Frequently Asked Questions

Click here to access our 'Home Purchase – Closing Checklist' prepared for you by Kelly Santini LLP.

1. A guide to our services and fees when you are purchasing a house
For any home buyer, especially if you are buying your first home, the process can be daunting and full of surprises.  The better informed you are the easier and less stressful the process will be. 

Your lawyer is in your corner helping you and keeping you informed throughout the process.  Buying a home is an exciting time that you will remember for the rest of your life.  Relax and enjoy the ride, knowing that your lawyer is there to guide you through and deliver the keys to your new home.

Below is a breakdown of the costs associated with a typical real estate purchase as well as a description of the common disbursements incurred by your lawyer in completing the purchase of your new home.

Determining Land Transfer Tax
Land Transfer Tax is payable on most residential real estate transactions and is calculated based on the price of the home being purchased. Please note that the purchaser may be eligible for a Land Transfer Tax rebate up to a maximum amount of $2,000.00 if they are a first time home buyer. The following is the formula used to calculate Land Transfer Tax:

For example if your purchase price was $250,000 the Land Transfer Tax calculation would be .01 x $250,000; minus 275 = $2,225.00.

This amount is due and owing on the closing date of the transaction and is payable to the Ontario Ministry of Finance.  

Title search
Prior to closing, your solicitor will conduct a search of title to ensure that you will have a valid title to the property you are purchasing.  The cost for the search of title will vary (usually $150.00 +) depending on the type of property you are purchasing (i.e. full lot or a part lot).  A sub search is performed again on closing to ensure the vendors have not further encumbered the property.

Registration cost
The current cost to register a document with the land registrar is $70.00 per document.  The registration cost for the average transaction is $140.00 (representing the transfer and mortgage of land).

Executions search
An execution search must be performed against the registered owners of the lands (vendors) as well as any mortgagors (purchaser obtaining a mortgage).  The cost of the execution certificate is $11.00 per person.  A preliminary search is performed when conducting the search of title and again on closing.

Title insurance
Title insurance for the purchase of Single Family with one Mortgage with a purchase price between $200,000.00 to $500,000.00 costs approximately $250.00 - $350.00 plus HST.

Office expenses
Disbursements include execution certificate, photocopies, courier, and postage/long distance.

* The disbursements quoted are estimates only and may vary depending on the municipality. H.S.T., where applicable, is in addition to the disbursements quoted.

2. A guide to our services and fees when selling your house
When selling your home, there are a number of issues which we will address for you in order to ensure a smooth transfer of your property to the purchaser.  These tasks carried out by your Kelly Santini LLP solicitor include: 

• Review and complete the draft deed which formally transfers the property from you to the purchaser.
• Prepare the statement of adjustments for the purchaser's lawyer. The purpose of the statement of adjustments is to calculate the precise amount that will be owed at closing. Adjustments will be made for the various payments that affect your property, including taxes.
• Write to your mortgage company to determine the exact amount owing on the date of closing. 
• Prepare and electronically register the necessary discharge of mortgage.
• Perform a subsearch of the property.  This outlines any existing mortgages and other instruments which are registered on the property.
• Answer the letter of requisition from the purchaser's lawyer and discuss with you any potential problems that could delay the closing.
• Oversee the execution of all the necessary documents.
• Instruct the purchaser’s lawyer on how to transfer the funds from the sale.  In most circumstances separate cheques are requested and made payable to your mortgage company, our firm in trust and you.
• Payout the mortgage, the real estate commission, outstanding property taxes, utilities, etc.
• After closing, advise the City of Ottawa, Enbridge and Hydro One of the change in ownership of the property.
• Report to you.

* The fees and disbursements quoted apply only to residential home sales and are subject to change without notice.

3. When should I be contacting a Lawyer regarding purchasing a home?
As soon as possible. Once the lawyer is involved, he/she can start working to protect the purchaser’s interests.   When it comes to buying and selling real estate, “the devil is in the details.” All too often, a fact or item incorrectly set out or completely overlooked in the original sale contract develops into a legal issue or matter of dispute between the buyer and seller. Such problems can be avoided by obtaining legal advice from a real estate lawyer early on in the process.

4. What information will my lawyer need to close my purchase?
A purchaser will need to provide the following information to his/her lawyer.

• Agreement of Purchase and Sale – A copy of the agreement should be forwarded to the lawyer.
• Name of the Mortgage Lender (if applicable) – It is common on home purchases for the purchaser’s lawyer to perform certain legal services for the mortgage lender.  These services include giving the lender a legal opinion on the title the purchaser will hold and ensuring the lender will have a valid mortgage on the property according to the mortgage agreement. 
• Inspection Report - A copy of any building inspection report that the purchaser may have received if required as a condition of your title insurance policy.
• Photo Identification - Copies of two pieces of photo identification (driver’s licence, passport, etc.) will be required for each purchaser.
• Date of Birth - The lawyer requires the dates of birth of all purchasers.
• Address for Service – The address that will be registered on the deed for future contact. Usually this is the address of the property in question, but may be a different address if the property is being purchased as an investment property.
• Title – If there is more than one purchaser, the purchasers need to instruct the lawyer whether the title will be taken as joint title or tenant-in-common.
• Property Insurance - As a condition of the mortgage, the lender will require that property insurance be in place on the closing date.  This requires the purchaser’s insurance agent to send to the lawyer a certificate of insurance or binder letter showing that the insurance is in place and that the lender’s interest is noted on the property.
• Closing Funds - On or before the date of closing, the purchaser will need to provide the lawyer with sufficient funds to complete the purchase by certified cheque, bank draft or money order.  These funds include the balance owing to the vendor as well as land transfer tax and any other required adjustments such as property taxes or fuel oil.  The lawyer will contact the purchaser prior to closing to provide the exact amount required.

5. What is Title Insurance and what does it cover?
Title insurance is now widely accepted by mortgage lenders including the major banks, trust companies, credit unions and private lenders.

a) What is title insurance?

Title insurance is an insurance policy issued by an insurance company which insures or indemnifies the home buyer and mortgage lender (where mortgage financing is involved) against loss or damage sustained as a result of covered title risks and defects. It further insures against various problems which would have been disclosed by an up-to-date survey of the property and against the property’s failure to comply with municipal or other applicable regulatory authority requirements. In essence, it transfers the risks connected with the property title from the home buyer and mortgage lender to the title company.

b) What is typically covered by title insurance?

• Another person or entity having an ownership or other interest in your property whether or not it appears on the registered title;
• Any mortgage or lien affecting the property;
• Any lien resulting from a court judgment, property tax arrears or public utility arrears;
• Any unregistered hydro easement;
• Any improperly completed, signed or registered documents;
• The invalidity of your title due fraud, forgery, duress, incapacity or impersonation;
• Forgery of a document after the policy takes effect under which another party claims an interest or lien against your title;
• An expropriation of all or part of your property;
• The lack of a right of access to and from your property;
• Your inability to legally require another party to complete a purchase of or extend a mortgage loan upon the property due to your title being unmarketable or to an infraction or adverse matters which would have been revealed by an up-to-date survey of the property;
• Your inability to use your property as a single or multi-family residence as provided for in your agreement to purchase the property; and
• An encroachment or building setback deficiency which you are forced to remedy by a court or other authority (other than any involving a fence or boundary wall).

As illustrated above, title insurance provides protection against the vast majority of title defects and other related legal risks likely to arise upon the purchase of a home. Like all insurance, it doesn’t protect against every potential title-related loss but rather against those which occur most frequently.

6. Handling utilities and insurance when Purchasing or Selling a Home

Utilities
Prior to closing, your solicitor will advise tax, water, hydro and gas of the change of ownership at the closing date.  You may also wish to contact each company to set up your account (i.e. payment schedule).

It is your responsibility to contact telephone, cable, satellite, and surveillance and internet companies as they will require information from you that we cannot provide such as what type of services you have or will require.

Insurance
Please note that if you are purchasing you will be responsible to arrange for adequate insurance for the subject property prior to closing.  In the event you will be obtaining financing, your solicitor will require an insurance binder (a letter confirming insurance) to be faxed to his/her office at least 2 days prior to closing as they must confirm insurance with the lender. If you are selling you will also need to notify your insurer.

Well and Septic
You may decide to purchase a property which is serviced by a well and septic system.  If this is the case, ensure that your Agreement of Purchase and Sale is conditional upon the vendor providing you with a water Potability Certificate confirming that the water is fit for human consumption.  (NOTE: Some lenders will not accept a certificate if it was tested more than 2 months prior to closing.  If your closing is later than 2 months after signing the Agreement, it may be wise to include a condition that the vendor has the water re-tested two weeks to one month prior to closing).

Also always request that the vendor provide you with any and all documentation regarding the septic system (i.e. make the Agreement conditional upon the vendor providing you with the septic use permit, if available).

NOTE:  You may also want to request that the vendors have the septic system pumped out prior to closing