Buying

Congratulations you’ve bought a new home! The next step is to retain a real estate lawyer.

The “acknowledgment” section on the signing page gives your realtor the authorization to send the purchase contract to your legal counsel and this is usually handled by the real estate office. Your first communication with your lawyer will be a letter or an email outlining what documentation he or she may need from you. Your lawyer’s role is to handle many transactional details from the time that your sales contract is firm until the closing. If all goes smoothly you may not have too much contract with him or her but if any issues arise you, your realtor and the lawyer will be working together to resolve them.

Your lawyer will advise you regarding the expenses you’re likely to incur with respect to the closing procedures including land transfer tax and any disbursements. If all the conditions in the agreement have been met and the offer is firm your lawyer will proceeds to investigate the title to the property. Initial searches include utility searches, property tax searches, building, zoning and planning searches and registered title searches. Your lawyer will also advise the utility departments of your name and the scheduled closing date and request that meter readings be done on the closing date so the final bills can be sent to the seller. A tax certificate is requested by your solicitor to verify the amount of the current year’s taxes and to ask about any arrears and outstanding charges for taxes. Your lawyer may also write to the building and zoning department to get the full particulars of zoning by-laws and restrictions and permitted uses (so you’ll know if you’re allowed to operate a business from your home or build a huge deck for example). If a survey was provided with the listing make sure your lawyer has a copy of that. If no survey exists, tell your lawyer so he/she can advise how your interests can be protected through title insurance. A title search of the property is begun in the Land Registry Office to make sure the seller is the true owner of the property, has the right to sell you the property and that the property is not subject to any encumbrances, encroachments, easements, liens, agreements or mortgages that were not disclosed in the agreement or purchase and sale. If you were unaware that a major easement existed at the time that you purchased the property this is a big issue. If this type of issue arises this is when you will be happy that you selected the right lawyer (I have a list under “resources” that you may refer to). This search has to be completed prior to the requisition date (title search date) shown on your agreement of purchase and sale.

Other important functions of your lawyer include:

  • A search of executions in the appropriate sheriff’s office to ensure that there are no executions against the prior owners of the property that would affect your title
  • Prepare and deliver a letter to the seller’s lawyer requesting that any items revealed in the initial searches be dealt with on or before closing
  • Review the contents of the mortgage commitment letter your bank will prepare when you arrange your financing and consult with you about the results of signing it
  • Advise you of any closing-day costs related to mortgage financing when your financial institution provides you with a final mortgage commitment letter
  • Certify title of the property to the financial institution on closing
  • Advise you about any government programs designed to assist home buyers that would apply to you including land transfer tax rebate programs, RRSP plans, and CMHC 5% down payment information

Unless you are financing your purchase with 100% cash you must have fire insurance to cover the property from the day of closing. Let your insurance broker know the name, address, phone number and fax number of both your lawyer and  the financial institution providing your mortgage. Your lawyer needs a letter confirming that insurance coverage is in place effective on closing – this is super important because the bank will not advance the funds to close your purchase until they know that you have property insurance.

On closing your lawyer will transfer the funds to the seller and give you the keys to your new home.  Congratulations you can now move in!

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