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Question:
We are working with a REALTOR® currenrly in buying a house. He has gone through the list of expenses we will incur in this purchase. One of the costs to us is a lawyer. Why do we need a lawyer when we are buying a home? R. & J Marshall
Answer: Thank you for your inquiry. REALTORS® do think that obtaining legal advice in the purchase of a home is vital in ensuring that all parties are protected from misrepresentation. We have decided to contact our own legal counsel Brenda Walper-Bossence to answer your question.
Question: A lawyer handles the legal aspects of the purchase. For instance, a lawyer searches the title to the property. A search of the title reveals the name of the current owner of the property, the legal description of the property, whether or not the Owner has mineral rights, and certain claims, liabilities or charges attached to the property. Other charges such as child maintenance & spousal support orders or writs of execution are not necessarily registered on the title, but may nevertheless affect the property. A lawyer will ensure that a Buyer is protected from any such claims against the Seller. The lawyer also handles the registration of title to the property in the Buyer’s name. Most Buyers want to obtain clear title to the property. To get clear title it is necessary to have all unacceptable claims against the Seller’s title removed before title is transferred to the Buyer. The lawyer ensures that the Seller’s mortgage and other encumbrances (like liens) are removed from the title, so the Buyer can take clear title to the property If a mortgage is required to finance part of the purchase price, the Bank or other Mortgage Holder will require a lawyer to prepare the mortgage, register the transfer and mortgage at ISC [Information Services Corp], previously known as the land titles office. The lawyer must also ensure that the other requirements of the Bank or Mortgage Holder are met, such as proof of adequate fire insurance, surveyor’s real property report, title insurance, etc. Two Buyers may have to decide whether to have title in one name or to have shared ownership. There are two types of shared ownership; joint tenancy and tenancy in common. Joint tenancy means that the property is owned by more than one person, and in the event of death of one joint owner, the survivor becomes the sole owner of the property. Tenancy in common means that there is more than one owner and that each owns a particular share of the property. The shares can be equal or unequal. There is no right of survivorship, so owners can give their share of the property by will to a person of their choice. A lawyer can assist two or more Buyers of property on which type of ownership is best for them. It is necessary to adjust the current year’s property taxes between Buyer and Seller to the date of the possession, and to ensure that the previous year’s property taxes are paid in full by the Seller. The lawyer will make the necessary enquiries, ensure that the property taxes are adjusted and the previous year’s taxes are paid. It is also necessary to ensure that the previous owner’s water & sewer account is current and there are no outstanding water & sewer charges that could be added to the property tax account of the property that the Buyer is purchasing. The lawyer will also make the necessary enquiries and ensure that the Seller’s water & sewer account is paid. Conclusion: Buying and Selling real estate is a complex process. The contract for purchase and sale and the mortgage contract are often two of the most important contracts entered into during a lifetime. Careful deliberations are necessary to ensure that the legal interests of both the Buyer and the Seller are adequately protected. Both Buyer and Seller should consider seeking legal advice at every step in the process. Respectfully submitted: Brenda Walper-Bossence Q.C. June 17, 2006
The Moose Jaw Real Estate Board reserves the right to print only those questions that they deem appropriate. If you would like to have a personal response to your question include your name & address and a reply will be forwarded to you.
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