Protecting your investment
In Toronto, Oakville, Mississauga, Hamilton, and Milton, buying or selling real estate is an expensive and complex process. Whether you’re a first-time home buyer or a seasoned real estate investor, you want to be assisted in your purchase or sale by a knowledgeable and experienced real estate lawyer.
A real estate lawyer’s services are critical to protect your legal rights and help you understand your legal obligations throughout the purchase or sale of your property. More than that, a real estate lawyer is there to provide you with guidance and advice on topics which may include: (a) who should own the property; (b) how should the property be insured; (c) the kind of mortgage you should get; (d) how you should hold title to your property; (e) whether your sale qualifies for the principal residence exemption; and (f) whether the transaction is subject to HST.
When should you hire a real estate lawyer?
Residential real estate lawyers are a vital part of buying or selling a home. For many people, the dilemma is whether they need to get the residential real estate lawyer involved in the property transaction process from the beginning or wait till after they have signed an offer of purchase.
The real estate lawyer should get involved in the process from the beginning; as early as when you make up your mind to purchase a new home or put your residential property up for sale. This way, they can protect your interests from inception and help you take on a real estate transaction’s challenges.
You need a real estate lawyer at every point of a home sale and purchase. Here are some specific scenarios you should consider hiring a real estate lawyer:
What are the duties of a residential real estate lawyer?
Review the offer to purchase
Hopefully, you’ve taken our advice and retained a real estate lawyer before signing the offer to purchase. However, whether you retained a lawyer before signing the offer or after, the first thing that the real estate lawyer will do is review the offer to purchase. The real estate lawyer will explain your rights and obligations under the agreement. The real estate lawyer will also determine, based on the review, what legal documents need to prepare and what other legal steps to take to complete the transaction.
Investigage title and description
If you’re a buyer, you want to ensure that you receive a title of the same quality as that required by the agreement of purchase and sale or, if appropriate, any mortgage instructions. Typically, the requirement is that the purchaser will receive a good and marketable title. A real estate lawyer will perform relevant title searches and will review the title searches to identify any problems with the title and potential solutions to rectify the title.
A residential real estate lawyer may also review zoning requirements for your property, particularly if you plan to change the property’s use after closing from its current usage. In such an instance, a residential real estate lawyer will undertake due diligence to determine if the future intended use of the property by you is or will be lawful.
Search for Executions
A real estate lawyer will search for writs of execution as part of the due diligence process in purchasing a property. A writ of execution is a court order or other statutory authority that permits a creditor to instruct a sheriff to seize and sell assets/property of a debtor to satisfy an unpaid debt. A writ of execution can include a writ of seizure and sale of land. Writs of execution could jeopardize land sale as the purchaser will not buy a property subject to a writ. The real estate lawyer acting for the buyer will work with the lawyer acting for the seller to clear any writs of execution to obtain clear title to the property, which is not subject to any executions.
Make requisitions on title/ reply to requisitions
Once the buyer’s lawyer has completed the required due diligence, the lawyer will prepare a letter of requisitions addressed to the seller’s lawyer requesting that the seller correct any deficiencies identified during the due diligence by the buyer’s lawyer. The seller’s lawyer will review the letter of requisitions, and the lawyer work with the seller to rectify any legitimate requisitions raised by the buyer’s lawyer.
Review mortgage instructions
If you’re financing your purchase, the real estate lawyer will also review the mortgage documents provided by the lender with you. The lawyer will advise you of your rights and responsibilities under the loan arrangements you have made. Some of the items that the lawyer will review as part of this process include: (a) whether the loan has a fixed or variable rate of interest; (b) the rate of interest on the loan; (c) what security you must provide in exchange for the loan; (c) what prepayment privileges, if any, are available to you; and (d) the events which constitute a default under the loan.
Arrange for title insurance
If you’re a buyer, your lawyer will likely also arrange for title insurance for your property. While title insurance is an “optional” policy, it is often necessary to order it, especially when financing is required to purchase the property. Title insurance protects you against problems with the title that existed before closing. While the buyer and their lawyer should undertake a thorough review of the property to ensure that the purchaser obtains the title they contracted for, it isn’t always possible or economically feasible to undertake all searches necessary to conduct thorough and complete due diligence. For example, in most sales of used properties, any survey that a buyer will provide will often be outdated and will not accurately reflect all structures and improvements located on the property. Obtaining an up-to-date survey is expensive and also time-consuming. If you don’t obtain an updated survey, you may discover after closing that an improvement you believed was on your property encroaches onto a neighbour’s property. Also, some issues are nearly impossible to identify before closing. For example, a trade-person may register a construction lien against a property you purchased after closing for work done on the property before closing. Title insurance may provide the protection you need in such instances. A title insurance policy can help protect you against any losses you may suffer due to title-related problems, access issues, and title fraud. Most policies will also cover legal fees if a lawyer is required to correct any problems.
Whether you are a buyer or a seller, the signing of the offer to purchase is only the first step in a residential real estate transaction. Your residential real estate lawyer will prepare the necessary documents to complete the transaction.
Review and sign documents with client
Your real estate lawyer will meet with you after the lawyer has prepared all necessary documents. Before signing the prepared documents, the lawyer will review the documents with you to ensure that you understand: (a) your obligations; (b) your rights; and (c) what you are purchasing. During this meeting, you will have the opportunity to ask the lawyer any questions relating to the closing process.
Attend to the closing
Once you have signed all required documents, your lawyer will close the transaction. If you’re a buyer, your lawyer will send the closing funds and required documents to the other lawyer and request that the seller’s lawyer releases the title’s transfer to the property for registration. If you’re a seller, your lawyer will send your closing documents and keys to the buyer’s lawyer. Upon receipt of the closing funds and buyer documents, your lawyer will release the property’s transfer for registration to the buyer’s lawyer. If you’re a seller, your lawyer will also arrange to pay out any existing mortgages and other encumbrances which you agreed to discharge as part of the closing process.
Provide reporting on transaction
Once the transaction is complete, your lawyer will prepare a reporting letter to you and, if necessary, to any lenders summarizing the transaction. As part of the reporting, your lawyer will provide you with copies of all documents signed by you and the other party.
How do I choose the best real estate lawyer?
- How long have they been in practice? To help you navigate the complex residential real estate terrain in Ontario, you need a real estate lawyer with proven years of experience.
At Beganyi Professional Corporation Law Firm, we have been in practice for over thirteen years. We have helped many individuals purchase and sell their residential real estate properties during that period. Not only are we well versed in representing individuals, we also provide legal services to developers, making us qualified to understand the residential real estate process from start to finish. To find out more, visit our about us page.
- What are the fees/costs? The legal fees for hiring a real estate lawyer in Ontario vary depending on what you need the lawyer to do, the type of purchase transaction, and the lawyer’s experience. Some real estate lawyers charge flat fees or fixed prices for various aspects of the residential real estate legal process, while others have hourly consultation rates.
Our firm offers competitive rates for residential real estate transactions. Our legal services for purchase real estate transactions cost $849 plus HST, which covers a review of the purchase agreement, review of title and off-title documents, and other required services. Retaining our legal services for sale transactions will cost $699 plus HST and covers preparation of sale documents, discharge of one mortgage, and other services as required. Our legal fees do not include taxes, disbursement, and applicable taxes on those disbursements. Learn more about our residential real estate fees here. We are happy to provide you with a no-obligation.