Real Estate Law

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For Buyers

The process of buying a home, particularly a first home, can be confusing and overwhelming. We strive to communicate with you throughout the process to ensure that you know what to expect and that the purchase goes smoothly. See below for an overview of the typical steps in the purchase of a new home.

At The House Lawyer a typical sale includes:

The Agreement of Purchase and Sale

If you are working with a real estate agent, your agent will assist you to prepare the offer for the purchase. Occasionally the offer will be conditional on review by your lawyer. If that is the case, and you have selected Carrie as your lawyer, the agent will send the paperwork to our office and we will review the offer and contact you to discuss it. You will then contact your real estate agent and advise them if you are satisfied and ready to waive that condition.

Once the offer has firmed up, the real estate agent will send the paperwork to our office where we will open your file. You will then be contacted by either Christine, or Judy.

How to Hold Title to the Property

If there is more than one owner of a property, we will need to know how you would like to hold title. There are two ways to hold title to a property with another person: as joint tenants, or as tenants in common. If you are joint tenants, when one of you dies, the survivor becomes the owner of the property outright. The death of the first joint tenant extinguishes his or her right to the property and full ownership passes to the surviving joint tenant. This happens regardless of what is written in the deceased owner’s will. Typically, married couples will hold property as joint tenants.

If you hold title to the property as tenants in common, each of the co-owners owns a specific percentage of the property. If one of the co-owners dies, his or her share does not pass directly to the surviving owner, but rather to the beneficiaries named in the deceased owner’s will.

Each scenario is unique, and sometimes there are more than two owners going on title. We will be happy to discuss with you the various options for holding title and the reasons you might choose one or the other.

Financing

In addition to how you wish to hold title, we will need to know if you are getting a mortgage for the property and if so, who the lender is. We need this information as early as possible so that we can communicate with the lender and get the paperwork in place.

Document Review and Legal Advice

We will review all legal documents related to the property transaction. This includes the Agreement of Purchase and Sale, any amendments, condo related documents, if applicable, title documents, and other relevant documents.

Title Search

One of the most important tasks we will perform is conducting a title search to ensure that the seller has a legal right to sell the property and that there are no outstanding claims or liens on the title.

Closing Procedures

We also oversee the closing process, which involves transferring funds, ensuring all conditions of the sale are met, and facilitating the exchange of legal documents to transfer ownership.

Registration of Documents

After the purchase is complete, we register the necessary documents with the appropriate land registry office to officially transfer the title to the buyer.

Title Protection

Title insurance is a policy that protects the buyer and their lender against potential issues with the title to the property. This could include matters that may have been discovered by an up-to-date survey, hidden title defects, liens, or other challenges that were not discovered during the title search. Your lender will also require title insurance before advancing funds under a mortgage. The cost of title insurance is often much less than it would cost to have your lawyer perform all of the additional searches and due diligence you would need if you did not secure your title with title insurance. Title insurance provides peace of mind to the buyer by offering financial protection against unforeseen title issues. It is a one-time premium paid at the time of purchase.

Setting up utilities

You are responsible for contacting the local utility companies to set up an account at your new home. Set out below are the telephone numbers for the local utility companies:

For hydro and electricity: Lakefront Utilities • 905-372-2193 • www.lakefrontutilities.on.ca

For natural gas: Enbridge Gas • 1-877-362-7434 • www.enbridgegas.com

For gas water heater rental: Reliance Home Comfort • 1-866-735-4262 • www.reliancehomecomfort.com

Signing the closing paperwork

A day or two before closing, you will need to meet with us to sign the closing paperwork. If you will not be available to meet with us in person to sign the closing documents, you must advise us as soon as possible so that alternate arrangements can be made. On or before the day that you sign the closing paperwork, you will receive a Funds Summary which sets out the amount of money we require from you in order to close the transaction. If you are not getting a mortgage, this amount includes the balance due on closing (the purchase price of the house less any deposit paid and adjustments made) plus our legal fee, disbursements and the land transfer tax. If you are getting a mortgage, this amount will be the difference between what you are getting from your lender, minus any deposit you paid. Don’t forget there may be land transfer tax to pay and your legal fees.

On the day of closing

On the day of closing, the mortgage money will be directly deposited into our trust account. Using this money, along with the funds we have received from you, we will write a cheque to the seller’s lawyer. The house keys may be exchanged via the lawyers office but often the keys will be made available in a lockbox at the property for your convenience. Unfortunately we cannot guarantee what time of day the transaction will close. Shortly after closing you can expect a detailed form from us outlining the transaction and confirming the successful completion of your purchase.

Land Transfer Tax

In Ontario, you are required to pay land transfer tax when you purchase property. As of January 1, 2017, the tax rates on the value of the consideration are as follows:

• Amounts up to and including $55,000: 0.5%
• Amounts exceeding $55,000, up to and including $250,000: 1.0%
• Amounts exceeding $250,000, up to and including $400,000: 1.5%
• Amounts exceeding $400,000: 2%
• Amounts exceeding $2,000,000, were the land contains one or two single family residences: 2.5%.

Click here for a land transfer tax calculator

If you are a first time home buyer, there is a rebate on the land transfer tax. As of January 1, 2017, the maximum amount of the refund is $4,000. This means that no land transfer tax would be payable by qualifying first-time purchasers on the first $368,000 of the value of the consideration for eligible homes. First-time purchasers of homes greater than $368,000 would receive a maximum refund of $4,000.

Please be sure to let us know if you think you might qualify for the first-time home buyer’s rebate.

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