Real Estate

Would it be advisable for a lawyer to review the Agreement of Purchase and Sale before I sign?
Yes. A prospective purchaser should always have his or her lawyer review the Agreement of Purchase and Sale before it is signed in order to ensure that conditions (i.e., satisfactory building inspection reports, water potability tests, septic system inspections or environmental assessments), are inserted to allow a purchaser adequate time to review the physical condition of the property. For example, the purchaser should conduct certain due diligence inquiries prior to closing including a building inspection, a septic system inspection and in some cases, an environmental assessment. A lawyer should also review the property survey for title defects and advise whether an up-to-date survey is recommended, confirm that adequate time is provided to properly negotiate financing for the transaction, and generally to advise the purchaser as to additional conditions and warranties that may be required to protect the purchaser's interests.

A lawyer acting for a vendor will review the Agreement of Purchase and Sale with a view to limiting a vendor's exposure on warranties and conditions that it must satisfy to close the transaction.

Should I involve my lawyer when negotiating a re-financing for my commercial property?
Yes. A lawyer involved in commercial financings offers advice as to what is reasonable and what is not, and will ensure that the terms of the mortgage loan commitment actually reflect the terms of the business deal.

Why is it important to have a survey of my property when I purchase a home?
A survey is an important part of a solicitor's review to determine whether there are any defects in title. A survey is required to determine whether the building(s) on the land are in compliance with zoning by-laws, whether there are any encroachments by building(s) onto adjacent lands or, in the alternative, whether any building(s) from neighbouring lands encroach upon the subject property. An up-to-date survey will also disclose the location of the fences in relation to the property boundary and whether or not there have been recent additions to the property. In addition, a survey also helps to determine whether or not anyone else may have a claim for adverse possession of the subject property or if any rights of way or easements exist.

What is the Ontario New Home Warranties Plan Act (the "ONHWPA")?
The ONHWPA provides protection and, in some cases, compensation to purchasers of new homes or condominiums for matters covered by the legislation. A builder of a new home must be registered under the ONHWPA and all homes built by a builder must be enrolled under the Act.  Typical Agreements of Purchase and Sale from builders include provisions relating to the ONHWPA, the builder's registration number, and enrolment of the home or condominium under the ONHWPA. A purchaser may be eligible for compensation for the loss of the deposit (up to $40,000 for a new home and up to $20,000 for a new condominium) where a builder is unable to complete the contract and cannot return the deposit to the purchaser.

The ONHWPA also provides compensation, where appropriate, to purchasers pursuant to the warranty provisions under the legislation. Under the ONHWPA, there is the option to perform repair work in lieu of paying compensation. Pursuant to the legislation, the builder warrants for one year that the home is constructed in a workmanlike manner, is free from defects, and covers those deficiencies noted in the purchaser's final inspection prior to closing the transaction. Water seepage, defects in materials, and work in electrical, plumbing and heating systems are among the matters covered by a two-year warranty. A seven-year warranty covers major structural defects in the home.

What is title insurance and how does it work?
A relatively recent development in the Ontario real estate market has been the advent of title insurance, which has existed in the U.S. real estate market for many years.

Title Insurance is an insurance policy that protects the purchaser or lender in the event of an unexpected title problem that arises following the closing of a real estate transaction. Certain off-title inquiries that would be normal for the purchaser’s solicitor and/or lender’s solicitor are not conducted, and the title insurance company provides the coverage for a problem arising post-closing that would have been revealed by a standard search. In Ontario, various title insurance companies are now operating, including Stewart Title Guaranty Company, First Canadian Title and Chicago Title Insurance Company. The Law Society of Upper Canada also operates a title insurance product called TitlePLUS.

What does it mean to own a property as “joint tenants”?
Where real property is registered in the name of two persons as “joint tenants”, and one of them dies, title to the land automatically devolves to the surviving joint tenant by the “right of survivorship.”.  For example, if a parent and a child own property as joint tenants and the parent dies, the child automatically becomes the sole registered owner of the property. No will is required to transfer the property to the surviving joint tenant.  The deceased's will does not have to be probated in order to transfer the property to the surviving joint tenant.