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Buying a Home? Don’t Ignore the Small Details

Buying A Home

Buying a home is an exciting yet overwhelming endeavor.  Like most homebuyers, you are probably focused on the big picture and the essential tasks you must take on. Don’t be so quick to overlook the minor details, or it could come back to haunt you.  One homebuyer in Richmond Hill learned this lesson the hard way in the fall of 2016.

Edward Yip signed a contract to purchase a home for $2.175M. The purchase included some of the appliances. The contract did not include any fixtures. Yip’s lawyer performed a title search after the contract was signed only to discover that the sellers of his new home did not own their HVAC equipment.

According to the warranty clause in the purchase agreement, any contractual rights survived the closing of the home and were binding on all parties. The sale contract lacked an amendment explaining that the HVAC system had a registered lien with Enercare, the owner of the system.
When they closed on the home, Yip was delivered a standard bill of sale which transferred ownership of the appliances and the fixtures. However, handwritten on that bill of sale were the words “except HVAC.” The terms of the purchase agreement were not reflected by the bill of sale.
Upon learning this, Yip told the sellers he would only close “under protest.” As such, the sellers said they would not close unless he withdrew his notification, which he did reluctantly.
When the closing was complete, Yip filed a lawsuit against the sellers of the home for the expense of buying the HVAC rental from Enercare. Newmarket Small Claims court heard the case in December 2018.
The judge ruled in favour of the buyer, explaining that the sellers knew that the HVAC system was still encumbered by the rental agreement. Yip was awarded $17,488.27 in damages for the buyout of the HVAC system and five chandeliers that the sellers had removed. The chandeliers were not in the terms of the agreement.
The homeowners appealed to the Ontario Superior Court, but their appeal was dismissed in February of 2020. In addition, Yip was awarded costs of $3,500.

This case highlights some vital lessons to both homebuyers and home sellers:

  • Sellers should be very clear about what appliances and fixtures are included and which ones are rentals in their seller agreements.
  • Disclose whether the hot water tank and HVAC systems are rentals or included in the property’s purchase price.
  • Buyers in similar circumstances as Yip are not allowed to refuse to close, but they can file a lawsuit against the seller afterward for their damages.

Do You Need a Mortgage Lawyer?

If you have questions about buying or selling a home and its appliances or fixtures, seek legal advice as soon as possible. Speak with a mortgage lawyer at Nanda & Associate Lawyers by calling (905)-405-0199 or use or contact us online. We assist clients of all nationalities and backgrounds and provide legal services in 19 different languages, including English, French, Chinese, Italian, Hindi, Punjabi, Gujarati, Bangla, Tamil, and Telugu.

Do I Need a Lawyer to Refinance My Mortgage?

Real Estate Lawyer

Many Canadians choose to refinance their mortgage to help lower their current interest rate or even to receive access to equity they have in their home. By refinancing, homeowners can access as much as 80 percent of their home’s value, less the balance of the mortgage. Although this is an exciting prospect, it can also leave some homeowners wondering if they are missing any critical details. Many homeowners ask if they should hire a Mississauga real estate lawyer to complete this type of significant transaction.

The Benefit of Hiring a Lawyer for Refinancing Your Home

While you do not have to hire a lawyer to complete the refinance of your home, it is always a good idea. There are many benefits to doing so. Using the lender’s legal services might be tempting as it can sometimes be cheaper, but doing so can cause the refinancing process to take longer than it needs to. Your own real estate lawyer in Brampton has the time to give you and your financial situation the attention you deserve. You are not just another number or loan when you hire your own lawyer.

What Your Mississauga Real Estate Lawyer Can Do

When you meet with your own real estate lawyer, there are several tasks they will perform. First, they will review your mortgage loan and its terms and conditions. They will make sure that you understand its terms and conditions, that they are legal, and are fair to you. Your real estate lawyer will also conduct a title search to see if there are any leans that have been placed against your home and can register your new mortgage. A lawyer can facilitate the entire financial transaction between you and the lender.

Avoiding Scams

Unfortunately, there are people who prey upon homeowners facing foreclosure or other dire financial situations with their homes. They usually come unsolicited and promise reduced interest rates. These types of scams are notorious for their upfront fees and not explaining the costs and fees incurred by refinancing. A lawyer with experience in real estate law can help you inspect a refinancing offer and determine its legitimacy, saving you from an offer that will charge fees but never provide any type of relief or refinancing.

Thinking about Refinancing? Hire a Real Estate Lawyer in Mississauga

If you are thinking about refinancing your home, you are most likely motivated by the financial benefits. You are not required to hire your own lawyer for mortgage refinancing and can use the legal team provided by your lender. However, it is crucial that you hire your own lawyer to ensure you are not being scammed, that the terms and conditions of your refinance are legal, and that your questions are answered.

Receive your consultation with a real estate lawyer from Nanda & Associate Lawyers by calling (905)-405-0199 or use our online contact form. We help real estate clients of all nationalities and backgrounds and offer services in 15 different languages, including English, French, Hindi, Punjabi, Gujarati, Bangla, Chinese, Italian, Telugu, and Tamil.

How Do You Transfer Land?

How Do You Transfer Land
Title Transfer Nanda Law

As circumstances in your life change, you may need to transfer the title to land or other real estate properties to someone else. For example, families may want to pass land down to a new generation or add a new spouse to a title. People also need to transfer land in cases involving divorce, or if someone passes away. A trusted Mississauga real estate lawyer can help you through the required steps for successfully completing a land transfer.

Steps for Everyone Involved

Each land transfer is unique and may have its own complications. That being said, the steps generally are as follows:

  • Hire a Real Estate Lawyer that you can trust to do your property title transfer correctly.
  • Explain every detail of the transfer and what you hope to accomplish to your Mississauga real estate lawyer.
  • The Real Estate Lawyer will draw up all the documents your transfer will need.
  • All involved parties will review the documents to ensure accuracy.
  • The involved parties will sign the appropriate documents.
  • The lawyer will register the title change documents.
  • The involved parties must inform the appropriate authorities of the title change, including the property tax department.

These steps may change due to differences in your case.

Steps for the Person Receiving the Title

The person who is receiving the title must be sure that doing so will not hurt their financial security. As such, these individuals should perform a title search to check for claims or liens against the property. Furthermore, most title receivers should purchase title insurance. You should get a consent from existing mortgagee before you transfer title otherwise the mortgagee can consider the title transfer as a default under the mortgage.

When a title is transferred, there are other parties who will need to be notified of the transaction. The person who is newly on the title should inform the following organizations:

  • Utility companies that service the property
  • The mortgage lender
  • The insurance company that provides home and fire insurance

Perhaps the most important step that someone should take in this situation is to hire a dedicated Mississauga real estate lawyer to ensure that all of the correct steps are taken.

Do Not Forget About the Land Transfer Tax

In Ontario, most real estate transfers are subject to a land transfer tax, but there are some exceptions. For example, you do not need to pay this tax in order to receive property from your spouse. However, children who receive property from their parents must pay this tax at the time of closing if any consideration is exchanged. If the property is gifted, then the land transfer is to be paid on any encumbrance. Mortgage registered on property. Be sure to consult a real estate lawyer about your tax responsibility before you transfer a title. The transfer will be land transfer exempt if it is free and clear.

Hire a Top Mississauga Real Estate Lawyer

As you can see, even the most basic land transfer transactions can be complicated. If your case has extenuating circumstances, it can make the transaction much more difficult. It is essential to have on your side a reputable lawyer who knows the local laws.

The professionals at Nanda & Associate Lawyers are trusted throughout the community. We are ready to serve, and speak 15 different languages, including English, French, Chinese, Tamil, Punjabi, Gujarati, Bangla, Italian, Telugu, and Hindi. If you’re ready to hire a Mississauga real estate lawyer, Contact Us today.

Court of Appeal Rules on Tarion Warranty Corporation’s Purchase Rider

According to a story in the Toronto Star, Ontario’s highest court has ruled against Tarion Warranty Corporation regarding its compulsory addendum form. According to the Court of Appeals, the addendum that is attached to each builder agreement is complex, particularly confusing, and lacks consumer protection.

In 2016, Anthony Ingarra signed an agreement to purchase a house from Previn Homes. This agreement had the mandatory Tarion addendum and a firm closing date of January 11, 2018. However, on that date, the builder could not close because it did not have the municipal occupancy permit. Instead, the permit was issued the following day.

Tarion Warranty Corporation

Unfortunately, Ingarra was not ready to close on this date either as he was not in funds. His lender requested five more days to approve the loan, but the home was incomplete when the appraiser inspected it prior to closing.

According to the Tarion addendum, a compulsory framework must be followed when closings are extended. If the builder is not able to close by the agreed-upon closing date and does not provide notice of the delay, the addendum mandates that the new delayed closing date be 90 days later, unless both parties come to a different agreement.

Legal counsel for both the builder and the buyer paid no regard to the addendum and agreed that the new closing date would be January 15th, which was then moved to January 17th. On January 17th, Ingarra asked for an extension of one more day to close. The builder’s lawyers declined the request, terminated the transaction, and kept Ingarra’s deposit.

Unwilling to give up that easily, Ingarra applied to the Superior Court, asking them to force the builder to close. In May 2019, the judge ruled that Previn Homes breached their contract and ordered that the sale be completed. The builder then appealed to the Court of Appeal.

Justice Peter Lauwers, on behalf of the three-judge panel, ruled that Previn Homes’ termination of the contract was valid. If Ingarra had invoked the automatic 90-day extension provided in the addendum, he could have agreed to close sooner. Since he did not, he no longer had certain rights.

Justice Lauwers commented that reaching this decision gave him no satisfaction. He went on to point out that the Tarion Addendum does not even begin to protect consumers. It’s small-font, single-spaced convoluted, long, and obscured document is a dangerous trap for trusting laypeople.

Do You Need a Skilled Mississauga Lawyer?

Are you having difficulty with a contract, a builder, or a home purchase? No matter your conundrum, we can help. Our lawyers have experience assisting clients with all types of legal challenges. We work tirelessly to get the justice you deserve.
Connect with Nanda & Associate Lawyers by calling (905)-405-0199 or use our online contact form. Our experienced Mississauga lawyers assist clients of all nationalities and backgrounds and offer services in 17 different languages, including English, French, Hindi, Punjabi, Gujarati, Bangla, Chinese, Italian, Telugu, and Tamil. The sooner you call, the sooner we can help.

Is a Mortgage Refinance Right for You?

Mortgage Refinance
Mortgage Refinance

Refinancing your mortgage can have many benefits, including debt consolidation, locking in a lower interest rate, and much more. However, you should never rush into the refinance process without considering all of your options with the help of an experienced mortgage lawyer. At Nanda & Associates, our lawyers provide advice and representation to residential homeowners to ensure they make the right decision for their specific situation. The following are some reasons why a mortgage refinance may not be the best option at the current time.

You Plan to Move Soon

There are costs and fees involved with obtaining a mortgage refinance, and eventually, homeowners can make up for those fees with monthly savings on their mortgage payments. However, if you plan to move in the next couple of years, you might not have enough time with the refinanced mortgage to save enough to make the fees and costs worth it.

You Have Had Your Mortgage for Many Years

At the start of your mortgage, you pay mostly toward interest, while later payments will address the principal balance of your loan. The same is true after you refinance. If you have already paid down your principal for several years, you might not want to start the entire process over and make interest payments for years before you can lower your principal balance. It might even result in paying more interest over time than you would have with your initial loan.

Your Lender Charges a Prepayment Penalty

Some mortgage lenders include a prepayment penalty in the loan terms. In some cases, this penalty can outweigh the savings that a refinance would bring. This could make it more economical to pay off your original loan according to its terms rather than seek a refinance.

A Mississauga Mortgage Lawyer Can Evaluate Your Options

Many people think that if interest rates go down or they could benefit from access to home equity, refinancing their mortgage loan is automatically the right decision. This is not always the case, and our legal team works closely with our clients to ensure they make mortgage decisions that will most benefit their situation.

If you decide to move forward with a refinance, we can help you through every step of the process. This includes helping with the following and more:

  • Determining whether your current agreement allows you to refinance
  • Reviewing your new mortgage agreement to ensure that it is in your best interest
  • Explain your rights and obligations under the proposed agreement
  • Identifying any vague or unclear terms in your agreement and taking steps to clarify their meaning
  • Representing you should a dispute arise after the new agreement is executed

Too many residential property owners in Ontario seek a refinance when it is not beneficial or they may make errors during the refinance process. Discussing your options with a lawyer will ensure that you only refinance your home when it is in your best interest and that any refinancing you pursue goes as smoothly as possible.
Contact an Ontario Mortgage Representation Lawyer to Discuss Your Options

Nanda & Associate Lawyers have worked with many commercial and residential property buyers or owners regarding mortgage financing. We can represent you if you are obtaining a brand new mortgage or if you are considering a refinance and would like to know your options. Call our firm at 905-405-0199 or contact us online to schedule your consultation today.

Have You Signed a Leaseback Purchase Agreement on a Condo? You Might Owe the CRA Thousands of Dollars!

Condominium Building

Condominium Building

Buying a condo unit with the intent to rent it out seems like a wise decision and many condo buyers opt for this. However, if you are among those individuals who signed a leaseback agreement with a company or directly with the builders, then you might now be owing thousands of dollars in taxes, according to the Canada Revenue Agency (CRA).

In Canada, builders are selling their condo units to buyers, while also giving them an offer for a “guaranteed rental” incentive. Becoming a condo owner with a certain guaranteed amount for two to 10 years, as per the agreement, is an incredible investment. That is until condo buyers started receiving letters from the tax authority to notify them that they owed a hefty amount of money in penalties, interest and taxes.

Did You Just Become a Builder?

These letters informed the concerned condo buyers that they are considered “builders” after signing the leaseback agreement. This rental guarantee incentive drew the interest of the tax authorities, through which they are now tangling up the unsuspecting Canadians under the provision that wasn’t meant to be applicable to them.

This tax act is intended to penalize those builders trying to sell condos to their own selves at a much lower rate with the aim of generating more income by renting it out.
Let’s have a look at the act and who qualifies as a builder.

According to the Excise Tax Act, “builder of a residential complex includes a person who acquires an interest in the complex before it has been occupied by an individual as a place of residence or lodging, for the primary purpose of making one or more supplies of the complex or parts thereof by way of lease, licence or similar arrangement to persons other than to individuals who are acquiring the complex or parts otherwise than in the course of a business or an adventure or concern in the nature of trade.”
Since this provision labels individuals as builders who purchase a condo with the intention of renting it out and won’t be residing there, thousands of condo buyers are now being sent letters notifying them that they are considered to be builders for GST/HST purposes and have to pay the taxes.

The Harmonized Sales Tax (HST)

All the buyers, who are not builders, have to pay an increased amount of HST due to the process of self-assessment that the builders are supposed to do. Increasing prices of condos in recent years have made the situation worse as buyers are subjected to taxes as per the property’s market value at the time it is leased out, instead of the time of purchase.
The more time passes between the date of purchase and the leaseback time, the higher the HST buyers have to pay to the CRA.

What Can You Do?

As a condo owner who opted for a leasing agreement with a builder or developer, you don’t have any control over when the tenants move in. Just like thousands of other buyers, the leasing being handled by the developer instead of a cash-back seemed like an appealing option, since you wouldn’t have to go through the entire process yourself.

But now being deemed a “builder”, you will have to pay the tax bill, which includes potential penalties and interest, instead of the HST rebate you were expecting. Even after paying the HST percentage on the purchase price of the condo, you would be assessed on the market value of the amount once the tenant leased the condo.

Challenging the CRA on their position that a condo owner is a builder, it is essential to consult a legal representative to help you in demonstrating the main purpose of the condo and dispute the underlying assumptions placed by the CRA. This can be a complex situation for you and it is recommended to consult with an experienced real estate lawyer to establish the next course of action.

Nanda & Associate Lawyers have a dedicated and experienced legal team ready to address your concerns and determine the best possible legal solutions for you. Feel free to book your consultation today and let us guide you in this challenging situation.

Pre-Build Condo Buyers Lose Legal Battle Against Developer

Pre-Build Condo Buyers Lose Legal Battle Against DeveloperBuyers of the recently canceled Cosmos condos have lost their legal battle with the developer. They filed a lawsuit claiming compensation after the two-year-old project was scrapped. Real estate lawyers said that this case would set up a discouraging legal precedent for future condo buyers.

The Condo Case Facts

In this case, Liberty Developments launched the Cosmos condo project close to the Vaughan Metropolitan Centre about two years back. They accepted bookings and deposits from buyers for condo units and scrapped the project this year after an inability to secure satisfactory construction financing. Two years later, buyers were sent refunds and notice intimating that the condo project has been canceled.

Justice Michael Penny of the Ontario Superior Court sided with the developer and rejected the buyer’s application to declare the purchase agreements unlawful. He maintained that declaring the contract void would not be in either party’s best interest.

Buyers felt that they lost out on asset creation as residential real estate soared in the Toronto area in this time period. Many real estate lawyers also proclaimed that the outcome was unfortunate for buyers of all canceled condo projects. It may even discourage them from taking the litigation route to claiming their rightful share.

The lawyer representing the Cosmos condo buyers did not comment on the case. He argued for declaring the purchase agreements void as the language contained exceeded the allowed legal conditions for the developer to ending the contract.

Condo vendors similar to Liberty developers took support from the Tarion addendum present in the purchase agreements on new homes to claim project cancellation. They demonstrated having taken all reasonable steps to obtain adequate construction funding for the project before they failed to secure it. Tarion is the home building industry’s regulator and new home warranty provider in Ontario.

Lack of Construction Financing Stalled the Project

The Cosmos contracts had a clause conferring absolute, sole and unfettered discretion on the condo vendor. Liberty developer’s lawyer stated that the provision could not pull down the condo vendor’s obligation to take reasonable steps for construction funding.

The judge agreed that eliminating the clause could put the condo vendor in an adverse position where they would be obliged to continue with an uneconomical project and invite bankruptcy. He further stated that early termination of the contract is preferable rather than risk being in a condo project under receivership or bankruptcy.

Impact on Buyer Protection Laws

Many real estate lawyers are in favour of allowing a specific time period to developers in case they cancel condo projects due to insufficient financing. Beyond this, the developer will need to purchase the condo units at market value. They also suggest that buyers should prefer developers with proven track records and carefully review legal agreements before signing them.

Buyer protection is essential with the rising number of condos being canceled in the Toronto area. In 2018 more than 5000 condo units were canceled as compared to 379 cancellations in 2016. Many buyers claimed that they would abstain from investing in pre-builds till Tarion and other buyer protection laws are strengthened.

Ontario government called on Tarion to increase the buyer awareness about all builders who cancel projects. It also plans to restructure Tarion to weed out conflict situations as Tarion regulates builders and protects consumers.

Liberty’s spokesperson maintained that the cancellation of Cosmos condos was a one-off event and will not be affecting their future projects. Meanwhile, another group of buyers of the Icona condos in Vaughan is mounting a legal challenge. They have recently been refunded their deposits by the Gupta group. Additionally, they are lobbying to the City of Vaughan to reject condo development applications from the Gupta group.

Buyer Beware – Uncovering the Taxes arising from Non-Residency of the Property Seller

Introduction

Buyer Beware - Uncovering the Taxes arising from Non-Residency of the Property Seller Did you know that the Canadian tax code has a rule in which the property purchaser can be held responsible for paying the capital gains tax on the transaction on behalf of the non-resident seller?
You will need to take precautions if you are dealing with a non-resident seller of a house or condo if you don’t want to be responsible for paying someone else’s capital gains tax. Let’s review the facts of the recent case, in which this matter was highlighted.

All Canadian residents have to pay tax on their worldwide income, while non-residents pay Canadian taxes, only when they earn income from Canadian sources. They may earn incomes from rental, dividends, employment, business and gains from selling Canadian real estate. Non-resident withholding tax is applicable on rental and dividend income.

Canadian Income Tax Act makes the purchaser of the property responsible for withholding 25 per cent of the purchase price from the non-resident seller. This withholding will not be done if the non-resident seller obtains a clearance certificate from the Canada Revenue Agency.

The request for the certificate needs to be made by paying 25% of the expected capital gain on the transaction along with filing the completed Form T2062- “Request by a Non-Resident of Canada for a Certificate of Compliance Related to the Disposition of Taxable Canadian Property” within ten days of the planned sale.

In 2017, the CRA clarified that it is the property purchaser’s responsibility to confirm that legal status of the seller of the property. The purchaser should do proper inquiries and complete due diligence.

Case Facts

In the recent case, the seller’s foreign address and the declaration were indicators which were missed by the buyer of the property.

In June 2011, a Canadian taxpayer brought a condominium in Toronto from a suspected non-resident of Canada. No clearance certificate or purchase price withholding was done in the transaction, and the purchaser was held responsible by the Tax Court, for payment of $92000 of capital gains tax.

The taxpayer was aware that it was an investment property, bought in 2009 by the seller, who did not reside there. The purchaser’s lawyer was informed that the closing documents would be signed by the seller in California. The seller also signed a statement made before a California notary public in Danville, California which stated that the seller is a non-resident of Canada at the time of sale and closing the transaction.

The Judge declared the property purchaser is to be liable for the tax as there were many concerns which reflected the non-residency of the seller. Fiscal concerns necessitate that the purchaser should have done more due diligence to discover the residency of the seller of the property.

How We Can Help

At Nanda & Associate Lawyers, our experienced Real Estate lawyers understand your specific circumstances and provide tailored and customized solutions for each of them.

Our Mississauga Real Estate Lawyers are available for a no-obligation free consultation. Come and experience our quality legal counsel and personalized care we give to each client. We ensure prompt communication and a professional approach to achieve successful outcomes for you.

Feel comfortable interacting with our caring team who speak more than 15 languages like English, French, Spanish, Italian, Portuguese, Albanian, Hindi, Punjabi, Kannada, Telugu, Tamil, Bengali and much more.

Lawyer Fees When Buying a House

Lawyer Fees When Buying a House

Buying a house or condo is an exciting, but complicated, process that requires the help of an experienced lawyer. Hiring a lawyer is a requirement in the final stages of home buying, after a deal has been made. But hiring a lawyer early on in the process makes the whole thing easier and prepares you for any unforeseen circumstances. A lawyer will ensure that you have completed all the required paperwork, made all the required payments, and that everything is in order for your new purchase. That being said, because buying a home is one of the biggest and most important purchases you may make in your lifetime, it’s a good idea to have a sense of what payments you will have to make, and what fees you will have to pay, on top of your down payment and mortgage so you aren’t caught off guard with a hefty bill you didn’t prepare for.

Below we will outline some of the different fees or payments that are required. We will then offer a simple step-by-step look at how a typical closing works in Ontario, concerning all legal fees and considerations.

Lawyer Fees

As is the case anytime you hire a lawyer (unless they are taking your case “pro bono”), you will have to pay lawyer fees on top of the money you’re spending on your new home. Lawyer fees are the payment you make for the time spent on your case by the lawyer or others at the law firm and are calculated by the hour. This includes the time lawyers spend reviewing and analyzing the offer; creating and completing documents; working with the other party’s lawyer or other parties involved; and any time they spend with you as their client – answering questions, collecting information, and communicating with you throughout the process. The amount a lawyer charges will depend on a number of factors, like the amount of experience the lawyer has or their location.

September 2017 changes to the Rules of Professional Conduct (the rules that govern all lawyers in Ontario) require lawyers to include all relevant information when they “advertise a price for residential real estate services,” but it is good practice to ask about any other legal fees to protect yourself against hidden or unexpected fees.

Disbursements

When you receive your bill from the lawyer, there will likely be a line for “unpaid professional disbursements”. But what does that mean? A disbursement is money paid by the lawyer to a third-party on your behalfDisbursements are necessary out of pocket expenses that are paid out to complete your file by your lawyer on your behalf and these costs have to be paid back to your lawyer on the completion of your file.

Examples of things that might fall under “professional disbursements” when you are buying a home include: any relevant government taxes (i.e., the Land Transfer Tax); title search and registration of title (ownership and new ownership); registration of mortgage; execution certificates; title insurance; and banking fees; and office and travel expenses related to your file.

How Does a Closing Work?

Now that you have a sense of the types of fees that are part of the home buying process, here is a step-by-step look at the closing process and the fees and considerations involved:

  • Offer to Purchase: This is the contract between you and the seller. Before signing an Offer to Purchase, you will want your lawyer to review it to make sure that everything is in order. Your lawyer will hold onto this and any other documents and money needed for the transaction until the process is complete. This is to protect you from misdealing or dishonesty throughout the process.
  • Waiver of Conditions: Your Agreement of Purchase and Sale may have certain conditions that need to be waived prior to becoming firm. These conditions could be for you to secure mortgage financing, review of the status certificate, for a home inspection, etc. The key thing here is that these conditions have a certain time limit for which if they are not waived, the Agreement becomes null and void. It is crucial to ensure that these waivers are done and that your lawyer receives a copy of the same for their file.
  • Title Search: Your lawyer will conduct a title search – a search for all records and documents that apply to the property, including the ownership. A title search will reveal if there are any legal issues with the property or ownership, and if there are none then you are able to proceed. This search will be done closer to the title search date as determined by your Agreement of Purchase and Sale.
  • Documents: Talk to your lawyer about what documents are required for the sale. These will include your approved mortgage application and insurance documents, amongst others, and you will need to provide these to your lawyer to prepare the closing documents.
  • Payments: Your lawyer can tell you what fees you’ll be required to pay, such as the Land Transfer Tax (based on purchase price), the Execution Certificates , and Title Insurance . You will make these payments in-trust to the lawyer.
  • Closing Documents: Your lawyer will prepare closing documents, including the transfer of land, mortgage documents, tax forms, and a statement of adjustment using the information you have provided them. A few days before closing you will meet with your lawyer to sign the documents and make any outstanding payments.
  • Finalizing the Sale: Once you have signed all the necessary documents and made all the required payments, your lawyer will register the transfer and mortgage documents , and deliver this to the seller’s lawyer, when the process will be complete.

There are many important parts to closing a real estate transaction, and a lawyer will help you navigate the process, keep everything in order, protect you in case of misdealing, and ensure that the whole thing runs as smoothly and easily as possible for you. It is important to communicate with your lawyer at from the very beginning of your real estate transaction and to keep them informed of any issues or concerns you may have so the same can be addressed well advance of the closing date.

Real Estate: Deposit Protection Basics

Real Estate: Deposit Protection Basics

Buying a home is an exciting, but sometimes very confusing and stressful, time in our lives. There’s a lot to consider when you are making this type of serious commitment, and just as much to worry about. This is especially true in terms of financing and payments. Not only are there down payments and mortgages to consider, there’s also deposits. Below we’ll introduce you to deposits and share some information on protection programs to give you some peace of mind during this exciting process.

What is a Deposit?

Similar to a down payment, a deposit is a payment that shows the seller that you are committed to purchasing the property and that you are in a financial position to do so. It is money you pay to secure an agreement of purchase and sale. It is applied to the purchase price at the time the deal closes.

The amount of the deposit can vary, as can the timeline for payment, and will depend on your agreement with the seller. Regardless of what you agree to, it should be clearly outlined in the agreement and the terms of your offer.

Deposits and Loss of Sale

Much like a seller requires protection – which can come in the form of a deposit – as a buyer you will also need protection, especially when you have a financial stake in the sale. Although deposits are non-refundable, there are some exceptions in place.

Say you’re in the market for a new-build home and want to move forward with a purchase. The home is still being built, but you have signed an agreement for purchase and sale and have placed a deposit to show your commitment. You are excited, making plans, and eagerly awaiting the completion of your new home, but it never comes. The builder has gone bankrupt and as a result is unable to fulfill their end of the deal. Aside from disappointment, you’ve also just paid a significant deposit that you’re not sure you can get back.

This is just one example of how a sale can fall through leaving you without your new home and uncertainty around whether you will be able to reclaim your deposit, so it’s important to know how to protect yourself in such an event.

Deposit Protection

As a consumer, your deposit may be protected under the Real Estate Council of Ontario’s (RECO) deposit insurance program through the Tarion Warranty Corporation (Tarion). Tarion protects deposits made when you sign an agreement of purchase of sale for freehold homes, condominium units, and other payments, including upgrades and extras applied to a freehold home or condominium unit. Importantly, payments made prior to signing an agreement of purchase and sale are not covered by Tarion, and neither are payments made to individuals or companies not registered with the RECO. Because of recent changes to deposit protection, there is different coverage depending on the type of real estate, the sale price of the home, and the date the agreement of purchase and sale was signed.

For example, a deposit made on a freehold home that has a sale price of $600,000 where the agreement of purchase and sale was signed on or after 1 January 2018, is protected up to $60,000, but a deposit made on a condominium unit is protected up to $20,000. A more detailed breakdown of deposit protection amounts can be found here: Tarion Warranty Corporation.

Although there are protections in place for deposits, there are requirements surrounding what and how much actually falls under these protections. In order to ensure that you are in a position to receive protection in the event of a dissolution of the sale, consult a lawyer before signing any agreement or making a deposit. You can call or email one of our real estate lawyers for free consultation for any of your residential, commercial real estate legal closing requirements.