This article was loaned to me by the Law Society of Alberta. Rather
than re-writing an article on real estate law, the Law Society
of Alberta graciously allowed me to use this article. I am sure
you will find it useful when considering buying a home.
Buying a home may be the largest investment of your life! Often,
many years of planning and saving have been required. It makes
sense to hire an expert to protect this investment - just as you
use an expert to repair your car, to educate your children, and
to take care of your heath.
Your lawyer knows about problems in the real estate business,
and can protect you from them if you ask for advice early enough.
If a property is listed on the multiple listing service, what
normally happens is that a Buyer finds out about the home through
a real estate agent (called a "selling agent"). Although
the selling agent may assist you in finding a home, any commission
the agent receives is paid by the Seller.
When you find a home you want to buy, your offer is put into writing
on a printed form called a "Real Estate Purchase Contract".
The real estate agent will have blank copies of this form, and
will usually fill in the form for you.
Take care to make sure that the offer states exactly what you
want to buy, and how much you propose to pay for it. Once an offer
has been prepared, signed by you, and accepted by the seller,
that offer becomes a binding contract. It is wise to ask your
lawyer's advice before signing the offer.
1. Save any advertisements and get a copy of the photographic
listing, if there is one, in case there is a dispute about what
you thought you were getting. Put in the offer any items mentioned
in the advertisement or photographic listing. Insist "any
promise good enough to make is good enough to write." If
other items are important to you, such as the legality of rental
suites, state those items in the offer.
2. Check the house for structural defects. If possible, hire an
expert of your choice. The cost for this expert is small compared
to the price of the property, and may prove to be good insurance.
3. Check out any zoning or building restrictions.
4. Find out how much the property taxes are.
5. Make your offer subject to conditions for your own protection.
For example, you could make the offer to buy subject to selling
your own home, or subject to being able to arrange suitable financing.
You could make the offer subject to getting your lawyer's approval,
or subject to getting a satisfactory report from your expert on
the structural condition of the home.
6. Always include a time limit on acceptance by the Seller.
7. Get estimates from the realtor, the new mortgage lender (if
applicable) and your lawyer, of the costs which you will have
to pay in addition to the purchase price.
8. Include in your offer any personal property you want included
in the purchase price. Personal property refers to items that
are not attached
to the land or buildings, such as drapes and appliances.
Sometimes, it is difficult to determine whether a particular item
is personal property or permanently attached. If in doubt, include
all items you want.
There are other costs besides the actual purchase price involved
in buying a home. Your lawyer can help you to understand the other
costs involved. The following is the suggested check-list of cost
items that you should discuss with your lawyer during the first
interview:
1. Legal fees - The fees for your lawyer's own services, which
may also include a component for out-of-pocket expenses or disbursements.
2. Property tax adjustments - A portion of the year's property
taxes which are credited to the Seller if the Seller has already
paid them. or credited to the Buyer if the Buyer will be required
to pay them. If you're obtaining a new mortgage. The mortgage
company may wish to hold back future taxes as well.
3. Transfer registration fees at the Land Titles Office. The Land
Titles office charges fees to register documents transferring
ownership of property from one person to another. An additional
fee is charged for registering mortgage documents.
4. Insurance for fire and other hazards.
5. Late interest charges The mortgage company will not advance
funds until title is transferred into your name and the lender's
mortgage is registered in the Land Titles Office. Because it takes
time to register these documents at the Land Titles Office and
to obtain the mortgage advance from the Lender, the sale price
may not be paid to the Seller until after the possession date.
Until then, you will be unable to pay the Seller the full purchase
price and will probably have to pay interest on the unpaid amount.
6. Opening of utilities account.
7. Goods and Services Tax (GST). There is a GST cost to the Buyer
on the purchase of most new housing, although the Buyer will get
a partial rebate if the purchase price is less than $450,000.
Most purchases of used housing will not require you to pay any
GST. The Seller should give you a written statement that no GST
is payable. There is also GST payable on your lawyer's fees and
disbursements and surveyor's charges. Currently, there is no GST
on the Land Titles registration charge.
8. Appraisal and inspection fees (if obtained).
9. A real property report.
10.. Any time a new mortgage is obtained in real estate there
are costs associated with it. Your lawyer can advise you about
these costs.
With the rising costs of single family dwellings, more and
more new home buyers are being attracted to condominiums. In addition
to the check-list of costs, the following is a suggested check-list
concerning condominium ownership that you might want to discuss
with your lawyer.
1. Condominium units and common property.
2. Owners' rights and responsibilities regarding property.
3. Group government and restrictions under any by-laws of the
Condominium Corporation.
4. Condominium maintenance fees and services.
From this brief summary of potential problems you can see the
complicated legal details that the purchase of property involves.
For this reason, you need the assistance of a lawyer. Your lawyer
will do whichever of the following tasks are necessary to ensure
you a trouble free purchase:
1. Ensure that the contract fully reflects your understanding
of the agreement before your lawyer approves of your signing it.
2. Examine the title to the property and ensure that the necessary
legal documents are properly prepared and registered so that the
property will be correctly conveyed to you.
3. Ensure that you understand clearly the terms of any mortgage
or other financing arrangements for which you are accepting responsibility.
4. Ensure that the adjustments are properly computed and that
the purchase monies have been property disbursed.
5. Certify to you that you have obtained a valid registered ownership
to the property you purchase.
6. Help you understand the full costs of home purchasing.
7. Help you understand the tax (principal residence provisions)
advantages of a home investment.
In summary, your lawyer's role is to help you get what you bargain
for, at the price you agree to pay. and on the terms you understand.
This article is intended to provide general information only.
It is not intended to replace legal or other expert advice. When
you have a legal problem it is best to consult a lawyer.
The Law Society's principle duty is to serve and protect the
public interest. A self governing association of all practising
lawyers in the province, its authority comes from the Legal Profession
Act of Alberta. The Legislature has respected the fundamental
democratic tradition that the legal profession should be independent
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