Once your bid for your dream property has been accepted, there is still so much to do before you can call the house trully yours. {In the following article, an experienced Toronto realtor will point out the most important steps of the process.}
Once the offer has been accepted, your legal adviser should explain to you your liabilities under the contract. Your lawyer should help you to understand all the expenses connected to the closing procedures, including Land Transfer Tax, disbursements and legal fees.
UTILITIES
Letters are sent by your lawyer to all municipal or regional utility departments to validate that there are no arrears or outstanding charges, such as gas, water or hydro expenses. The utility departments will also be informed if the equipment on the property is rented or owned, and also about the planned closing date, the name of the new owner and the vendor’s attorney. Details about the billing type and whether the billing is metered, all this is also demanded by these letters.
TAXES
A Tax Certificate is asked by your attorney to confirm the amount of the current year’s taxes and to inquire as to arrears and outstanding charges for taxes for the current year and any previous years.
BUILDING & ZONING
A letter is sent by your attorney to the Building and Zoning Department together with a copy of the survey for the property to disclose the full details of zoning by-laws and restrictions relating to the distance from the street and side and rear lines, type of construction, lot areas and building areas, lot frontage and depth requirements and permitted uses.
TITLE & EXECUTION SEARCH
A Search of title to the property is commenced in the appropriate division of the Land Registry Office to establish whether or not the seller is the owner of the property, whether or not he has the right to convey the property, and that the property is not subject to any encumbrances, encroachments, easements, liens, agreements or mortgages that were not disclosed in the Agreement or Purchase and Sale. It is also necessary to make sure there are no executions against the vendor or previous property owners that would affect your title. This is managed by an execution search in the appropriate Sheriff’s Office.
FINANCING
In the meantime, while your attorney is busy doing all the initial searches, you should arrange all the necessary financing details. You should have decided, before signing the Agreement of Purchase and Sale, the amount of financing you will qualify for and the amount you will require to complete the business. There are a number of expenses that you may not be aware of on the day of closing that relate to mortgage financing. Again, it is a good idea to ask your attorney about these fees, when you get the Mortgage Commitment Letter from the financial institution that you have chosen.
BEFORE THE DAY OF CLOSING
You will also need a certified cheque to confirm the balance of closing funds to your attorney. Bring this with you when you come to sign all the documents needed a few days before the closing.
CLOSING DAY
Your solicitor will agree to meet with the vendor’s attorney at a mutually convenient time at the appropriate Land Registry Office where he will sub-search title and complete final execution searches. Documents, keys and cheques will be exchanged and your attorney will supervise the registration of all necessary documents. Once the documents have been registered the vendor’s attorney may release the funds to his clients and your attorney may release the keys to you.
AFTER CLOSING
After closing your legal adviser will prepare a reporting letter to you certifying your title and explaining all details of the transaction. When you move in to your new home check to see that all items in the Agreement of Purchase and Sale indicated as included in the purchase price are left on the property by the seller. In case you find out anything is missing, get in touch with your legal adviser as soon as possible.
