Buying or Selling Real Estate privately?
NOTE: the article below is general information and does not constitute legal advice. Please contact a real estate lawyer to ensure you are receiving advice that covers your particular situation.
From time to time, I will get a call from a potential buyer or a seller asking about the steps to complete their real estate transactions without the use of a real estate agent. My suggestion is to always sit down with a local real estate agent who knows your market and has the requisite skills to assist you with your transaction. One should aim to understand the services realtors provide; the value they add to the transaction and how this can help you in the long run. That being said, if you are absolutely certain that you are prepared to do without the services of a real estate agent, some general steps are outlined herein.
First, the buyer and seller would have to determine who is making the initial offer and thereby having their lawyer draft the agreement of purchase and sale. The lawyer will have a fee for this, usually based on time spent or they may have a set fee. If you work things out in advance, it can help simplify the real estate contract which may save you some money on legal fees. Remember, the lawyer is not and cannot play realtor. The lawyer is generally not going to visit the subject property or have much of an opinion about the true market value – this is the area of expertise of real estate agents. That being said, from a contract perspective, below is a general list of questions that we require from someone looking to have an agreement of purchase and sale drafted. Be advised that these are basic questions and that your transaction may differ and have additional moving pieces that need to be considered. For general information, this is what we would ask of the parties:
Agreement of Purchase and Sale (Private Questionnaire)
• What are the names of the buyer(s)? – Please provide full legal names as they are to go on the title.
• What are the names of the seller(s)? – Please provide full legal names as they are to go on the title.
• What is the address of the property? – Please include any parking/locker details, if any.
• What is the offer/purchase price?
• What is the amount of the deposit?
• Who is the deposit being paid to? – Usually, it is being paid to either the realty company or the seller’s lawyer, in trust. It is advised not to make a cheque directly payable to the seller.
• Who is making the offer (buyer or seller)?
• What is the irrevocability date?
In other words, how long does the other party have to accept your offer?
• What is the closing date?
• Which items are being purchased as a part of this transaction?
When in doubt, list it out. Usual items include a fridge, stove, washer, dryer, electric light fixtures etc.
• Are there any rental items on the property?
The buyer typically assumes these rental contracts.
• Is the property a single-family residential dwelling or is it a duplex/triplex/multi-unit. Please provide details.
• Are there any realtors involved in the transaction at all? If so, please provide their name and contact details.
• What type of conditions are you looking to include in the agreement?
Generally speaking, a buyer may want to make it conditional to financing or home inspection to name a few or possibly subject to the sale of an existing home or confirmation that home/fire insurance can be obtained by the buyer. Further details would be required.
• Are there any Tenants on the property? If so, are the tenancies being assumed? Please provide copies of the leases.
• What is the name and contact information for the lawyer representing the other party?
• Are there any other items you wish to share?
As you can see, there is a lot of information that needs to be gathered. Note that if there are any conditions included in the agreement of purchase and sale, they need to be drafted to meet the intentions of the buyer and seller. Further, the conditions also need to be addressed once they are satisfied by signing further documents/ schedules.
Another note is to make certain of which items are being kept by the buyer and which are going to be removed by the seller. Generally speaking, chattels do not form a part of the agreement unless specifically referenced as included. Chattels are items of personal property that are not ‘attached’ to the real estate such as washers, dryers, stove, tables, chairs and various other items that make up ‘stuff’ inside a house. On the other hand, items that attach to a building/house are generally known as fixtures. These items are known to be sold with the property unless specifically excluded. An example of a fixture may be a built-in workbench or a built-in wall safe. Though there is some grey area, one suggestion is that if it will cause damage to remove it from the property, it may be considered a fixture. This is the reason to work it out in the agreement and as usual, real estate lingo goes, ‘when in doubt, spell it out’. Not only will this avoid unpleasant surprises, but it will also assist with any potential litigation if a dispute arises.
There are a number of other items that need to be considered and clients (buyers or sellers) may require more contact with their real estate lawyer since they do not have the benefit of working with a real estate agent. The main message here is that if you’re going to decide not to proceed with the assistance of a realtor, be aware of your rights and speak to a real estate lawyer before signing anything.
VRS Law is a real estate law firm serving Kitchener, Waterloo, Cambridge, Guelph, and other areas west of the GTA. We offer assistance in buying, selling, refinancing along with other practice areas. If you have any questions about real estate lawyer Kitchener, give us a call!Read More
Disclaimer: Please note that opinions and information herein (and elsewhere on this website) is general information and is not to be considered legal advice. Please contact a Kitchener real estate lawyer for advice in relation to your specific scenario.
WHAT TO LOOK FOR IN A STATUS CERTIFICATE
If you’ve come to this page while searching for information on a status certificate, it is likely that you are involved in purchasing a condominium either as a prospective buyer or a realtor. This package of documents shared by the condominium corporation is often the subject of many questions, deadlines and processes involving a number of parties. As a real estate lawyer in Kitchener, I see status certificates as a critical document that requires a review. It provides very important information on a variety of things some of which are listed below.
What is a status certificate, what does it include?
In exchange for a fee ($ 100 +), a prospective buyer is provided a package of documents referred to as the status certificate. This contains documents including the condominium by-laws, condominium declaration, the budget, and rules of the condominium corporation and a summary document. Real estate agents will often (highly suggested) make their client’s offer conditional on a review of a status certificate by a lawyer. Review of these documents allows the buyer to cross-check the information provided by the seller. For example, if the seller indicates a certain amount for monthly common expenses and the status shows a higher amount (perhaps due to a recent increase in condominium fees), the buyer can be better prepared for the true costs involved.
What are the risks in NOT reviewing a status?
There are many risks. As a starting point, you do not have a financial snapshot of the condominium and its affairs. The status will reveal if the condominium corporation is involved in any lawsuits or other legal proceedings. A lawsuit may very well impact the finances of the corporation so additional details may need to be explored. It will also disclose whether the current owner is up to date in paying the common elements (maintenance fees as it is sometimes referred to as) and whether the condominium corporation has placed any liens on the property due to arrears of such payments or unauthorized changes to the unit. Certainly, one would want to know this information upfront and make an informed decision.
What other documents are included in a status?
The status certificate would also include a reserve fund study. This is a study required to be completed under the governing legislation and is prepared in conjunction by engineers and accountants. Every few years, a certified professional (engineer) is required to attend provide an opinion on the major components to see which items require repair and replacement. As a result of the report, the corporation is not only able to budget but also to project how much money is to be allocated into a reserve fund (sort of like a long term savings account) for the years to come. The general thought is that more is better!
Follow the rules
Although most clients understand the concept that purchase of a condominium would come with certain rules, it is important to review them. Are there restrictions on pets? Short-term rentals (Airbnb) or student rental, parking etc. When it comes to these rules, a prospective buyer should understand them in advance of the purchase.
What else would one find out?
You may get some sense into how many units are rentals rather than being owner-occupied. This could certainly impact a potential purchase decision. You also want to know which utilities, if any, are covered by the monthly common expenses. More and more utilities now, especially in newer condominiums are being separately metered which means you would pay fees for these utilities on top. Understanding this allows will allow one to budget properly. Also, if the condominium is facing issues or in bad financial shape, a special assessment may be imposed on the unit owners. This is where additional fees may be required from unit owners to cover some type of shortfall. Very important to know this upfront.
Remember, there is no magic wand one can wave to know if it’s a ‘good purchase or not’ but reviewing this document can give some insight into what you are getting into. The point is, there’s a lot involved and it is best to have the status certificate reviewed and provide adequate time to conduct the review.
VRS Law is a Kitchener-Waterloo Law firm and assists clients purchasing, selling, refinancing real estate property including condominiums which require the review of status certificates. We also help clients with their estate planning and estate administration needs. In other words, we assist those looking to prepare their wills, power of attorneys and receive assistance with probate or executor related services.
If you are buying a newly built real estate property, it is important to review your particulars with a lawyer in advance of closing so you understand not only your agreement and obligations within, but also the HST-related consequences.Read More
Do you need to obtain the Grant of Probate on Death?
NOTE: The article shared below is for informational purposes only and is not to be considered legal advice. For the correct advice pertaining to your situation, please contact a wills and estates lawyer in your area.
After the passing of a loved one, one of the key questions facing family members is whether they have to go to court in order to obtain the grant of probate. The short answer is, it depends on what is involved in the estate. In particular, one needs to know what type of assets exist in the name of the deceased individual and whether they can be transferred through other methods that may avoid the need for obtaining probate. In this short post, we will look at just some of these situations.
Where a grant of Probate may be required:
If the individual died without a Will, a situation known as intestacy, a probate process must follow and the individual applying will obtain something called letters of administration. It is no wonder that lawyers stress the importance of having a Will prepared.
Deceased owned real property
If the deceased held real property (house, land, mortgages etc.), then it is likely that an application must be made to the court in order to obtain the grant of probate. This is what the land registrar relies on in order to allow transfer or dealing with property in Ontario. There are some increasingly rare occasions that this may not be required if the property falls within the old Registry system.
Other property held by institutions
In a scenario where a bank or other third parties hold property under the name of the deceased, they may insist on the grant of probate. Why? Mainly so they are protected. The party acting as the Estate Trustee will have to obtain this grant through the court process in order to prove they have the authority to deal with such assets. Most importantly, by insisting on such, the banks or institutions limit their liability by relying on this grant.
However, in the event that accounts are relatively small, a bank may not insist on the grant of probate, particularly where indemnities are signed and parties are known to the bank – such as a surviving spouse.
Protection for the Executor and proving the validity of the Will
By following the process of obtaining the grant, the Executor limits him or herself from potential liability to a certain degree. This way, if another party makes a claim that they had authority to act under another will or document, the Executor can at least claim that they are acting under confirmation of the courts. Of course, this does not by any means lower the standard by which an Executor is expected to carry out his or her duties. Certainly, the grant itself can be challenged but there is no question that obtaining the grant is a method of protection for the Executor. Further, the act of obtaining a grant on its own is confirmation that a valid will exists – this is especially useful in a situation where there may be a question regarding the capacity of the deceased Testator.
Whether a grant of Probate may not be required:
Items that can usually be transferred from deceased’s name:
There may be a property that is held by way of a right of survivorship that may be allowed to be transferred without the need for probate. However, recent cases in the Supreme Court of Canada put some of these joint accounts into question and legal advice should always be sought.
Additionally, an insurance company may transfer insurance proceeds to a listed under a beneficiary designation without the need for probate. The same may apply for registered plans such as RRSPs etc.
Depending on the jurisdiction involved, personal effects, cars and vehicles, Canada Pension Plan death benefits are usually transferred without the grant of Probate. Shares that the deceased held in a private corporation may also be allowed to be transferred without the grant.
Make a list and obtain legal advice
The main message here is that there may be a number of assets that require probate and a few that do not. As obtaining the grant of probate in an estate matter takes takes at least a number of months or more and requires patience from all involved. The key is to make a detailed list and gather information if you are acting as the executor and obtain legal advice from an estate lawyer as to what steps are to be taken.
Our office serves and assists with wills, estate, probate as well as real estate matters in Kitchener, Waterloo, Cambridge and surrounding areas such as the GTA .
NOTE: The article shared below is for informational purposes only and is not to be considered legal advice. For the correct advice pertaining to your situation, please contact a wills and estates lawyer in your area.Read More
It is no doubt that a real estate lawyer plays a key role in your transaction.
Broadly speaking, in a purchase transaction, your real estate lawyer will conduct the necessary searches of title, order insurance policies, work with your mortgage lender, correspond with the other side and attend to registration of your transaction.
In a sale transaction, the real estate lawyer will work with your existing lender to discharge mortgages and any other liens, draft statement of adjustments for the buyer’s lawyer and distribute the remaining proceeds including realtor’s commissions etc.
In a mortgage refinance transaction, a real estate lawyer will conduct the necessary searches, the new mortgage as well as discharge the previous, and advance any remaining funds as instructed.
Whether you are buying, selling or refinancing your property, deciding which real estate law firm you wish to work with is an important step.
Here are some tips on choosing the law firm you wish to work with:
- Real Estate Focused: real estate law should be a key focus of their practice. You may not want one that dabbles into the area or has a busy litigation practice that requires them in court. You may find that this could impact the quality of service you receive.
–> Our office is highly focused on real estate – has been so for 7 years.
- Lawyer Involvement: Have you had any contact with the person you have hired? Having this contact will not only put you at ease but it will be an indication as to who you have access to for questions and advice from start to finish – especially if certain challenges arise. A high volume real estate firm may have various legal administrators or law clerks which may help but your transaction should be closely reviewed and attended to by one person in particular – the lawyer. After all, that is who you are paying.
–> Call us for any questions and concerns. While our law clerk will offer help when needed on routine or administrative matters, legal matters, questions and concerns are attended to by the lawyer. Not only that, you will be in touch with both the lawyer and the staff.
- Experienced: your real estate lawyer should have several hundred or better yet, thousands of transactions and several years of experience under their belt. This means that the lawyer will have pretty much seen it all and can provide the right guidance and advice during the course of your transaction.
–> We have helped thousands of clients with their purchase, sale or refinance transactions.
- Break down of Fees: unless you have been working with a lawyer with whom you have an established history and trust, it may be best to ask the question: what is this going to cost? Most people like to know up-front what their costs will be and would like to aim that such costs are kept as precise as possible. In other words, you want to avoid surprises. For the most part, legal fees (including disbursement costs) in a residential real estate transaction can be advised in advance of a law firm being retained. Try to find out ahead of time what the numbers are going to look like by asking for an estimate or a break-down of fees so you can budget.
–> Just as we like to know what we pay for in advance and within reason, we provide the same treatment to our clients.
- Good standing: The lawyer you choose should be in good standing with the Law Society of Ontario.
–> We are in good standing.
Please contact our law office for any questions in relation to real estate in and around the Kitchener-Waterloo region. We look forward to helping you, please contact us if you have any question.Read More
Title Insurance and it’s use in Real Estate
So you are finally set to close on a real estate property and move in to your new home. You have hired a real estate agent to help you find the property within your price range, in the neighbourhood of your choice and the offer has been accepted. You have decided on the lawyer you wish to work with and are eager to know how much all of this is going to cost. You find out from your real estate lawyer that title insurance will attract a fee of a couple hundred dollars. Given that this bumps up your costs during closing, you want to know what a title insurance policy is all about and how it works. Let’s find out…
What title insurance is NOT:
Let’s dis-spell some misconceptions about title insurance from the start. Title insurers stress the fact that their policies are certainly not intended to be any form of a home warranty and should not be misunderstood as such. For example, it does not speak to whether the property is well built or that the roof or foundation is intact and certainly does not provide coverage for the appliances purchased as part of the transaction. Neither does it provide a guarantee that you will be able to change the current use of the property.
Title Insurance – what is it?
When you purchase a real estate property, you obtain “title” to the property through a process under which the previous owner transfers their ownership to you. This is done by way of registration of a document called the Transfer/Deed under the Land Titles system. According to some accounts, title insurance has been around in the US since 1868 and was used to provide protection to purchasers for unanticipated title problems. However, it has picked up popularity in Canada in recent years where it is obtained virtually in all residential and a large majority of commercial real estate transactions. The focus under a title insurance policy is not to guarantee title, but instead is on providing compensation or damages depending on the loss or claim.
When completing a real estate purchase transaction, lawyers will routinely order a title insurance policy that provides protection for both the buyer as well as the mortgage lender if the property is mortgaged. The main reason is so that the policy holders have protection from certain risks that are present whenever real estate transactions are involved.
When title insurance is ordered by the law firm, the company charges a premium for the policy. The premium amount is lower if the transaction is a ‘cash’ transaction in that it does not involve a mortgage. This premium will be higher for properties that are of higher value and the amount of insurance is the actual purchase price of the property. The amount of the premium may vary depending on a number of factors some of which may include the type of property, the purchase price, the registered amount of the mortgage etc.
An important point about title insurance is that once it is ordered, the protection remains for as long as the insured party is on title without the need for renewals or monthly premiums. Once the deal has closed and your lawyer has ordered the title insurance, coverage will continue under the owner policy for as long as the same buyer owns the property.
Risks covered by Title Insurance:
In brief, according to the Financial Services Commission of Ontario, some of the most important coverages which may be available under a title insurance policy are as follows:
- Protection from defects in title – such issues may hinder ability to have clear rights to the property
- Conflicting ownership interests
- Liens that exist on title – for example, a previous owner has outstanding mortgages that remain on title or other liens such as condominium liens.
- Encroachment issues – where an existing structure on land needs to be removed because it sits partly on a neighbour’s property.
- Errors in surveys and public records
- Title Fraud
Essentially, title insurance ordered by your real estate lawyer will provide owners (and banks, if the property is subject to a mortgage and a lender policy is ordered) with a comprehensive and no-fault protection against title risks involved in a transaction.
Perhaps the most popular reason to have title insurance is to cover title fraud. As a general example, this may involve a situation where a fraudster deals with or transfers the title to your home without your knowledge. This may be by way of transferring title to him or herself by stealing your personal information and forging documents. The second step may involve the fraudster registering a mortgage on the title to your home and absconding with the funds. Of course, as the years go by, the fraudsters seem to get more and more advanced in their approach. Hence the need for the protection that title insurance provides. Here, the innocent party (insured) may later discover that the title to his or her property is defective when an unknown mortgage lender contacts them about the default in payment. Luckily, the protection offered continues after closing in that the individual may seek compensation from the title insurer due to the fraud.
In the real estate world, policies obtained for title insurance may cover different type of risks depending on the type of property one is purchasing. For example, there may be certain items covered on a residential policy jacket that would be excluded in a commercial policy. Typically, commercial policies require even more due diligence due to higher cost of properties and the increased cost of coverage.
Other risks that may be covered:
- Title defects such as liens, executions against title, encroachment issues
- Arrears in taxes
- Arrears in hydro and gas
- Executions against prior owners
- Fire department work orders against the property
- Hydro work orders against the property
- Compliance with conservation authorities
- Access limitations
- Planning Act contraventions
- Fraud, forgery, or false impersonation where they effect the insured’s interest on title
Exclusions from coverage:
When there are risks that are difficult to quantify, title insurers will typically exclude such from coverage. That being said, here is a small list of some of the standard exclusions that may be listed under your insurance policy:
- Environmental matters (termites, infestations, UFFI, underground storage tanks, soil contamination, leakage of water etc.)
- Land claims – Native or aboriginal
- Post-closing expropriations
- Future use in the event the owner changes the use of property
- Default on the owner’s existing mortgage
- Legality of rents under the rent legislation
- Risks known to or agreed by the insured but not shared with the title insurer
- Septic system functionality
Also, a title insurer will require a multi-unit endorsement for a property containing 2-6 units (including basement apartments) in order to provide additional coverage.
Title Insurance serves as a lower cost alternative of closing a real estate law transaction and all parties, including the buyer and lender may be put to ease if a certain item is covered under the policy. It is often more cost effective to order a policy than to conduct off-title searches and / or obtain a new survey which can add up quickly. It is also known to be a time saver in the sense that it reduces the type and number of searches a law office has to conduct. As a no-fault compensation provider, it is no wonder title insurance has, in a sense, taken over real estate conveyancing and is a go-to choice for both law firms and home owners and lenders.
For further questions or information about your real estate transaction in Kitchener-Waterloo or surrounding regions, please contact our office.
Condominium Law: Buying real estate in Kitchener-Waterloo and surrounding regions
It is interesting to see how many people tend to gravitate towards purchasing a condominium as opposed to a semi-detached or detached home. Whether you have just started shopping for real estate or have already signed an Agreement of Purchase and Sale, one thing is for sure: as a potential buyer, it is a good idea to understand what it is that you are buying, especially when it comes to buying into something like the condominium, knowing condominimum law it very important.
It is no surprise that condominiums are a popular choice for those looking to get into the real estate market. This could be due to a variety of factors such as affordability (thanks to the sky-rocketing real estate prices over the last few years), availability or simply being able to ditch your shovel and lawnmower by having a property management company handle the exterior maintenance of the property. In our real estate law practice, we often close transactions involving condominiums and deal with buyers from all walks of life. However, many people buying a condominium for the first time do not know what is generally involved and what the key attributes of this form of ownership are. As a result, we share some tidbits:
Source of Condominium Law:
It is the Condominium Act, 1998 which governs condominium corporations and under which we find details with respect to how to create a condominium, the structure involved, the rules and regulations, the requirements with respect to owners, tenants, management and many other facets. The main documents that govern the condominium are the declaration and description, the by-laws, and the rules.
In a sense, when you are buying a condominium, you are buying a form of legal ownership in your unit along with an undivided interest in the common elements. This means that typically, the portion of your unit entitles you to exclusive use and ownership. This use is limited within the boundaries of this unit. Your condominium also comprises of areas known as common elements which may include lobby areas, garage for parking, facilities shared between the unit owners such as a gym, party room and the like. These areas may be said to be owned in a communal manner for use of all of the unit owners.
Boundaries and Common Expenses
You may wonder exactly what you own within the condominium complex. To find that out, one must reference the declaration and relevant condominium documents to know the boundaries of their units and the areas that make up the common elements. The declaration will also tell you the percentage of maintenance fees or common expenses that each unit owner is responsible for. It is important to note that in many condominiums, a unit owner will pay for his or her pro- rated share of the expenses paid to maintain the common elements. This could include things like paying for maintenance, development, security, insurance, etc. Although it may sound obvious but generally, the more amenities a condominium has, the more likely it is to have higher common expenses. Typically, a high-rise will have many common element areas whereas a townhouse complex is likely to have less. The real estate scene in Kitchener-Waterloo appears to have many condominiums set up as townhouses and less high-rise buildings which are more commonly seen in and around Toronto. However, as we can see with the development projects that have started as well as those that are in the pipeline, the local skyline is set to adjust even more.
Some condominiums may have parking, storage and lockers set up as separate units just like the physical space in which the buyer is going to own. However, in other condominiums, these areas may be designated as exclusive use for the by virtue of the buyer’s ownership of the unit.
There are multiple types of condominiums that one may come across. You may have a common elements condominium, vacant land condominiums, standard condominiums, phased condominiums etc. They all derive their authority from the Condominium Act, 1998.
Who runs this operation?
Typically, a Board of Directors is elected which makes decisions related to operations as well as money management. The Board may hire a management company to see the day-to-day operations. Some smaller condominiums may not employ a property manager due to budgetary constraints and choose to be more hands on.
The Board also plays a role in ensuring compliance of the rules and regulations in a condominium with the underlying idea being that through collective endeavour, all owners contribute to a good overall standard. The rules and regulations should be reviewed to ensure that you are comfortable with them and to identify any lifestyle concerns.
What is a Status Certificate?
Imagine you were buying shares of a company (publicly listed or private), would you want to know its’ financial merits and ensure it is not involved in any legal trouble? If the answer is yes, one may want to consider making an offer conditional to review of a status certificate by a lawyer for 3-5 days from receipt by the buyer. Either party (buyer or seller – usually with the help of the property manager or their respective real estate agent) can order the status certificate.
In a nutshell, it provides a snapshot of the legal and financial health of the Condominium Corporation. It is often a very large document consisting of multiple components some of which have been mentioned above. It will tell us whether the condominium is facing major financial challenges (i.e. have there been any special assessments imposed recently on top of the current common expenses – which means more money out of your pocket as the potential buyer). It will also disclose if there are any lawsuits that have been filed or any other litigation that the condominium is involved in and whether there is adequate insurance in place.
Further, it will also show details with respect to what kind of money is available for major repairs and replacements. If the condominium you’re buying into is dipping into the negative, it may lead to concerns for the possibility of higher common expenses. This is where the reserve fund study comes in which provides an indication from another professional (engineers) on the likelihood of major repairs. It’s a pretty good idea to let a lawyer look at this before you sign off on the dotted line.
All in all, becoming a homeowner (whether owning a condominium or a house) is major step. It is a good idea to know what it is that you’re buying and have an understanding of what is involved. Be sure to consult a professional to guide you every step of the way. For further questions about your real estate transaction, contact a Kitchener-Waterloo real estate lawyer.
TYPICAL ROLE OF A BUYER IN A REAL ESTATE PURCHASE TRANSACTION
A typical real estate transaction involves multiple parties which may include: the buyer and seller, the real estate agent, mortgage broker, representative of the bank / lender, insurance companies, as well as lawyers on both ends of the deal – one for the seller and another for the buyer. Once you have selected the lawyer to handle the ‘closing’ of your transaction, there are a series of steps that your lawyer will undertake on your behalf in order to complete the transaction. This will involve you and your lawyer to collect information from the above-mentioned parties. Therefore, as a buyer, it is critical that you play an active role in providing information and being accessible to the lawyer to ensure that your closing is completed in a timely fashion.
So what could the lawyer expect of you as the buyer? The information below offers an insight into the sort of things you would likely be involved with:
Provide your lawyers information to:
- Your Realtor: The real estate agent requires details of the lawyer’s office including the name, address, email, phone and fax number in order to send the agreement of purchase and sale to the lawyer’s office.
- Your Bank representative or Mortgage broker: The representative will forward the necessary ‘instructions’ to your lawyer to prepare and review mortgage related documents.
It is important that your lawyer’s information is passed on to the above-mentioned parties as soon as possible to avoid any difficulties or delays or to avoid missing important timelines.
Be in contact with your lawyer:
- It is not uncommon that your phone number and other contact information changes before your final closing date. You must keep this up to date with the lawyer’s office to make yourself accessible for information and / or setting up a meeting. If you provide email as a method of contact, be sure you access it frequently.
- Provide your lawyer’s office details with respect to your intended use of the property. Is it an investment property? Will you be occupying the property? Are you a first time buyer?
Provide any other paperwork to your lawyer:
- If you are buying a condominium, you may have a set amount of time in which your lawyer is to review the status certificate. It is your responsibility to ensure that the lawyer receives a copy of the status certificate and has sufficient time for review. Your realtor may be able to assist in gathering the status certificate and delivering it to your lawyer.
- Your lawyer will review your agreement and also answer any questions you may have regarding the closing process.
Order Fire Insurance:
- Fire insurance is a requirement when purchasing a home (as opposed to a condominium – unless specified). Your lawyer will advise you of the particulars of how to set it up. You will have to speak to an insurance company / representative in order to set it up.
Preparation for meeting with Lawyer:
- It is typical for a potential buyer to actually meet with a lawyer in person for the first time right before closing. Prior to that, you will be in touch with the law office several times by phone to provide or receive information.
- Prior to meeting with your lawyer, you will be required to provide certain information such as: parties who are taking title to the property; the manner in which the parties will take title; name and date of birth details; spousal consent particulars; fire insurance set up; and any other information required to complete your transaction. As a result, keeping continual contact and being accessible is very important.
- Your lawyer’s office will also provide you a draft trust ledger prior to your meeting. Assuming the lawyer has all mortgage instructions on time, he or she will know how much money will be advanced to the trust account prior to closing. The remainder of the ledger will include figures such as legal fees & disbursements, land transfer tax figures as well as adjustments from the seller’s lawyers. The lawyer will also specify the amount you are required to bring in at the meeting (usually by way of a bank draft) along with details of who it is to be made payable to.
- You will also be required to bring with you items such as: 2 pieces of valid and unexpired IDs; Fire Insurance particulars (if not already provided); Bank Draft; and any other necessary documents.
- The meeting will usually take anywhere from 30 minutes to 1 hour – depending on the transaction. Your lawyer will go through all the documents including those required by your lender.
- The meeting is usually held a few days prior to the closing date and will be scheduled in advance.
- This is a great opportunity to ask any further questions.
Pick-up your keys!
- Once registration is complete, the lawyer will contact you to come in to pick up the keys to your new home ! Note that keys will only be released once everything is fully registered.
Although it has been around for over a decade, many clients still wonder what title insurance is and what exactly it covers. A title insurance policy may be purchased for new and existing home owners as well as lenders. Sometimes lenders require that a title insurance policy be obtained prior to releasing the mortgage funds.
The “Title” of a property refers to your legal ownership of it and it could be the case that your property may be subject to claims without you having knowledge of it. The ‘closing’ process of your transaction involves a search of public records to review current and prior ownership of the property as well as previous dealings related to it. These claims may be made by the local municipality, a former owner, and or companies seeking an interest in the property. Historically, lawyers used to provide an opinion on title by conducing thorough and often expensive search procedures. However, with the advent of title insurance, lawyers no longer provide such opinions as their clients are protected by title insurance which they purchase at a lower cost.
Since the buyer has an expectation to receive clear title, your lawyer will require the above issues be taken care of by the seller’s lawyer prior to closing. However, sometimes problems which are not apparent by standard searches or items which would be too expensive to conduct searches for. It is often prudent to purchase title insurance which may cover risks such as:
- existing liens against title;
- irregularities with surveys or public records;
- unregistered easements and right of ways;
- unknown title defects;
- encroachment issues (a structure sitting on a neighbour’s property).
Sometimes a survey is simply not available or may not be up to date and in these situations, it is commonplace to purchase a title insurance policy in order to provide coverage. Another important coverage is for homeowners who suffer losses against title to their property as a result of fraud or forgery.
It is important to note that the policy lasts for the duration of your home ownership and most title insurance companies are willing to extend the policy to those who inherit the property or to recipients of a gift.
Have more questions? Please feel free to contact our office for more information on title insurance and closing a real estate transaction.
Note: The above is general information and is not to be construed as legal advice. Please contact a real estate lawyer for more information.Read More
Sometimes, those who may have trouble qualifying for a mortgage may enter into this type of arrangement with a potential Seller. In a rent to own, the Seller is essentially financing the buyer / tenant’s purchase of the property until you can qualify for the same and buy it.
Often this involves an “option to purchase” under which the buyer is not a buyer in a true sense but only a tenant with an option to buy which he or she may exercise at a future date depending on the contract. This typically involves a deposit to be paid along with a higher than normal rent payment which is structured for a certain time until the option can be exercised. Further, some agreements may be set up so that a portion of the rent payment goes towards the down payment.
It is important to have this agreement structured properly so all parties are aware of their rights and obligations. A buyer has to understand the legal difference between being a tenant and not yet a buyer and the risks he or she faces in relation to both the deposit and the down payment. There are plenty.
It is also important to ensure that a mortgage lender will recognize the “down” payment given to the owner / seller to truly be a “down”. If the bank does not, it may mean that the option to purchase cannot be exercised – thereby leading to a scenario the potential buyer may risk losing their deposit / down payment.
It is important to consult a lawyer to discuss this further
This article is for information purposes only and does not constitute legal advice and does not create any solicitor-client relationship. Please contact your legal representative and accountant.Read More