Possibly, a home is one of the most significant assets purchased and sold in a person’s lifetime. Sale of residential property is a complex transaction, and the necessary steps should be taken to avoid expensive mistakes.
Hiring a skilled Real Estate Lawyer will help you get through this sale process in a better manner and ensure protection of your legal interests.
A. Spousal Consent & Proceeds Payment Post Closing
As a registered owner, you will receive the sale proceeds by certified cheque upon the sale of the residential property. The cheque is typically received on the next business day after the property sale transaction has been closed. You will receive the refund of any excess purchaser’s deposit over the realtor’s commission (plus GST) on the completion of the transaction.
Multiple Registered Owners Selling Property
If more than one person are registered owners and selling a property, they will need to give a written confirmation of how the sale proceeds are to be distributed. If no confirmation is received, the net sale proceeds will be given in one certified cheque on the next business day of the date of closing of the sale transaction.
Matrimonial Home Being Sold
If a matrimonial home is being sold, the net sale proceeds are payable to both the spouses even though the property may be in a single spouse’s name. This rule is applicable for a property which has been a matrimonial home only. Any property which has been purchased for investment will not be treated in this manner, and no spousal consent will be needed for its sale.
In the circumstance when one spouse is the registered owner and is selling the matrimonial home, the other spouse can provide written consent for completion of the sale to the purchaser. The consenting spouse can also sign a direction that they will not stake claim to the sale proceeds which should be payable in full to the spouse who is the registered owner.
The consenting spouse also is recommended to seek independent legal advice before giving their consent and declaration.
B. Fire Insurance Cancellation & Vacancy
You should cancel your fire insurance policy on the property being sold, only after confirming with your Real Estate Lawyer that the sale transaction has been completed. You will need to intimate the fire insurance company if the property is likely to be vacant for more than 30 days so that they can cover the enhanced risk of the vacancy before the closing takes place.
C. Law Firm Meeting before the Closing
Closing documents need to be signed in the office of your Real Estate Lawyer. You will need to handover one key at least for the property being sold at the meeting to your Lawyer. Two identifications will be needed out of which one has to be a valid government photo identification card. These will be needed for the your Real Estate Lawyer records’ and should be valid on the date of closing.
During office hours, we do provide interpreters with prior intimation. After office hours, you will need to arrange for the interpreter yourself to be present with you at the closing appointment in the lawyer’s office.
D. Power of Attorney for Closing
If a power of attorney is being used for closing the sale process, the net sale proceeds will still be payable to the registered owner. A power of attorney should be ready for the closing meeting and should be arranged before the meeting time.
E. Sale by Non-Residents of Canada
The specific process of the sale of residential property by Non-Residents will be intimated which includes holding back of 25% of proceeds till the clearance certificate is obtained by CRA, once you connect with us at the time of closing. Your legal status at the time of closing of the sale transaction will be considered.
F. Utilities & Cable
All utility departments need to be notified before closing to make sure that you can get the final meter readings. The final meter readings will be taken on the date of the completion of the sale transaction, and you as the registered owner will need to make its payment. All meter readings made after this day will be taken over the physical owner.
In the circumstance that you do not have a water meter if the property is in the City Of Toronto, you will need to update your Lawyer to make adjustments for the prepaid water. If you are on a flat rate for water and do not have a water meter, you will still need to inform your Real Estate Lawyer. Telephone and cable services will also need to be checked for prepaid adjustments.
If your residential property is heated by oil, you will need to give written confirmation to your Real Estate Lawyer. The fuel oil tank will also need to refilled and paid off by you as on the date of closing. Do submit a copy of the final fill receipt with the documents when you sign your final papers.
G. Payments of Instalment Proceeds
As a registered owner, you will be responsible for the payment of all bills, expenses which fall due on a date before to the closing date. The expenses such as mortgage payment, common expenses and property taxes will need to be paid in full before the closing date of the sale transaction. Your Real Estate Lawyer will adjust for any prepaid payment covering the days beyond the closing.
H. Closing Transaction Documents Checklist
Your Real Estate Lawyer would require certain documents for preparing your sale file for the closing. Doing this would be done many days before the closing date. You can email, fax or hand deliver copies of the required documents which includes, details of existing mortgages, ownership documents like transfer deed, all tax and property bills and receipts and survey for houses and not condominiums.