Buying a home is one of the biggest financial investments in your life, so hiring the right real estate lawyer should not be overlooked, or viewed as a ho-hum necessity of buying your dream home (or any property for that matter).
A good real estate lawyer will uncover, review and advise you as to whether you’re buying a home with a “clean bill of health” and they are a crucial, but often times misunderstood, component of the real estate purchase process. The role and duties of your real estate lawyer can be broken down into three different points in time: a) the offer stage; b) between the acceptance of the offer and prior to closing; and c) the closing date.
Offer Stage
At this stage your real estate lawyer can help you and your realtor put together an offer to purchase the property and ensure that your obligation to carry out the transaction is conditional upon certain important conditions being completed to your satisfaction. Conditions normally include the transaction being conditional upon obtaining mortgage financing, obtaining a satisfactory inspection report and that the property is insurable.
Your lawyer can also help you and your realtor with any “out of the box” clauses that should be inserted into the agreement to protect you. Such clauses can include written guarantees (i.e. warranties) you want to receive from the Seller certifying the condition of a pool, roof or condition of the property, amount of rent being received from tenants at an income property, that there are no flooding issues etc.
Between Acceptance of the Offer and Closing
Once the offer has been accepted by the Seller you now have a binding agreement of purchase and sale which obligates you, with exceptions, to buy the property at the agreed upon price.
At this stage, your real estate lawyer will usually carry out the bulk of their duties for you.
Your lawyer will carry out title and off-title searches to ensure you are buying a property without a host of legal issues. Think of your lawyer as a “legal home inspector” who will carry out a legal inspection of the property to ensure you won’t end up with a home costing you tens of thousands of dollars in potentially problematic legal conundrums.
This translates into your lawyer checking to make sure the property will be purchased free from all liens and mortgages, that it has road access, that it isn’t subject to any easements which negatively affect the use of the property, there are no boundary issues with neighbours, that your property can be used in conformity with applicable zoning by-laws and that the taxes are paid and up to date among other things.
To further protect you your lawyer will also coordinate and obtain title insurance for you to ensure that in the event undiscoverable legal problems rear their ugly head later you’re protected.
The Closing Date
The closing date is the day set out in your agreement of purchase and sale where the property will officially be transferred to you and registered in your name.
At this stage, your lawyer would have likely already met with you to sign all necessary “closing documents” which would include the transfer, mortgage (if applicable), review the breakdown of all the monies that need to be provided to purchase the property and other related documentation.
On the closing date, your real estate lawyer would arrange to receive the mortgage funds from your bank and thereafter transfer the monies over to the Seller’s lawyer.
Once the Seller’s lawyer is in receipt of the purchase proceeds, the Seller, through their lawyer, would then authorize your real estate lawyer to register the transfer and thereby put the property into your name as the new owner.
Once the transfer is registered, after your real estate lawyer has checked that there are no outstanding judgments against the Seller, you are now officially the owner of the property.
Your lawyer would then contact you to inform you that the transaction has now been completed and (if they’re really nice) congratulate you on this momentous occasion in your life! You’re then free to pick up the keys or obtain the lockbox code in order to begin moving in.
In Summary, your real estate lawyer plays a crucial role throughout the real estate cycle and fulfills different duties depending on the stage of the closing process. At the initial stage, they can oftentimes work with you and your realtor to prepare an offer that is in line with your best interests, once the agreement has been signed, they will review the title and off-title condition of the property to ensure all defects are addressed before you take ownership and on the closing date they will coordinate the transfer of funds with the Seller’s lawyer, register the transfer and arrange for you retrieve your keys or lockbox code so you can begin moving in.
Jonathan R. Huza is the managing partner and real estate lawyer at Huza Law Office. To discuss a real estate matter you can call him at 613.936.2100 x. 204 or email him at jhuza@lawcornwall.com.
Comments