Payment from Proceeds after Closing
Generally, the proceeds from the sale are available through a certified cheque or bank draft that is payable to the registered owners of the property on the closing day at 5:30 PM. The deposit of the purchaser is secured by the realtor (in trust) till the day of closing. In case this amount is larger than the commission of the realtor, it is obligatory that the excess funds be refunded back to the purchaser after the closing.
Power of Attorney: When a Power of Attorney is used by the selling party to close a sale, the net sales from the deal will be legally paid to the original owner and not the person in whose name the power of attorney is registered.
When Multiple Sellers are mentioned
In case there is more than one seller, it is required that each seller’s share in the proceeds from the sale be made payable to the registered owner. Also, all the individual details must be specified in case each of the sellers requires a different cheque. The division of the funds in between the sellers must be clearly conveyed to us in writing. It is advised that each of the sellers gets an independent legal opinion from his/her lawyer.
In case the ownership of the home is in the name of one spouse but the home has a matrimonial ownership, then we require consent from the other spouse as well before the closing day. The other spouse (besides the registered owner) must visit our office before the closing day (along with 2 pieces of IDs) and duly sign a consent form regarding the sale that states that there is no objection. The net sale proceeds can be paid in two ways. In case the non-registered spouse signs a consent form regarding sale proceedings, then the entire funds from the sale will be given to the spouse in whose name the property is registered. In other case, if the consent form is not signed, then the proceeds will be equally distributed among the spouses. This rule is strictly applicable to the matrimonial properties only. It is not applied to the investment properties and such cases do not require spousal consent.
Cancellation of Current Fire Insurance
Remember, do not cancel your fire insurance till the day you have successfully closed the deal. This is because if you cancel the insurance and the deal is not closed somehow, you will be left with an un-insured house and a potential fine. Furthermore, if your property will remain vacant for more than 30 days after you have closed the deal, you should duly inform the concerned fire insurance company about the vacancy.
Appointment to Sign Before Closing
The sellers will be required to come to the office exactly TWO days before the closing date. This appointment is made to sign all the relevant documents in front of the lawyer. You are required to leave one key of the property with our office. Also, bring two pieces of personal identification documents as we require them to maintain our file records. It is obligatory on our part to maintain a complete identification of the client to close the transaction.
If an individual relevant with the sale has problem speaking English, you are required to bring a certified interpreter. We can also provide you an interpreter. In case you require this service, you should inform us duly in advance so that we have sufficient time to arrange one.
Power of Attorney Usage
If your sale is being completed using a Power of Attorney that you have given to an authorized person, your sale will be completed as usual. The authorized person will sign the documents on your behalf. But remember, the net sale proceeds will be payable only to you and not the person to whom you gave the power of attorney. In case you have a written agreement with our office, only then the funds can be issued to the person holding the power of attorney.
- It is the seller’s responsibility to arrange any power of attorney well in advance before closing date.
- Contact our Office if you are a non-Canadian Resident, or you will lose Canadian residence prior to the closing date.
- Clear all the bills related to utilities and other readings. The sellers are required to pay for all the utilities up to the closing date.
- In Toronto, many users opt for flat rate for water readings. In case you have such an arrangement, contact us. We can make arrangements for any prepaid water bills.
- Cable companies must be informed about your potential vacancy in advance.
- For homes heated by oil, you are required to inform our office in writing. Also, as a seller you are required to properly fill up the fuel oil tank on the closing date and pay for the oil. The receipt of the oil bill should be submitted to our office before the closing. On the closing date, you will be given the credit pertaining to the fuel oil tank. In case, you fail to provide the fuel oil tank, there can be dispute on the closing date.
Instalment Payments due Before Closing Date and Post-dated Cheques
You, as a seller, are required to pay all the relevant taxes related to the property before the closing date. These include common expense, property tax, mortgage payments, utilities etc. All the payments that are to be paid by the seller before the closing date will be arranged by our office.
Post Dated Cheques
As a seller, it is your responsibility to stop all the pre-authorized cheques that will relate to property after the deal is closed. For example, the bank must be notified of the sale of the property and any pre-authorized cheques should be stopped.
Documents Required for Closing
The closing date may be a few days ahead, but the documentation process begins well in advance. Our lawyers will start processing your file for closing many days before the actual date of closing. This ensures transparency and all the deal related documents are cross-checked carefully. Our experts will require that you submit all the below mentioned documents by mail, fax or in-person.
- Ownership documents containing the copy of Transfer/Deed. You must have got this document when you purchased the property in the past.
- All the mortgage related details including name, address and contact number of the mortgage company.
- All the tax bills and receipts about the property tax and reality tax applicable in your area. All the details of such tax bills you paid till date are required.
- Copy of survey in case the property is not a condo
- Your identification documents and future contact number.