Law Times

PAGE 10 FOCUS June 13, 2011 • Law Times Strong opposition to paralegals in real estate LSUC review on scope of practice to consider more than family law BY JUDY VAN RHIJN For Law Times T he current review of the scope of paralegal practice by the Law Society of Upper Canada will consider paralegals' role in the real estate community. While paralegals are hopeful for a modest expansion into the area, members of the bar remain fi rmly opposed to what they consider to be a reduction in standards for no real public benefi t. When Treasurer Laurie Pawl- itza told Convocation at its Feb- ruary meeting that there would be a review into the scope of paralegal practice, much of the reaction focused on concerns with the family law bar, but the issue is just as big a can of worms among real estate lawyers. Th e starting point for the review is to be the recommendations of former Supreme Court justice Peter Cory in his 2000 report on regulating paralegal prac- tice in Ontario. Th e report included two recommendations relating to real estate practice. Th e fi rst was that paralegals should be able to appear on an appeal in the fi rst instance from a decision of the former rental housing tribunal upon pass- ing a special examination or a comprehensive course. Th e law society's position at the time was that licensed paralegals should appear on appeals on a question of fact alone to another board, tribu- nal or the Ontario Court of Justice but not the Superior or Divisional courts. It took the view that a question of mixed fact and law required more extensive and comprehensive education than that proposed for paralegals. Th e second recommenda- tion was that licensed paralegals subject to only one mortgage. Th e LSUC opposed this sug- gestion. It took the view that paralegals should be prohibit- ed from practising in the area of real estate law. "Because of the complexities of both title and non-title matters and the related skill sets required to address these matters, the public interest requires the in- volvement of a lawyer," it said in its formal response. Roy Th omas, director of 'Unlike other areas, there's an over- abundant supply of lawyers doing real estate,' says Steven Pearlstein. should be able to act for a ven- dor on the sale of a residential property that's either clear of any mortgage encumbrances or communications at the LSUC, says the review panel isn't com- mitting to those recommen- dations specifi cally. Instead, it's conducting a needs review. "In some cases, things have changed since 2000," says Th omas. "It's premature to be talking about specifi c areas." One of the biggest changes is that the law society has been regulating paralegals for the last few years. Another change is the advent of title insurance, which is generally seen as reducing the risk involved in real estate trans- actions. "Th ere are no barriers that the public would have to overcome to utilize paralegals," says Chris Surowiak, president of the Paralegal Society of On- tario. "Th ere are now the same protections as for lawyers. Para- legals would have to prove they are competent to practise in real estate, as they do for immigration practice, which has been recently opened up to paralegals." Marshall Yarmus, the para- legal who proposed the motion that lead to the current review, hopes it will endorse some of Cory's recommendations to allow paralegals to do some of the work in real estate, including "routine things like searches and registra- tions that law clerks normally do and not the lawyers themselves." Th e needs assessment will be AN AUTHORITATIVE GUIDE TO THE INTERPRETATION AND APPLICATION OF SECTION 50 NEW PUBLICATION THE LAW OF SUBDIVISION CONTROL IN ONTARIO, THIRD EDITION SIDNEY H. TROISTER, LSM Every real estate lawyer knows that section 50 affects all real estate transactions in Ontario. This is the only resource to help guide you through the intricacies of this complicated section. Written by renowned expert Sidney Troister, this text has become known as a leading Planning Act resource since its original publication in 1988. This indispensable and practical text helps you analyze and assess the validity of title and address any problems that may arise. This new third edition updates the law and practice and includes: • updated case law and commentary • updated legislation • new commentary on the effect of land titles conversion and the automation and parcellization of title • a detailed section on the validation of title • analysis of and recommended strategies for dealing with the complex problems that arise under section 50 an exercise to gauge the demand for paralegal services in real es- tate. In 2000, the law society's research found that among the users of paralegal services, 25 per cent said they'd use a paralegal in real estate matters and 69 per cent said they'd retain a lawyer. Among lawyers' clientele, 18 per cent said they'd use a paralegal for real estate work, while 80 per cent preferred a lawyer. From these fi gures, the law so- ciety concluded there was no real need for paralegals to practise in the area, a sentiment echoed for other reasons by Steven Pearlstein of Minden Gross LLP. "Th e real push for paralegal services from a public standpoint is accessibility to professionals and keeping costs down," he says. "Unlike other areas, there's an overabundant supply of lawyers doing real estate. Th ey're a dime a dozen, and there's no upward pressure on the cost. Th e price of legal fees on a real estate transac- tion has stayed roughly the same for the last 30 years." Pearlstein questions Cory's suggestion that paralegals should do simple sales. "How do you know if it's simple until you get into it? How many diff erent areas of law do you deal with in a real estate transaction? It's a serious and complicated transaction." Pearlstein has observed that ti- Hardbound • 464 pp. January 2011 • $139 P/C 1002010000 ISBN 978-0-88804-514-0 Price subject to change without notice, to applicable taxes and shipping & handling. Visit canadalawbook.ca or call 1.800.565.6967 for a 30-day no-risk evaluation tle insurers try to do simple trans- actions but keep running into problems they need help with. "While a large proportion of transactions do go smoothly, you won't know if you need a lawyer until you're into the transaction. Th en it's too late." Pearlstein agrees that things CANADA LAW BOOK® Untitled-3 1 www.lawtimesnews.com 6/3/11 10:58:14 AM have changed since Cory's report, but he and his colleagues are still opposed to any paralegal involve- ment in real estate practice at all. "Title insurance is not the pana- cea that everybody thinks it is. Th ere are lots of things it doesn't cover. In the latest residential transaction I did, I found two new exemptions in the title in- surance policy. Also, people don't fully understand title insurance. It's one of the things a lawyer has to explain." Photo: Sandra Strangemore

• Cover
• Summary Judgement
• Native Impasse
• Focus On Real Estate Law