Monthly Archives: December 2008

This informative article reprinted with permission from:

BILL FRIC
Fric Loweinstein & Co. LLP
Barristers & Solicitors
#310, 2891 Sunridge Way NE
Calgary, Alberta T1Y 7K7
Phone: (403) 291-2594
Fax: (403) 291-2668

What To Do & Expect?

After all conditions are waived, typically the listing real estate office will send your Real Estate Purchase Contract and contact information to the lawyer you have chosen.

The lawyer will then review the Contract and do a tax and title search, including a search of liens and other encumbrances affecting the property.  If something unusual is encountered, the lawyer may contact you at this stage.

If you are a Seller, and if you have not already arranged for an updated Real Property Report (Survey), then call the law office and discuss that as soon as possible.  Note that usually a Seller must provide a Real Property Report that shows all improvements built on the property, including fences, and it must have on it a Certificate of Compliance from the City.  (This requirement does not apply to most condos – but it does apply to bareland condos, where you own the land around your unit.)

If you a Buyer, ensure at this time that all the money you will need to pay will be available to you in a bank draft by at least ten days before the possession date.  If you need to make arrangements to get the money out of an RRSP or investments, or by way of interim financing of another property, you need to make these arrangements now, as sometimes your bank will need time to make the money available.

If you are buying and getting a mortgage, do whatever your lender may still need in order for your lender to finalize your mortgage.  Mortgage companies may need a lot of time to process your mortgage, so do this as soon as possible.  If you are getting a mortgage, the lawyer will have to wait to get mortgage instructions from your lender.

Once a law office receives mortgage instructions from your lender, the law office will calculate adjustments to your purchase price, and the net amount of your mortgage advance.

Typical adjustments are for taxes, condo fees, and homeowner’s association fees.  For example, if a Buyer of a condo takes possession on September 15, the Buyer will have to reimburse the Seller for one half  (1/2) of September’s condo fees.  If taxes on the condo are paid up to the end of the year, as is most often the case, then the Buyer will have to reimburse the Seller for those taxes pre-paid for the period September 15 to December 31.

Mortgage advance refers to the net amount your mortgage company will be paying to the lawyer to complete your purchase.  Since some lenders may take off high ratio fees, application fees, appraisal fees, a tax holdback, or the first month’s interest, or even a courier fee, that will leave you with less than you may expect to receive under your mortgage. (You should ask your lender or broker about these deductions when you first apply for a mortgage).

Once these adjustments are calculated, the law office will call you.  Note that lawyers will typically deal with transactions in the order in which they close (that is, by possession date).  Therefore, if your possession date is not for several weeks, you will not likely receive a call until about two weeks before your possession date.

If you are going to be unavailable or difficult to reach, call the law office and let them know.

When the law office calls you they will set up an appointment between you and the lawyer.  You will be told what you will need to bring in with you to that appointment.  Note that all money payable on a real estate transaction must be paid by bank draft or certified cheque which you will have to obtain from your bank and bring to your appointment with the lawyer.  You may have to bring in proof of fire insurance, or if it’s a condo, your condo documents.  You will also have to bring picture I.D. with you of a type required by your particular lender, usually a valid driver’s licence and a credit card.

When you meet with the lawyer, the lawyer will review with you the title to the property, any encumbrances on title, and the Real Property Report or Condo status.  The lawyer will review your mortgage and all calculations.  If you are buying and placing a new mortgage, you will have to sign a lot of documents.  Come prepared for that and if possible avoid bringing small children with you as the process can take some time and you should want to learn what you can about your mortgage and other aspects of the transaction.

The lawyers will ensure that the proper amounts are paid and arrange for the transfer of title.  The listing agent will typically contact the Seller’s lawyer to ensure that everything has been done and that keys can be released.

The lawyers will payout any liens against the property that are not being assumed, and arrange to obtain a registered discharge of those liens.  For example, if the Seller had a mortgage that has to be paid, then the lawyers will contact the Seller’s mortgage company, arrange for a payout of the Seller’s mortgage, obtain a Discharge of Mortgage, register that Discharge, and then send proof of discharge to the Buyer and to the Buyer’s lender.  It will often be months after payout before mortgage companies send out discharges.

After possession, the law office will send one or more reports, which include a certificate of title in the Buyer’s name and all other relevant documents that you may need, together with an accounting of all funds.  When you meet with the lawyer, you will be told when to expect to receive your reports.  If you are a Seller, be aware that funds are often not releasable until some time after the possession date.

Sometimes you will need additional services from your lawyer, and the need for these may arise at any stage of the real estate transaction.  For example, people will often need something reviewed before conditions are waived.  Typically your Realtor will be able to alert you if there is a further need for legal input beyond what we have outlined above.  Your Realtor and/or lender can estimate your legal costs for you or you can call us in advance for an estimate.  Typically, real estate lawyers employ legal assistants experienced in the routine aspects of these transactions, and when calling a law office you may find it easier to ask for the particular legal assistant to whom your file has been assigned.  Do not be reluctant to call the lawyer directly, particularly if you have an unusual transaction.

Prepared for Realtors and their clients by:

BILL FRIC
Fric Loweinstein & Co. LLP
Barristers & Solicitors
#310, 2891 Sunridge Way NE
Calgary, Alberta T1Y 7K7
Phone: (403) 291-2594
Fax: (403) 291-2668

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Mike says:  I have used Fric Lowenstein & Co. for my personal real estate transactions, and will continue to do so because of their exceptional service.