Real Estate Law FAQs

A real estate lawyer in Ontario plays a pivotal role in property transactions. They ensure that the legal aspects of buying, selling, or leasing property are handled accurately. From reviewing contracts and conducting title searches to facilitating the transfer of ownership and managing the closing process, their expertise helps safeguard your interests throughout the transaction.​

A title search is a crucial step in a real estate transaction. It involves a comprehensive review of the property's ownership history, legal claims, liens, and encumbrances. This process helps identify any potential issues that could affect the property's marketability or your ownership rights. A real estate lawyer performs this search to ensure that the property's title is clear and transferable.​

The costs associated with a real estate lawyer in Ontario may include legal fees, disbursements (out-of-pocket expenses), and land transfer taxes. Legal fees can vary based on the complexity of the transaction and the services provided. Disbursements cover expenses such as title searches, registration fees, and other administrative costs. Land transfer taxes apply when transferring property ownership. It's advisable to discuss fees and potential additional costs with your lawyer upfront.​

No, lawyers are not required to obtain title insurance, however, The Law Society of Ontario, which governs lawyers, requires that ALL lawyers when acting for purchasers inform their clients about title insurance and its advantages, conditions and limitations. Unfortunately, no lawyer can completely assure a purchaser that there is absolutely no chance of an error in government records, or that there are no undisclosed claims, or that what appears to be the signature of the prior owner or consenting spouse is a true signature or that there has not been any fraud involved with the property. Title insurance can satisfy these gaps in the traditional lawyer’s opinion on title. The coverage for fraud and forgery covers both the period prior to closing and after. With title insurance, the lawyer is not required to complete the many searches that are normally required for a lawyer’s opinion on title. As a result, the fee for the title insurance is offset by avoiding the arduous fees associated with completing these searches.

Residential purchases cannot be completed without proof of fire/home insurance if you are obtaining a mortgage. It is mandatory that your fire/home insurance agent provide your lawyer with a fire/home insurance binder letter prior to closing. This binder letter should include the details of any mortgagees and show guaranteed replacement cost. For condominium purchasers, the condominium corporation arranges insurance for the entire condominium complex. It is still necessary for the individual unit owner to obtain insurance for their contents and for public liability. The fire/home insurance should always become effective on the day of closing.

Ontario Land Transfer Tax is payable at the time of registration of the transfer and is based on the consideration paid for your property. Ontario Land Transfer Tax is calculated as follows: Value of consideration percentage: • Amounts up to and including $55,000.00: 0.5% • Amounts exceeding $55,000.00, up to and including $250,00.00: 1.0% • Amounts exceeding $250,000.00, up to and including $400,000.00: 1.5% • Amounts exceeding $400,000.00: 2.0% • Amounts exceeding $2,000,000.00 where the land contains one or two single family residences: 2.5% If the subject property being purchased is in the City of Toronto, there is an additional Land Transfer Tax payable to the City of Toronto. First time home buyers may be eligible for a refund of all or part of the Land Transfer as payable on their purchase.

When you take title to a property you must provide to your lawyer your full names and dates of birth as well as the manner in which you wish to take title to the property. You may take title in two ways: as joint tenants or tenants in common. The main difference is that joint tenants have the right to survivorship while tenants in common do not. If a property is taken in more than one name, as joint tenants, and one registered owner dies, the property will revert to the remaining named joint tenant by right of survivorship. If the property is held as tenants in common, upon the death of a registered owner, that owner’s share in the property reverts to the deceased owner’s estate, which will share ownership with the remaining registered owner as a tenant in common.

Every new home in Ontario is protected by a mandatory warranty that is provided by the builder and guaranteed by Tarion Warranty Corporation. This warranty coverage is outlined in the Ontario New Home Warranties Act. The coverage under the Act includes deposit protection, protection against defects in work and materials, protection against unauthorized substitutions and protection against delayed closings or delayed occupancies without proper notice. For condominiums, warranty coverage also includes common/shared areas of the building.

This refund applies to all homes, whether newly constructed or resale. The refund can be claimed at the time of registration or directly from the Ministry of Finance. To claim the refund, you must be at least of 18 years of age, must occupy the home you purchased as your principal residence within 9 months of the date of transfer and you cannot have owned a home, or an interest in a home, at anytime, anywhere in the world.

Closing costs can include costs such as Land Transfer Tax, registration fees, legal fees, title insurance, HST (if buying a new home) and property taxes. There also may be costs associated with a delay should the transaction not be closed on schedule.

A mortgage is a means for the buyer to access funding to buy a property. When a buyer applies for a mortgage with a bank or any other financial institution that offers mortgages, they receive a loan in return for using the property as collateral to secure the buyer’s obligation to pay off the loan. If the loan is not repaid, the lending institution will be able to retain possession of the property and sell it for proceeds to satisfy the loan. A mortgage is a legal contract and often, it must be in writing.