Legal Aspects of Your Real Estate Transaction

PURCHASE

Searches:
Your lawyer will receive a copy of the Agreement of Purchase and Sale from either you or your real estate agent and will conduct the following searches:

      1.  Title
      2.  Water
      3.  Hydro Account Status
      4.  Consumer Gas Account Status (if applicable)
      5.  Zoning Compliance
      6.  Hydro Work Orders
      7.  Writs Seizure and Sale
      8.  Tax Search (Realty Taxes)
for rural properties, the following searches will also be conducted:
      9.   Septic
      10. Well Water
      11. Unregistered Hydro Easements


Mortgage:
If you are obtaining a mortgage or mortgages in order to finance your purchase, your lawyer will obtain instructions from the mortgagee and prepare all mortgage documentation.



Insurance:
You should attend to obtaining insurance for the property, to be effective on the date of closing. It will be necessary for your lawyer to obtain a binder from the insurance company confirming the details of coverage and the mortgagee's interest.


Adjustments:
Prior to closing your lawyerwill receive a Statement of Adjustment from the vendor's solicitor. This statement provides from for adjustments made to purchase price i.e. Deposit paid, realty tax adjustment, cost of a full tank of oil (if applicable). There may be other adjustments.


Closing:
Prior to closing, your lawyer will ask that you come in to sign the documents required and to provide a certified cheque for the balance due on closing.
On the date of closing your lawyer or his/her agent will attend at the Registry Office. A sub-search of the property will be conducted in order to ascertain that no documents have been registered or judgements filed, affecting the property, subsequent to the initial title search done. Certified cheques will be exchanged for an executed deed and other documents as well as keys for the property.


Land Transfer Tax:
Land Transfer Tax is paid to the Treasurer of Ontario on every real estate purchase. Click on the following link to calculate the land transfer tax that you must pay:

 https://www.oreb.ca/tools/land-transfer-tax-calculator/

SALE
Your lawyer will receive all documentation received by the purchaser's solicitor and attend with you upon the signing thereof.
 

Upon closing your lawyer will attend at the registry office in otder to meet the purchaser's solicitorand exchange keys and documentation in return for certified cheque(s).

After closing, will attend to the registration of discharge(s) of mortgage and confirm same with purchaser's solicitor.

Subsequent to the closing of your transaction, either purchase or sale, your lawyer will provide a reporting letter detailing the particulars of the transaction and providing copies of relevant documentation.

  
Housing Types

Bungalow

Bungalows are detached, single-family dwellings with 1 level above ground. It is on its own lot and completely separated from any adjacent housing.

Duplex (Up and Down)

A duplex is a building which consists of two dwelling units--one above the other--under the ownership of a single person. If the property is attached to another dwelling it should be noted in the listing "Remarks."

Garden Home

A type of row unit with a front and back door, but no garage.

One-and-a-half-storey Home

see Semi-Bungalow.

Row Unit

This is a style of housing in which three or more dwelling units of similar design and size are attached. Each is on its own lot with separate ownership.

Semi-bungalow

Semi-bungalows are detached, single-family dwellings with one-and-a-half levels above ground, They are sometimes called one-and-a-half storey homes. They have their own lot.

Semi-detached

This type of housing consists of two separate but attached dwelling units. Each has its own lot.

Semi-detached Bungalow

A bungalow attached to another dwelling, each being situated on its own lot.

Split-Level Home

A detached, single-family dwelling with multiple levels above ground separated by small flights of stairs, on its own lot, and separated from any adjacent housing.

Three-storey Home

A three-storey home is a detached, single-family dwelling with 3 levels above ground, It is on its own lot and completely separated from any adjacent housing.

Triplex

A triplex is a building consisting of three units, all owned by the same person.

Two-storey Home

A two-storey home is a detached, single-family dwelling with 2 levels above ground, It is on its own lot and completely separated from any adjacent housing.

MLS Abbreviations

 #

number

&

and

+

plus

1st

first

approx

approximately

avail.

available

bdrm

bedroom

beaut.

beautifully

bldg

building

blk

block

blt

built

bnglw

bungalow

bsmt

basement

bth or bathrm

bathroom

c/a or cent/air

central air

c/v or cent/vac

central vac

cc

clothes closet

ceil

ceiling

comm. to s.o.

commission to selling office

cond.

condition

const.

construction

cpbds

cupboards

dbl

double

dcc

double clothes closet

dinrm

dining room

drs

doors

dshwr

dishwasher

elec

electric

equip

equipment

excel

excellent

famrm

family room

ffp

fireplace

fridge

refrigerator

furn

furnace

gov't

government

hrdwd

hardwood

hrdwd flrs

hardwood floors

hwt

hot water tank

incl

included

info

information

invest

investment

l.o.

listing office

l.r.

listing representative

l.s.

listing salesperson

lge

large

lnscp

landscaped

loc

located

lvgrm or livrm

living room

maint

maintenance

mbed

master bedroom

meas

measurement

mi

miles

mtge

mortgage

pc

piece

PIT

Principal, Interest and Taxes

poss

possession

priv

private

prop

property

qual.

quality

recrm

recreation room

rm

room

RMOC / rmoc

Regional Municipality of Ottawa-Carleton

s.c.

selling commission

sq ft

square feet

thruout

throughout

twp

township

w/

with

w/w

wall to wall

woodwk

woodwork

yd

yard

Mortgage & Financial Terms

Appraisal

An estimate of a property's value.

Closing Day

The day the legal title to a property changes hands .

CMHC

Canada Mortgage and Housing Corporation. A Crown corporation providing information services and mortgage loan insurance.

Debt-Service Ratio (DSR)

The measurement of debt payments to gross household income which may include the main wage earner's salary, salaries of other wage earners, commissions, bonuses, overtime, etc.

DSR

see Debt-Service Ratio.

Financial Institutions

Banks, credit unions, insurance or trust companies.

GDS

see Gross Debt Service.

GDSR

see Gross Debt Service Ratio.

GE Capital Mortgage Insurance Company

GE Capital Mortgage Insurance Company is the only private sector source of mortgage insurance for lenders in Canada.

Gross Debt Service (GDS)

The amount of money needed to pay principal, interest, taxes and sometimes, energy costs. If the dwelling unit is a condominium, all or a portion of condominium fees are included, depending on what expenses are covered.

Gross Debt Service Ratio (GDSR)

Gross debt service divided by household income. A rule of thumb is that GDS should not exceed 30%. It is also referred to as PIT (Principal, Interest and Taxes) over income. Sometimes energy costs are added to the formula, producing PITE, which moves the rule of thumb GDS to 32%.

Mortgage

A contract providing security for the repayment of a loan, registered against the property with stated rights and remedies in the event of default. Lenders consider both the property (security) and the financial worth of the borrower (covenant) in deciding on a mortgage loan .

Mortgage Broker

A person or company having contacts with financial institutions or individuals wishing to invest in mortgages. The mortgagor pays the broker a fee for arranging the mortgage. Appraisal and legal services may or may not be included in the fee.

Mortgage Insurer

In Canada, high-ratio martgages (those representing more than 75% of the property value) must be insured against default by either CMHC or private insurers. The borrower must arrange and pay for the insurance, which protects the lender against default.

Mortgage Term

The length of a mortgage contract. This may extend from 6 months to 10 or more years. At the end of the mortgage term, the borrower must pay the amount owing on the mortgage or renew the mortgage with the lender.

Mortgagee

The person or financial institution lending the money, secured by a mortgage.

Mortgagor

The property owner borrowing the money, secured by a mortgage.

PIT

Principal, Interest and Taxes

PITE

Principal, Interest, Taxes and Energy. See also "Gross Debt Service Ratio."

Term

see Mortgage Term.

Variable-rate Mortgage

A mortgage in which payments are fixed, but the interest rate moves in response to trends. If interest rates go up, a larger portion of your payment goes to the interest; if interest rates go down, a larger portion of your payment goes towards the principal.

Real Estate Terms

Real Estate Board

A non-profit organization representing local real estate brokers, agent or salespeople. It provides services to its members and maintains and operates an MLS (Multiple Listing Service) system for the community.

REALTOR

A trademark identifying real estate professionals in Canada who are members of The Canadian Real Estate Association. They subscribe to a high standard of professional service and to a strict Code of Ethics.

The above information is believed to be correct, but is not warranted.  

Feel free to " Contact " Kaveh, ifyou have any additional question.