Can One Lawyer Act for You and Your Lender in Saskatchewan?

When you arrange a mortgage, the lender may ask you to use a certain lawyer, or tell you that one lawyer will handle both the purchase and the mortgage. That raises a fair question: can one lawyer really act for you and for the lender?

The answer depends on the circumstances, the lender's instructions and the professional rules lawyers must follow. This article explains how the arrangement generally works and gives you questions to ask before you sign anything.

This article covers the law of Saskatchewan.

Why a lender is involved at all

When you buy with a mortgage, there are two sets of interests. You want to own the property on clear terms. The lender wants its mortgage properly registered and secured. On a Saskatchewan title, mortgages and liens appear as registered interests, so the lender cares how the title reads and what else is registered against it.

Whether a lawyer must be involved in your purchase, and what your lender asks for at closing, depends on your situation and your mortgage documents, so it is worth confirming with a lawyer. The lender may give the lawyer written instructions about what must be done before funds are advanced.

The lender's position matters later too. A mortgage lender on land in Saskatchewan can foreclose only by an action in the Court of King's Bench, and it must first give notice to the Provincial Mediation Board by serving the mortgagor and the Board with a notice of application for leave. The lender must wait 60 days after notifying the Board before starting the court foreclosure process. During that period the Board talks with the borrower about options such as paying arrears, selling the property, or transferring it to the lender. Farm land follows a separate process under Part II of The Saskatchewan Farm Security Act, where the Farm Land Security Board reviews farm foreclosures and mediation is involved before the creditor can go to court.

One lawyer or two?

Sometimes the same lawyer acts for both the buyer and the lender on the same transaction, and sometimes the lender uses separate counsel. Where it is allowed and how it must be handled depends on the lawyer's professional rules and the lender's instructions, which are worth asking about directly.

What matters most is a conflict of interest. A conflict can arise if your interests and the lender's pull in different directions, for example if a problem shows up on the title or if you and the lender disagree about terms. Ask the lawyer how they would handle that, and whether they would have to stop acting for one or both of you.

Cost is a separate point. In a standard Law Society offer to purchase template, each party pays their own lawyer, and the purchaser pays the Land Titles Registry fees to register the purchaser's name and mortgage. Ask for the cost of any shared arrangement in writing.

What a lawyer typically checks on the title

Whether one lawyer or two are involved, the title is central. A current title search through ISC Quick Search finds active titles by parcel number, title number, owner name or land description, and lets you view a title image or request a certified print. It does not show previous owners or interests that were removed, which the advanced Search tool covers.

• Registered interests, including mortgages and liens.
• Any title lock, which is a prohibition on the title.
• Judgments, which are tracked separately in the Judgment Registry.

These are the kinds of items that can affect both you and the lender, and they are why instructions and conflicts matter.

Some registered interests can also be removed over time. Under the Land Titles Regulations, 2001, the Registrar can issue a notice that a registered interest will lapse 30 days after the notice is sent unless a court order extending the registration is registered. Whether this affects your purchase depends on the title, so it is worth confirming with a lawyer.

Questions to ask before you agree

• Who exactly will the lawyer be acting for: me, the lender, or both?
• Am I free to choose my own lawyer, and what happens if I do?
• What does the lender's instruction letter require, and can I see it?
• What will you do if my interests and the lender's differ?
• Would you have to stop acting for me, or for the lender, if a conflict arises?
• What will it cost me in total, in writing, including registry fees?
• If something goes wrong with the title, who do I speak to?

What to do next

Before you accept a lawyer suggested by your lender, ask the questions above and compare them with what another lawyer would say. Keep copies of the mortgage commitment, the offer to purchase and any lender letter. If the lender says you must use a particular lawyer, ask for that requirement in writing and have a lawyer of your choosing explain what it means for you.

Frequently asked questions