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Tag: closing

  • 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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  • 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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  • I Received the Previous Owner’s Bill. What Should I Do?

    I Received the Previous Owner’s Bill. What Should I Do?

    You’ve spent the first month living in your new home and you couldn’t be happier. 

    However, when you go to check the mail, you notice a most unwelcome surprise. The city indicates there is an amount owing from the previous owner’s bill.

    Your first thought might be malicious intent on the side of the seller, them trying to get away without properly taking care of their bills. However, chances are that this is probably not the case. The most likely scenario is that the previous owner's bill was never sent to them, or, on occasion, the municipality did not process the change of ownership in a timely manner.

    Commonly, bills such as water and property taxes are connected with the property, while utilities such as hydro and natural gas are associated with the consumer. Therefore, while a title changes ownership, water and property taxes continue to accumulate charges to the account associated with the property even as the owner’s name is changed on the accounts. This common mistake sometimes leaves the new homeowner with the leftover bill of the seller. 

    If you find yourself in the situation of having to deal with a previous owner's bill, worry not, below we’ve outlined the exact steps you should take to resolve things. 

    Key Takeaways:

    • • Water bills and property taxes are associated with a property instead of a customer like utilities. This means you will sometimes see arrears on your water bills and property taxes from previous property owners.
    • • To deal with an arrears on your water bill contact your lawyer and have them contact the seller to request payment.
    • • Dealing with property tax arrears are more common on new homes and require your lawyer to contact the builder’s lawyer to adjust. 
    • • While arrears on your bill are a common post-closing issue and are often easy to solve, it is an excellent example of the benefits of title insurance.

    What Should You Do with Arrears on Your Water Bill?

    If you notice that there are arrears on your water bill from a previous property owner, the first thing you should do is contact your real estate lawyer and provide them a copy of the bill. Your lawyer will then contact the seller’s lawyer, who will then contact the seller directly to request payment of the bill. 

    If you do not receive a reply from the seller you are left with two options. If you have title insurance, you may submit a claim to your insurer. If you already paid the bill, the title insurer will reimburse you directly.  If you did not pay the bill, the title insurer will pay the bill on your behalf. However, if you do not have title insurance, your choices would be to either take the seller to court which would be costly and time consuming, or pay off the bill yourself. 

    What Should You Do with Arrears on Your Property Taxes?

    Property tax arrears on existing homes are rarely an issue after closing because they are known and adjusted at closing. However, if they are discovered, contacting your lawyer and following a similar format as you would for the above water bill situation is the best scenario.  

    However, if the property you are purchasing is a new home, then it is likely that the property taxes need to be adjusted with the builder after closing. It typically takes several months for a new property to be assessed. Once that happens, the new owner will receive a supplementary property tax bill.

    When you receive your supplementary property tax bill, we recommend you contact your lawyer to ensure everything is in order before contacting the builder’s lawyer to properly adjust the bill between the parties.

    More often than not, the builder will pay their portion of the bill to the new owners to reimburse them for paying the entire bill. Each builder has different policies in adjusting for property taxes therefore it is usually best to leave discussions up to your lawyer when getting reimbursed. 

    Final Thoughts

    Adjusting after closing for arrears on your bills is often a common post-closing situation and most of the times can be resolved fairly quickly.

    If all sides are cooperating, then the adjustment can be taken care of quickly and seamlessly. However, it’s recommended you always consult with an expert when dealing with these issues to avoid any mishaps. If you have any further questions, rest assured that the Deeded team is here to support you in any way we can.

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  • How Can I Protect My Home With a Will?

    How Can I Protect My Home With a Will?

    Prepared by Willful for Deeded

    Owning a home is so exciting! You’ve likely been preparing for this purchase for a long time. You’ve just closed and you just can’t wait to move in and settle down. 

    We’re not here to bring down the mood, but have you thought about what happens to your home if you were to die unexpectedly? 

    A recent study commissioned by online estate planning platform, Willful, shows that 49% of Canadian homeowners don’t have an up-to-date will, and 1 in 4 Canadians don’t know what happens to their home if they pass away. For many individuals, property is one of the biggest assets they own. So while no one wants to think about their own death, it’s important to make plans to protect your property in the event of your death. 

    What is a Will?

    Your last will and testament is a legal document that outlines how you wish to distribute your assets such as property and money when you pass away. Your will is also where you name guardians for any minor children and an executor who will be in charge of settling your affairs on your behalf.

    In the context of a home, you can think about it like home insurance. In the event of an emergency, having a will makes sure that your home will be left to the beneficiary or beneficiaries of your choice if you were to pass away.

    What Happens To my Home if I Die Without a Will?

    When a person dies without a will, they are considered to have died “intestate”. No, this does not mean the government will get your house. But it does mean a provincial formula will decide how your home will be distributed. The rules vary from province to province, and in many cases, it means your home and other assets will not be distributed to the individuals you would have liked.

    It’s important to note that most provincial formulas don’t account for common law spouses, so it’s even more important to plan in a will if you’re in a common law relationship.

    Does The Type of Ownership Affect if the Property in My Will?

    How you own your home can significantly affect how your property is distributed in your will. Depending on how you own your home, there are a few ways the home can be distributed upon your death. 

    Owning Property on Your Own 

    This is when you own property solely under your name. In this situation, your property is covered by your will when you pass away. Like any other assets you may own, you can leave it as a specific gift or it can be distributed to your beneficiaries as part of your residual estate.

    Property Owned Jointly With Rights of Survivorship 

    This is when you own a property jointly with rights of survivorship with a spouse or someone else. In this situation, property passes directly to the other person who co-owns the home, along with any associated mortgages/debt. As a result, this property does not become part of your estate and what happens to it is not governed by your will.

    Property Owned Jointly With Tenancy in Common

    If you own property as joint tenants in common, you and the co-owner each own a share of the property. In this situation, the property will not automatically be passed to the other owner. As a result, your share is included in your estate and can be gifted through your will.

    Depending on how the home is owned, this may also affect taxes at the time of your passing

    Do I Need to Update My Will Every Time I Move?

    It’s important to review your estate plan regularly to ensure that it is up to date, and moving is a great time to do that!  Any time to sell or acquire an asset, you will want to make changes to any specific gifts in your will. For example, If you’ve left a property at a specific address to someone, you’ll need to update it to the new address.  Having the correct information is crucial to ensure your gifts are honoured. 

    If you’ve moved to a different province (or country!), you will also be subject to local wills and estates laws in that market. While most Canadian provinces recognize wills made in other provinces, it’s always best practice to update your will to adhere to provincial legislation. It’s also important to ensure your selected executors and guardians still make sense in your new location.

    The Important Takeaway?

    If you own a home, you need a will. While it may sound like a lot of work - creating your will is actually one of the easiest things you can do to protect your home and loved-ones. There are many ways to make a will, but online estate planning platforms, like Willful, make it easy for you to make your will in 20 minutes, all from the comfort of your home!

    Willful is an online estate planning platform that makes it affordable, easy, and convenient to create your will and power of attorney documents online in less than 20 minutes. Learn more about Willful here.

    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 article was written by Willful. Deeded Law Professional Corporation and Willful are independent entities. Deeded Law Professional Corporation does not assume any liability for the accuracy of the content or any services that may be provided by Willful.

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