A Brief Overview on Buying a House or Condominium in Ontario

Spring has sprung and you are finally ready to venture outside to start searching for a home or condo to move into. Unfortunately it’s not as easy as signing on the dotted line and getting the keys to your new place. That’s why it’s important that you hire the right lawyer to help you navigate

this process.

Once you’ve chosen that perfect home your next step will be to enter into an agreement of purchase and sale (for the purposes of this article we have called it the “Agreement”). The Agreement will set out all of the pertinent terms of your purchase i.e. the price, certain conditions and the closing date. It is always a good idea to have your lawyer look over the Agreement prior to signing it (we would be happy to meet with you, review your Agreement and advise you at no cost).

Often there are conditions in favor of the buyer that make the purchase conditional on certain items being satisfied. The most common conditions we see are a financing condition and a home inspection condition. This means that the Agreement is not firm until you have secured financing or completed a home inspection to your satisfaction. With the GTA real estate market being as competitive as it is we often advise our clients to get pre-approved for financing prior to looking for that dream home as you want to come armed to that bidding war, if necessary, with the best possible offer. If you are buying a condominium a condition commonly found in the Agreement is to have your lawyer review a condominium status certificate. The status certificate sets out the status of the condo and outlines its financial stability and liability.

Once the Agreement has been entered into and the conditions satisfied your lawyer will be an integral part of getting the deal done. Your lawyer’s job is to protect your rights by ensuring that the Agreement is complied with and you get clear title to your house or condo. Once your Agreement is signed it will get forwarded to your lawyer where the lawyer will search title to the property, ensure taxes have been paid, outstanding utility bills have been paid, the representations and conditions of the Agreement have been satisfied and complied with, ensure zoning bylaws are complied with and obtain details of your mortgage. You should expect your lawyer to ask you certain questions with respect to the purchase, see my previous blog post regarding joint tenants v. tenants in common for an important consideration. You will also want to discuss with your lawyer whether you qualify for the land transfer tax rebate as a new home buyer and the amount of land transfer taxes payable by you on the closing.

Several days prior to closing you will attend at your lawyer’s office to sign all the closing documents and deliver the closing funds. In anticipation of the closing date the purchaser’s lawyer and the seller’s lawyer will exchange closing documents and keys to be held in escrow pending completion of certain formalities. On the closing date the transfer and the mortgage will be registered against title by the purchaser’s lawyer. After registration the deal can be closed and the keys and funds are transferred.

Buying New? A few extra considerations

You should note that there are several additional matters to consider if you are buying a new condo, for instance:

You have a 10 day cooling off period after signing the Agreement to give it some thought and cancel the Agreement if you are so inclined.
This would be a good time to have your lawyer review the Agreement and the disclosure package provided by the developer.

There are 2 closing dates:

There is the occupancy closing date whereby the unit is ready to be occupied. You are not yet registered on title and will be required to pay a monthly occupancy fee; and
The final closing date takes place after the condominium has been registered. At this point additional documents will have to be signed and the remaining funds will need to be delivered.
New non-condo homes may not be subject to the 10 day cooling off period and consequently it is especially important to have your lawyer review the Agreement prior to signing it. For both new homes and condos, before closing you will be required to conduct a pre-delivery inspection (with a representative of the builder) which allows you to look at your new property and record any deficiencies on the Completion and Possession with such deficiencies to be remedied by the builder in the timeframe set out in the Agreement.
This blog post is intended to provide just an overview of the process from a legal perspective and does not take into account all of the complexities and issues and that may arise. If you have any questions or would like us to take a look at your Agreement free of charge please send us an email or give us a call.