Why Should You Have A Lawyer Assist You In Purchasing A Home?


Whether you are a seasoned homebuyer or in the process of purchasing your first home, it can be a stressful experience. Having a lawyer assist you with the home buying process can ease a great deal of that stress. On a basic level a lawyer will guide you through a real estate transaction with neat checklists and arrange for the land to be transferred to the buyer. However, there are many other important tasks the lawyer assists with in a real estate transaction. Read on to learn more.

1.  Due Diligence Searches

A lawyer will conduct a series of due diligence searches for you. These serve a variety of purposes, but generally ensure that you are aware of what exactly you are buying, that there are no unknown interests on the property and that each party pays their respective costs.

One such search is search of the Land Titles Registry. This search will reveal if there are any unexpected parties with a claim against the property. Additionally, this will reveal the amount of the mortgage that the current owner's lender has secured against the land, which will need to be paid out in the course of the transaction.

Another search the lawyer will perform is for municipal taxes on the property. Conducting this search allows your lawyer to ensure that there are no arrears in taxes on the property accrued by the seller. Having this information also allows your lawyer to calculate the taxes due on closing. This will ensure that you, as the buyer, are not paying for taxes on the property accrued prior to closing on the sale.

2.  Review Contracts

Lawyer may not become involved until after the agreement for sale has been completed and conditions are removed. At this point financing may already be in place and the sale is ready to move ahead. Your lawyer will receive all required pieces of information, such as the address of the property, the names of the parties, purchase price and possession date. This enables the lawyer to start working on the file.

The lawyer will review the contracts and ensure that all conditions are completed and will ensure that all necessary aspects of the sale are accounted for. The lawyer will also review the offer and confirm what exactly it is you are purchasing. For example, they will ensure you understand what appliances are included in the sale of the home, whether there are any rented appliances which need to be contracted for and if there are any moveables, such as outdoor storage sheds, that are not included in the terms of the sale.

3.  Secure you against fraud

Lawyers are able to give and accept trust conditions. A trust condition is a promise undertaken by a lawyer, which, if accepted, binds the lawyer personally to ensure that this promise is followed through on. It is important to note that only a lawyer can give trust conditions to another lawyer. Having a lawyer on both sides of a transaction ensures that both parties follow through with the sale as planned. Both the buyer's and seller's lawyers will give and undertake trust conditions in a transaction. For example, the seller's lawyer will be undertake to transfer the title into the name of the buyer and pay out any current mortgage on the property, upon receiving funds. The buyer's lawyer will undertake to forward the mortgage funds as soon as they have access to them. Buying a property without a lawyer can leave you vulnerable to being defrauded. You do not want to find yourself in the position of having forwarded funds to a seller, if there is no trust condition in place binding them to transfer the land to you in return.

4.  Advise on title insurance

Your lawyer can answer any questions and advise you on the benefits of title insurance and real property reports, or if they are required in a transaction. Title insurance is an alternative to ordering a real property report. A real property report will tell you where your property lines are and if there are any easements or encroachments on the property. Ordering a real property report allows a buyer to know exactly what they are purchasing and if there are any contractual issues to be dealt with prior to furthering the transaction. Ordering a real property report can be quite costly and in some circumstances arranging for title insurance can be an appropriate, and less expensive, alternative to doing so. Title insurance covers specific loss on damage that results from certain defects to the title or ownership of the property.

Sometimes a lender will require that you obtain title insurance, and your lawyer can advise you if this is the case. Title insurance, depending on your policy, can protect you from financial losses that may occur as a result of dealing with unexpected easements or encroachments. It can also protect you if you discover that a structure on the property is in violation of a municipal bylaw, after the closing of the sale.

5.  Ensure you have title after transaction closes

After the closing of the transaction, your lawyer will provide you with a copy of the title to your new property. Any interests against the land registered against the land on behalf of the seller will usually have been dealt with by this point, yet may still appear on title for a short period of time. Your lawyer will advise you as to what these interests are, why they are still there, and provide you with an updated title once those interests have been discharged. This title should be free and clear of any registered interests against the land at the time of the transfer. After the sale, your lender, if one was involved, will have its mortgage registered on the title.

If you have any questions about the role of a lawyer in a real estate transaction or require assistance in an upcoming property purchase, contact us today.

April 2019

Disclaimer: This article contains general information only as of the indicated date. It relates to Saskatchewan, Canada and may not be applicable in your jurisdiction. It does not constitute legal advice to you and no solicitor client relationship will be established by reading this article. Specific legal advice should be obtained by the reader on any topics discussed above from a lawyer entitled to practice law in your jurisdiction.

© Copyright 2019 Olive Waller Zinhkan & Waller LLP. All rights reserved. No part of this publication may be transmitted or reproduced without the written permission of the copyright holder.