Real Estate Law
Besides the purchase price of the property, what other costs do I need to consider when buying property?
Land transfer tax applies to most purchases of real property in Ontario and is based on the purchase price. You may qualify for a credit of up to $4,000.00 if you are a first-time home buyer. Most transactions involving a lender require either an up-to-date survey of the property or title insurance and even if a lender is not involved, they are often recommended. Depending on the type of property being purchased, HST may apply. You will also have your legal costs plus HST and disbursements. Lastly, there may be adjustments on closing for things like property taxes and propane.
What is title insurance?
Title insurance is an insurance policy that protects residential or commercial property owners and their lenders against losses related to the property’s title or ownership that are unknown at the time of closing. A title insurance policy may provide protection from such losses as:
- Unknown title defects that exist as of the closing date that you do not know about (title issues that prevent you from having clear ownership of the property);
- Existing liens against the property’s title (e.g. the previous owner had unpaid debts from utilities, mortgages, property taxes or condominium charges secured against the property);
- Encroachment issues (e.g. a structure on your property needs to be removed because it is encroaching onto your neighbour’s property);
- Title fraud;
- Errors in surveys and public records; and
- Other title-related issues that can affect your ability to sell, mortgage, or lease your property in the future.
Your title insurance policy will protect you as long as you own your property, and will cover losses up to the maximum coverage set out in the policy. It may also cover most legal expenses related to restoring your property’s title.
When should I contact a lawyer to discuss my real estate transaction?
Ideally, a lawyer will be contacted as early as possible, but not later than 3 weeks prior to the closing date. This is due to the amount of time that is often required to obtain certain documents such as zoning reports and property tax certificates.
When can I expect to meet with my lawyer?
In most cases, documents are signed a few days prior to closing and it is never recommended to leave signing until the day of closing. Clients therefore do not need to plan to meet with their lawyer on the day of closing, but rather will want to ensure that they will be available to meet with their lawyer a few days prior to closing. In cases where clients will be away, it is sometimes possible for arrangements to be made for clients to sign well in advance or at a different location and this can be dealt with on a case by case basis. Regardless of the circumstances, clients will want to make sure that they can be contacted on the closing date to ensure that any last-minute details can be addressed.
When will I get the keys to my new home?
Although we do our best to complete real estate transactions as early in the day as possible, the exact time of closing is typically dependent upon when the vendor has removed all of their belongings from the property and the bank has advanced the mortgage funding to our office. For this reason, we cannot guarantee a closing time and will contact you as soon as the keys can be released.
How often should I update my will?
You should review your will anytime that there is a material change to your personal or financial circumstances, such as a death/birth in the family or a significant change to your net worth, either up or down. Even without a material change, it is still advisable to read through your will every year to make sure that it continues to reflect your wishes.
Where should I store my will?
The original will is generally kept by your lawyer and stored at their office in a fireproof storage unit. You will be provided with a copy of your will and you will want to store this in a safe and accessible place with your other important personal documents. You will want to inform the estate trustee and/or a trusted family member, as to where the will is stored and the name of the lawyer that has the original, so that the will can be accessed in a timely fashion. It is also important that copies and/or originals of a previous will are destroyed or given to your lawyer to be kept separate, so that the correct version is found and relied upon.
If I only want to make a small change to my will, do I need to have the entire will re-drafted?
In some cases, it is possible for a codicil to be prepared, which allows a simple change to be made to an existing will, without having to change the will itself.
What is a power of attorney and when is it used?
A power of attorney appoints a person or persons to act on your behalf when you lack capacity to act for yourself or, in some cases, you are unable to act for other reasons such as travel. There are two types: 1) a power of attorney for property and 2) a power of attorney for personal care. The powers given to a power of attorney can be limited in scope, such as to handle a specific legal transaction on your behalf or the individual(s) can be appointed in a general manner, allowing them to handle all matters related to your property or personal care.
What is probate and when is it required?
Probate (formally called a Certificate of Appointment of Estate Trustee) is the process whereby the Court certifies the will of the deceased and the appointment of the estate trustee(s). Probate fees (formally called estate administration tax) are payable during the certification process. In order to deal with certain assets (for example, most real estate holdings) probate will be required. However, with careful planning, probate can be avoided in some circumstances.