Buying or selling a property is a significant investment for most people, involving critical decision-making and negotiation. It is important to involve a lawyer to address legal concerns and ensure that the legal aspect of the transaction is handled correctly. Having a real estate lawyer while buying a property is necessary in Ontario.
Your real estate agent can help you find your dream home and negotiate the best deal, but your real estate lawyer will guide you through the buying process. A real estate lawyer’s assistance is invaluable throughout the buying process and can help protect your legal and financial interests. They will ensure compliance with the terms of your purchase and sale agreement and that the legal transfer of the property’s ownership is completed accurately, meeting all legal obligations as per the law.
A real estate lawyer provides legal guidance, ensuring the transaction is completed smoothly and correctly, minimizing potential risks or issues that may arise.
The video from LawPRO Explains what your real estate lawyer does for you.
The Role of a Real Estate Lawyer
Real Estate Lawyers handle the Conveyancing of the Property, which includes handling the paperwork that transfers the property title to your name, dealing with your mortgage financing, and paying the seller the purchase price. Real estate lawyers review the legal documents and issues related to a transaction, including the legal review of the Agreement of Purchase or Agreement of Sale.
When to Contact a Real Estate Lawyer?
Buyers and sellers should contact a real estate lawyer as soon as an Offer to Purchase is signed. Conveyance of a property can be complex and time-consuming, but real estate lawyers have the experience and expertise to ensure the process is smooth and headache-free. Your Lawyer can explain the terms in plain language, outline the steps you will need to take, and guide you throughout the process.
Before Closing
Retaining a Real Estate Lawyer
Retaining a real estate lawyer for your transaction refers to the legal process starting from your initial consultation up to the closing of the transaction and possession of the property. Your agreement of purchase and sale will include the purchase price, closing date, and any other relevant terms that both parties have agreed to. Once both parties sign it, your lawyer will receive a copy from you or your real estate agent alongside other relevant documents.
Conducting Searches on the Property
Your lawyer will review the agreement of purchase and sale and related documents, conduct necessary searches on the property’s title, and perform due diligence on it. They will also discuss with you any outstanding claims or debts against the property (if applicable) and other legal issues affecting the title.
Your lawyer might also have to obtain a Tax certificate for the property from the municipality where the property is located to calculate your property taxes. In this case, the lawyer will calculate the tax payment portions pertaining to each party based on the closing date, and the amount of the tax will be prorated as per. This means that the calculation will indicate the number of days each party owns the property in the entire year and the amounts to be paid accordingly by each party.
Therefore, if the seller has overpaid for property taxes, the amount exceeding their proper portion will be credited to them; if the seller has already paid it, the buyer will receive a credit towards their purchase price.
Preparing Closing Documents
The lawyer will start preparing the closing documents required to complete the transaction, such as the transfer of title, mortgage documents, and other legal paperwork. They will contact your mortgage broker and lender (if applicable) to receive the necessary documents for your mortgage and financing and to arrange the funding of the mortgage proceeds to the lawyer’s trust account.
The lawyer will also share a statement of adjustments indicating the outstanding shortfall balance you must provide before closing. Finally, the lawyer will prepare all documents for filing in the land registry office on the closing date and book an appointment with you to sign and answer your questions.
On the Closing Day
On the closing day, the lawyer will conduct another title search on the property to ensure that no last-minute claims are registered against the title and that the transaction can be processed.
The lawyer will then release funds held in their trust account, send the balance to the seller’s lawyer, and pay any money required as per the statement of adjustments. If you are purchasing a newly built condo, they will also get a copy of the certificate of possession from the New Home Warranty Program.
The lawyer will also arrange all necessary paperwork for the closing and ensure the correct execution of these documents. Once both the buyer and the seller have completed all necessary documentation for closing, the Lawyer will proceed to record the title deed, which will effectively transfer ownership of the property from the seller to the buyer for the agreed-upon price.
After the sellers receive the payment from the buyer’s lawyer, they inform their realtor to release the keys. The realtors then arrange the handover of the keys, which usually occurs before noon on the closing date.
How Does One Become a Real Estate Lawyer?
To become a real estate lawyer in Ontario, Canada, one must navigate through a comprehensive educational and licensing pathway outlined by the Law Society of Ontario (LSO), the governing body for lawyers in the province. The process encompasses the following key steps:
1. Complete an Undergraduate Degree
While not explicitly required, most law school applicants have completed an undergraduate degree. There is no preferred field of study, but courses that enhance critical thinking, writing, and research skills can be beneficial.
2. Attend Law School
Enroll in and successfully complete a law degree program (Juris Doctor or JD, or Bachelor of Laws or LL.B.) from a Canadian law school recognized by the LSO, or an equivalent program abroad. Coursework should include property law and other related subjects.
3. National Committee on Accreditation (NCA) Assessment (if applicable)
For graduates of non-Canadian law schools, an assessment by the NCA is required to determine whether additional coursework or exams are needed to meet Canadian legal education standards.
4. Complete the Licensing Process with the LSO
- Licensing Examinations: Pass the Barrister and Solicitor Examinations, which test knowledge in various legal subjects, including ethics and professional responsibility.
- Experiential Training: To fulfill the experiential training requirement, complete an articling program under the supervision of a licensed lawyer or the Law Practice Program (LPP).
- Good Character Requirement: To be eligible to practice law, all candidates must demonstrate that they meet the LSO’s good character requirements.
5. Call to the Bar
After successfully completing the above steps, candidates are eligible to be called to the Bar of Ontario, formally admitting them to practice as lawyers in the province.
6. Begin Practicing as a Real Estate Lawyer
Upon admission to the Bar, you can start practicing law in Ontario, specializing in real estate. This specialization may involve handling transactions, property disputes, development projects, and other property-related legal matters. Building expertise through continuous learning and practical experience is crucial.
7. Continuing Legal Education (CLE)
The LSO requires lawyers to engage in ongoing professional development to maintain their legal knowledge and skills, including staying updated on real estate law and practice changes.
8. Maintain Insurance
in Ontario, lawyers who provide legal services to the public must have professional liability insurance. This requirement is enforced by the Law Society of Ontario (LSO) to ensure that lawyers have adequate coverage to protect themselves and their clients against claims of professional negligence. The primary objectives are to compensate for losses arising from a lawyer’s professional services and uphold the profession’s reputation.
For lawyers practicing privately, this insurance is typically obtained through the Law Society’s insurance program, administered by LAWPRO (Lawyers’ Professional Indemnity Company). LAWPRO provides the mandatory professional liability insurance coverage required for practicing lawyers in Ontario. This coverage is designed to protect lawyers and their clients in the event of errors, omissions, or acts of negligence that may occur in legal services.
The mandatory insurance policy includes specific coverage limits and conditions, and lawyers may opt to purchase additional coverage based on their practice’s size, nature, and risk exposure. The insurance premiums may vary depending on several factors, including the lawyer’s practice area, with certain areas of law possibly deemed higher risk than others.
Moreover, lawyers engaged in specific types of law or practice settings, such as those working in-house or for the government, may be exempt from the mandatory insurance requirement under certain conditions. However, they are encouraged to assess their need for professional liability coverage based on their circumstances and potential liability exposure.
In addition, any lawyer who intends to practise real estate law in Ontario is required to carry a real estate practice coverage option.
Becoming a real estate lawyer in Ontario is rigorous and requires a commitment to continuous learning and development. It’s also important to regularly check for updates on requirements from the Law Society of Ontario, as these may change over time.
Summary
A real estate lawyer is essential to a real estate purchase and sale transaction in Ontario. They provide legal guidance and support to buyers and sellers throughout the process, ensuring that all necessary steps are followed and the transaction is completed successfully. By hiring a real estate lawyer, buyers and sellers can have peace of mind knowing that their interests are protected and that the transaction is being handled professionally and ethically.
Working with an experienced real estate lawyer can help ensure a smooth and successful closing.
Buying or selling a home in Toronto might be quite challenging since this may be the most important transaction in a lifetime. While making every effort to ensure the transaction is closed smoothly and on time, our lawyers will also assist you in understanding the details of your transaction and strive to be accessible to you throughout the process. We provide quality legal services in real estate law to individuals and businesses while protecting the best interest of our clients, even in the most complex matters. Insight Law Professional Corporation is committed to providing efficient legal services. If you are buying or selling property or require legal assistance regarding a real estate matter, we are here to help you. Contact us today to learn how we can assist you.
The information provided above is of a general nature and should not be considered legal advice. Every transaction or circumstance is unique, and obtaining specific legal advice is necessary to address your particular requirements. Therefore, if you have any legal questions, it is recommended that you consult with a lawyer.
