Are you looking for your first home, but you aren’t sure of the steps involved to complete your purchase?
Don’t feel bad. The first-time home buying process can be both scary and confusing, but when you finally find the right home for you and your family’s needs, it feels very rewarding. You finally made it and you should feel proud of your accomplishments.
However, before you get to that point, you’re still wondering how you’re going to get there in the first place. The answer is simple: by working with real estate professionals whose goals align with your own. And no, that doesn’t just mean a real estate agent. You’ll also need to retain a real estate lawyer to complete your purchase.
What Is Real Estate Law?
Real estate law governs the legal aspects of buying and selling land and properties. It’s not just up to real estate agents to see the transaction through. While they help sellers list and market their homes and help buyers look for the right home qualities, real estate law is about the actual ownership and transfer of ownership of the property itself. So, if you’re wondering “what does a real estate lawyer do in Ontario and do I need one?” the answer is yes. A real estate lawyer handles all of the necessary legal steps and documents involved with a real estate transaction which we’ll get into more detail below.
What Do Real Estate Lawyers Handle?
You can expect your real estate lawyer to assist with the following:
Reviewing Documents and Protecting Your Interests
Regardless of whether you’re buying your first, second or third home, you likely don’t understand legal jargon. This means that you won’t understand everything laid out in the contract. This is where your lawyer comes in. A real estate lawyer can help clients understand the terms of their Agreement of Purchase and Sale, what the next steps are, negotiating terms on your behalf if possible, and handling other legal documents. If you are buying a condominium, your real estate lawyer will be also the one reviewing the status certificate and providing you feedback and legal advice.
In short, real estate lawyers have your best interests in mind and is essential in the process of purchasing your property and transferring ownership of the property to you.
Title Searches and Requisition Letters
A real estate lawyer is responsible for completing a title search of your purchase property before closing. Any issues they find on title will be brought to the attention of the lawyer of the Seller to rectify before you complete the transaction and for any existing liens and encumbrances to be deleted. Your real estate lawyer also helps you understand any easements, restrictive covenants, and other items on title to your property.
Purchasing Title Insurance
Title insurance often gets confused with home insurance, but the two are very different. Title insurance is what protects the property owner and the mortgage lender from things that have happened before closing that could affect your ownership rights to the property or the mortgage lender’s priority. While it’s not mandatory in Ontario, it’s highly recommended in case there are any defects in the title, forgery, fraud, or any other legal issues that would affect your ownership rights and cover many issues that may not be revealed in a title search. When title insurance is ordered to close your real estate transaction both an owner’s policy and a lender’s policy are ordered to protect both the buyer and the mortgage lender. Title insurance can be ordered with many types of properties, including but not limited to rental properties, cottages, vacant land, office buildings, warehouses, etc.
Completing Your Mortgage
A mortgage agent or broker can find you the right mortgage to finance your home purchase, but the mortgage lender they connect you with requires your real estate lawyer to complete and perfect their mortgage security in order to lend you money. Without your real estate lawyer, you won’t be able to finalize your mortgage and obtain the required mortgage funds to close your purchase. A real estate lawyer will receive mortgage instructions from your mortgage lender before closing and will work to draft all legal documents that need to be signed to complete the mortgage, submit to the Lender what is required to meet your mortgage conditions, and register the mortgage lender’s mortgage charge security interest on title. Mortgage funds are also to be transferred from your mortgage lender directly to your real estate lawyers trust to complete your purchase.
Land Transfer Taxes
Land Transfer Taxes have to be paid on closing when the transfer of the property is registered. On the closing date, as set out in your purchase and sale agreement, ownership will officially be transferred to your name and your real estate lawyer will help transfer documents and finalize financial transactions. Land transfer taxes take up most of the closing costs, but some first-time buyers may be eligible for a land transfer tax rebate. These Land Transfer Taxes will be paid through your real estate lawyer when they register the transfer of ownership with the Land Registry. Your real estate lawyer will advise you on how much money to provide to pay for the Land Transfer Tax.
Other Closing Costs
Other closing day costs in addition to Land Transfer Tax and your down payment amount, will include legal fees, registration fees, any home or property inspections/surveys, GST or HST (if you are buying a pre-construction property, which you may also be able to qualify for a new housing rebate), property tax and insurance, title insurance, and much more. Your real estate lawyer will review these costs with you and ask you to bring in funds to complete your purchase.
Completing your Transaction
A real estate lawyer is required to complete the closing formalities of your purchase with the Seller’s real estate lawyer. The two lawyers exchange closing documentation, sign electronically on the Land Registry System, transfer funds to be held in escrow, and register the transfer of ownership of the property to you with the Land Registry. Your real estate lawyer will review closing documents signed by the Seller to make sure the appropriate closing documents have been signed and received before closing.
Hand You The Keys
Finally! The final step! The day has come to get the keys to your new home. But, from whom? That’s right – your real estate lawyer. Real estate lawyers will have you sign any last documents and then it’s time for the transaction to officially be finalized and have the keys to your new home handed over to you. Once the closing formalities are completed and the transfer of ownership is registered, you are finally the new owner.
Legal Representation when Things Go Wrong
Not all real estate transactions go smoothly and more often that not, there will be issues that pop up during your journey to completing your real estate purchase. A real estate agent can only answer so many of your questions about the home and property whereas a real estate lawyer can offer you the right legal advice when things go wrong. A real estate lawyer can provide legal advice on issues like property disputes, misrepresentations about the property by the Seller, damage to the property before closing, zoning laws, property taxes, and much more.
However, should any more serious issues arise, our real estate litigation lawyers can help you start your legal action and represent you in court.
What Is Real Estate Litigation?
Real estate litigation refers to any disputes that can end up arising during the purchase or sale such as a breach of purchase agreements, title defects or property rights. This is where our real estate litigation lawyers can come in to assist with making your legal claim, guiding you through the litigation process, and representing you in court. Receiving experienced legal advice, no matter if you’re a first-time buyer or an experienced buyer, can end up saving you money and headaches. A real estate transaction is stressful enough to begin with but with the help of a real estate lawyer and an agent, you can rest assured knowing that your interests are well protected and all of your questions will be answered along the way.
Need To Hire A Real Estate Lawyer?
Here at KLJ Law, we provide trusted legal advice regarding real estate transactions in and around the Markham, Ontario area. We understand that purchasing and selling can be a daunting task, but with our real estate lawyer by your side, it doesn’t have to be. We’ll thoroughly guide you through the process by drafting and reviewing documents, negotiating terms and conditions, completing due diligence searches, assisting with aspects of mortgages and financing options, and more. Remember, we work for you. Our goal is to make real estate transactions as seamless as possible so all you have to do is focus on moving your family into your new home or move on to your next home.
Contact Our Real Estate Lawyers Today
Contact our lawyers today by giving us a call or by filling out a form. Your initial consultation is completely free! Let us know what you need help with and we’ll walk you through our process and how our fees work. We look forward to helping you with your real estate transactions!