Real Estate Law

December 2022- What Are the Legal Documents When You Are Buying a Property?

real estate lawyer

Buying a property, whether it is your first one or not can be very overwhelming, there is tons of paperwork to be done and deadlines to meet. This is why having a Calgary real estate lawyer is in your best interest. They are trained professionals who have experience in the area, and who will make your situation much less stressful and time-consuming.

This professional will help you meet deadlines, avoid unwanted surprises, and ensure your rights and responsibilities are being met and that your best interests are always being thought of.

But after all, which documents are necessary?

After you have done all your research and have settled on a property you want to acquire, you will start off with an offer to buy—that’s when the first document, the Standard Contract of Purchase and Sale comes into place. This document will set the rights and obligations to all parties involved in the purchase, including conditions and deadlines. This can become a legally binding contract when signed off by parties, and all of the people involved must do their best effort to comply with the terms agreed on or risk being taken to Court.

After the first terms and conditions have been set, there comes a document called Property Condition Disclosure Statement (or PDS), which will clarify potentially relevant information to buyers. While this is not an obligatory document under the law, it became standard procedure to build trust. However, even though the PDS isn’t legally obligatory, the seller still must disclose latent defects they are aware of. Latent defects are everything that cannot be normally detected by a standard inspection—that includes past structural damage, underground storage tanks, any history of flooding, or any history of infestation.

You, as the buyer, can request the PDS to be attached to the purchase contract, on the other hand. An attached PDS becomes bound to the contract and the seller guarantees everything specified on it is true. If the seller is not honest, this document may be very helpful in case you sue for damages.

As mentioned, latent defects are those which cannot be normally identified by a standard home inspection. A Home Inspection Report is a piece of document done by a hired professional expert where they will inspect the property so the buyer has more guarantees on the situation of the property which will allow for an informed opinion about it. This professional will identify the conditions of the structural, electrical, plumbing, insulation, and ventilation components of the building.

Those reports can be extensive and technical but are designed to be comprehensive for those who are not trained, professionals. Problems are expected but can range from very minor ones to very major ones. The objective of the report is to show the buyer where they might expect to expend money on repairs, and while they may not be able to evaluate reasonably accessible areas, those reports will mention them as not covered so the buyer is aware.

The next step is the Title Search. The Title Search will occur to ensure the seller is allowed to properly transfer the property to the party buying it. The land title office in your city will keep track of any situation associated with the property such as mortgages. As one of the most important documents, this will show you if the property being bought can be transferred and if it can meet your goals and expectations for its use.

After everything has been checked on and it comes time to close the deal, you will need the Purchase Agreement, where it is recognized that the buyer will be the new owner of the property. It is important to ensure all information is correct to avoid any delays and missed deadlines.

After that, the buyer will fill out a Property Transfer Tax Return with the land title office—some provinces may have incentives towards it. A Property Transfer Tax Return is an essential step as the land title office has strict deadlines to pay any taxes owned and missing it can be a lot of headaches as they may refuse to register you as the new owner.

Other documents involved are the Statement of Adjustments which shows how much is still owed to complete the transaction, such as property transfer taxes, strata fees, or title insurance. This document also includes any credits the buyer may have from previous payments.

The Mortgage Loan Agreement is the terms and conditions between the buyer and their lender about the money borrowed to complete the purchase of the property. Attached to this there is also the Direction to Pay document, drafted by a lawyer which recognizes directions the buyer will take in using the borrowed money, in other words, how the money is being used.

All those steps can be extremely overwhelming, and when you are already stressed with finding a good property and making sure it meets all your requirements, the last thing you want is more stress related to paperwork, especially because if you are doing it by yourself you are more likely to make a mistake or miss a deadline. Hiring a real estate lawyer in Calgary will be your best line of defence against those situations and make the big day a much happier day.

Related Posts

Leave a Reply

Your email address will not be published.