Title Insurance is a insurance policy that protects the owners of the residential and commercial property owners and lenders against the losses related to the property title. It provides coverage for the title related risks associated with real estate transactions

Title-related risks insured by title insurance include:

1. Unknown defects in title ie., any defects that prevents you from having clear title to the property;

2. Compliance risks, such as non-compliance with restrictive covenants, the existence of major encroachments;

3. Any liens against the property title, for eg. Unpaid debt from utilities, mortgages, property taxes or condo fees secured against the property.

4. Title frauds

5. Any other title related issues that prevent a homeowner from selling, mortgaging or leasing the property.

There are two types of title insurance policies:

1. Lender Policy- provides coverage’s for the amount of the property’s mortgages

2. Owner Policy-sets out the maximum coverage for various title related losses set out in the policy for the owner of the property.

For a onetime fee called premium, title insurance will protect the home owner as long as he/she own the property and will cover losses to the maximum coverage as set out in the policy.

The premium is based on the value of the property and the choice of the title insurance company. The title insurance policy is usually purchased when you buy the property.

Important Steps for Buying a Home (Resale home or condominium) in Ontario:

• Agreement of Purchase and Sale is signed by the buyer and the seller.
• Agreement of Purchase and Sale to be final has certain conditions which are for the benefit of the buyer. For example, Agreement is conditional upon buyer obtaining financing or conditional upon buyer obtaining home inspection to his satisfaction. If you are buying a condo, then the agreement is conditional upon review of the Status Certificate by the buyer’s solicitor. Status certificate can be obtained from the property management of the condominium.
• Once the conditions of financing, home inspection and review of status certificate is complete within the time limit specified by the Agreement, a waiver must be signed

by the buyer and the seller stating that the conditions have either been complied with or waived , pursuant to which the Agreement becomes final.

Having completed these steps, you as a buyer should inform and send the executed Agreement of Purchase and Sale along with any amendments and the waivers to your lawyer

The buyer’s lawyer will then communicate with the seller’s lawyer and the buyer’s lender from the start to end, prepare all the necessary documents required for the completion of the real estate transaction.

Agreement of Purchase and Sale “Real Estate Closing Date”

This article will explain what you can expect during the closing process from the moment your offer is accepted until you get the keys to your new home with specific reference to the closing date.

One of the main clauses of the agreement is “Completion Date” reads as “The Completion Date states “this agreement shall be completed by no later than 6.00 PM on the ———–day of ——–. Upon completion, vacant possession of the property shall be given to the Buyer unless otherwise provided for in this agreement.”

“Time is the essence” is a legal doctrine whereby performance of a contract is required by a specific date and often by a specific time. This simple provision provides for added certainty in defining the rights and obligations of the sellers and buyers, particularly when it has been negotiated and expressly made a part of the contract.

I have seen in my Real Estate Law practice that many buyers who are selling and also buying their house on the same date experience difficulties and the entire process becomes stressful for them. Any delay in the completion of one transaction affects the other transaction, in terms of extra penalty, extra cost of the movers and the worst you may be out of your home if the sale of your house is complete and your buying transaction falls on the next day or next day after weekend. It is always a good thought to give you a few days time between your sale-purchase transactions. When you are buying and selling your homes, you may want to consider taking a bridge loan for your buying. You would realise paying a little extra few hundred dollars more, if you are also selling your home, on bridge loan would be stress free and inexpensive than holding up moving trucks and camping in hotels. Besides, you’ll have added peace of mind when everything is not getting clubbed together. I would invariably suggest separating the two deals scheduling completion on different dates. Don’t make them dependent; make them independent of each other.

Do not hesitate calling me or having an appointment before you finalize your deal or financing.

Please note that the information in this newsletter is not legal advice rather are some ideas sharing with the readers. However you are welcome to discuss your situation with me after having an appointment.

Call us @ 905-290-7205 for more information.

Important Steps for Buying a Home (Resale home or condominium) in Ontario:

• Agreement of Purchase and Sale is signed by the buyer and the seller.
• Agreement of Purchase and Sale to be final has certain conditions which are for the benefit of the buyer. For example, Agreement is conditional upon buyer obtaining financing or conditional upon buyer obtaining home inspection to his satisfaction. If you are buying a condo, then the agreement is conditional upon review of the Status Certificate by the buyer’s solicitor. Status certificate can be obtained from the property management of the condominium.
• Once the conditions of financing, home inspection and review of status certificate is complete within the time limit specified by the Agreement, a waiver must be signedby the buyer and the seller stating that the conditions have either been complied with or waived , pursuant to which the Agreement becomes final.

Having completed these steps, you as a buyer should inform and send the executed Agreement of Purchase and Sale alongwith any amendments and the waivers to your lawyer

The buyer’s lawyer will then communicate with the seller’s lawyer and the buyer’s lender from the start to end, prepare all the necessary documents required for the completion of the real estate transaction.

In my previous newsletter I have tried to educate you on different issues concerning Real estate sale and purchase. Sometimes you are selling property and sometimes buying. As such your role and duties differ as a seller and buyer.
In this article let me to provide you some insight on fixture and chattels and rental items. I have seen in real estate closings that the buyers and sellers take this important aspect quite lightly.

Fixture and chattels

One of the contentious issues arises in a real estate transaction is that of chattels versus fixtures. Sellers and buyers both lose sight of the fact that they are contracting for items that are usually in the hundreds of thousands of dollars. However, there have been instances where a transaction was put in jeopardy for some ten dollar object. The OREA form has made the chattels and fixtures issue much simpler. The rule is simple. If it is fixture it must stay unless specified to be excluded and chattels will not be present unless specified to be included.
The chattels section simply stated asks for “chattels included”.
The rule to follow is “when in doubt spell it out”. Detail in chattels section (model, colour, serial no., etc) is strongly recommended. It is possible for seller to suggest that the fridge in the garage is the one that was the one to be left behind. Not the brand new one the buyer saw in the kitchen. In addition, as a buyer‘s solicitor, it might be appropriate to provide for a warranty in the agreement as to the good working order of the chattels on closing.
When it comes to fixtures, it is important to specify those items that the seller wishes to remove. These may include things like the dining room chandelier.

Rental items

There are number of items that would be listed in this section. These include hot water tanks, furnaces and equipments, water softeners, air conditioner, etc. It is important to disclose these items. They appear as fixtures. If not mentioned specifically as rental, the buyer is going to believe that the buyer will be the owner of these items when such may not be the case.
I have seen in my practice that the sellers many a times believe that that they own the equipment’s when got installed however in realty these might be rental or leased or the installing company had put a lien against the property and the seller perhaps was unaware. There are many varied situations as such my advice is to consider this section seriously while listing your property for sale or buying the property to avoid legal complications in closing the transaction.
Please note that this is for information only and not to be considered a legal opinion or advice and each situation is different. You need to check up with me along with details of your case.

Feel free to call me

Balvinder Kumar
Barrister, Solicitor, & Notary Public
201-10 Kingsbridge Garden Cir, Mississauga, ON L5R 3K6
PH: 905 290 7205

Why is home inspection necessary? 

Home inspection is an essential clause in the Agreement of Purchase and Sale that permits the buyer to hire a professional inspector to inspect the house for any vital defects.

These defects may relate to the wiring of the home, defective pipes, faulty heating systems, plumbing problems and issues with regard to flooring and roofing. Home inspection addresses to these issues and should be taken seriously. If ignored the cost of repairs required in the house may be very high.

Home inspection will provide the buyer with the following:

• It educates the buyer about the condition of the house;
• It provides the buyer with a list of repairs including time frames, the costs involved and other recommendations.
• It discloses conditions that are not readily visible or understood by a non-technical buyer;
• It reduces the liability of the realtor

It gives the home buyers a better understanding and more information about the property they intend to purchase.

If the home inspector’s report highlights defects in the property, the buyer has an option of cancelling the deal or continues with buying the house with a less price.

So buyers, beware…do not ignore home inspections…

What is Home Insurance and Why you need it? 

Your home is one of the most important asset that is vulnerable to to natural disaster, burgalry and other risks. Most of the lenders and financial institutions prior to advancing the funds on closing, require the homebuyer to have a home insurance. Home insurance generally consists of coverage for the building structure of your property for property damage from fire, wind, hail, theft or other similar damage, though it may include more or fewer terms depending on the requirements of your lender.

Once Agreement of Purchase and Sale is final, your mortgage approved, you must contact an insurance company for home insurance. Your lawyer will require a home insurance policy or a home insurance binder to be forwarded to your lending financial institution. If you are buying a condominium, the condominium corporation maintains a building insurance which is forwarded to the lender. The Certificate of Insurance is provided to the buyer with the status certificate package.

It is important to note that the home insurance of the property only covers the building structure and does not cover the personal contents in your home. It is advisable to maintain a content insurance. The insurance maintained by the Condominium Corporation will not provide the personal content insurance.

Consult your insurance broker for the best advice.

WHAT YOU SHOULD KNOW ON MORTGAGES TO MAKE A WISE DECISION

From the desk of Real Estate Lawyer

I have been thinking for quite some time to communicate some thoughts which could be useful in making right decisions in your real estate transactions whether you are the first time real estate buyer or refinancing an existing mortgage, one of the issues that always bother most Canadians is the mortgage financing. In order to have peaceful transaction completed you should consider following steps besides others:

1. Mortgage should be arranged well in advance, preferably before you sign the agreement of purchase and sale. You should know where you stand.

2. Always obtain a mortgage pre-approval confirmation in writing.

3. All the terms and conditions should be discussed in details especially with regard to the rate of interest, terms of mortgage, whether open or closed, variable or fixed, pre-payment and penalty clauses, CMHC fee, and what amount would be available to the lawyer for disbursement.

4. Make sure to confirm exact dollar amount to be adjusted towards any HST, property tax hold back, interest adjustment , first instalment, etc. This would give you a fair idea of the amount of finance being sent to the Lawyer and how much, if any, you would be arranging from personal sources. I have seen in my practice, the clients who do not have clarity on this area are confused and they struggle at the time of closing. For existing homeowners, before your mortgage is due for renewal you should check up with the existing financial institution and compare with the other institutions including the total borrowing cost.

5. Whether you are dealing directly with the financial institutions or through mortgage agent, make sure that you understand all the conditions and the institutions requirements should be completed before the scheduled closing date; proof of income, proof of funds, proof of employment, proof of cash down payment, payment of other debts obligations, appraisal, etc.

6. Most important, but not the last always stay in touch with the financial institution or mortgage agent

With whom you are dealing to make sure that the mortgage instructions are sent to the Lawyer well in advance of the closing date. I have seen some clients are struggling up to the last day of closing which result in delay in closing and consequently delayed cost.

Do not hesitate calling me or having an appointment before you finalize your deal or financing. Please note that the information in this newsletter is not legal advice rather are some ideas sharing with the readers. However you are welcome to discuss your situation with me after having an appointment.