FAQ

Real estate lawyer Toronto most frequent questions and answers

PURCHASE

You do not need a home inspection but it is strongly recommended to get a home inspection done before buying a property. Ideally, it should be a pre-condition before the Agreement of Sale and purchase becomes binding. The inspection report will reflect if the property meets the building and zoning laws. The inspection may not reflect hidden defects since it is a visual inspection of the property, such as plumbing, foundation, electrical wiring, ventilation, and roof conditions, to name a few items. A home inspection cost may range from $300 to $600, depending on the property’s shape and size. 

You need a real estate lawyer to buy a house in Toronto. A real estate sale or purchase transaction cannot be completed without hiring a real estate lawyer. Once you have decided to buy, you need to make an offer to purchase by sending a draft agreement of purchase and sale to the vendor. If the seller accepts the offer with or without conditions, you need to retain a real estate lawyer in Toronto to complete the transaction.

Generally speaking, one lawyer cannot represent both parties in a real estate transaction in Ontario. Only in exceptional and limited circumstances, one lawyer is permitted to represent both parties, for example where the transferor and the transferee are the same but the legal status of the property is to be changed such as severance of land.

We have a detailed article on this topic “Can a Real Estate Lawyer Represent both buyer and seller” Click Here.

Under the Ontario New Home Warranties Plan Act and Regulations, the Ontario government established a private corporation called Tarion in 1976 to protect the right homeowner’s owners by regulating builders. The warranty covers deposits made as a down payment made to the builder.

The warrant also covers if in the event the builder delays the closing without giving proper notice. After you move into the property, you can opt for one, two year and seven-year warranties.

First-year Tarion warranty covers defects in material, unauthorized change in construction or finishing, such as colours and styles, code violations.

Two-year Tarion Coverage includes water penetration to basement or foundation walls, windows, doors, plumbing, electrical, heating systems, and exterior work damage.

Seven-year Tarion Coverage includes major structural defects to the property such as damage to load-bearing walls or beams.

Click Here to Learn More.

On the Closing Date, we can only release the keys once we have registered the property in the purchaser’s name. In other words, we can only release keys to our clients once they become the property owner. It is common for mortgage funds to arrive by 4:30 pm on the closing date, thereby resulting in a delay in releasing the keys. If we receive funds within time, then we can release keys between 4 pm to 6 pm.

Once we have registered the property in your name, we will email you a copy of the transfer and mortgage (if applicable) and will advise you that the keys are ready for pick up. The hard copies of all the documents signed, including title insurance, statement of adjustments, trust ledger and our report on the title, will be available for pick up within two to three weeks from the date of closing.

Yes, we usually send a draft set of documents ready for signatures a day before our appointment. Please take the time to check the name spelling and registration status—Example Joint Tenants or Tenants in Common. Please do not be alarmed if you do not understand that legal jargon. At the time of our appointment, one of our real estate lawyers Toronto will discuss all documents you will be signing in detail.

Suppose you are purchasing with a mortgage. Then, in addition to your deposit made at the time of the offer to purchase, you need to make arrangements for your legal fees, land transfer tax, title insurance, government registration cost, plus any shortfall towards your downpayment. We cannot give you a specific amount until we have received a statement of adjustments from the seller’s lawyer and mortgage instructions. Both sets of documents arrive a few days before closing. In some cases, a few hours before closing. Therefore, we cannot give a specific amount until all documentation is complete.

Yes, our real estate lawyer in Toronto can sign up clients online, provided we can verify your original IDs. In some cases, we may need to meet in person to verify your IDs and witness your signatures in original. 99% of the real estate transaction can are online. If you have scheduled an online meeting with your lawyer, please ensure you have access to a smartphone, desktop, camera, mic and high-speed internet. Online real estate meetings could be delayed due to setup issues on the client-side.

A Seller is under an obligation in law to disclose any defects within their knowledge, such as revealing if the property is dangerous or likely to be dangerous or unfit for habitation (i.e.: mould issues etc.)

A seller is not liable for a hidden defect unless the seller had full knowledge of such a defect. The seller is also under an obligation to disclose known defects from the date of signing the agreement until closing.

The Police maintain a list of marijuana grow operations, but there is no public database of suicides, murders or other crimes.

A seller must disclose if a grow op when:

    1. there is an actual material latent defect of which the seller knows or ought to have known;
    2. the buyer asks a specific question or expresses a specific concern;
    3. the Agreement of Purchase and Sale contains representations that the property was not used as a grow op or for criminal activity; or
    4. there is some statutory and or regulatory requirement for such disclosure to be made.

As a buyer, you should ask as many questions as possible and complete due diligence on the property prior to signing the Purchase and Sale Agreement. Signs are difficult to spot; it is recommended to get a home inspection done and get it in writing from the seller that the property was not used as a grow op. 

Check  RECO website for Signs of Grow Ops

No. Land Transfer Tax is paid only at the time the property is being transferred from one party to another, whereas you have to pay property tax every year to the local municipality, as per the tax bill.

CLOSING COSTS

Closing costs’ is the term used to refer to the expenses and legal fees required to be paid on closing. This might refer to the closing adjustments like prepaid property taxes, legal fees etc. 

Closing Costs when buying a property. 

  1. Land Transfer Tax Ontario
  2. Real Estate Lawyer Toronto Fees
  3. Real Estate Law office disbursements
  4. Title Insurance 
  5. Provincial Sales Tax (PST) on CMHC mortgages Insurance.
  6. Fire Insurance
  7. Registration of Transfer $78 & Mortgage $78
  8. Stewart Assyst Charge $28.30 (Applicable only if mortgage instructions are sent electronically to the lawyer)
  9. Bank Charges

Click Here to Learn More About Closing Cost when buying a house.

Closing costs is a loose term used to cover a wide variety of costs, expenses, and for this reason, it will depend on whom you are asking? If you were to ask an owner, he/she might include the cost of moving, whereas this is not the actual closing cost. A closing cost when selling a house includes:

  1. Realtor’s commission
  2. Real Estate Lawyer Toronto Fees for sale
  3. Real Estate Law office disbursements
  4. Law Society Levy & Mortgage Payouts

Click Here to Learn More About Closing Cost.

The purchaser’s responsibility is to pay any closing costs, and it is paid at the point of closing. Closing costs is added to the purchase price.
For example, the balance purchase price is $500,000/- and your closing cost is $4,500, then this is the amount that will be added to the amount that is payable to the real estate lawyer at the time of closing.
This amount will be distributed to the relevant parties by your real estate lawyer in Toronto on the date of closing. The amount will also include any legal fees and disbursements owed to your lawyer. Your lawyer from the closing costs will also pay Land transfer taxes.

The average closing cost on a property in Ontario can range from 1.5% to 4% of the property purchase price. This cost is to be paid by the date of closing.

Depending on the type of transaction, closing costs will vary from resale purchase to a builder purchase. Builder purchase closing costs are higher because, in addition to standard closing costs, the statement adjustment includes additional expenses such as: 

  1. Tarion warranty.
  2. Development Charges.
  3. Paving of driveways & trees planted.
  4. Property tax adjustment,
  5. Interim Closing Legal Fees and Interim Occupany Fees (Condo Only)
  6. Extension fees
  7. NSF Fees for cheques deposited(if there are any),
  8. Installation and connection fees for meters etc.
  9. Unpaid interest (Condo Only) 

When it comes to condos, interim closing legal fees, interim closing occupancy fees, unpaid interest on the balance to pay for closing is an additional cost. Property taxes are prepaid on an estimated basis only since the property is newly built. The fuel oil tank (if there is one) and two months prepaid maintenance added to closing costs for a new built. Don’t forget the seller’s lawyer fees and disbursement added in the statement of adjustments as closing costs for a new build.

 In the case of a resale home, there will be none of these costs.

In addition to standard closing costs, some optional closing costs may apply when buying a house in Toronto. 

  1. Appraisal Fees. The bank charges this fee at the time of mortgage approval, usually between $300 to $400 for residential properties.
  2. Home Inspection. We recommend getting a home inspection before buying a property; it may cost between $300 to $600. 
  3. Property Insurance or Fire Insurance. When you buy a property, you need to get fire insurance for your home and its contents. 
  4. Utility Bills and Property Taxes Prepaid. If the seller has already prepaid utility bills or property taxes, the buyer would have to reimburse the seller at closing. 
  5. Moving Cost. Although this is not the official closing cost as far as a real estate lawyer is concerned. Despite the fact, the purchaser will incur expenses related to moving.