“Experienced knowledge of personal injury law combined with our diligent and timely representation = results.”
At Clermont Clausi Gardiner & Associates, we offer you professional and thorough representation. We can help.
Our Real Estate practice has been providing legal services to the Ottawa community for over 40 years. If you are buying or selling a home, we can help. We also provide services with respect to mortgages and refinancing.
Please find below a brief overview of the Real Estate legal services offered by Clermont Clausi Gardiner & Associates:
- Residential Sale
- Residential Purchase
- Commercial Sale
- Commercial Purchase
Buying a Home
Buying a Home in Ottawa, Ontario.
Before making an offer on a home, you should obtain pre-approval on a loan through a bank, mortgage company, or other lender. Obtaining a mortgage commitment from your financial institution helps give you an idea of how much you can borrow and how much money you need to contribute personally. The rates and terms vary slightly among institutions, so compare terms to get the best mortgage for you. Once you receive a conditional commitment from the bank, you can contact a seller or builder directly or through an agent. Real estate agents charge a commission to the vendor on the sale of their home, a fee which is ultimately passed on to the purchaser by becoming part of the sale price, but a buyer does not pay an agent’s fees directly. Remember, a conditional mortgage approval is not final, so for your protection, your offer must have financing as a condition.
An ‘Agreement of Purchase and Sale’ will be prepared by your lawyer, agent, or builder once you are ready to make an offer on a home. This contract sets out a number of important promises and representations made by the purchaser and vendor to each other. In addition, important information pertaining to the sale, including the selling price, the amount of your deposit, and the closing date (the date you move in) are listed in this contract. It is always recommended that your lawyer review an offer before you sign it and submit it. In some cases, contractors ask you to sign first and put a clause in the agreement giving the purchaser three to five days to have their lawyer review the agreement before the agreement becomes binding.
The deposit you pay is negotiable between you and the vendor, but is commonly between $1000.00 and $10,000.00. It is intended to evidence the serious intent of the offer. If you have signed an agreement, waived conditions, and then fail to complete the purchase, you could forfeit the deposit to the vendor if the default is caused by you. You may also be liable for damages if the vendor cannot sell the house for the same price you had offered. You can avoid this by including in the contract a specific date that the deposit will be returned without interest or deduction if certain prerequisites are not met by the vendor. You should not make a deposit without having your lawyer review the contract first
You should request in the contract an up to date survey from the vendor. If the vendor is unable to provide you with one, you may have to pay to have an up to date building location plan of survey prepared for you. This may cost up to $1000.00 or more. Since preparing a new survey is costly, and since the lender may request an up to date survey, and since the vendor often only has an older survey on hand, title insurance is now accepted in most cases as a substitute for the up to date survey.
After you and the vendor have signed the contract, you should take a signed copy of it to your lawyer. Your lawyer will have to conduct and review a title search to your property. Your lawyer may have to conduct searches on such matters as zoning, building code compliance, taxes and hydro arrears, depending on your intended use of the property and other factors that may require off title searching. Title insurance is a frequently relied upon substitute for searches in these areas and is generally less expensive to obtain. In addition to the cost of these searches, you will also have to pay your lawyer’s fees and also expenses known as disbursements, such as deed and mortgage registration fees. Land Transfer Tax, based on a specific formula and is slightly less than 1% of the purchase price, is usually the largest single disbursement incurred in a purchase.
Your purchase will be conducted by electronic registration. After closing, your lawyer or the firm real estate clerk will contact you and give you the keys to your new home. Usually your report is available on closing as well. A report is also sent to your lender by the lawyer. Since this will most often be in the late afternoon of the closing date, it is not good practice to plan your move into your new home before the end of the closing day or on the day following. Also, do not close the sale of one property and the purchase of your new property on the same day. Please contact us for further discussion.
Title insurance is an insurance policy you buy when you purchase your home to protect you from a loss that might arise after you become the owner, if the causes of this loss are detected after you become the owner, and are related to issues that could be a cloud on your title or prevent you from having good marketable title when you want to sell.
Title insurance is a recent arrival on the scene when you consider how real estate purchases have been handled historically in Ontario. Generally, the way most transactions were done up until the mid 1990’s was that a lawyer did detailed searches not only of title but also of all of the often peripheral areas that could give rise to a cloud to the title of the property. These included zoning, building standards and compliance, survey compliance, utilities structures, property taxes, property development, agreement compliances, work orders, easements, etc. Each of these separate searches required a cheque to be sent with a requisition for a report to respective third parties, who in turn would reply, often not for some time. This procedure is a full certification procedure and is still the most thorough way to know what you are buying.
Title insurance companies, however, offer an insurance protection against you sustaining an economic loss if something goes wrong after you have closed your purchase if the loss arises because of a problem in any of the above areas that traditionally would be searched but are not because a title insurance policy is bought instead. To be compensated, you will have to demonstrate that there is a title related defect existing on the property, that costs you money to repair, that you are required to repair, that existed at the time of the purchase, and that it was not known at the time of the purchase. Using title insurance is less expensive than doing a full certification on closing, and in many cases allows you to close because you can’t get a response to a requisition in time for closing. It can also cover a known risk upon approval by the title insurer.
A lawyer’s search will result in evidence that clear title will pass to the purchaser upon closing. This is so because the rules presently require that a lawyer certify title only to the title insurance company before the title insurance policy may be issued. Title insurance provides for compensation to be paid to the purchaser in the event that a defect on title is later discovered, resulting in damages to the purchaser. Usually, the title insurance covers a defect which would not be possible to discover prior to closing. Also, some types of title insurance also insure you against a possible error by your lawyer resulting in a title defect. The boundaries that establish the kinds of claims title insurance companies acknowledge are covered by a policy and are changing daily. This is primarily because the experience with title insurance is relatively new in Ontario as discussed above.
Government Programs for First Time Home Buyers
1. RRSP Program
First time buyers may use this federal plan to withdraw up to $20,000 tax free from their own RRSP and apply it towards the purchase of a home.
In order to apply, the current rules created by the federal government are as follows:
- you must be an RRSP holder;
- you must be a resident of Canada at the time of withdrawal;
- you must complete a T-1036 Form in order to withdraw the RRSP funds from your institution; and
- you may only withdraw the funds after you have entered into a valid agreement to purchase a home.
Any funds you wish to withdraw under the program must have been in your RRSP for at least 90 days. You can even make a contribution to your RRSP early in the year before the RRSP deadline. In other words, you can make a contribution to your RRSP, receive a tax refund, and 90 days later withdraw that same contribution for use in buying a home under the program.
Once you have applied the RRSP funds to the purchase of your home, you are required to pay back the RRSP over a maximum of 15 years. A minimum of 1/15 of the amount withdrawn must be deposited back into your RRSP in each of the 15 years following your home purchase. You may also repay the withdrawal amount in larger and more regular installments. However, if you fail to repay the minimum amount required in any given year, then that amount will be included in your taxable income for that particular year during which you missed a repayment to your RRSP.
2. Land Transfer Tax Refund for First Time Home Buyers of New Homes
First time home buyers entering into an agreement to buy a residential and principal residence are eligible for an instant refund of their Land Transfer Tax paid up to $2,000 per home.
In order to apply:
- you must be a first time buyer, and cannot have owned a home anywhere in the world ever;
- you must enter into an Agreement of Purchase and Sale; and
- you must register the conveyance at a Land Registry Office upon closing.
When you register the transfer of the property, the Land Registry Office will provide you on closing with a credit. Otherwise, you may later request a rebate through an application to the Ministry of Finance.
CAUTION: These plans are enacted by statute or regulation by various governments. They are generally specific to be in effect for a period of time and the respective governments extend and change plans periodically. It is prudent to verify the conditions in effect with your respective fund managers.
Costs Involved in Your RESIDENTIAL Real Estate Transaction
Standard Legal Fees
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These are the costs that your lawyer incurs on your behalf for which you are responsible to repay on closing. Examples of disbursements are Title Insurance, title search, registration charges from the Province of Ontario, etc. In a purchase, your disbursements are normally around $900.00, and in a sale around $275.00.
Land Transfer Tax (LTT) is a tax charged by the Province of Ontario to buyers of real estate. LTT is payable on closing and collected from you by your lawyer, and then submitted to the Province. Click here for our online LTT calculator.
Costs Involved in Your COMMERCIAL Real Estate Transaction
*Legal Fees, Disbursements, and LTT vary greatly depending on the nature of the transaction. Please contact our office today for a discussion of the costs you may incur.
Should you have any questions about buying a new home, please contact Alan Clausi who would be happy to discuss with you your plans.
For More Information Contact:
Clermont Clausi Gardiner & Associates
1447 Woodroffe Avenue,
Ottawa, Ontario K2G 1W1