As a lawyer in Ontario, a key set of forms that you must comply with are the "Form 9" documents. These forms, found under By-Law 9, range from A through E and cover various aspects of trust account management and real estate transactions. Let’s discuss the various Form 9 documents and the purpose they serve.
Form 9A: Electronic Trust Transfer Requisition
Among the Form 9 series, the one that you are likely most familiar with, as it is the one most used, is the Form 9A. Lawyers are required by the Law Society to complete a Form 9A before initiating any electronic fund transfers from their mixed trust account – such as e-transfers or wires.
Its significance lies in providing essential transaction details similar to those commonly found on a physical cheque. These details include: the amount to be transferred, client/matter references, reason for transfer, details of trust account to be debited, the recipient’s name, along with signatures from the person requisitioning and authorizing the transfer. Without these specifics, the ambiguity of the electronic transactions on bank statements are insufficient for posting bookkeeping entries or for auditing purposes.
In other words, completed Form 9A’s help your bookkeeper in their duties. They also help lawyers demonstrate they are properly administering client trust funds and that they are following LSO regulations, as these reports are required to be presented when being audited by the Law Society.
For more information on the Form 9A, click here: https://www.lso.ca/about-lso/legislation-rules/by-laws/by-law-9/form-9a-electronic-trust-transfer-requisition
Form 9B: Authorization of Withdrawal by Teranet
The Form 9B is an authorization form used by real estate lawyers to allow Teranet (the provider of Ontario's electronic land registration system) to withdraw funds directly from the lawyer's “special” trust account to pay for land transfer tax and registration fees. A Form 9B gives Teranet the necessary access to the lawyer's trust account to facilitate these electronic payments. The Form 9B must be completed before authorizing Teranet to withdraw funds. They must then compare the confirmation with the authorization record to verify the withdrawal.
This form streamlines the real estate transaction process and ensures required government fees are paid in a timely manner.
Click here for more information on the Form 9B: https://lso.ca/about-lso/legislation-rules/by-laws/by-law-9/form-9b-authorization-of-withdrawal-by-teranet
Form 9C: Electronic Trust Transfer Requisition (Closing Funds)
The 9C is an Electronic Trust Transfer Requisition used specifically to request the electronic transfer of closing funds from a lawyer's trust account to complete a real estate transaction. Prior to the transfer, the electronic trust transfer requisition must be signed by the licensee or an authorized individual with signing authority on the respective trust account. The electronic transfer must produce immediate confirmation of the fund transfer. The confirmation of the transfer should include essential details such as account names, account numbers, and the date of transfer.
Click here for more information on the Form 9C: https://lso.ca/about-lso/legislation-rules/by-laws/by-law-9/form-9c-electronic-trust-transfer-requisition-closing-funds
Form 9D: Investment Authority
The 9D is required for private mortgage transactions. It provides (1) written instructions from the investor to the lawyer on how to handle the mortgage investment, (2) specific details of the mortgage investment and (3) cautions the investor that they are responsible for assessing the financial merits of the investment.
The Form 9D helps reduce the risk of miscommunication and protects the lawyer's professional liability insurance coverage.
Click here for more information on the Form 9D: https://lso.ca/about-lso/legislation-rules/by-laws/by-law-9/form-9d-investment-authority
Form 9E: Report on the Investment
Finally, a Form 9E is a report on the investment that a lawyer must complete for private mortgage transactions. This ensures documented communication between the lawyer and client and is part of the LSO's efforts to protect the public and reduce insurance claims.
Click here for more information on the Form 9E: https://lso.ca/about-lso/legislation-rules/by-laws/by-law-9/form-9e-report-on-the-investment
Conclusion
In summary, Forms 9A, 9B and 9C are sometimes individually referred to as “The Intention” as they signify your planned actions and should be filled out before starting the relevant transaction withdrawals. These documents should then be saved with each “Execution”, the confirmation report that verifies that you followed through on your intended actions as stated.
Forms 9D and 9E relate specifically to private mortgages. Together, they show communication between the investor and the lawyer, facilitating the mortgage transaction process while ensuring legal compliance and transparency.
The Form 9 series of documents play a critical role in helping Ontario lawyers with managing their trust funds efficiently while also they ensure lawyers meet their regulatory obligations around trust accounting, real estate transactions, and private mortgage investments.
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Keith Hill Jr. is the Principal at Bookkeeping Matters Inc (BMI). For over a decade, Bookkeeping Matters has been fulfilling bookkeeping needs for lawyers throughout Ontario and other provinces. As a former Legal Accounting professor, Keith has also positioned BMI as a premier provider of online legal accounting training. Specializing in several practice management software, Keith and his team can be contacted at: info@bookkeepingmatters.ca / 1-800-893-2820 / www.BookkeepingMatters.ca
©2024 Bookkeeping Matters Inc. All rights reserved. Reproduction with credit is permitted.
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