Role of the Lawyer in Purchasing Canadian Real Estate...

The first step in buying a home is submitting your offer to purchase. This document is called a real estate purchase contract. Your real estate agent will help you prepare and submit the offer. Once the offer is accepted, it is a legal contract and you are bound by all of the terms. Remember: if it is not in writing, it is not part of the offer.

After a real estate purchase contract has been accepted, the bulk of your lawyer’s work begins. A search is done at the Land Titles Office to obtain a copy of the title and review all of the registrations against the title. A search at the Personal Property Registry is done to ensure that any freestanding items that you may be purchasing, such as the appliances, are free and clear. This search also ensures that there are no outstanding judgments or other Court Orders against any of the parties that may interfere with closing. The tax roll is searched to make sure the taxes are paid and that there are not special assessments.

Your title may be subject to a number of registrations. Utility right-of-ways, restrictive covenants, and the like, typically remain registered against the property after your purchase. They do not affect your title and in fact can often enhance the value of your property. For example, a restrictive covenant that prevents you and your neighbors from operating a business out of your home or from painting the outside or you home in wild colors will enhance the value of your home as it ensures that your neighborhood will remain a quiet place to call home. Your lawyer will explain the full impact of these registrations.

Other registrations against title such as builder’s liens, caveats and mortgages must be removed to ensure that you obtain good title. Your lawyer will ensure that these encumbrances are addressed and will do the necessary follow-up work after the closing date to ensure they are discharged from the title.
Having a lawyer to assist you with your house purchase is like buying a policy of insurance. Every lawyer in Alberta carries significant liability insurance. In addition, every lawyer in Alberta carries significant liability insurance. In addition, every lawyer in Alberta contributes to a fund that is available to reimburse any money that is improperly paid out of a layer’s trust account.

Lawyers have worked out a system to deal with the timing of closing. The problem is this. Sellers do not want to provide a signed Transfer of Land until they have been provided with a full payment for their property. The buyer does not want to provide payment in full until he/she has presented the Transfer of Land for registration at the Land Titles Office and obtained satisfactory registration. Land Titles Office takes anywhere from one to ten working days to process a Transfer of Land.

Through the use of trust conditions and trust accounts, lawyers provide a solution to this timing problem. Your lawyer will ask for your share of the purchase money several days prior to closing. Once your lawyer has the money in their trust account, the seller’s lawyer will allow the buyer’s lawyer to send the signed Transfer of Land to the Land Titles Office. Once registration is complete, the money is released to the seller’s lawyer and the seller. Rules and conditions govern the various problems that can arise during the closing and what will happen with monies that are held in trust.

Your lawyer must have your money several days prior to closing. If you are selling one property and buying another property with closings on the same day, you may need to arrange interim financing. This is a temporary loan to ensure that monies are in place to complete your purchase.

After the closing, your lawyer will make sure that any outstanding encumbrances are discharged from title. Your lawyer will also attend to any other unfinished matters such as the registration of an encroachment agreement of the fulfillment of outstanding conditions.
Finally, your lawyer will provide you with a complete written report with copies of all relevant documents to show that you have good title to the property.

.../Courtesy of Stan Galbraith
This article provided as a public service by the Alberta Land Surveyors’ Association.

(Jessica Stoner of RE/MAX Alpine Realty is a licensed agent in Alberta and represents International clients purchasing real estate in Canmore)