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Tag: real estate closing Toronto

  • 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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  • Can you close your Alberta property from out-of-province?

    Can you close your Alberta property from out-of-province?

    Compared to Real Estate markets like Ontario and British Columbia who have seen overwhelming increases in home prices in recent years, Alberta’s Real Estate market remains relatively affordable for Canadians.  With a lower average home price, Alberta Real Estate also generates plenty of investment opportunities with positive cashflow and has become a popular destination amongst Real Estate investors.

    When it comes to closing your Alberta property, you’ll need to use an Alberta-licensed Real Estate Lawyer to close your transaction.  If you are out-of-province aren’t physically located in Alberta yet (perhaps you’re still in the process of moving or buying an investment property and reside in another province), your closing may either involve travelling to Alberta to sign your closing documents or hiring an additional lawyer or notary that is local to you, to witness the signing of your documents.

    Alberta saw more new residents and Real Estate investors in 2021 than any other province in the country.  If you are one of the many people who are considering relocating to Alberta or buying an Alberta investment property, here are some key things that you need to know about the closing process in Alberta and how our team at Deeded can make your Alberta property closing seamless and affordable.

    Both travelling to Alberta and hiring an additional lawyer can add to the costs, and complexity of closing your Alberta Real Estate transaction.  At Deeded, our virtual closing process helps you avoid both travel and the additional costs.   Here’s how it works:

    1. Initiate your closing by getting a quote through our website and uploading your Alberta purchase contract.
    2. Our friendly team will get in touch to explain the closing process and answer any questions you may have.
    3. An Alberta Real Estate Lawyer will work with you and your bank and/or mortgage broker to get your mortgage proceeds (if applicable).  You can seamlessly deposit your down payment funds into the lawyer’s trust account at any Canadian branch of TD bank.
    4. When it’s time to sign your closing documents, you’ll meet your Alberta Real Estate lawyer via secure video conference to sign your documents.
    5. Once your property is registered, they will arrange transfer of keys to you or your property manager.
    6. You can track the entire process through a user-friendly, personalized portal so you always know what’s next.

    What are the benefits of a virtual closing process for Alberta Real Estate?

    You’ll typically save time and money by not needing to travel to Alberta to sign your closing documents and avoid the additional costs of hiring an additional local lawyer to witness you signing your closing documents.   A virtual closing is secure, seamless, and efficient.

    Can you close properties in all cities within Alberta?

    Yes.  Whether your property is in Calgary, Edmonton, Medicine Hat, or anywhere else in Alberta, we can help you close.

    Do I physically need to be in Alberta to sign closing documents?

    No.  You can be anywhere in Canada.  All you need is a computer with a video camera and a reliable internet connection to attend your virtual signing appointment.

    I’ll be moving to Alberta.  Can you help me close my sale as well?

    Absolutely.  If your current property is anywhere in Ontario or British Columbia, we can help facilitate the closing of your sale, along with your Alberta purchase. 

    Can you help me refinance my Alberta investment property?

    We certainly can.  The same virtual process and benefits apply when you’re refinancing your Alberta property. Simply ask your lender or mortgage broker to use Deeded to close.

    Are there extra costs for this service?

    We certainly can.  The same virtual process and benefits apply when you’re refinancing your Alberta property.   Simply ask your lender or mortgage broker to use Deeded to close.

    How do I get started with closing?

    Simply click here to submit your information and purchase contract.

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  • Does Alberta have a land transfer tax?

    Does Alberta have a land transfer tax?

    If you’re considering moving to Alberta or buying an Alberta investment property, the question if Alberta properties are subject to a land transfer tax (or property transfer tax as it may be called in some provinces), comes up quite often.

    Does Alberta have a land transfer tax? The short answer is no.  While most Canadian provinces levy a property or land transfer tax, Alberta requires only Land Transfer Registration Fees and Mortgage Registration Fees to be paid.

    The amount of these fees is much smaller when compared to other provinces.  Here’s a breakdown of the fees you can expect:

    • The Land Transfer Registration Fee costs a base of $50 and an additional $2 for every $5000 in property value.
    •  If you have a mortgage on your property, a Mortgage Registration Fee applies and costs a base of $50 and an additional $1.5 per $5000 on the mortgage amount.

    It's important to note that these fees and any legislation regarding land transfer taxes or applicable closing costs may change at any time. Always check with your lawyer or real estate professional prior to signing an agreement.

    For example, a $300,000 Alberta property with a $200,000 mortgage would cost:

    • Land transfer registration fees:  $170
    • Mortgage registration fees: $110

    These fees tend to be a small fraction of what a homebuyer could potentially pay for Land Transfer Taxes if buying a property in Ontario or British Columbia, making Alberta an attractive and cost-efficient place to purchase a property.

    If you’re purchasing or refinancing a property in Alberta, the Deeded team can help you close your transaction seamlessly with our virtual process.  You can sign your documents virtually from anywhere in Canada, saving you from having to travel to Alberta or retaining a second lawyer locally to witness your document signing.  

    Getting your Alberta closing process started is simple.  Click here to get started, upload your purchase contract, and we’ll get you on your way to owning your Alberta property.

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  • Conditions On An Offer:  Why They Matter

    Conditions On An Offer: Why They Matter

    Purchasing a home has a great deal of inherent risk, that is why sometimes buyers and sellers look to mitigate that risk by using certain protections when making an offer. That is where conditions on an offer to purchase come in.

    When a buyer’s offer is accepted by a seller, both parties are entered into the contract. However, when making an offer, either party has the choice to make the agreement contingent on certain factors.

    These criteria, or conditions, are clauses that would void or alter the purchase/sales contract if certain obligations are not met.  These obligations can typically fall under three major categories: home inspection, mortgage approval, and lawyer’s review of the agreement.

    Mortgage or Financing Condition

    It is common sense not to purchase something that you don’t have the money to pay for, that’s exactly the purpose of a mortgage or a financing condition in your offer.  The financing condition clause protects the buyer in the case they are not able to secure a loan. 

    This clause allows the buyer a predetermined period of time (usually 3-5 business days) to secure a lender that will issue a mortgage after the date the offer is accepted. If the buyer is unable to secure a lender that will commit to a loan, the buyer may invoke this clause of the agreement and walk away from the sale with the down payment and no other penalties.

    It is always a good idea to get pre-approved by a mortgage lender prior to putting in an offer.  This process will give you a better idea of what you can afford and what the lender is willing to lend you. Although the clause may allow you, as the buyer, to walk away from the transaction, it is always a good idea to have your mortgage lined up.

    Home Inspection

    A home inspection is one of the most important clauses to include in a closing agreement. This contingency allows the buyer to have a third-party inspect the property after putting down a deposit. 

    The purpose of this condition is to ensure that there are no issues with the property such as damage. However, if something does appear to be wrong, a home inspection contingency allows the buyer several options. They may either request that it be fixed at the sellers’ expense, renegotiate the price to factor in costs of the repairs they would have to pay or ultimately back out of the sale. It’s rarely advisable to waive an inspection contingency, for more information of why home inspections are a must have, visit this blog.

    Lawyer’s Review Condition

    Before entering a binding agreement that may involve a very significant purchase such as a home, it is always wise to have the agreement reviewed by a lawyer.   

    There have been many cases where both buyers and sellers did not understand their obligations under a binding agreement of purchase and sale. Some of these cases have resulted in litigation and heavy financial judgements against buyers or sellers. Having a lawyer review clause in your agreement will allow for a few days to have the agreement properly reviewed, giving you peace of mind.

    Waiving All Conditions in a “Hot Market”

    The Real Estate market has been highly competitive across North America for the past few years with properties often receiving multiple offers and bids in attempts to purchase the property.

    As a buyer, it is ultimately your decision whether you would like to waive or forego any certain conditions in order to make your offer more attractive to the sellers.  For example, a seller would typically see an offer with no conditions more attractive than an offer with certain conditions.  

    Quite simply, it gives sellers more certainty as opposed to having to wait days for all conditions to be satisfied and risking having to re-list their property should the deal fall apart.

    While removing conditions may increase your chances of securing the property,  it comes with taking on additional risks.   For example, if you agree to purchase a property without an inspection and find out there are damages and issues after the fact, those issues become your responsibility.

    Final Thoughts

    When making an offer on a home it’s wise to use an experienced Realtor that can help you ensure you have proper protection. 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 to suit your situation.

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  • Land Transfer Tax. What Is It and How To Budget For It.

    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).

    What is The LTT?

    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.

    Do I Qualify for the Ontario Land Transfer Tax Refund?

    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.

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  • Status Certificate. What is it and Why Should You Care.

    Status Certificate. What is it and Why Should You Care.

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

    What Information Can I Get From A Status Certificate?

    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 Status Certificates?

    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?

    Status certificates 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 status certificates 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.

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