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The Real Estate Sub-Committee (RESC) of the Law Society of Saskatchewan Ethics Committee is pleased to share with the Law Society membership the Uniform Trust Condition Format letter (UTC Letter), updated to 2022. Like its predecessor standard trust condition letter, the current UTC Letter is intended for use, as appropriate, in Saskatchewan residential real estate conveyancing. By refreshing the format, and modernizing the substance of the standard trust condition letter, it is hoped that the UTC Letter will generally be relied upon by lawyers as a document requiring little or no modification in transactions based on the standard Saskatchewan Real Estate Association residential contract of purchase and sale (the “Contract”), resulting in safer and more efficient closings in most instances.
To broadly frame the modernization of the standard trust condition format, much focus was given by the RESC as to whether the public was adequately protected from unnecessary risk in current standard residential conveyancing practises. In particular, it appears that the use of title insurance products in Saskatchewan has been the greatest external force resulting in ad hoc changes to the standard trust condition format. In recent years, lawyers on both vendor and purchaser sides of files have frequently navigated unique and disparate revisions to the “standard” letter on a deal-by-deal basis: it thus appeared to the RESC that a review and reset to the standard trust condition letter was appropriate.
Title insurance is but one dynamic factor that renders drafting a “one size fits all” trust letter practically challenging, if not impossible. Furthermore, the standard trust condition letter is often used in the context of privately negotiated residential contracts, and realtor or privately negotiated commercial real estate contracts, none of which can reliably be described as having “standard” terms. It is a commonly accepted tenet in the legal profession that a trust letter should not deviate from the contractual terms of the transaction. Like the standard trust condition letter used to date, the UTC Letter cannot be relied upon to “fix” frailties in the Contract, fully address the usage of title insurance, or cover the unique closing parameters of private residential or commercial real estate contracts.
Recognizing its original purpose, and in keeping with the intention to refresh the functionality of the standard trust condition letter, the RESC adopted a subtle rather than sweeping approach to modernization. Attached to this memo, please find UTC Letter, which is generally intended for use with little modification as a standardized precedent in relation to conveyancing transactions based on the Contract. As has been past practise with the standard trust condition letter, it is anticipated that the UTC Letter will in future also be utilized as the base trust letter for real property conveyancing transactions other than those based on the Contract, again, with a view to mitigating risks and affording efficiency in closings. In such instances, the UTC Letter may (and indeed should be) amended through bold and strike through as required by the specific transaction.