Selling Your Home

A Guide to Our Legal Services

Introduction

Congratulations on the sale of your home!

Selling a home is a major decision and we would like to thank you for referring the legal work to us. You can be sure that it will be carried out with high standards of care and professionalism. Our services are designed to ensure you that your transaction will be processed and managed in the most practical and efficient manner possible.

We know it is important to keep you informed and to answer your questions. This article provides answers to a number of questions that we are commonly asked. If you have others, please contact, and one of our lawyers or experienced staff will be glad to help you.

How can the Agreement of Purchase and Sale be Amended?

It is a good idea to consult us before signing any document which could be an amendment to the Agreement. Amendments can be achieved by written agreement (usually prepared by the Real Estate Agent) or by an exchange of letters by the lawyers.

What Documents Should You Provide to Us?

Generally speaking, we need the following:

• Agreement of Purchase and Sale and all amendments
• Deed
• Details of outstanding mortgages
• Survey
• Confirmation of how the property is heated
• Recent tax bill
• If your home is a condominium we'll also need the address of your condominium corporation.
• If you purchased title insurance when you bought the property then provide us with a copy of the policy

It is particularly helpful if you can give us a copy of the lawyer's report that you should have received at the time of the original purchase.

Do You Have an Obligation to Provide a Survey?

The simple answer is: Yes. Most Agreements of Purchase and Sale require the seller to provide a copy of any available Survey showing the location of the dwelling and other buildings on the lot. Some Agreements have amendments which specify that a new survey is to be obtained at the seller's expense. A copy of your survey should have been included in the lawyer's report when you purchased the property.

What About Utilities?

If your house is heated by oil, then the tank should be filled on the day of closing and we will obtain from the buyer an appropriate reimbursement for the value of the oil by way of an adjustment on closing. You should make arrangements to have the meters read for all other utilities as well. If these meters are inside the property, then you will need to make arrangements to provide access to the property on the day of closing.

Naturally, you should continue to make all regular payments. Arrears on hydro and water accounts must be paid by the closing day. The final bills will be sent to your new address and they should be paid promptly.

If you rent or have a purchase plan for any heating, cooling or any other equipment then let us have the details so that a proper adjustment or repayment can be made.

What if the Property is Damaged Prior to Closing?

An Agreement of Purchase and Sale contains an implied obligation on the seller to repair any damage which occurs after the Agreement is signed other than the usual wear and tear arising from normal living.

Should You Give Your Keys Directly to the Buyer?

The best advice we can offer is that you should give the keys to us and not to the buyer. If there should be any delay or problem in the timely completion of the transaction, we like to have possession of the keys as a bargaining tool. We want to make sure that your interests are protected before the buyer is allowed to take possession of the property.

Deciding on Whether an Item May Be Removed from the Property?

Most Agreements of Purchase and Sale contain specific lists of items that may be removed or must remain. Generally speaking, the basic structure, and anything which is so firmly attached to it that it can be called a "fixture", must remain with the property. When in doubt, please call us for advice and clarification.

Should You Cancel Your Insurance?

The cancellation of house insurance is your responsibility. Make sure that coverage is maintained until the end of the day of closing. If for any reason the closing is delayed then your agent must be contacted to ensure the continuation of coverage. If you are not transferring coverage to a new property, you may be entitled to a partial refund. If you intend to vacate the house before closing day, it is most important to advise your insurance agent and purchase an inexpensive additional coverage.

Should You Keep Paying Your Municipal Taxes?

You are responsible to pay that portion of municipal realty taxes which relates to the period prior to the closing date. If you have paid more than your share, we will recover the difference as an "adjustment" at the time of closing. You should make all regular tax payments which are due prior to the closing date. If you are personally making tax payments, then keep the receipts and bring them to us when you execute the final documents.

When Do I Sign Documents?

Usually we will arrange an appointment for you for the day before closing. If you plan to be away around that time, please let us know as soon as you can.

When Should You Stop Payments on Your Mortgage?

Remember that regular mortgage payments are for interest that has already accrued. It follows that all regular payments due prior to the closing date should be made.

If you are on an automatic or pre-authorized chequing plan, the lender should stop drawing funds just prior to closing. It is a good idea to make sure this actually happens.

What About G.S.T.?

If you have occupied your home as a residence only and if you have not claimed an input tax credit for G.S.T. paid on the original purchase or for any improvements, then G.S.T. is not collectible on your sale.

How is Your Mortgage Discharged?

From the proceeds of your sale, we will set aside sufficient funds to pay out any existing mortgages and we will arrange to have the funds paid to the mortgage lender. It usually takes a number of weeks until we actually receive the official discharges of any mortgages. When received, we will register them in the Registry Office on your behalf.

When you budget for the cost of discharging a mortgage, it is important to remember any penalty interest that may be charged for early repayment. Details concerning these charges can be obtained from your mortgage lender. Most mortgages permit partial repayments without penalty. If you have available cash, a repayment before closing may significantly reduce any penalty. Make sure you let us know if you do this!

What Time Must You Move Out?

Most Agreements of Purchase and Sale provide that vacant possession is to be given "upon completion". In other words, when the deal is "closed". The time of closing varies and the "possession" time in unpredictable. If you are packed and start to move first thing on the day of closing, there are unlikely to be any problems. It would be rare that the buyer would arrive at the property with keys prior to noon on the day of closing.

We try to close all our transactions as early in the day as we can. Remember that the buyer may be selling a home and that transaction must be completed first. The simple fact is that you cannot force a buyer to complete a transaction early in the day.

How is the Real Estate Commission Paid?

We will set aside a portion of the proceeds of your sale to pay the commissions due to the Real Estate Agent and make all arrangements to send the funds to the realtor. When you budget for these charges, don't forget that you must pay G.S.T. on commissions.

How Will the Net Proceeds be Used for the Purchase of a New Home?

If you a purchasing a new home, you will sign all documents at the same appointment. These documents will include an authorization to use the sale proceeds on your purchase. We look after the necessary transfers of money.

When Can You Pick Up the Balance of Your Money?

It is our goal to have the balance of your funds available to you on the day of closing. We also do our best to pay out any mortgages to be discharged on that day in order to minimize any further interest charges to you. Unfortunately, this cannot always be done. However, we do have an excellent track record of successful early completions on closing day.

What are Representations and Warranties?

Every Agreement of Purchase and Sale contains some statements by the seller that certain circumstances exist at the time of execution of the Agreement. A common example is the "warranty" that a home has no urea formaldehyde foam insulation or a "representation" that a septic tank is in good working order.

If it should turn out that a statement of this nature was not true when it was made, then you could be liable to the buyer for the cost of correcting the situation. It follows that this liability could arise even if the problem is discovered after closing. It does not follow that liability arises if the problem first occurs after closing.

What Documentation Will You Receive After Closing?

Soon after closing we will provide a written summary of all the details of the transaction including the financial information.

While the financial gain on the sale of a home qualifying for the "principal residence deduction" is free of income tax, the sale of many properties will create taxable income. Keep our reports so that you will have an easy reference when preparing your tax return.

Any Other Questions?

It is important to understand that the answers we have provided are general in nature. If you have any specific questions relating to your particular circumstances or transaction, please do not hesitate to contact us.