. In this scenario the wrong condominium unit has been conveyed on a previous occasion, however, the previously made wrongful conveyance has been identified. Sadly, the closing cannot occur until the problem is corrected. Correcting the problem will most certainly be time consuming and costly, closing will most certainly be delayed.
- Alternatively, a search of legal condominium unit 9 reveals that the seller is the registered owner of legal condominium unit 9. The closing can occur, the offer should be amended to correct the legal description; the condominium corporation may decide to “switch” material numbers on doors to condominium units.
In my day-to-day, I once encountered a single legal condominium unit that had been wrongfully conveyed 12 times over the course of 10 years. No one had ever bothered to review the condominium plan to ensure the correct condominium unit was being conveyed; the closing was delayed for over 12 months and until the error was corrected. To correct the error, each existing unit was required to transfer their unit to the other unit owner, mortgages were then discharged and new mortgages were registered.
If you are conveying a condominium unit it is of imperative importance that the correct legal condominium unit be conveyed; review the condominium plan, you will surely rather be the conveyancer who identifies a wrongfully conveyed defective chain of legal condominium units rather than being a link in an otherwise defective chain.
Prepared by:
Jason Bryk
Partner
204.956.3510
[email protected]
This article represents general information and is not legal advice. Please contact us if you would like legal advice that is tailored to your particular circumstances. We would be happy to help.
