For most people, purchasing or selling a property might be the most significant investment or financial transaction they would make in their lifetime. While it initiates with a significant decision-making and negotiation process for buyers and sellers, a lawyer’s involvement is essential in addressing legal concerns and ensuring that the legal aspect of the transaction is properly handled. Buying a property might be a complex and confusing process, which is why having a real estate lawyer while buying a property in Ontario is important.
While your real estate agent finds you your dream home and conducts the negotiation for you to have the best deal, your real estate lawyer will navigate you through the legal process of buying a property. A real estate lawyer can provide valuable guidance and assistance throughout the buying process and can help protect your legal and financial interests. Your lawyer will ensure compliance with the terms of your purchase and sale agreement and the legal transfer of the ownership of the property is completed accurately and all legal obligations are met as per the law.
A real estate lawyer is an essential part of a purchase transaction in Ontario. They provide legal guidance and ensure that the transaction is completed smoothly and correctly, minimizing potential risks or issues that may arise.
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 it is signed by both parties, your lawyer will receive a copy of it from you or your real estate agent alongside other relevant documents.
Conducting Searches on the Property
Your lawyer will review the agreement of purchase & sale and related documents, conduct necessary searches on the title of the property and perform due diligence on it. They will also discuss with you any outstanding claims or debts against the property (if applicable) as well as 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 made an overpayment for property taxes, then the amount exceeding their proper portion will be a credit for them; if the seller has already paid it, then 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 transfer of title, mortgage documents and other legal paperwork. They will be in contact with your mortgage broker and lender (if applicable) to receive necessary documents for your mortgage & 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 with you indicating the outstanding shortfall balance that 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 for signing and answering your questions.
ON THE CLOSING DAY
On the closing day, the lawyer will conduct another title search on the property to ensure that there are no last-minute claims registered against the title and the transaction can be processed.
The lawyer will then release funds held in their trust account and send the balance to the seller’s lawyer and pay any money required as per the statement of adjustments. If you are purchasing a new built condo, they would also be getting 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 have received the payment from the buyer’s lawyer, they inform their realtor to release the keys. The realtors will then arrange the handover of the keys. Usually, this occurs before noon on the closing date.
In conclusion, a real estate lawyer is an essential part of 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 that 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.
Insight Law 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.
