Professional legal assistance in a real estate transaction is essential|
Even if you have a lawyer who will see to your business
get familiar with legal aspects of the transaction, so you
can stay in
Agreement of Purchase and Sale
Your lawyer should review the agreement and consent to all changes made during negotiations. Have the lawyer's final approval before signing the document.
agreements on resale homes are more routine lawyer's review is especially important when you buy a new house. Contracts on new homes contain many clauses which favour
builder's interest and builder's sales reps don't have the same legal obligations to buyers as licensed real estate agents.
Property Title Search -
Buyer's lawyer will search property title at the local land registry office to make sure sellers are legal owners and there are no unsettled claims against
Building & Zoning Search -
If the transaction isn't title insured, the lawyer will probe the property survey against municipal bylaws and records, to disclose any infractions.
The survey has to be sent to the local municipality along with a request for details about the building and the zoning of the property. This inquiry will reveal compliance with municipal specifications about permitted construction and uses of the property.
The lawyer should also examine data on occupancy permit, completion requirements, outstanding work orders and subdivision agreements.
Utilities & Property Tax Search -
This service includes inquires about utilities (gas, water, hydro) payments and property tax. Your lawyer will make sure that outstanding balances are cleared
by previous owners before closing day. If anything was paid beyond the closing day buyer's refund has to be passed to the seller.
Title Opinion -
Survey analysis along with property searches can expose title defects before it's too late. Once they are completed the lawyer will give you opinion on the quality of the title.
That's why lawyer's participation is so important. Without legal help you can buy someone's problems which will become yours along with the house.
When title defects are found sellers and buyers can work with their lawyers towards removing them. If they can not be removed the lawyer will advise you whether to proceed with the transaction and at what risk, or whether to walk out.
Title Insurance -
If you decide not to survey the property and buy title insurance instead you will not need lawyer's opinion on the title. However, you still need legal assistance throughout closing. Furthermore, title insurance
policies are not universal - they provide varying coverage which should be discussed with your lawyer.
Title insurance can be purchased only through a lawyer.
That's because lawyers continue to search the title and provide their title opinion to the insurer. Building and zoning search is not necessary since possible title
defects it can detect are covered by the insurance.
Mortgage Agreement -
Lenders often let the buyer's lawyer to work on their behalf as well, to reduce your cost. Upon receiving mortgage conditions from your lender the lawyer will ensure that
requirements for appraisal, survey (title insurance) and home insurance are met.
Then, he or she will prepare documents,
send them for approval and make all necessary arrangements so funds can be released.
Land Transfer Tax and GST -
If applicable in your province the lawyer will calculate the amount of the land transfer tax you have to pay.
When you buy a new home he or she will also determine
whether you should assign your GST rebate to your builder. Usually GST tax is included in the price, and builders advertise prices reduced by the amount
of the rebate. In this case the agreement of purchase and sale includes an assignment of the rebate to the builder.
Executions are court sanctioned claims filed by creditors against debtors. Buyer's lawyer has to make sure there are no executions against the seller (or prior owners)
because they would jeopardize property title. This search is also performed against buyers who borrow funds to secure lender's interest in the property.
Closing Day -
On that day you will become the new owner of the property. In order to make it happen the lawyer has to make sure that your seller is paid in full and property title
transferred to you.
How to Hire a Lawyer
Lawyer's Experience -
Don't take any chances with beginners or someone who doesn't specialize in real estate. Hire only an accomplished professional practicing in this field for considerable number
of years. When you talk to a lawyer don't be shy to ask about credentials, years of experience and type of real estate he or she mostly deals with.
Legal Fee -
Do not shop necessarily for the lowest fee. If you think about
savings you should also remember how much you can loose when something goes wrong. It's simply not worth it. Experienced lawyers charge higher fees but they will give
you peace of mind and security.
Services and Cost -
Ask what specific services will be rendered and at what cost, including service fees and disbursements. If you hire a lawyer offering fixed closing price ask whether you will have to pick any extra cost.
Service in Your Language -
Complexity of real estate jargon may be a disturbing concern. If you are not comfortable with English, consider finding (if possible) a lawyer speaking your native language.
Finding a Lawyer -
Start your search from a social circle of trusted individuals whose opinion you value and who had a positive experience with a real estate lawyer. You can also ask your lender if they can recommend some good lawyer - they are genuinely interested that you purchase a property with a good title.
Another source you can use is
Lawyer Referral Service, usually sponsored by local legal associations. Referral office can help you find real estate lawyers who are registered with
the Service and practice in your area.
What if I don't have a lawyer yet
You can secure your deal by making the contract to buy conditional on your lawyer's approval.
Make sure to reserve enough time to contact your lawyer since objections can be made before the specified deadline.
What infractions can be exempted
When zoning bylaws change property upgrades to comply with the new laws typically aren't required and the property is said to have a 'legal non-conforming use'.
This special exeption status can continue only as long as the property is not expanded or changed.
Owners who make additions or rebuild are required to remove
all non-conforming features, and the entire property will have to comply with existing bylaws.