Welcome to the Frequently Asked Questions (FAQ's) portion of our website. Please select the link below for more information on that particular subject.
- Assuring Good Title
- What is Good Title?
- What is a Letter of Opinion?
- What is Title Insurance?
- Advantages of Title Insurance
- Things to consider
- How much is the premium?
- What if something goes wrong after closing?
- Do I still need a lawyer to do my real estate transaction?
- Do I need a real estate lawyer?
Assuring Good Title
Buying a home is the biggest purchase most of us will make. With so much money on the line, the last thing you need, is to find out there is a lien on your home or to have a problem that will make it difficult for you to refinance or sell. One of your lawyer's major responsibilities is to make sure you get good title to your property.
Back To Top
What is Good Title?
Good Title means that the house or property you have purchased is really yours and that no one else has a claim to it that you do not know about. Good Title also makes sure that your property is correctly described in all official documents and that those documents are properly registered.
Back To Top
What is a Letter of Opinion?
Traditionally a lawyer assures a buyer of Good Title with his/her opinion on title. A lawyer provides his client with a Letter of Opinion, which sets out whether the buyer has a good and marketable title to the property. This opinion is arrived at following a number of searches and inquiries. What if something goes wrong after closing? If problems creep up after closing and the buyer can prove the lawyer did not do everything legally necessary, then the buyer can sue the lawyer for any losses he/she suffers. Lawyers in Ontario are required to carry errors and omissions insurance.
Back To Top
What is Title Insurance?
Over the last few years, Title Insurance has been gaining popularity in Ontario. It offers home buyers another way of guaranteeing Good Title. If there are any problems after closing, the buyer will be covered for losses up to the amount of the policy. The amount of the policy is generally equal to the purchase price of the home. The policy is usually in effect until the owner or his/her heirs no longer own the property.
Back To Top
- The cost of the policy may be less than the cost of rectifying a particular problem.
- It may save having to get a new survey.
- There may be fewer disbursements to pay since fewer searches will be required.
- If something goes wrong, the buyer should be able to recover his/her losses more quickly.
- Since this is "no fault" insurance, the buyer does not have to prove the lawyer was negligent.
- The buyer is protected against mistakes by a third party, such as a municipality giving incorrect information.
Things to consider
Like any insurance policy it has both exceptions and exclusions with its coverage (be sure to review them carefully).
Although you may be able to bypass the requirement for a survey, id does not change the fact that certain problems may exist e.g. your neighbour's fence is actually on your property or the property is smaller than you were told.
Back To Top
How much is the premium?
Depending on which company you buy from and the purchase price of the house, the cost of the premium is approximately $150 for a condominium and $170 to $275 for a single family home.
Back To Top
What if something goes wrong after closing?
As long as the problem is covered under the insurance policy, the buyer makes a claim directly to the insurance company. There is no need to hire another lawyer or to prove negligence.
Back To Top
Do I still need a lawyer to do my real estate transaction?
Yes, your lawyer will review your agreement of purchase and sale, will prepare your deed, mortgage and affidavit of residence. He/she will explain your options for assuring you have Good Title, will help you decide if Title Insurance is necessary, will help you choose an insurance company, will purchase the insurance policy on your behalf and will review and explain the policy to you.
Back To Top
Do I need a real estate lawyer?
At first glance, buying or selling a house seems like a straightforward proposition. For this reason, some people might be tempted to oversee the transaction themselves or have a less than legally qualified person do so. From a technical point of view, it can be done, but from a practical point of view, you are probably just asking for many headaches. Whether you are the vendor or the purchaser, there are many details to attend to, some small, some big. The one thing they do have in common is that all are a potential problem if skipped.
One of the first services your lawyer can provide is to review the listing agreement (in the case of the vendor) and the agreement of purchase and sale. Ideally, you should have your lawyer go over these documents before you sign them since it is much more difficult, if not impossible, to make changes afterwards. If however, you contacted your lawyer only after you have signed, he/she can still review them to be sure that you are fully aware of the implications.
If you are selling your house, there are a number of items your lawyer will look after. This checklist highlights some of the main tasks.
- Prepare the draft deed.
- Prepare the statement of adjustments for the purchaser's lawyer (The purpose of the statement of adjustments is to calculate the precise amount that will be owed at closing. Adjustments will be made for the various payments that affect your property, including taxes).
- Write to the mortgagee to determine the amount owing on the date of closing.
- Prepare and register the necessary discharge of mortgage.
- Answer the letter of requisition from the purchaser's lawyer and discuss with you any potential problems that could delay the closing.
- Oversee the execution of all the necessary documents.
- Attend at the registry office on the day of closing.
- Arrange to have the purchaser's deposit forwarded to you.
- Report to you.
If you are the purchaser, then the "to do list" is even longer. As the purchaser, your main concern is that you are getting what you think you are getting and that down the road someone is not going to come along to claim your property. Most of what your lawyer will do is aimed at ensuring you will be getting good title on closing day. The following is a list of what your lawyer will do to make sure the purchase goes smoothly.
- Search the title to the land.
- Search for executions in the Sheriff's office.
- Find out if there are arrears owing to any of the utility companies or the municipal tax office.
- Make sure the property complies with all by-laws and that there are no outstanding work orders.
- Send the vendor's lawyer a letter of requisition explaining what needs to be attended to before the transaction can close.
- Inform the vendor's lawyer how you intend to take title.
- Review the statement of adjustments and other draft documents.
- Order an up-to-date survey if necessary.
- Help you decide if you should purchase title insurance and where necessary purchase it on your behalf.
- Represent your bank in the transaction.
- Oversee the execution of all the necessary documents, including affidavits.
- Review and register the various documents.
- Calculate the land transfer tax.
- Arrange to get the keys to your new home.
- Do sub-searches and check for liens on the day of closing.
- Provide you with an opinion of title.
- Report to you.
This information is a brief summary for information purposes only and is applicable only in the Province of Ontario. It is not intended to be legal advice. Full and complete legal advice can only be given by a lawyer who has detailed information about your individual circumstances