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Tag: real estate lawyer

  • 3 Questions You Need to Ask Your Alberta Real Estate Lawyer

    3 Questions You Need to Ask Your Alberta Real Estate Lawyer

    If you just firmed up your purchase or sale (Congratulations!), you’ll likely need to choose a Alberta 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 must ask any Alberta Real Estate lawyer when buying or selling a house:

    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?

    An Alberta Real Estate lawyer can now witness real estate closing documents remotely. This means you can meet with your lawyer through video-conferencing 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.

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  • Most Common First Time Closing Mistake

    Most Common First Time Closing Mistake

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

    Let’s face it. Buying a home 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 first time closing mistake we see with 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.

    Below we've broken down the closing costs you need to know about as a buyer so you don't fall for the most common first time closing mistake:

    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.

    For information on how your family may be able to help you cover this cost visit our gifting a down payment blog post.

    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.

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  • The Top Real Estate Closing Costs to Consider in Alberta

    The Top Real Estate Closing 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 real estate 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 real estate 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 real estate closing 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 real estate closing 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 closing 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. Contact the Deeded team and we’d be happy to give you a more accurate estimate.

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  • Closing On a Friday

    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.

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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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