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Category: General tips

  • Statements for Payouts  – Why are you being asked for them and what you need to know.

    Statements for Payouts – Why are you being asked for them and what you need to know.

    What are Statements for Payouts?

    If you are refinancing your mortgage to pay out several debts such as credit cards, car loans, etc., you may be required to provide a recent (within the past week or two) statement for each debt to be paid out that shows the following information:

    • Your outstanding balance
    • The account number
    • Your name

    But I’ve already submitted these to my broker or lender, why are you asking for them again?

    Without question, it is frustrating to be asked for the same documents again and again.

    As a rule of thumb, your lawyer will try to use documents your broker and lender has shared with us.  However, there may be a lag of weeks and even months from the time you apply for your new mortgage until closing time.  

    Some statements may be out-of-date and show an incorrect balance as they may have been used or paid down as of late.  A statement within the past week or two provides a more accurate amount that is to be paid out to your creditor and will avoid additional interest and future hassles in paying off your debts.

    What’s the best way to get these statements?

    Most of your statements can be accessed online by logging into your creditor’s website.   Some website provide the option to download a statement, while some may require you to take a screen capture.  

    When you are saving or screen capturing your statements, please ensure your name, account number, and outstanding balances are clearly visible.  Otherwise, you may be asked to resubmit the statement.

    Why does the statement need to show the account number and my name specifically?

    Your lawyer is undertaking payment to your creditors and need to ensure we have the correct account numbers and are paying the correct party.  This is to avoid situations where payment is made to the wrong accounts or made fraudulently.

    Can’t you just do this for me?

    Unfortunately, privacy rules and regulations prevent lawyers from speaking to creditors on your behalf.  At Deeded, we understand that the process of obtaining statements is tedious and time-consuming and are working on various solutions to solve for it in the future.

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  • What exactly is broom swept condition?

    What exactly is broom swept condition?

    If you are selling or buying a home, you may encounter a clause in your agreement that states that your property must be left in “broom swept” or “broom clean” condition.   What exactly does broom swept mean and why misinterpreting this condition can lead to legal arguments and bruised feelings?

    What is broom swept condition?

    Unless professional cleaning was included as a condition within the agreement of purchase and sale, the seller is typically expected to leave the property in what some in the industry refer to as “broom-swept condition”.  Broom swept or broom clean condition typically includes sweeping or vacuuming the floors, removing garbage, emptying cupboards, clearing closets and appliances (if included) and making sure that the property is free of any personal belongings (again, unless they were included).

    A common complaint from buyers when they take possession of a property is that sellers will leave their stuff behind.  From garbage bags to old paint cans, shampoo bottles in the shower, to old furniture, leaving personal belongings behind for a buyer to dispose of can quickly escalate to arguments and even legal ramifications between the buyer, seller, and their respective lawyers.

    Sometimes things are left behind with best intentions.  If you’re selling, you may think the buyer may want to keep something. However, thinking they may want to keep something doesn’t mean that the buyer actually does.  You should ask beforehand, so you know whether to leave it.  Otherwise, you’ll need to take it with you when you leave.

    For buyers, scheduling a walkthrough a few days before closing can also help identify any potential situations where stuff is left behind and allows for the opportunity to speak with the sellers to clarify what’s going and what’s staying.

    My seller left belongings and garbage behind.  What can I do?

    In the situation where your agreement states that the property shall be left in broom swept condition, but you unlock the door to find unexpected items or garbage left behind, document the situation by taking pictures and notify your Real Estate lawyer as soon as possible.  In most cases, your lawyer will communicate with the seller’s lawyer and request they rectify the situation and remove their belongings or compensate the buyer for removal costs.

    I’m the seller.  How should I leave my place?

    Regardless of whether it is in the agreement or not, leaving your place tidy for the buyer is a common courtesy.  No new owner wants to come into their new home to have to get rid of stuff left behind by others.    

    You don’t need to leave your place spotless and immaculate, but most definitely, pack all your personal items and dispose of items you are not taking with you in a proper manner prior to your move-out date.   Leave your property in clean condition, free of dirt, garbage and clutter.

    What if garbage is improperly left on the curb?

    Some sellers think it’s ok if they dispose their items by putting them on the curb and assuming it will be picked up by garbage collection.  

    Every municipality has different garbage collection schedules and may or may not accept some items for disposal.  Therefore, simply putting items on the curb is not a good solution for sellers unless you’re certain that these items will be picked up and are within the guidelines and limits of the municipality.  

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  • What is a trust agreement in Real Estate?

    What is a trust agreement in Real Estate?

    In most cases, the beneficial and legal owners of a property are one and the same, but they can be separate individuals through a “trust agreement”.  Simply put, a trust agreement is a legal tool to separate the legal and beneficial owners of the property.

    What are “legal owners”?

    The legal owners are the persons named in the deed/transfer when the property is transferred and registered with the land registry. If there is a mortgage taken out for the transaction, it would be under the legal owner’s name.

    What are “beneficial owners”?

    The beneficial owners are persons who receive the profits from the property, whether that be rents or funds from the sale of the property.

    Why separate legal and beneficial owners?

    On occasion, a property may have separate legal and beneficial owners.

    For example, a member of the family may want to ensure they are entitled to the proceeds of the property, but don’t want to be named in the mortgage. This can occur for various reasons. 

    Perhaps they don’t qualify for a mortgage, or their inclusion would lead to adverse effects with respect to the mortgage.  In other cases, an individual may want to ensure that their common-law partner would be entitled to the proceeds of a property he/she purchased prior to their relationship. 

    What are some important facts to consider with respect to a trust agreement? 

    A trust agreement can be drafted by a real estate lawyer, but on most occasions, you may need to retain a separate lawyer then the lawyer who handled your transaction.  Reason being is that most real estate lawyers who close your property transaction also represent the lender/bank in the transaction.  This can put the lawyer in conflict since a trust agreement may be detrimental to the lender’s claims to the property.

    A trust agreement does not override any family law statutory obligations. This means that if the legal owner is liable for any spousal/child support or any other family law obligations, they have the right-of-way to the proceeds of the property, no matter who the beneficial owner is.   

    Lastly is whether the property is jointly owned or through tenants-in-common. If the property is jointly owned, the trust agreement must be accepted and signed by all joint tenants. However if it is owned by tenants-in-common, an owner can form a trust agreement outlining the terms specifically for his/her share of the property.

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  • Deeded automates onboarding to dramatically speed up closings

    Deeded automates onboarding to dramatically speed up closings

    The most anticipated part of a Real Estate or mortgage transaction is being done with it.  Closing is by nature the most complicated part of buying a home or refinancing a mortgage.  

    Tying together every loose end and officially sealing the deal involves coordinating dozens of documents and data that come from various sources, often triggering numerous follow-ups and manual tasks. 

    Above all, when time comes to close a transaction, it is often the homebuyer or borrower that ends up becoming the “quarterback” for chasing down documents, many of which may have previously shared with other parties such as their Real Estate agent or Mortgage agent earlier in the process.  Combined, these factors make for a slow, stressful, and highly inefficient closing experience.

    “It’s unimaginable how much effort and manual coordination goes into gathering all the documents needed to close on a home or mortgage. Dozens of emails, documents and faxes are flying around for each transaction. It’s grossly inefficient, unsecure, slows things down to a crawl. It’s a huge divergence from what today’s consumer expects.  It puts them in a stressful situation, at a moment when they should be happy and excited”.   says Reuven Gorsht, Co-founder and CEO at Deeded

    At Deeded, our vision is to make the closing experience seamless, transparent, and affordable for all those involved. 

    We are excited to introduce new onboarding technology within our robust platform that effectively automates the process of collecting the necessary documents and data needed for closing a transaction.  Leveraging artificial intelligence and machine learning, we are dramatically speeding up the closing process and reducing the inefficiencies that previously burdened clients, lenders, and real estate professionals. 

    Homebuyers are increasingly looking for frictionless ways to simplify the home buying process, all the while having access to expert advice” said Gorsht. 

    By automating the most inefficient parts of the process, we divert our efforts to better serving our customers, ensuring they have a seamless experience while drastically simplifying the process for everyone involved in the transaction” added Gorsht.

    Customers who have recently experienced our virtual closing process have noted the immediate benefits of the new onboarding technology.  Recent Toronto homebuyer Neil said “Working with Deeded made purchasing a home easy. They have excellent online systems for intaking the request and the signing process. Their responsive and clear communication made the transaction easy and provided reassurance in what can otherwise seem like a complicated process.

    While we’re already seeing tangible progress in making the architecting the Real Estate transaction of the future, we’re continuing to relentlessly focus on making the closing experience frictionless, transparent and affordable.  This is just one of many game-changing innovations we plan to introduce as we reimagine the Real Estate transaction” added Gorsht.

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  • Behind the scenes:  What happens on closing day

    Behind the scenes: What happens on closing day

    One of the biggest questions during a Real Estate transaction is “when do we get our keys?”

    Before getting your keys, there are several steps that need to be completed first and this all (believe it or not) happens behind the scenes on closing day. 

    What is Closing Day

    Closing day is the day when you take legal possession and finally get to call your new house your home. Prior to closing day, the buyer will be signing and reviewing documents prepared by the lawyer with regards to their mortgage loan, down payment, closing costs & purchase price. They will also review a statement of adjustments, which outlines the final closing numbers. Lastly, the buyers must arrange for funds to be deposited in the lawyer's trust account, while the lawyer requests the remaining funds from the mortgage lender. The funds are then transferred to the seller's lawyer who releases the property to be registered in the buyer's name, along with a mortgage (also called charge) which will be registered in the favour of the lender.

    When Should You Schedule Your Closing Day?

    Picking a closing day may seem like a simple decision, however there are many factors to keep in mind to avoid major issues from arising. Picking a closing on a Friday may cause issues if you cannot get everything before 5:00pm, businesses and systems will close for the weekend leaving you unable to close which may cause you to pay extra costs. The same principal is recommended for avoiding closing days before long weekends. 

    In addition, you should also keep in mind, Real Estate transactions peak in month-end especially during the Spring. Be aware this means everything, and everyone will be busier, such as movers, lawyers, realtors, and lenders. Therefore, it may be more difficult to ensure all parties are available and able to attend your closing. Overall, it is recommended to avoid picking a closing day before Fridays, long weekends, and month-ends wherever possible.

    What Happens on or near Closing Day?

    On the actual day of closing there are a number of tasks that must be completed by each party before the keys can change hands.

    • • The buyer will sign a variety of documents prepared by their lawyer relating to the mortgage loan, and the purchase of the home.
    • • Your lender will send the mortgage funds to your lawyer.
    • • You must provide the rest of the purchase price to your lawyer as well as the additional closing costs.
    • • Your lawyer transfers the funds to the seller's lawyer.
    • • Your lawyer will register the property in your name with the Land Title / Land Registry Office. If applicable, they will also register a mortgage (also commonly referred to as "charge") in favour of your lender.
    • • You will receive a closing report, which includes a copy of the deed/transfer of title.
    • • Your Lawyer will provide instructions on how and where you can get your keys. At Deeded, we will typically arrange for lockbox so you can easily access your new property.
    • • Additionally, please make sure you contact all appropriate utilities to inform them you are the new owner (i.e., hydro, electricity, water, condo fees, taxes etc.) so they can update their billing information.

    As you can see, there's a whole lot that happens on or near your closing day, with most steps happening behind the scenes. The goal is to have all these tasks completed by 4pm to 5pm which is when many agencies and lenders close for the day. If the deadline isn't met, the closing is typically extended to the next business day. Hence closing on a Friday or before a holiday weekend is not recommended.

    Additional Closing Costs

    • Your Deposit- The deposit is a portion of the total home purchase price that will be paid out-of-pocket by the buyer. Typically, the down payment is between 5-20% of the total purchase price.
    • Land Transfer Taxes (LTT) – The LTT is calculated as a percentage of the purchase price of your home. The exact percentage varies from province to province and sometimes individual municipalities like Toronto have additional costs. Alberta does not have LTT.
    • CMHC Insurance – Should you use less than 20% for your down payment, you will be required to obtain CMHC insurance. This is an insurance policy that protects your lender should your borrower default on your loan repayment.

    This is not an exhaustive list, visit this blog for additional information on closing costs, however we always recommended speaking to your realtor and lawyer to ensure you know exactly what your circumstances will be at closing.

    Can Deeded Help with My Closing?

    Of Course! When it comes to purchasing a home, our team at Deeded strives to make the process as easy as possible so you can “close” and get your keys as quick as possible. 

    Our team helps you understand your obligations, help you navigate the legal documents that need to be signed before funds are released to you and can expedite the closing process, all to ensure you have a fantastic closing experience. Please feel free to contact us anytime.

    Final Thoughts

    The closing process is a complicated and high-stress event, not just for the buyers and sellers but the realtors, lawyers, and lenders as well. Although it is understandable that you want the closing process to be done as quickly as possible, being patient will help things go much more smoothly. 

    If you have any further questions our experienced team is ready and able to make your closing a simple, quick, and painless process. Feel free to contact our team if you have any questions on our closing procedure, and to obtain a quote, please click here.

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  • Five most common title transfer issues

    Five most common title transfer issues

    A title is a legal term that means registered owner of a property.  A title transfer is assigning ownership, or part of the ownership to another party.

    When purchasing a property, the title must be transferred from the seller to the new owner. However, it is not always as simple as signing a document, a large number of properties may require work to "clean up" issues with a title.

    Here is a list of the five most common issues:

    Property has a Lien

    If any of the previous title holders had outstanding debt, such as unpaid property taxes, general contractor bills, or a judgement from the court to pay off a creditor, those companies may have placed a lien on the property. 

    A property lien is a legal claim on assets that allows the holder to obtain rights to the property if debts are not paid. If there is a lien on the property you are purchasing, you may inherited it upon closing. 

    This is an example of a very common issue that can be resolved by your lawyer on closing. Using a title search will identify if there is a lien on the property and you can work with your lawyer to address and resolve the issue. 

    Boundary Disputes

    If you will not be getting a survey on your potential property before closing from the sellers you run the risk of having a boundary dispute with neighbouring properties. A boundary dispute is somewhat common and the only way to resolve this issue is through an up-to-date survey on the property. 

    Your Real Estate lawyer may recommend a property survey if there is evidence to suggest it would be beneficial. However, this is quite often not the case, few closings include property surveys because of the cost and length of time it takes to complete. Without taking proper protection, this potential issue could be a serious financial burden to resolve.

    This is a case where title insurance is a great option to mitigate some of the unknowns and protect future interests in the property.

    Illegal Past Deeds and Fraud

    There are a number of illegal actions that may impact the sale of a property and the transfer of a title in the future. That could include deeds made by minors, people lying about their marital status, an undocumented immigrant. Illegal past deeds such as this may pose an issue to the transfer of a title and cost significant amounts to rectify.

    In addition to the above illegal actions, fraud is another potential issue that may impact title transfers but is much more difficult to identify. When a lawyer conducts a title search you can identify anything that can be searchable through public documents and registrations. However, fraud is often undetectable through these available documents making it one of the most difficult of these common issues to protect against. 

    Undiscovered Encumbrances

    When you purchased the property, you may not have been aware that a third-party may hold claim to part or all of the property from a previous event such as a lien. This may limit what you as the owner will be able to do with the property. These limits are known as encumbrances and are placed on the property itself, not the owner. 

    A real estate lawyer for title transfer will help discover if the property in question has unknown encumbrances. Some encumbrances are welcomed by owners, such as zoning laws that restrict properties in an area from being used for commercial purposes. Others can be more troublesome, like liens placed on a property that seek repayment of debt. 

    Almost all property, particularly in densely populated areas, is encumbered in one way or another. That is why it is important to have a knowledgeable real estate lawyer by you side when learning if there are encumbrances on a property

    Public Record Errors

    Whether it be adding an extra zero or misfiling a document, public record errors do happen. Unfortunately, when filing and clerical errors occur, they are often difficult to detect or notice because sometimes they blend in easily. Dealing with public record errors can cause serious financial stress on the title owner and be very time consuming to rectify. 

    How Can I Protect Myself?

    Throughout this article we’ve listed all issues that may arise from a title transfer and likely caused you lots of anxiety. You're probably wondering now, what can I do to protect myself from all these problems. The answer is simple, get title insurance

    While every policy is different and we recommend checking your specific policy for the details, but in general, title insurance will cover you for all of the above title-related issues and more that can affect your ability to sell, mortgage, or lease your property in the future, or its value.

    Final Thoughts

    When conducting a title transfer on a property it’s wise to use an experienced real estate lawyer that can help you ensure you have proper protection and don’t ignore any serious issues. If you have any further questions, rest assured that the Deeded team is here to support you in any way we can.

    Send us an email and we would be happy to answer any questions you have or provide recommendations for your situation.

    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.

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