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

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

warranty

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!

What is “First Dealings for Estate Sales”?

Dream house.

Recently I have had several agents raise questions on a clause in an Estate sale which referred to first dealings and the fact that probate might not be needed. So what is a “First Dealings for Estate Purposes.”

The requirement in Land Titles is that upon the death of an owner, the estate trustee must obtain probate. The conversion of properties from the old registry system to Land Title has lead to an exemption from the requirement for Probate for these converted properties to Land Title Qualified.

The First Dealings Exemption is applicable if the deceased acquired the property while it was registered under the registry system and was subsequently converted to Land Title Qualified and the deceased still owned the property, then the owner will be exempt from the requirement for probate. This First Dealings Exemption will still apply as long as the dealings do not transfer title, such as mortgages and discharges.

The exemption will still apply if a joint tenant has died on the registration of a survivorship application will not vitiate the first dealings exemption for the survivor. Inter-spousal conveyances due to the dissolution of a marriage will not disqualify the owner from the First Dealings Exemption. This exemption is only available where there is a Will and where the property is in the Land Title Qualified.

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

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: Part 3 of 3

house-in-hands

Should I Stay or Should I Go Now?!  What happens when a common law relationship breaks down and one party wants to sell the home and the other party is happy living in the house and often is not making much of a contribution to the upkeep?

 The party that wants to sell can sever a joint tenancy by registering a transfer to themselves.  Thus converting the property to tenants in common.  He or she can also force the sale of the property by commencing an “ Action for Partition”.  Parties are not locked into their properties.  The agent can advise the party to seek legal advice on a partition action.  Usually, a letter from the selling party’s lawyer will get the desired results of getting the property listed.  However, if an action is required agents must allow sufficient time to have the action heard.  Talk to the selling party’s lawyer, months are quite often required, but the courts will order the sale and even dispense with the signature of the non co-operating party if necessary.

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

Contact toll free: 1-877-744-2281

Online: www.paquettetravers.com

Family Law Issues in Real Estate: Part 2 of 3

homesplitting

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 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.  Be prepared and ready to advise!

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

Contact toll free: 1-877-744-2281

Online: www.paquettetravers.com

Family Law Issues in Real Estate:Part 1 of 3

commonlawpicture

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 two people living together for three 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 any party acquires any interest in real property. Thus from an agent’s point of view in common law circumstances, the consent of the common law is never required to list or sell the property. This applies even in the case of the matrimonial. Only if both parties are on 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. If you have any suggestions for future topics please let us know.

Prepared by Don Travers, Solicitor with Paquette & Travers

Contact toll free: 1-877-744-2281

Online: www.paquettetravers.com

Here Today, Gone Tomorrow – The Risk of No Conditions!

Sold

In this very hot market, we are seeing most deals without any conditions, and in particular, no financing condition.  However, this is not necessarily a blessing for the Seller. Sales not being completed because of the Buyer cannot get financing.  The Seller believes they have a firm Agreement of Purchase and Sale act upon that information to buy a new home. Unfortunately, the Seller finds out when they get close to the closing, that the Buyer cannot close because the price paid for the house is not justified by the bank’s appraisal.  The Seller is left in the inevitable position of not being able to complete their purchase.

To make matters worse, there was a multiple offer, and unfortunately the seller selected the perceived best offer, which turned out to be the wrong offer.  The offer had only the minimal deposit, so the seller does not have much to fall back on for their damages.

In order for Agents acting for the sellers to protect their clients, the Agents should be making sure that the accepted Agreement of Purchase and Sale have larger deposits.  If buyers can not come up with a larger deposit, they probably cannot make up any shortfall in the bank financing either.

If you sold your home in 2016, you will have to report it to the Canadian Revenue Agency in your tax form that deals with Capital Gains, even though any gains remain tax free if you have lived in the house as long as you owned it. The basic information related to the transaction must be filled out on the income tax form including the year of purchase, the proceeds of the sale, and the description of the property.  The penalty for not reporting the sale of a home and not having your tax return amended if necessary is up to $8000. This change in reporting will make it easier for the CRA to catch taxpayers who try to claim the principle residence exemption on more than one property for the same period.

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

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

Watch for more Travers Tidbits to follow each month!