When you think of what’s involved in a real estate transaction, you likely think of everything before the sale. For the seller, there’s the home preparation, photographs and marketing to find the most qualified buyers. For the house hunter, going to showings and choosing your home are what stands out. Few people think about what happens after the fact, once the paperwork is signed but before the closing date.
However, the closing process is critical to ensure a seamless transfer of ownership. When something is off legally, the transaction can fall through. Even worse, there can be lawsuits. Real estate contracts are legally binding, with potentially severe consequences when breached. Unfortunately, legal jargon is nearly impossible for a layperson to understand, never mind follow to the letter. But what exactly does a real estate lawyer do, and do you really need one?
A Real Estate Lawyer is Always Required–to Some Degree
While not recommended, you could negotiate the terms of the purchase agreement if the contract is simple enough. However, The Land Registration Reform Act of Ontario requires a lawyer to examine the title before any ownership transfer can occur. The lawyer steps in to make sure all the i’s are dotted and t’s are crossed to eliminate any issues before they arise.
Your lawyer will pour over the purchase agreement to see that every clause is valid and can advise you whether any conditions will impact the house closing. They also inspect the property title to find out if there are any liens or outstanding taxes.
If the property is a condo, the lawyer will thoroughly review the status certificate, ensuring that the management company has the required reserves to maintain the building. This gives you peace of mind that you won’t get dinged with a hefty and unexpected assessment fee after your purchase.
Whenever complications or disputes arise, you’ll always want a good lawyer in your corner.
Looking for more facts that can help you succeed in real estate? These resources may be helpful:
- How to Negotiate a Real Estate Contract
- Pre-Qualification Vs Pre-Approval: What’s Better?
- How to Stand Out in a Changing Market
Buying a Home? Add in a Clause for Your Lawyer to Review
Making an offer to purchase can get complicated on large transactions like real estate. You have to put a lot of thought into the market to know how much to offer and what, if any, conditions you should place to protect yourself.
Your real estate agent is there to help you get the best possible price and terms. But did you know that a real estate lawyer can help create a bulletproof offer? For example, you’re probably already familiar with certain conditions buyers often place when bidding on a home. Conditions of home inspection and condition of financing are two of the most common clauses you’ll see.
However, many people don’t realize that you can even include a condition of legal review. This allows you to have your lawyer inspect the offer before it becomes binding and can save you a lot of headaches during the close.
Woolcott Real Estate is one of the top teams in Burlington and Hamilton for a reason. Find out more about our selling process here.
Selling? How a Lawyer Protects Your Financial Interests
When selling a home, your real estate lawyer works to ensure the buyer follows through with all of their commitments, including submitting the deposit and down payment on time. Your lawyer will also uncover any problems with the property title and resolve them before they affect your closing.
Working with a highly qualified real estate lawyer brings peace of mind to what might otherwise be a stressful transition!
Can the Buyer and Seller Use the Same Lawyer?
Ontario law generally prohibits the buyer and seller from using the same lawyer. As you can imagine, this could become a significant conflict of interest and detrimental to both parties. However, there are some exceptions to this rule:
- When the buyer and seller are considered related under the Income Tax Act
- When the transferor and transferee are the same person, and the transfer takes place to sever land
- A transfer between an estate trustee and the beneficiary
- In a remote area where finding separate lawyers represents an undue inconvenience
Ready to sell your home but wish to do so privately? We have a network of interested buyers actively looking for their next home right now. Find out more about our private services here.
Most Common Legal Pitfalls in Real Estate
Now that you know the importance of working with an experienced real estate lawyer, let’s look at some of the most common legal pitfalls and how to avoid them.
- Errors in drafting the purchase agreement. Big or small, errors in the contract can cause the property not to close or result in a lawsuit after the fact.
- One party wants to back out after the market changes. Legally, it’s not allowed, but breaches do happen, especially when a property dramatically changes in value after the papers are signed. Having a lawyer review the contract reduces the chances of last-minute problems.
- Misunderstanding zoning laws. A buyer might purchase a property with the intention of performing significant renovations. Checking the zoning laws before agreeing to purchase is critical.
- Disputes over chattels and fixtures. What is included in the offer and what is not? Both parties must be on the same page.
- Seller representations and warranties. The seller is obligated to disclose certain facts about the property, and must honour all stated warranties.
A successful sale begins with knowing how much your house is worth in today’s market. Book your free home evaluation here.
Finding a Good Lawyer
It’s not every day that you’re buying or selling a home. As a result, you may not have a lawyer in mind or a plan to find one. You can try searching through Google reviews to see a lawyer’s track record from previous clients.
However, the best way to find the right professional for you is often through your network. Your real estate agent will have connections with trusted experts in every field you can imagine. Finding a qualified real estate lawyer is often as simple as asking for a recommendation.
Do you have questions about what it’s like to buy or sell in the current market? Our local experts are standing by and ready to answer your questions, big or small. Reach out to us today.