Although the above section briefly describes your Lawyer’s role in closing the purchase transaction, the following are key aspects to note of the transaction:
REVIEW OF AGREEMENT OF PURCHASE AND SALE
The Agreement of Purchase and Sale, or merely the “Agreement,” is an essential document that should contain all the concerns related to purchasing or selling a home.
It includes, among other critical items, the property’s price and directions on how to pay, as well as a detailed description of the property and other conditions of the process.
The lawyer should thoroughly analyze the Agreement before the buyer signs it, and if the buyer has any questions about the Agreement of purchase, they must ask their lawyer
New build construction contracts or Agreements require a lawyer’s approval as to the form and content. However, this is not a practice for a resale home.
Agreement of Purchase and sale sent to the lawyer after it is signed by the parties, where all conditions to the Agreement are satisfied, has no scope for a lawyer’s review. If this is the case, the lawyer may not help the client but will surely identify any legal issues to protect their interest in the transaction.
A Title Search reveals the instruments registered against a property. Examples of standard instruments include the Transfer, a Charge, Notices, Bylaws, etc. When purchasing a home, the buyer must know what instruments will be remaining on the home following closing.
Your Lawyer will conduct a Title Search in every transaction. Sometimes the lawyer may have to do multiple title searches to ascertain any liens, charges, mortgages, caveats or notices such as notice for sale or power to purchase by a bank, etc.
Suppose the buyer is acquiring a loan for the transaction. In that case, the lender will necessitate that a lawyer looks at the land records before the transaction’s conclusion and report to the bank any concerns the lawyer may have.
After inspecting all of the above, the lawyer will report to the buyer, the lender, and provide copies of the Land Registry title.
Suppose the buyer is not obtaining a loan. In that case, their real estate lawyer in Ontario will conduct title searches, review title transfer documents from the seller, and make sure no claims are registered against the property.
Title insurance protects against genetic vulnerabilities in real estate titles, which may not be apparent from the title search.
Your Real Estate Lawyer cannot guarantee against latent defects in the title that are not registered; hence, these are not easy to discover from a review of the public records.
Such latent defects in the title may include fake deeds, missing inheritors, clerical mistakes, issues with payment of property tax, condo fees, the property’s boundary, etc. A title insurance policy will protect you, the buyer, against such defects.
It is also crucial to note that if you are purchasing a home with a mortgage, your lender will make it a condition for financing to obtain lender title insurance to protect their interest.
Simultaneously, the purchaser is also strongly recommended to buy the owner’s title insurance policy.
Suppose a buyer purchases an owner’s policy at the same time as the mandatory lender’s policy. In that case, the title insurance company may give considerable concessions toward the cost of the buyer’s title insurance policy.
Your Lawyer will make the Title Insurance arrangements and confirm you have a legal title upon finalizing the closing.
This is to provide peace of mind to the buyer and prevent frustrating and costly situations in the absence of title insurance protection.
Our Real Estate Lawyer is registered and on the approved lawyer’s list with leading title insurance companies such as FCT (First Canadian Title) & Stewart Title & Chicago title.
Your lawyer may also be responsible for acquiring a metropolitan Tax certificate for the property from the town or city where the property is situated; this is done to calculate property taxes.
If the seller has overpaid their property taxes, then the amount will be a credit to the seller; if the seller has not paid the property taxes, then a credit is given to the buyer towards their purchase price.
The lawyer’s responsibility is to ensure that you only pay property taxes for the number of days you own the property and not for the entire year.
CLOSING THE TRANSACTION
Before the closing date, a final Trust Ledger showing the statement of accounts and the copy of the title, land transfer tax, and other reports will be provided to the buyer by the lawyer; these documents will contain a brief description or detail of monetary aspects regarding the transaction.
Along with the final statement, the lawyer will explain many other documents to the buyer, including the details of any mortgages/loans.
The Lawyer for closing is responsible for making arrangements for all necessary closing paperwork, fixing the closing schedule, explaining all essential closing documents and ensuring the documents are all executed correctly.
After the buyer and the seller have completed all the closing documentation, the lawyer will record the title deed, which is how the seller conveys the house’s title to the buyer for the determined price.
After that, the lawyer will exchange legal documents and keys with the seller’s lawyer.
At this point, your transaction will be complete. Your Lawyer in will complete the necessary reports for your transaction, and, following this, the lawyer’s role in the transaction will come to an end.