With the market as busy as it is, including purchases of new homes from builders, we thought it would be important to address a significant mistake we are seeing. Many people know that there is a 10 day cooling off period when a buyer buys a new build Condominium. Unfortunately, they also presume that this applies to new home freehold purchases. It does not. The 10 day cooling off period applies only to purchases of new Condominium units. It does not apply to the purchase of a new freehold home from a builder. If a buyer wishes to have a chance to review a new freehold home purchase agreement from a builder there must be a clause in the agreement making the transaction conditional on Solicitor’s review of the new home purchase agreement. It is not automatic, like it is with the condominium. With all purchases of new homes we recommend the inclusion of a Solicitor’s review condition, especially with all of the extra charges and other builder advantages we are seeing in these agreements. Even if it is hard to change these agreements in the current market, it is still helpful to know what is in them.
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4 Common Mortgage Refinancing Problems to Avoid
Tips for Buying and Selling a Home during COVID-19
It goes without saying that 2020 was a year unlike any we had collectively experienced before. From little things like keeping hand sanitizer in your bag to big things like buying and selling a home in a safe and responsible way, COVID-19 has certainly made us adapt to a new way of life.
With that said, we’ll explore some things to keep in mind whether you’re buying a home during COVID-19 or selling a home during COVID-19.
What Are the Risks of Adding Someone to Your Property Title?
For many people, their homes will be the single biggest investment of their lives and their largest source of equity. As such, no decision regarding ownership of said equity should ever be taken lightly. As any experienced real estate lawyer in Toronto will tell you, you should consider the risks carefully before adding another name to your property title.
Remember that by adding a person to your property title, you are legally granting them a bundle of rights including control, enjoyment, possession, exclusion, and disposition of the property that were formerly exclusive to you. This is a major decision and requires careful thought and planning.
The best real estate lawyer in Toronto will advise you of all the risks that adding someone to your property title entails. These risks are no small matters either, and if ignored, can lead to significant consequences.
Here are some risks to consider.
3 Tips for Choosing the Right Closing Date
You’ve done the hard part: you’ve found a home you love and have made an offer. Congratulations! But the next step that people often overlook is extremely important: choosing the right closing date. As any good real estate lawyer that deals with house closings in Toronto will tell you, this date shouldn’t be selected at random.
While the seller may stipulate a closing date in the contract, let’s take a look at some helpful tips that will guide you in choosing the right closing date when the option is available.
6 Things You Need to Know about Refinancing Your Mortgage
Finding your dream home is pretty exciting. The same cannot be said about qualifying for a mortgage. Many homeowners find refinancing their mortgage to be stressful, and for good reason—from different interest rates to amortization periods and penalties, there is a lot to consider.
But it can be worth it. Refinancing a mortgage with more favourable terms and conditions can save you thousands of dollars in interest charges. Refinancing a mortgage with a lower interest rate is also a great way consolidate and pay off debt and access some of the equity you’ve built up in your home.
If you’re thinking about refinancing your mortgage in Toronto, here are six things you need to consider.
Questions You Should Ask Your Real Estate Lawyer when Getting a Mortgage
If you’re thinking of buying or selling a home, make sure you talk to a skilled real estate lawyer. It doesn’t matter which side of the deal you’re on, an experienced mortgage lawyer in Toronto is invaluable.
A real estate lawyer can help you with all of the legal details associated with the transaction, including a title search, easements, zoning issues, the closing process, etc. But an experienced real estate lawyers can also go over other issues or concerns you might have.
Keep in mind, this is probably going to be the biggest transaction of your life, and you need to make sure you’re as informed and educated as possible. That’s why it’s imperative that you ask a closing lawyer any questions you might have.
Here are some questions you should ask your real estate lawyer when getting a mortgage in the Greater Toronto Area.
Title Tips – It’s not what you make, it’s what you keep! – Is it time to set up your PREC?
Personal Real Estate Corporations (PREC)
Lawyers, doctors and dentists have long had the ability to incorporate for tax purposes. Finally, Tax Fairness for Ontario agents has come about with the passing of Bill 145, Trust in Real Estate Services Act, 2019, bringing long overdue Tax Fairness for Ontario real estate agents by allowing them to incorporate a Personal Real Estate Corporation (PREC) and enjoy the benefits of low corporate income tax rates.
ADVANTAGES OF INCORPORATION: 1. Lower corporate income tax rates. 2. Wealth creation through tax deferral. 3. Lower effective personal tax. 4. Income splitting opportunities
What Are the Characteristics of a Good Real Estate Lawyer?
Thanks to the Internet, it’s easier than ever to find a real estate lawyer in Toronto. Unfortunately, quantity does not translate into quality. That can make finding a good real estate lawyer in Toronto very difficult. Which can be disconcerting for those looking to close on the biggest financial transaction of their life.
Many homebuyers looking for a real estate lawyer focus exclusively on price. And while the cost of a real estate lawyer is definitely something to take into consideration, it shouldn’t be the only thing you focus on.
Below are some of the top qualities and traits that the most successful real estate lawyers in Toronto share.
Most Common Real Estate Title Transfer Problems
Finding your dream home is a milestone. But that doesn’t mean the home buying process is over. A common question we field is whether or not a property buyer should purchase title insurance. Title insurance is a form of insurance used to insure the buyer and their lender against loss or damage as a result of title defects.
Important Questions to Ask Before Closing on a Home
Searching for your dream home is exciting; finding the right neighbourhood, imagining where your furniture would go, having friends over, deciding if you’ll plant a garden. Actually, closing on the sale of the home, though—that can be stressful. This is the final decision in the home buying process, when money changes hands, you get the keys to your property, and take on all that extra responsibility.
Most of us don’t go through the home buying process very often, so it’s tough to rely on any past experience. That’s why it’s important to ask a lot of questions and understand what you’re signing and taking on. In fact, it’s essential. After all, you can never be too well-informed.
Here are some important questions your should ask before closing in Toronto.
How Lawyers Are Closing on Real Estate during the Coronavirus Pandemic
While it was thought that selling houses during the COVID-19 pandemic would have been a big challenge, and it was at the beginning, statistics have shown that the market is actually busier than it has ever been in certain circumstances. This is because demand for real estate is strong, interest rates are low, and many people have managed to keep their jobs during the pandemic. As such many transactions are being closed regularly and we are happy to advise that our procedures and systems, such as many of those across the industry, have been changed to allow the market to continue in its strength.
Home Selling Myths Debunked
If you’re a homeowner wondering whether it is worth selling your home, there are probably quite a few misconceptions about selling your house that you’ve heard. So, to keep you on track with the truths and myths about selling your house, here are the top home selling myths debunked.
What Does a Lawyer Do When You Are Buying a Condo?
Does a buyer need a lawyer? If you’re considering buying a house or condo in Toronto, you will need a real estate lawyer to help you through the process. What does a lawyer do when you’re buying a condo? Their primary responsibility is to protect your rights and make sure all the terms of the purchase and sale are met by the seller, so that you can obtain the title to the property. Here’s a more in-depth breakdown of what a closing lawyer does while buying a house or condo.
9 Hidden Costs of Selling a House
So, you’ve decided to sell your home—congratulations! Whether you’ve chosen to upgrade to a larger home or downsize to a smaller, cozier property, selling your home is a big deal.
Working with the right real estate agent and real estate lawyer can help make this exciting process as stress-free and smooth as possible; they can also help you prepare for all the necessary fees, especially the hidden costs of selling a house.
How much does it actually cost to sell your home and what fees should you prepare for? Keep reading as we break down some of the hidden costs of selling a house.
Everything You Need to Know about Status Certificates
If you’re currently looking to purchase a new condo, it’s important to do your research as well as to work with an experienced real estate lawyer. The last thing you want to do is purchase a condo on a whim and later find out that there are maintenance fees or regulations you weren’t aware of.
So, how do you ensure that you have all the important information you need about your prospective new home before you sign on the dotted line? That’s where a condo status certificate can help.
You’ve likely heard the term “status certificate” before, but what exactly is a status certificate and why is a status certificate important?
Here’s what you need to know about this invaluable document and the purpose of getting a status certificate.
Things to Consider Before Opting for a Mortgage Deferral
Over the last few months, there has been a lot of uncertainty surrounding the COVID-19 pandemic and the economy. Millions of people lost their jobs, businesses were forced to shut down, and Canadians coast to coast were required to isolate and social-distance.
While the pandemic has certainly taken a toll on our social lives and on the economy as a whole, it’s also forced many homeowners to question whether they will be able to pay their mortgage.
Luckily, the five largest banks in Canada—Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Nova Scotia (Scotiabank), Bank of Montreal (BMO), and Canadian Imperial Bank of Commerce (CIBC)—have stepped up to offer mortgage deferrals in Toronto and across Canada.
What is a mortgage deferral? And does a mortgage deferral hurt your credit? Here’s what you need to know about this new form of financial assistance from lenders and whether it’s the right move for you and your family.
Should You Refinance Your Mortgage in the Wake of COVID-19?
The COVID-19 pandemic hasn’t just affected millions of Canadians financially, but it has also sent the global economy spiraling. Many Canadians have already lost their jobs and the housing market has taken a major hit, which has led to concerns that the mortgage process will be affected, too.
Now more than ever, people are rushing to refinance their mortgages and provide themselves with a bit of a safety net. But is mortgage refinancing during COVID-19 really the right move?
The answer is that it strongly depends on each individual’s circumstances.
Here’s a breakdown of whether you should refinance your mortgage now and a few of the benefits of mortgage refinancing during COVID-19.
Pros and Cons of Buying a House Before Selling
Even though the housing market has slowed during the global COVID-19 pandemic, the industry has adapted to the challenges and is taking advantage of online tools to accommodate people who are still interested in buying or selling. Buyers who already own a home will need to decide whether to buy a new house before selling the old one, or vice versa.
Here’s what you need to know about how to buy a house while selling your own in Canada.
Title Tips – Closings, Real Estate Law and Covid-19 – Where We Stand
Firstly, we hope you and all of your families are doing well and observing as much as possible the directive to stay home and work from home as much as you can. These are difficult times and this is the best way to get through them.
However, although most of us are home as much as possible, many of you have questions about the impact of Covid-19 measures on existing or new closings. Below is the essential information that you need to know. The Bottom Line is that Real Estate transactions are still closing:
- The Land Registry Office and Teraview system are digital and there is no expectation that they will be shut down at this time.
- Lawyers have been declared an essential service and as such can remain open to complete real estate closings, although many are adjusting to working from home.
- The Law Society has relaxed rules on Commissioning Affidavits and Declarations so lawyers are allowed to Commission sworn documents and Identify clients remotely using digital signatures and video interviews. Lawyers are signing clients remotely and banking online as much as possible. Also, the current circumstance has people thinking about estate planning and Wills, which often requires making sure title is held in joint tenancy so that if one person passes away the property automatically passes to the survivor. The Ministry of the Attorney General has advised that an emergency Order In Council has been made under s. 7.1 of the Emergency Management and Civil Protection Act with respect to the virtual commissioning and execution of wills. This means that people can both have their Wills and any Title Transfer required completed virtually.
- Lenders are allowing lawyers to sign their documents through digital signature and remotely on mortgages for purchases and refinances, although some lenders are not or are doing so on an ad hoc basis.
- Title Insurance companies have confirmed that their fraud coverage will apply to cover buyers and lenders accepting digital signatures and remote signing.
- The law is not clear on whether Covid-19 measures can excuse the performance of a Residential Real Estate contract. The two most likely elements or doctrines of law to apply to the situation are Force Majeure clauses and Frustration of Contract.
- Force Majeure: Unlike most Commercial agreements there are no Force Majeure clauses in the standard Orea Residential Resale forms. These are clauses which allow parties to be discharged from the obligations in the event of serious unforeseen circumstances.
- Frustration of Contract: This applies to discharge parties from their obligations when through no fault of their own unforeseen events make completing the contract something almost completely different than what they had bargained for. Essentially, the parties’ reasons for entering into the contract have to be destroyed by the unexpected event. It would be difficult to establish this in a Residential Real Estate transaction. Frustration of Contract is a final options which require the parties to almost have no other alternatives or workarounds to limit or avoid losses. Given that registry systems, law offices and banks remain open it is unlikely to apply to residential real estate transactions.
- Cooperation between the Parties and Lawyers: Given that the law is not clear, lawyers and clients are being advised not to take hardlines in instances where Covid-19 measures impact a party’s ability to close, as it is expected that courts will not look favourably on a party who is not reasonable or takes advantage of the current circumstance.
- Covid-19 Clauses: Covid-19 clauses have been drafted to factor this reality into an greement:
- Covid-19 Clause – more ways out, better for buyers as they are more likely to need a way out- although it does give both the buyer and seller more ways out: The parties agree and acknowledge that in the event that either the BUYER, SELLER, or any of their respective lawyers/notaries, relevant service providers, branches of Canadian Banks or other Lenders, Land Registry Offices or other Government Agencies become the subject of a Voluntary or Mandatory Covid-19 virus quarantine, closure or travel restriction prior to the time of completion herein which results in the Buyer or Seller being unable to complete the transaction on the completion date stated herein, the completion date herein shall be automatically extended at the request of either party for a period of up to ten (10) business days after such quarantine, closure or travel restriction order is lifted. Such extension shall be up to a maximum delay of sixty (60) days unless the parties otherwise mutually agree to further extensions. Upon the expiration of the maximum 60 day extension period either party may elect to terminate this Agreement, in the event of which both parties will be released from any liability or obligation to each other.
- Covid-19 Clause -less ways out, better for sellers as the are less likely to need a away out- although it does give both buyers and sellers less ways out and confirms an obligation to Close: The parties herein acknowledge and agree that they are required to close this transaction notwithstanding any impacts of Covid-19, save and except the closing of the Land Registry Offices and all financial institutions. In the event that the closing herein cannot happen because of a shutdown/disruption in the operation of the Land Registry System and/or financial institutions, the completion date herein shall be automatically extended to the fifth business day following the date upon which the said shutdown/disruption ends and the Land Registry System and financial institutions reopen.
- With many law offices closed, or lawyers working from home, clients should expect to have to wire funds to lawyers and key exchange arrangements to be made between buyers and sellers, perhaps with the help of agents.
- Tarion has amended its rules about times for extensions and many builders are using the “Unavoidable Delay” provision to extend transactions.
- Lawyers and all participants in the industry are being advised to be on high alert for possible instances of fraud because of the relaxed rules and video signing.
The situation is fluid with regular updates from the Law Society, Title Insurance, Lenders, and Governments so all of this is subject to possible change. We wish you good luck, health and safety during these difficult times.
Title Tips is not intended and should not be relied on as legal advice. For specific questions or situations, please feel free to call John Zinati for assistance.