Delays put real estate clients at risk, province warned

They're tardy deeds but they're not dirt cheap.

Staffing shortages at the province's Registry of Deeds created a paperwork backlog last fall, and sparked a series of warnings from the legal community to the government about how those delays could hit their clients in the pocketbook.

The Law Society of Newfoundland and Labrador wrote government officials about the "very serious matter" on Nov. 25, 2014.

"I have received a number of messages from members expressing serious concern about the impact that the current issue with the Registry of Deeds is going to have on the public both in terms of potential delays in closing transactions, the inability of lawyers to act because they may no longer be able to certify title and the consequent additional costs that the public may have to bear," executive director Brenda Grimes noted in an email.

CBC News obtained more than 150 pages of correspondence on the issue, through provincial access-to-information laws.

• Read the fullresponse to CBC's access-to-information request

The province now says the system is back on track.

But correspondence from just a few months ago provides a road map of complaints from lawyers about how delays in the system could jam up their clients.

Staff shortages caused problem

Lawyers and others involved in property transactions reported that delays were causing trouble with the banks, which require registered documents to finalize mortgages.

Government officials repeatedly replied that staff shortages were at the root of the problem.

Things got so backed up that a title-searching firm indicated in late November it would no longer sift through the 95 batches of loose deeds not entered in the system.

That meant the searchers could no longer assure the law firm overseeing a deal that everything checked out with the transaction.

Enda Searching Service Ltd. wrote that letter.

Company owner Enda Davis told CBC News his firm resumed searching for loose deeds in late January, when some of the backlog had been cleared.

Davis said lawyers who could not get a loose deed search done had a choice take their chances, or have their clients buy title insurance.

According to Davis, title insurance for a residential transaction could cost hundreds of dollars, and into the thousands for a commercial property deal.

Minister says issue now addressed

Service NL Minister Dan Crummell says the problem has been addressed.

"Right now there is no backlog, we're back to our regular normal business processes, and the registry is operating within normal lead times," Crummell said.

"We understand the implications, took them very seriously, took a number of actions to put it back on track."

According to the minister, new staff have been hired and trained, workers did overtime shifts, and other Service NL employees were re-deployed to help out.

"We have thrown some human resources at it," Crummell noted.

The issue appears to have gone all the way to the top levels of the government. Five pages of documents described as cabinet records were withheld from the package provided to CBC News.

Focus on electronic filing

According to Crummell, the province is encouraging more law firms to file their documents electronically. Currently, just over half come in that way.

"That will definitely speed up the system," Crummell said.

The Law Society appears to be happy with the efforts made to date.

President Kenneth Baggs wrote Service NL in mid-February to formally thank the department.