In the first part of this series of articles, we discussed a document referred to as the Lender/Buyer Consent. If you would like a recap of the Lender/Buyer Consent, please visit: https://touchstonelawgroup.com/conveyancing-documents-101-lenderbuyer-consent-part-1/.

This week, we will cover Acknowledgment and Directions. This document is frequently used in light of British Columbia’s electronic registration system when there is a mortgage being registered in conjunction with closing of the purchase and sale.

With mortgage financing, the borrowers will sign a copy of the mortgage document in the presence of a lawyer, notary public or a commissioner for taking affidavits.  In British Columbia, the mortgage is prepared on an approved Land Title Office form called a “Form B”.  This is the document that is submitted for registration in British Columbia in order to register the lender’s mortgage interest against title to the property the purchaser is acquiring. With electronic registration, the physically signed Form B is not submitted to the Land Title Office.  Instead, the lawyer or notary will electronically sign a form of the Form B confirming that the lawyer or notary is holding a physically signed copy on their file. This uploaded version does not bear a signature from the borrower.

As a result of this process, the purchaser is often asked to sign a document referred to as an Acknowledgment and Direction which often looks something like this:

This will confirm that:

• I/We have reviewed the information set out below and that this information is complete and accurate.
• You are authorized and directed to register a valid FIRST/SECOND charge/mortgage (hereafter the “charge”), in favour of  _______________ and I/we shall be bound by the terms of such charge;
• The effect of the electronically registered documents described in this Acknowledgement and Direction have been fully explained to me/us and I/we understand that I/we are parties to and bound by the terms and provisions of these document(s) to the same extent as if  I/we had signed these documents; and
• I/We are in fact the parties named in the documents described in this Acknowledgement and Direction and I/we have not misrepresented our identities to you.

DESCRIPTION OF CHARGE/MORTGAGE (for the Chargor/Transferor)

When signing this document, the buyer should be aware that they are confirming the above noted statements and agreeing to be bound by the mortgage submitted for registration notwithstanding the lack of a signature on the registered Form B.

Please note that the above is provided in blank form as an example and will not always be the same, but it is not unusual to see a document similar to the above as part of the document package for closing.

 Author: Una Gabie