You can phone your real estate lawyer at any time! Truly, it’s never too early to be connected to a real estate lawyer, but there are specific times when a real estate lawyer can help you with a purchase or sale.
There is a common misconception that real estate lawyers should be brought into the picture quite late in the purchase or sale process. Yes, realtors and brokers are excellent, and they are able to address many issues as they come up. However, they may not be familiar with all of the legal issues that you could face, and they cannot provide legal advice as you go through your transaction.
Your real estate lawyer sees what you might not see. Whether there may be potential issues with financing, issues with the wording in your Agreement of Purchase and Sale, issues with defects that may not have been caught, or anything else that arises - it’s important that your lawyer has a full grasp of the transaction so that they can offer quick advice when you need it most.
So, when should you call your real estate lawyer?
When Should Purchasers Call Their Real Estate Lawyer?
When you’re buying a home, the lawyer’s job is to protect your interests. That means carefully reviewing all of the documentation and monitoring the transaction so that everything goes smoothly on the day of your scheduled closing. If something unforeseen does happen, they can be the ones to come in and save the day.
Your real estate lawyer can assist you as soon as you are considering putting in an offer on a home. They can help you go through the agreement of purchase and sale in fine detail, reviewing every clause and explaining exactly what you’re agreeing to as the purchaser. They are also instrumental in making sure that that agreement says what you expect it to. If you have come to any sort of understanding with the vendor in negotiations, it needs to be part of that agreement.
Your lawyer will also complete a full title search on the home and review it with you. Think of title as your legal right to own the property that you are buying. Your lawyer will ensure that you obtain good and marketable title – meaning that the property is free of defects and claims that could affect your ownership. This will make sure that your rights are protected and will prevent future legal issues.
However, a title search may turn up issues with title, such as past tax issues, or any liens against the property, such as from past builders or contractors. The title search may also uncover easements or restrictive covenants on the property that you did not know existed. An easement is the right of someone else to use your property such as a utility company, or a shared laneway with a neighbour. A restrictive covenant may restrict your use of the property or stop you from building a structure that you had intended. This information may be crucial to you in deciding whether or not you have to proceed with your deal.
Lastly, if you are buying a condominium, the lawyer will also review the status certificate. A status certificate for condo owners is like a snapshot with information not only about that unit, but about the condo corporation and their finances. If the unit looks great visually, but there are significant financial issues within the condo corporation that may lead to increased management fees or levies, it is important to know that before deciding to purchase.
No matter what, remember to involve your lawyer early. They are human, and need time to carefully review documents! Yes they can work quickly in an emergency, but most purchases do not need to create emergencies. Making that connection early on can make the whole transaction run smoothly.
When Should Sellers Call Their Real Estate Lawyer?
Similarly, it is important for lawyers to be engaged in the selling process for many of the same reasons as with a purchaser. For the Agreement of Purchase and Sale, for example, they will review that contract carefully with sellers because that agreement works both ways. If a seller has any unique expectations from the purchaser, those should be specifically stated in the contract. Or, if the purchaser is expecting anything from the seller, the lawyer can explain those conditions and what they mean.
Your lawyer will also be actively engaged with your mortgage lender to make sure that the mortgage is discharged after the sale. If you are selling a property that has a mortgage, the lawyer makes sure that the balance of the mortgage (and any fees or penalties) are fully paid from the sale proceeds, along with any other outstanding taxes and the balance of the real estate commission. They will then transfer the remaining proceeds from the sale to you.
You will meet with your real estate lawyer a few days before closing in order to review and sign all necessary documents. They will review with you all of the amounts owing out of your sale proceeds (the balance on the mortgage, unpaid utilities, taxes, etc.) and will explain exactly how much you should expect to receive. They will hold those funds in trust until everything has been settled and then pay you the remainder accordingly.
Final Thoughts
If you’re working with a realtor, they will ask you who your lawyer is, and it makes your transaction easier if you can provide them with a name that you trust. Your lawyer needs to have a keen eye and sharp attention to detail so that they can help you flag any issues as your closing date approaches. If trouble does arise, they can often jump in to resolve things quickly, and keep the deal moving ahead.
We are proud to be that trusted name in real estate law that purchasers and sellers love working with over and over again. Our clients value our experience and expertise to guide them through their transaction, and they know that we are always in their corner. Contact us today to learn more.
