When someone is involved in selling a property in Ontario, a lawyer is required to complete the transfer. A lawyer’s work involved in a sale varies, depending importantly on the type of property involved, and other important factors that dictate what a lawyer does or does not do.
Agreement of Purchase and Sale
The seller will typically receive a “conditional offer” from a buyer. If the seller accepts a conditional offer, the buyer is permitted to complete certain items to complete this transaction; if the buyer does not complete, or waive the conditions, then the contract is terminated a mutual release is signed by both parties.
Often, an “unconditional offer” is delivered to the seller. Subject to exceptional circumstances leading up to the closing, the agreement of purchase is binding on the parties. The offer also becomes binding when the conditions included in an offer have been completed and the buyer waives them.
In a typical sale, the seller’s lawyer is required to deliver to the buyer’s lawyer draft documents, which include the Statement of Adjustments. The other documents include the seller’s warranties, representations, declaration and undertakings. The latter documents are best to be discussed with a lawyer; they are standard documents in almost every transaction.
The Statement of Adjustments sets out the purchase price, tax adjustments, and any other adjustments, such as condo fees.
Any remaining work required by the seller’s lawyer will depend on what the purchaser’s lawyer requisitions, or requires, the seller’s lawyer to produce or complete on or before closing, and often times sometime after closing. A perfect example is the discharge of mortgage (which does not happen right away for non-private lenders).
A seller is required to provide certain information to his lawyer. If there’s a mortgage on title, the seller provides the name and account number for the mortgage so that his or her lawyer may properly payout this mortgage so that its discharged, or removed, from title.
The seller’s lawyer will also provide to his lawyer his property tax information, such as the total amount for the year and the balance. If it’s a condo, the seller will provide the amount per month. This allows the lawyer to properly prepare the Statement of Adjustments.
Additional information will depend on the type of property, such as a cottage, farm or a commercial property; but generally, the above are of the key ingredients in the sale of a home.
Closing, Funds, and Keys
Prior to, or on the closing date, the seller’s lawyer delivers to the buyer’s lawyer the keys and the seller’s documents. On closing date, the buyer’s lawyer delivers to the seller’s lawyer the purchase funds and the buyer’s documents.
The buyer’s lawyer cannot release the keys, and the seller’s lawyer cannot disburse the funds received from the buyer’s lawyer. These are held in escrow pending the completion of the transaction.
Once satisfied, the seller’s lawyer will “release”, or sign off, on the Transfer/Deed, which then allows the purchaser’s lawyer to register the Transfer/Deed in the purchaser’s name. Upon registration, the keys may be released to the buyer, and the funds may be disbursed. The transaction is complete!
*Please note that the above does not capture the true extent of the process; it’s best that you seek the input of a law office for further information.