The role of a real estate attorney
First, your attorney will send you a letter outlining the documents they may need from you. Since you are likely to pay at least $1,300 for legal services, I think it is important to know what your attorney will do for you! Here is some detailed information about the role of a real estate attorney and what you need to do when working with your attorney and mortgage insurance. Don’t wait for a top lawyer before taking on your new procurement position, be sure to interview them before the closing date.
Your real estate attorney should tell you about the expenses you are likely to incur in connection with the closing procedure, including:
Land Transfer Tax
expenses
Legal fees
property tax
If you’ve purchased a new home from a construction worker, a real estate attorney can give you an informed estimate of how much you should budget for “hidden fees” such as:
Ontario New Home Guarantee Registration Fee
Water meter installation fees
fencing fees
Deposit fee estimation
many others
If all the conditions in the agreement are met and the offer is firm, the attorney proceeds with an investigation into the ownership of the property. Initial searches include:
Facility searches
Property Tax Searches
Construction searches, zoning and planning
Searches for registered address
Messages are sent by your attorney:
To all municipal or regional utility departments to ensure that there are no arrears or fees due
To ensure that there are no unconditional sales contracts, easements, agreements or unregistered concessions
To discover any other encumbrances affecting property or equipment left by the seller
Facilities are a big issue and cases are always written in real estate newspapers and magazines, about buyers who didn’t realize they weren’t allowed to put up a fence or make a parking space because surveying the property they were working from wasn’t actually showing the city’s rights to access the property. Your attorney’s job is to make sure all of this is disclosed to you. Your attorney will also inform utility departments of your name and exact closing date, and require that final meter readings be taken on the closing date so that final invoices can be sent to the vendor.
Your attorney requests a tax certificate to verify the amount of the current year’s taxes and to ask about any tax arrears and fees owed. Your attorney will also write to your building and zoning department for full details of zoning regulations, restrictions, and permitted uses (so you know if you’re allowed to run a business from your home or build a massive deck, for example). It’s important to send your attorney a copy of the survey for the property as soon as possible – if the seller has a survey, I’ll get it for you if it’s not already on the offer documents. In the absence of a survey, tell your attorney so they can advise how to protect your interests with property insurance.
Start the search for ownership of the property at the Land Registry office to ensure that the seller is the real owner of the property, has the right to sell the property to you, and that the property is not subject to any mortgage, encroachment or easement rights. liens, agreements, or mortgages not disclosed in the agreement, or purchase and sale. You may have heard of fraud cases where people’s homes were sold from under them by fraudsters who had no title to the land! This is where your attorney really gets paid. This search must be completed before the order date (the address search date) indicated in your purchase and sale agreement.
Other important functions of your attorney include:
Carry out a search for executions at the appropriate sheriff’s office to ensure that there are no executions against previous owners of the property that would affect your right.
Prepare and deliver a letter to the seller’s attorney requesting handling of any items disclosed in the initial searches on or before closing.
Review the contents of the mortgage commitment letter prepared by your bank when arranging your financing, and consult with you about the outcome of signing it.
Notify you of any closing day costs related to mortgage financing when your financial institution provides you with the final mortgage commitment letter.
If your attorney is also acting on behalf of the financial institution (this often happens), he/she will prepare all the necessary documents for the mortgage and submit this package to the financial institution for approval before closing:
– Attestation of real estate ownership of the financial institution upon closing.
Notify you about any government programs designed to assist home buyers that apply to you, including land transfer tax credit programs, Ontario homeownership savings plans, RRSPs, and CMHC 5% down payment information.
Let your insurance broker know the name, address, phone number, and fax number of both your attorney and the financial institution offering your mortgage. Your attorney needs a letter confirming that the insurance coverage is valid upon closing – this is very important because the bank won’t pay USD to close the purchase until they know you have property insurance.