Real Estate FAQ’s

How To Choose a Real Estate Lawyer

1. How much time do you require to complete a purchase/sale/refinance file?

Depending on the time of year, we require a minimum of 10 business days to complete your transaction. If your time period is shorter, please contact us at 1-877-744-2281 in order to determine whether we will be able to assist you on a rush basis.

2. I just bought and/or sold a home. How do I get started?

If you are using a real estate agent, please inform your agent that you would like to use our law firm, and have your agent email a copy of the Agreement of Purchase and Sale to our office. Alternatively, a copy can be faxed to 1-855-744-8008. If you do not have an agent, or if you are purchasing directly from a builder, please drop off the Agreement for review to one of our four offices, or scan and email them directly. Upon receipt of the appropriate documentation, our staff will be in touch to re-confirm receipt of all documents.

3. How long does it take for my Agreement of Purchase and Sale and/or Status Certificate to be reviewed?

Your documents will be reviewed within 24 to 48 business hours upon receipt of the relevant documents. To top it off, we will review your Agreement and/or Status Certificate, free of charge!

4. What is Title Insurance and what does Title Insurance cover?

Title Insurance reduces the Home Owner’s disbursement costs on the transaction as it provides protection in lieu of a complete survey. Title insurance covers the homeowner for example, if the previous owner had outstanding unpaid property taxes and/or did not apply for building permits and completed extensive renovations on the existing home. We are pleased to offer all our clients insurance coverage through Stewart Title.

5. How is Land Transfer Tax calculated?

When you buy land or an interest in land in Ontario, you pay land transfer tax. Land transfer tax applies to all conveyances of land in Ontario. Please input your purchase price into the calculator located on our website to determine the amount of tax you owe on the transaction. We can also assist you with these calculations as required.

6. How do I qualify for a First-Time Home Buyer Rebate?

Beginning January 1, 2017, the maximum amount of the refund is $4,000. The increased limit of $4,000 applies only to conveyances or dispositions that occur on or after January 1, 2017, regardless of when the Agreement of Purchase and Sale was signed. To qualify for a refund: ▪ The purchaser must be at least 18 years old. ▪ The purchaser must occupy the home as their principle residence within nine months of the date of transfer. ▪ The purchaser cannot have ever owned a home, or an interest in a home, anywhere in the world, at any time. ▪ If the purchaser has a spouse, the spouse cannot have owned an eligible home, or had any ownership/interest in an eligible home, anywhere in the world, while he or she was the purchaser’s spouse. If this is the case, no refund is available to either spouse. ▪ In addition to the above, the person must have sold the home prior to marriage providing proof by disclosing the home’s address and date sold. ▪ The purchaser cannot have previously received an Ontario Home Ownership Savings Plan (OHOSP)-based refund of land transfer tax. Beginning January 1, 2017 eligibility for the first-time home buyers refund program is restricted to Canadian citizens and permanent residents of Canada. You will be required to provide a copy of your Canadian Birth Certificate, Canadian Passport or Permanent Residency Card. Should you have any additional questions, please don’t hesitate to contact our office.

7. What type of identification (ID) is required by my bank/lawyer?

Your lawyer is bound by the mortgage instructions set out by each financial institution to verify your identity via the appropriate forms of identification. Each financial institution has its own requirements for acceptable identification. You will be required to produce two pieces of ID at the time of your appointment. You must have one mandatory piece of ID (valid Canadian passport, Canadian birth certificate or permanent resident card) & a secondary piece of ID (valid driver’s license or social insurance card.) Such documents must be produced and will be photocopied by our staff when you attend our office for your appointment for your transaction to be completed. If you have any questions with regards to appropriate ID, please contact our office immediately to clarify.

Knowledge is Power!  Contact us today to find out more.  We’re here to help!

Kitchener/Waterloo Office
423 King Street North,
Waterloo, N2J 2Z5
 1 (877) 744-2281
TF Fax: 1-855-744-8008
Local Fax: (519) 744-8008
info@paquettetravers.com

Family Law Issues in Real Estate (Part 1)

two-hands-grapsing-a-model-house

A common problem in Family Law situations is when the client sells a matrimonial home and plans to use their share of the proceeds to buy another home. This “Dream Client” can become a nightmare if the agent is not careful. It is not uncommon for spouses to assume they will receive half (1/2) the equity of the house upon the sale. It is important for agents to ensure their client has a separation agreement in place, dealing with the proceeds of the sale of the house, or at least an irrevocable direction to the lawyer acting on the sale for what is required to complete the new purchase, before the spouse commits to a firm agreement of purchase and sale on a new house.

Spouses can get very vindictive, and on a sale, will often insist the proceeds of the sale be held in trust by their real estate lawyer until all Family Law issues are resolved. If the proper caution is not taken as mentioned above, the spouse’s purchase can be thwarted and the purchasing spouse can be exposed to damages for failure to close.

Always make your client aware of this, and do not let them firm up without clarification of who gets what of the sale proceeds. Spouses can never count on their spouse continuing goodwill.

Knowledge is Power, which results in more business!

If you have any questions or concerns, please feel free to contact us at your convenience.  If you have any suggestions for future topics please let us know.

Prepared by Don Travers, Solicitor with Paquette & Travers Professional Corporation

Contact toll free: 1-877-744-2281                                          Online: www.paquettetravers.com

Watch for more Travers Tidbits to follow each month!

Family Law Issues in Real Estate

commonlaw

I recently gave a seminar for the Kitchener Waterloo Real Estate Board on Family Law issues in Real Estate with my business partner, Barry Paquette, who is a Certified Specialist by the Law Society of Upper Canada in Family Law.

One of the most misunderstood aspects of family law issues in real estate is “What is a Common Law relationship.” A Common Law Relationship is legally defined as 2 people living together for three (3) years, or a relationship which has a child from it. Many people will refer to themselves as common law without meeting these criteria.

It is important to note that even if the parties meet the legal definition of common law, this does not mean that they have any interest in the other persons property. A legal common law relationship can impose support obligations on each other. However, parties must legally be married, before a party acquires any interest in real property. Thus from an agents point of view in common law circumstances, the consent of the common law partner is never required to list or sell the property. This applies even in the case of the matrimonial home. Only if both parties are on the title – would both have to sign, which would be obvious in any circumstance.

Knowledge is Power, which results in more business!

If you have any questions or concerns, please feel free to contact us at your convenience. We would love to hear from you!

Prepared by Don Travers, Solicitor with Paquette & Travers Professional Corporation

Contact toll free: 1-877-744-2281 Online: www.paquettetravers.com

Referrals are the lifeblood of our business. If your clients, family or friends are in the process of buying, selling or refinancing Real Estate, our greatest compliment would be a recommendation from you.

We are never too busy for your referrals!

If you would rather save some trees, please contact Heather Schmitz at my office and she would be happy to add you to our email mailing list for future tidbits!

Furthermore, you may find all of our previous tidbits on our website for your reference. Go to: http://www.traverstidbits.com/

Stigmatized Properties and Latent Defects

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Agents sometimes run into problems when taking a listing because the Seller is aware of a defect and does not want the Agent to disclose the defect. The problem is that the obligations of Sellers are not the same as the Agent. The Agents have a broader duty of disclosure than do the Sellers. Agents, under the regulations pursuant to your Code of Ethics are obliged to disclose material facts relating to the property.

RECO has addressed stigmatized properties. ‘Stigma’ is not defined, but RECO provided examples, as follows:

1. The property was used in the ongoing commission of crime. (eg. Drug dealing, chop shop, brothel)

2. A murder or suicide occurred at the property.

3. The property was previously owned by a notorious individual. (eg. Organized crime, known murderer.)

4. There are reports that the property is haunted.

5. A former grow-op which has been remediated according to the local health or building authority.

Sellers have only two duties when it comes to disclosure:

1. To disclose a latent defect that renders the premises unfit for habitation; and

2. To disclose a latent defect that renders the premises dangerous in themselves.

The courts have held that Sellers do not have to disclose a death, suicide or murder in the house. A grow-op, haunted house, or murderer’s house, such as Paul Bernardo’s house (although now demolished), would not require disclosure by the Seller, but certainly by the Agent. In the past, the principle followed by the courts was “buyer beware.” The problem with ‘stigmatization’ by definition, it is ephemeral (in the eyes of the Buyers), and their subjective personal preferences.

Agents face a difficult decision in this situation; whether to take the listing or not. If the listing is taken the Agent can face a disciplinary hearing before RECO, if there is non-disclosure of the defect. If the Agent discloses the defect, he or she could face a law suit by their client for breach of their fiduciary duty to the client.  In the RECO v Rybitsky, the failure by the Agent to disclose a previous grow-op that had been remediated, led to a fine of $11,000.00 for breach of the Code of Ethics.

Where this gets tricky is where it is a matter of degree, such as insect or mice infestation. How bad are the bugs and mice? Have efforts to clean up failed? Does it create a contingency health hazard? Agents could lose the deal but disclosure is preferable to a disciplinary hearing.

Knowledge is Power, which results in more business!

If you have any questions or concerns, please feel free to contact us at your convenience. If you have any suggestions for future topics please let us know.

Prepared by Don Travers, Solicitor with Paquette & Travers Professional Corporation

Contact toll free: 1-877-744-2281 Online: www.paquettetravers.com

Watch for more Travers Tidbits to follow each month!

Property Tax Assessments – Who Pays?

Property-Tax-Assessment

We recently were contacted by an agent advising us of confusion about new properties sold without tax assessments.  The example used was a new property sold within a year of being purchased, where there is no assessment and therefore no property taxes have been paid.

The question was “What should the realtors and Sellers and new Buyers know about who pays and how is the money collected?”

The answer is the Seller is responsible for the taxes up to the closing date, and this will have to be adjusted after closing when the bill is received.  The taxes run with the land and the new owner, the Buyer, will receive the tax bill and will pass it on to their lawyer.  The lawyer should have as part of the closing, received an undertaking from the Seller’s lawyer, to hold back sufficient funds from the sale proceeds to cover the Seller’s share.  The lawyer should have worked out an estimate of what those taxes are.  The lawyers will then do the tax adjustment, pay the Seller’s share to the Buyer so they can pay the City, and the balance left over will be refunded to the Seller.

Knowledge is Power, which results in more business!  If you have any questions or concerns, please feel free to contact us at your convenience.

Referrals are the lifeblood of our business.  If your clients, family or friends are in the process of buying, selling or refinancing Real Estate, our greatest compliment would be a recommendation from you.  We are never too busy for your referrals!

Watch for more Travers Tidbits to follow each month!

 

Well and Water Warranties

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It is extremely important when buying a rural property that the appropriate warranties are granted from the Seller to the Buyer.  The following clause best sums it up:

I/We _______________________, the Sellers in the transaction, hereby warrant to the Buyers with respect to the domestic water supply and domestic water supply system, that:

  • The water supply is capable of supplying an adequate flow (a minimum five (5) gallons per minute);
  • The water provided is potable on a year-round basis;
  • The Seller is not aware of any contamination or impurities in the water;
  • The Buyer will have a reasonable opportunity to enter on the property for purposes of obtaining water samples;
  • The normal water tests will show either a “0-0” reading or an acceptable reading as defined by the Ministry;
  • There are no unsafe contaminants to a level deemed unacceptable under the “Drinking Water Objectives”;
  • The water is completely clear, clean and free of any displeasing colour or smell;
  • The pump, holding, pressure and distribution systems all perform adequately, have been properly maintained and repaired and will be in good operating condition on closing;
  • The well is situated entirely within the limits of the subject property;
  • The well services only the subject premises and is not a communal well; and
  • The well is a dug or drilled well, not from a water source such as a river, spring lake, stream or other surface water.

Knowledge is Power, which results in more business!  If you have any questions or concerns, please feel free to contact us at your convenience.

Referrals are the lifeblood of our business.  If your clients, family or friends are in the process of buying, selling or refinancing Real Estate, our greatest compliment would be a recommendation from you.  We are never too busy for your referrals!

Watch for more Travers Tidbits to follow each month!

Grow Ops … and The Usage of “To the Best of My Knowledge and Belief”

indoor-grow

The above term is often used in the Agreement of Purchase and Sale; but what is the effect of it on representations and warranties?

In the Court of Appeal case of “Beatty v. Wei” found that despite a Seller’s representation during the time they had owned a property, that the property had not been used as a grow op, the effective date of the truth of the representation made to “the best of the Seller’s knowledge and belief” was at the time that the representation was made. Without the language in the clause that the representation continued until closing, the representation did not continue, and, in this case, it was discovered that the property had in fact been used as a grow op at some time prior, but that fact was unknown by the Seller and the Seller was not liable.  The emphasis to be placed on representation is the knowledge of the Seller when the representation was given and not on whether the property had been used as a grow op.

The representation given was limited to the Seller’s knowledge at the time given and was not absolute.

If the Buyer wants the representation to apply up to the date of closing, the Agreement of Purchase and Sale should be written to include this timeframe. Since the clause did not reflect “up to the date of closing”, the representation only applied to the date of execution of the Agreement of Purchase and Sale.

We all rely on “to the best of my knowledge and belief” in our agreements, so it is important to realize that without language that makes the knowledge apply to the date of closing, the effectiveness of the representation is limited to the date it is given.  Even if the Buyer finds out prior to closing that there was a grow op, the Buyer does not have the right to terminate the Agreement of Purchase and Sale.

Knowledge is Power, which results in more business!

If you have any questions or concerns, please feel free to contact us at your convenience.  If you have any suggestions for future topics please let us know.

Contact toll free: 1-877-744-2281     Online: www.paquettetravers.com

Watch for more Travers Tidbits to follow each month!

The Obligation of Disclosure in Agreements of Purchase and Sale (APS) …and The Case Of Marijuana!

Why-Everybody-Should-Be-Allowed-To-Grow-Marijuana-At-Home

Beatty et al. v. Wei et al. is a Superior Court of Justice decision dated June 5, 2017. This case is significant because it speaks to representations and warranties made by a Seller in an Agreement of Purchase and Sale, specifically with respect to the relationship between representations and warranties made to the best of the Seller’s knowledge and belief and the ability to rescind an otherwise valid APS. The basic facts of this case are as follows: An APS was entered into between Buyer and Seller. In the Agreement, the Seller represented and warranted that to the best of their knowledge and belief, the property had not been used for the growth or manufacture of illegal substances. At the time this representation and warranty was provided, this was in fact true. Before closing, the Buyers discovered through their own investigation that the property had in fact been used to produce marijuana in 2004. This was confirmed by a letter by Toronto Police. The Buyers refused to close the transaction and demanded the return of their deposit. The Sellers refused to agree to the termination of the APS and brought an application for declarations that the APS was a firm and binding contract, the Buyer had breached the APS and that the deposit had been forfeited. The Buyer applied for declarations that they were not required to complete the transaction and for the return of their deposit.

The Court ultimately found in favor of the Buyer. The Buyer was able to rescind the APS and the deposit was returned. Why? The Judge reasoned that this representation and warranty given by the Sellers was relied upon by the Buyers and induced them to enter into the APS. If it were the case that the Sellers had discovered there once was production of marijuana at the property, the Seller would be obligated to notify the Buyer before closing because they would no longer be able to make that representation and warranty. This would be a material change to the contract and would be grounds for rescission. The Judge reasons that the Buyer’s rights are not affected merely because they were the ones who made the discovery, and thus the same principle must apply. This was a material change to the terms of the APS and the Seller could no longer sell the property on the same material terms and conditions agreed upon in the APS.

Real Estate Agents should be mindful of this decision because of the potential implications it could have when this representation and warranty is made in an APS. If your Seller represents and warrants that to the best of their knowledge and belief a particular circumstance about a property is either true or untrue, a Buyer may have a valid claim for termination of the APS if in reality the state of the property conflicts with what your Seller has represented and warranted. If acting for a Seller, be aware of the potential risks to the APS if a representation and warranty is made that is discovered to be a mistaken belief in reality. If acting for a Buyer, if your Client has been induced to enter into an APS based on a mistaken belief that is represented and warranted by a Seller, your Buyer may have a right to terminate the APS and to have the deposit returned.

Knowledge is Power, which results in more business!

If you have any questions or concerns, please feel free to contact us at your convenience.  If you have any suggestions for future topics please let us know.

 

Prepared by Bryan Mayes, Solicitor with Paquette Travers

Contact toll free: 1-877-744-2281                                                          Online: www.paquettetravers.com

Watch for more Travers Tidbits to follow each month!