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3 questions to ask your Alberta lawyer

Congratulations on buying or selling your Alberta home.  

If you just firmed up your purchase or sale (congrats!), you’ll likely need to choose a Real Estate lawyer to facilitate your closing.  

No matter which lawyer you choose, asking the right questions before moving forward with having the lawyer (or law firm) who is going to handle your transaction can make the entire experience smoother and more predictable. 

Here are some questions you should ask a lawyer when buying or selling a house in Alberta:

What are the fees INCLUDING disbursements?

Legal fees are the professional fees your lawyer charges for completing your real estate transaction. In addition to legal fees, disbursements are third-party costs paid by your lawyer in connection with completing your transaction. Disbursements usually include costs such as land title fees, tax searches, title insurance, and courier costs.

Can I sign my documents Virtually and HOW do you conduct your virtual meetings?

Alberta real estate lawyers can now witness real estate closing documents remotely. This means you can meet with your lawyer through videoconferencing to have your closing documents signed and witnessed. However, not all lawyers conduct virtual signing meetings in the same manner.

At Deeded, virtual signings are easy, efficient and client friendly. Our lawyers can remotely witness Alberta real estate closing documents regardless of where you are located, either inside or outside of Alberta.  All you need is a computer or tablet with a webcam, an internet connection, and a mobile phone.

What is your process?

Home buying/selling is exciting but can also be one of the most stressful experiences of your life. Whoever you choose needs to be able to explain the closing process so that you can anticipate what is required and know what to expect.

At Deeded, our goal is to make the process as smooth and seamless as possible. Our welcome package provides you with everything you need to know about the home closing process. Further, at every stage of the transaction, we will let you know what’s happening next. If you have any questions during the process, please do not hesitate to call, email or text us.  

What’s the best day for closing?

When you’re making an offer to purchase a property, you’ll be asked when you would like to “close” on your property as part of the agreement to purchase.  The date you pick will also have to align with your seller’s expectations as they may need to arrange to move and vacate the property.

On closing day, the ownership of the property is transferred to you, the buyer, and in most provinces, you will receive the keys to your property towards the end of the day.

While typically any business day can be designated as your closing day, it is important to consider a few factors that may make your closing experience easier and avoid potential issues should closing get delayed.

Here are a few of our suggestions when you’re picking your closing date:

Avoid Fridays, if you can

While a Friday might sound like the ideal day of the week to close on a purchase.  Friday closings can be the cause of major challenges and extra costs should something not go according to plan.

That’s because mortgage lenders and the electronic land registry are open until 5pm on Friday afternoon.  After 5pm, registration and transfers of funds, if needed, become impossible until the following Monday.

During the day of closing a lot goes on behind the scenes and timelines can be very tight.  Funds move between the buyer, the buyer’s lender and the seller and their lender (and their respective lawyers).   After the funds arrive, the transaction needs to get registered before keys can be released to the buyer. 

Needless to say, even the slightest delay or something not going according to plan can mean the difference between meeting the 5pm registration deadline or missing it.   If the 5pm deadline for registration is missed for whatever reason, your transaction will likely not close till the next business day, which is Monday.

Depending on your circumstances, such delays can be costly and put a wrench in your moving plans, so if you can potentially avoid a Friday closing date, you may just eliminate a few potential headaches and hassles.

Before a long weekend or holiday

We love our long weekends and while it may seem like the ideal time to close and settle into your new home, a long weekend can present the same challenges of closing on a Friday.  

With mortgage lenders and the land registry closed for the long weekend or upcoming holiday, any delays in closing may result in having to wait until the next business day to close.

Month-end, especially in the spring

The volume of Real Estate transactions peak during the months of May through to September.

This means that law firms, movers, appraisers, and many other parties involved in your transaction get particularly busy these months, and particularly on the last few days of the month.

Closing at month-end isn’t an issue.  In fact, it’s quite common.  

However, with an increased volume of transactions and all the players in the system working to hit month-end deadlines, the chances of something slipping through the cracks will likely increase.  It also means you may not always get your first choice of lawyer, mover, etc., especially as covid continue to slow down and change processes in the industry.

When negotiating your closing date, picking a day other than Friday, prior to a long weekend or on a month-end may be a good idea, despite the inconvenience. 

While your transaction may close without a hitch, even if on a Friday or the end of the month, picking the right closing date can decrease the chances of having closing issues.

Important note: This article is not Legal Advice.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

Practical Tips on Drafting Title Insurance Clauses in an Alberta Contract of Purchase & Sale


When it comes to closing a home in Alberta, on occasion, the seller may offer a credit for the costs to the buyer to purchase a title insurance policy in lieu of the seller providing an up-to-date real property report (RPR). 

Title insurance is available for a low premium that is paid only once at the time of the purchase. Title insurance provides coverage for losses arising from survey/RPR related matters including:

>Forced removal by a governmental authority or an affected neighbour/easement  holder of all or part of the existing structures due to encroachments onto adjoining land or onto an easement; and

>The land being unmarketable, which allows another person to refuse to perform a contract to purchase, lease or make a mortgage loan due to adverse matters that would have been disclosed by an up-to-date survey/RPR.

Title insurance does not cover known defects at the time of the purchase. This would include deficiencies disclosed in an RPR or home inspection report obtained prior to closing. However, some title insurers may provide coverage for known issues subject to underwriting approval. If you wish to use title insurance to deal with known issues, the availability and extent of coverage must be confirmed with the insurer prior to offering a
title insurance credit to the buyer to compensate for the known issue.
Do be cautious in drafting title insurance clauses in the purchase agreement. Avoid vague clauses such as:

>Buyer accepts the RPR as-is with title insurance

>Title insurance in lieu of RPR

Clauses such as these do not address a) who pays for the title insurance; or b) what happens if the RPR shows a known defect which a title insurer will not cover. 

At Deeded, we would be happy to help you draft these clauses and would welcome the opportunity to collaborate with you on the purchase agreement to ensure the best interests of your client.

Important note: This article is not Legal Advice.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

This is the most common closing mistake for first time buyers

We love working with first time buyers and are always striving to educate clients to ensure their first closing experience is a smooth one.

Let’s face it. Being first time buyers isn’t easy.  There’s a lot to know about buying and closing a home and while there’s a flood of information out there, it is important to get the right professionals working with you to make your home buying experience as smooth and stress-free as possible.

The most common mistake we see with first time buyers is forgetting to budget for closings costs.   With all the excitement, first time buyers often forget that these closing costs must be paid upfront in cash, unlike the mortgage which is amortized and paid in instalments over time.

Before the keys can be handed over, however, there are still a few expenses buyers need to shell out for. These closing costs must be paid upfront in cash, unlike the mortgage which is amortized and paid in installments over time.

Here are the closing costs you can expect as a first-time buyer:

Down Payment

While your lender will provide your mortgage funds to your real estate lawyer on closing day, as a buyer, you must have the cash down payment ready to go, minus any amount that has already been paid as part of your deposit.

If you aren’t liquid (meaning you don’t have the down payment money sitting in cash), make plans to have the down payment cash ready at least 3-4 days prior to closing.  Keep in mind that if you have your money with an online bank, it may take a few days to transfer funds, so plan accordingly.

Your lawyer will be in touch a few days prior to closing to let you know the exact amount to bring towards the closing.  This amount will include any adjustments, legal fees, land transfer tax and other costs we’ll discuss shortly.

Adjustments

What’s an “adjustment”?

If you are buying a resale or new construction property, you will likely have to pay for several adjustments on closing.   Adjustments can include payments for utilities, property taxes or in cases of new construction, account setup fees, development charges, and others.

Adjustments can range from a few hundred to several thousand dollars.   For example, if the seller of your property has paid property taxes for the year and you are buying the property halfway through the year, you will owe the seller your portion of the property taxes.  

Your lawyer will inform you of adjustments a few days prior to closing.

Land Transfer Tax or Property Transfer Tax (LTT / PTT)

Home purchases in Ontario and British Columbia are subject to a provincial land transfer tax. Outside of the down payment, this is likely the largest outlay to be paid at the time of closing so it is very important to budget for.

Home buyers in the City of Toronto pay municipal land transfer tax (MLTT) in addition to the Ontario LTT, which effectively doubles the land transfer amounts owed.

Legal Fees, Disbursements, Title Insurance

Legal costs include a number of services, such as registering the transfer of the property and registering the mortgage. Your lawyer will also facilitate the purchase of title insurance, which protects the buyer from any other claims made toward the property. It can also include the ordering of the property survey, should the buyer wish to obtain one.

Legal fees and title insurance premiums can vary depending on the property type, location, and several other factors.

When you can anticipate and budget properly, the stress associated with closing your first property can be drastically reduced. Remember to consult with professionals such as your Realtor, Mortgage Broker and Real Estate Lawyer, and ask lots of questions… there’s no bad or silly questions you can ask.

Important note: This article is not Legal Advice.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

Virtual Real Estate Closings: Here to stay in Alberta

Since the Covid shutdown, lawyers have been able to witness real estate closing documents remotely and that includes virtual Real Estate closings in Alberta.

A virtual closing means you can meet with your lawyer through videoconferencing to have your closing documents signed and witnessed instead of having a face-to-face meeting with your lawyer and signing documents with ‘wet ink’. At Deeded Law, we leverage the latest technologies to make virtual signings easy, efficient and client friendly.

The Alberta government recently decided to allow remote witnessing to continue indefinitely.

How Does a Video Conference Signing Work?

At Deeded Law, our lawyers can remotely witness Alberta real estate closing documents regardless of where you are located, either inside or outside of Alberta. All you need is a computer or tablet with a webcam, an internet connection and a mobile phone.

Prior to the meeting, we will obtain your written consent to proceed with a video conference signing and to take screen shots of you and your identification. We will also get a copy of your government issued identification and provide any original documents required to be signed.

To ensure confidentiality, we encourage you not to have anyone else present in the room during the video conference. During the meeting, you will be required to show the same identification previous sent to us. The lawyer will take “screen shots” and compare the photos on the identification with the individual on the video.

After witnessing you sign your documents, you will send us a PDF version or photograph of any originally signed documents. Only originals documents are required to be returned via courier using the provided
return address label.

You will receive an electronic version of all executed and sworn documents as part of the final reporting package, to keep for your records.

The Top Real Estate Closings Costs to Consider in Alberta

It is too often that we get clients who are closing the purchase or sale of their home in Alberta and are surprised to find out that they did not budget for all their closing costs.

Nothing is more stressful than finding out you have to scramble to come up with more money for your closing.   Nobody likes surprises.  That’s why we are always aiming to educate our clients and partners early in the home buying or selling process.

If you are buying or selling a home in Alberta, here are some of the closing costs you may encounter:

Legal Fees

In Alberta, you will need a lawyer to close your Real Estate transaction.  Legal fees can range from $800 – $1500 and can sometimes include or exclude disbursements (expenses incurred by the lawyer, which are typically passed on to you such as couriers, search costs or other fees).

When comparing legal fees, ask for an estimate of total fees you can expect to pay for your closing, including disbursements.

At Deeded, we offer a flat fee for closings and you can calculate your full closings costs on our website. 

Adjustment Fees

Say you are buying a home, closing in July and the seller has prepaid their full property taxes for the full calendar year.   In this situation, your lawyer “adjusts” the taxes so that you (as the buyer in this example), would owe a pro-rated portion of the expense to the seller.

Typical adjustments happen for property taxes, condo/strata fees, or any other fees that may have been pre-paid or unpaid by the buyer or seller.

It is important to always budget for adjustments as they can increase your closings costs.

Land Titles Fees

The cost of transferring land title in Alberta is set by the Land Titles Act and charged by the Alberta Land Titles Office.   It is paid for by the purchaser of the property on closing.

This fee is calculated based on the value of the property and the mortgage funds borrowed and can be several hundreds of dollars.

We offer a Land Titles calculator, along with calculating any other closings costs on our website.

Real Property Report (RPR)

A Real Property Report (RPR) is a legal document that clearly illustrates the location of significant visible improvements relative to property boundaries.  A seller will typically have to obtain an RPR as a condition of their sale.

The amount of work (and cost) to prepare a Real Property Report varies between properties. Lot size and shape, number of buildings, natural features, age and availability of the property boundary information all affect the cost.

Estoppel Certificate Fees

You need this certificate to purchase a strata unit or a condominium in Alberta.  The estoppel certificate typically costs around $200 and shows you if outstanding interest is due from the previous owner, or if there are any unpaid condo contributions or interest that is due.

Title Insurance

Title insurance protects you from unknown title defects (title issues that prevent you from having clear ownership of the property).  For example, existing liens against the property’s title , encroachment issues (e.g. a structure on your property needs to be removed because it is on your neighbour’s property), and Title fraud.

Title insurance is often recommended, but is optional. The cost of a title insurance policy in Alberta can range from $200 and up, depending on the value of your property and could be a worthwhile investment for peace of mind.

Property Insurance

If you are borrowing money for your home, your lender will typically require that you have a certain level of insurance coverage on your home and ask for proof of insurance (also known as an insurance binder), prior to closing.   Without insurance, a lender will typically not advance the mortgage funds to the lawyer.

It is a good idea to call your insurance broker and shop around a few weeks prior to closing.

Finally, it is important to mention that your fees can vary depending on the property, location and situation.   We’d be happy to give you a more accurate estimate.

Important note: This article is not Legal Advice.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

Closing on a Friday

When an agreement of purchase and sale is negotiated, both parties will agree to a closing date that seems reasonable. Just as there is said to be a preferable day to book a flight or find an economical hotel room, when negotiating your closing date, the day or week of the month to close may have advantages and disadvantages. Closing on a Friday may have it’s disadvantages.

In Canada, the time span between the offer being signed and the closing date is typically 30-90 days, although some closings may be shorter or longer, depending on circumstances for the buyers and sellers.  This period is meant to allow the buyer time to obtain a mortgage, search the title, and plan their move.  

Avoid closing on a Friday, if you can

Friday might sound like the ideal day of the week to close on a purchase.  Most people are of the mindset that they can take the day off work, and have the weekend to move in.  However, Friday closings can be the cause of major challenges and extra costs should something not go according to plan.

That’s because mortgage lenders and the electronic land registry are open until 5pm.  During the day of closing a lot goes on behind the scenes.  Funds move between the buyer, the buyer’s lender and the seller and their lender (and their respective lawyers).   After the funds arrive, the transaction needs to get registered before keys can be released to the buyer.  

Needless to say, even the slightest delay or something not going according to plan can mean the difference between meeting the 5pm registration deadline or missing it.   If the 5pm deadline for registration is missed for whatever reason, your transaction will likely not close till the next business day.  If your closing was originally on a Friday, that means you won’t be able to close until Monday.  If it is a long weekend, you’ll be closing on Tuesday.

While there are implications to not closing on time, some of the most common ones are additional per-diem costs for interest incurred on a mortgage or bridge financing, delays in moving (remember, your seller also has plans to move out before closing), or other penalties.  Above all, it is a stressful situation for everyone involved, despite best efforts.

Month-end closings

Due to the nature of Real Estate transactions, law firms get particularly busy on the last few days of the month, especially during peak Real Estate months such as May through to September. 

Closing at month-end isn’t an issue, but keep in mind that closing involves multiple parties that need to come together to complete your transaction.  With an increased volume of transactions and all the players in the system working to hit month-end deadlines, the chances of something slipping through the cracks will simply increase.  

When negotiating your closing date, picking a day other than Friday or on a month-end may be a good idea, despite the inconvenience.  While your transaction may close without a hitch, even if on a Friday or the end of the month, picking the right closing date can decrease the chances of having closing issues.

Important note: This article is not Legal Advice.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

Land Transfer Tax. What is it and how to budget for it.

You’ve signed on the dotted line and your offer was accepted.   Congratulations on your new home!  As you start readying your finances for closing, one of the top items that first-time home buyers forget to budget for is the land transfer tax (LTT for short).

Buyers of houses and condos in Ontario pay LTT when they purchase a property.  Buyers who are purchasing a property in the City of Toronto also get to pay the Toronto LTT, on top of the Ontario LTT amount.

With rising property pricing the LTT can be significant.  To give you an idea, on a $1M property in the City of Toronto, you’d be paying $32,950 in LTT.  This amount is due on closing and is collected by your lawyer and remitted to the government.  The LTT applies to all properties:  resale or new construction.

The land transfer tax amounts are calculated on a sliding scale formula, but to make things easier, use our simple Land Transfer Tax calculator where you can plug in your purchase price and save yourself the number crunching. 

There is some good news for first-time buyers.  You may qualify for a rebate equal to the full amount of your LTT, up to a maximum of $4,000.

To qualify for the Ontario Land Transfer Tax Refund for First-Time Homebuyers, you must meet the following criteria:

  • You must be a Canadian citizen or permanent resident of Canada,
  • You must be 18 years of age or older,
  • You must live in the home within 9 months of purchasing it,
  • You cannot have owned a home before, and
  • If you have a spouse, they cannot have owned a home during the time they have been your spouse.

If you’re planning on buying a house or condo, make sure you’ve budgeted for land transfer tax.

Important note: This article is not Legal Advice.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

Six most common post-closing issues and how you can avoid them

There are few things that are more exciting than getting the keys to your new home.  What you typically picture as a happy and exciting moment, can quickly turn into a stressful and frustrating mess thanks to a variety of situations that can transpire after closing.  In “industry-speak” we call these post-closing issues.

As much as we are optimists, we’d like to set the stage with both buyers and sellers.  Something willgo wrong upon closing.  Something willundoubtedly bother you when you close.  Whether it’s garbage that the seller failed to dispose of and left behind, or the dirty toilet in the main floor powder room.  Our best advice is just be prepared, put it all in perspective, and realize that not everyone see things that same that you do.

While there may be thousands of different ‘post closing’ situations, here are the top six we’ve encountered with our buyers or sellers.  The good news is that some of these can be avoided through proactive communications and some due diligence.

Damage to Property

You get your keys and arrive at your new home.  While the place looked spectacular during showings, now that the seller’s furniture and possessions are gone, you notice damage to the drywall.  Maybe you go to the basement and see a big puddle beside the hot water tank.

These things are unfortunately common.   As a typical closing takes 60-90 days from signing the purchase agreement, a lot can change in the condition of a property.  Damages that may not have been visible during showings all of a sudden appear now that the property is vacant.  Sometimes even minor things like removing artwork from the walls can leave nail holes and damages that may require repairs after closing.

post-closing damage

How to handle:

First, you need to know that these types of things are expected, and damages can occur intentionally or unintentionally.   It is important to put things in perspective as to how significant these damages are before you put your time and stress into rectifying them.

When you take possession of a property, make detailed note of any unexpected damages and if possible, take clear photos of the damaged area(s).   Submit the notes and photos to your lawyer and real estate agent.  Please note that submitting these photos doesn’t guarantee that the damages will be rectified, but at the very least, you’d be starting a process where the seller’s lawyer will be notified, and the seller be given the opportunity to respond to your claims.

Surprise!  You’ve got Rented Items

You move in and a month later, you receive a bill to pay for your hot water tank rental.  Problem is, you had no idea it was rented.  You didn’t sign a rental contract or even consider the possibility when you bought the place.  Now you’re stuck with monthly bills you did not plan on having.

It is the job of the seller, and the listing agent, to disclose if there are any items in being sold with the home that are rented such as a hot water tank (or in some cases, air conditioners, furnaces and other appliances).

There is a section within the standard Agreement of Purchase & Sale that specifies which items, if any, are rentals.  Barring the inclusion of a rental item in this section, then all items and equipment are deemed to be free and clear of any encumbrances.

So, what happens when you take possession of your new home, and find out that the hot water tank is rented?  Or the furnace?  Or the air conditioner?

Well, the seller is on the hook for the contract, but will the seller now buy out the contract after the fact? What if they refuse or blame their real estate agent for not including it in the listing and/or the agreement of purchase and sale?

How to handle:

Before you sign an agreement of purchase and sale, ask your real estate agent to verify any rental items with the seller’s agent (who should double-check with their seller).  While there isn’t a sure-fire way to avoid misrepresentation, it never hurts to double check.   If there are rental items, you can request to see those agreements and/or contracts and can require the seller to pay off any contracts prior to the closing date.

During the closing process, your lawyer typically also double-checks with the sellers’ lawyer to see if there are any rental items or contracts, however, the reliance is still on the seller to represent the facts as sometimes rental items may not be registered on title.

If you find out about a rental item that was not disclosed after your closing, reach out to your lawyer immediately.  Your lawyer will likely reach out to the seller’s lawyer and advise of possible next steps.

Appliances not working

You can’t wait to cook your first meal on your new home’s gorgeous stainless-steel stove.  You flip the switch and nothing happens.  The stove won’t even turn on.

Before you get frustrated and opt out for take-out food instead, remember that this happens all the time and could just be a matter of poor timing.  It can also be an appliance that wasn’t in good repair to begin with.

The agreement of purchase and sale will typically include a condition where the seller warrant’s that appliances and home systems will be in good working order upon closing.  This clause can vary in cases where you are buying a property as-is or the seller is aware of an appliance not working or excludes it from the agreement at the time of negotiation. 

How to handle:

Your purchase and sale agreement should include a condition that allows you to revisit the property a certain number of times prior to closing (usually 2-3 times is the norm we see).  We suggest booking the last revisit within a couple of days of closing and using that revisit as an opportunity to briefly inspect the property, including the operations of major appliances. Also, if you had your home inspected, check the inspector’s report for that appliances.

If you notice anything out of the ordinary such as an appliance not working, inform your lawyer as soon as possible.

Another option to protect yourself at closing and after closing is purchasing a home warranty policy.   There are several affordable options on the market that will protect your appliances and home systems in case of breakdown or replacement, giving you peace of mind.

Sellers still on the property after closing

Yes, it happens.  You open the door to your new home only to discover the seller is still in the midst of packing their belongings.  In the meantime, you might have your moving truck outside, charging you by the hour.

Whether an honest mistake or just poor planning by the seller, in these situations, both lawyers must be made aware so that the property gets vacated as soon as possible.

How to handle:

Closings typically happen between 3-5pm in the afternoon.   Once funds have been exchanged and the property’s title is in your name, your lawyer will release the keys.   Sellers are notified to plan to vacate their properties by the afternoon, but things like forgetting to book the elevator or your seller’s moving truck not showing up sometimes do happen. 

If you do find yourself in a situation where the seller has not left the property, keep your cool and try sorting out the situation with them.  They can also be in the same stressful situation that you are in.  While the situation wasn’t what you expected, having a calm and rational discussion may be the best way to deescalate a situation.

The case of the missing chattels

You move in and notice the seller removed all the curtains and curtain rods.  You are in total shock as you were under the impression that the curtains and rods come with your home.

When negotiating your agreement to purchase, it is important to understand the difference between a chattel and a fixture.   A chattel is an item of tangible movable or immovable property except real estate and things (such as buildings) connected with real property.  An example of a chattel is a stove, fridge or a laundry machine.

A fixture in real estate is an item that is fastened or attached to the property like a curtain rod, a light fixture, or even a bathtub (to be extreme). Fixtures are part of the property and should come with it when the buyer takes possession.

There is a section on the agreement of purchase and sale that says “chattels included.”  That’s because all chattels are deemed to be “excluded” unless specifically included.

There is a section on the Agreement that says “fixtures excluded.”  That’s because all fixtures are deemed to be “included” unless specifically excluded.  It is excluded unless it is specifically included in the Agreement.

A curtain rod is a fixture.  It is screwed to the wall.  It is affixed.  It meets the rudimentary test of “nailed, screwed, or glued.  This curtain rod is included unless it is specifically excluded in the Agreement.

How to handle:

Keep in mind that your agreement needs to be as specific as it can and you need to pay special attention to the chattels and fixtures sections before you sign.  If you negotiate for certain chattels to be included, list them out and be specific down to the location (for example: upright freezer in basement, shelving unit on the first floor family room, etc.). 

If you take possession and notice a chattel or fixture missing, consider its importance (it may not be worth the effort or stress to chase down a $20 lighting sconce that was removed) and inform your lawyer as soon as you can.

Garbage and/or junk left on property

post-closing damage

This is the number one complaint we get from buyers by far.  The sellers may have left some of their possessions, garbage or junk inside or outside the property.

As a general rule, the buyer expects the seller to leave the property free and clear of any possessions or garbage.  However, it happens all the time.  Whether it is garbage left on the lawn days ahead of scheduled garbage pickup or the seller leaves some possessions behind.

How to handle:

Consider the severity of the situation and inform your lawyer if necessary.  Your lawyer will work with the seller’s lawyer to potentially rectify.

Important note: This article is not Legal Advice.  No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.

Status Certificates. What are they and why you should care.

If you are buying a condo, you will probably encounter the term “status certificate”.  What exactly is a status certificate and why is a status certificate important?

Think of a status certificate as a comprehensive document that provides information about the current state of a condominium property.  The purpose of it is to give potential buyers as much information as possible about their unit and the overall health of the operations of the condo complex.

A condo unit is typically subject to additional rules and regulations compared to a (freehold) house because it’s managed by a Board of Directors and often a property manager. 

The condo board is responsible for managing the budget for the overall condo, which includes upkeep, repairs and improvements to the common elements on the property.  Common elements are typically anything outside of your unit such as elevators, lobby, amenity facilities, etc. For this reason, you’ll want to make sure that the condo board is fiscally responsible and can handle necessary repairs that come up now and in the future.

That’s where the status certificate comes in.  The status certificate is a recent collection of relevant information such as the condos by-laws (rules about things like pets, fitness facilities, swimming pools, barbecues, smoking, etc.), a current budget for the condominium, a recent reserve study (we’ll talk about that in a moment), and whether any lawsuits may be pending against the condo.

With this information at-hand, a status certificate can help you make your purchase decision and anticipate any issues such as:

  • Anticipated increases in maintenance fees
  • Any major future repairs you may be liable for a share of
  • The overall financial health of the condo
  • Any special assessments that may be costly down the road

Where do I get a status certificate?

You or your Real Estate agent can order a condo corporation’s status certificate. All you have to do is submit a written request and pay the $100 fee (plus HST) to management or the condo corporation.

It takes about 10 days, although it can be rushed for an additional fee.

Is it mandatory to get a status certificate?

Typically, when buying a resale condo, your real estate agent will recommend that you obtain a copy of the status certificate and thoroughly review it with your real estate lawyer before you commit to a purchase.

Most offers on resale condos are conditional upon review of the condo status certificate, so that buyers can ensure everything is in order.

If you are getting a mortgage or refinancing your mortgage on a condo property, your lender will require a status certificate be obtained and reviewed by a lawyer as a condition of the mortgage.

How do I review the status certificate?

As the status certificate can often be complex and contain key information within dozens of pages, we recommend having an experienced Real Estate lawyer review the status certificate for you.  A lawyer will know the key information to look for, how to interpret the information and will typically summarize the key points and what you should be aware of.  

What is a typical ‘deal breaker’ that can be found in a status certificate?

Condos carry a monthly maintenance fee to pay for common expenses are shared between all owners. If the condo corporation is running short of funds to pay operation expenses, you will notice an increase to your maintenance fees.  While some increases may be reasonable, in some circumstances, when reviewing the status certificate is a condition of your offer to purchase, a sharp increase to maintenance fees may not be within your budget and you may decide to not proceed with buying the unit. 

Another major item that can be found by reviewing the status certificate is called a special assessment.  A special assessment is an additional charge that condominium owners are required to pay on top of their regular monthly maintenance fees. While all owners are responsible for paying a special assessment, it’s important to realize that the condo board of directors does not need to get the approval of individual owners to add a special assessment.  For example, if the condo has an urgent requirement to repair the roof at a cost of $500K and does not have sufficient funds in the reserve to cover the cost, each unit may have a special assessment put against it, which means you and other unit owners are liable for your share of the cost of repairs. 

Under Ontario law, there’s very little owners can do if they can’t pay or disagree with a special assessment. If an owner can’t pay, the condominium corporation can put a lean on the property. 

Keep in mind that reviewing the status certificate will only highlight any issues at the current time but does not guarantee against having condo fee increases or special assessments in the future.

Can Deeded help with my status certificate?

Of course!  As you are shopping for a condo unit, we’d be happy to review the status certificate for your property and provide you with a comprehensive, yet understandable summary.  If you are in a bidding war situation, we’d be happy to turn around a status certificate review within 48-72 hours.   Please feel free to contact us anytime.