It's easy to get caught up in the excitement and anxiety of buying your first home. The purchase is likely the largest you have ever made and it may be where you plan to raise a family. In order to ensure that you first home purchased is handled properly, you will want to use an experienced real estate lawyer who can help you navigate through the process. Your Oakville or Burlington real estate lawyer can review the agreements, advise you, inform you of government programs that may apply to you, protect you legally and financially where possible and act on your behalf in order to close the deal effectively.
Review the Agreements and Advise You
Before signing an agreement for purchase and sale, a real estate lawyer can advise you on conditions you can make that give you flexibility to withdraw from a deal if you encounter problems (e.g., a condition of lawyer review and approval, a condition of home inspection and/or financing). Failing to ensure that the terms of the purchase are exactly what you had in mind could lead to extra costs later or prevent you from getting out of a deal if you later find something seriously wrong with the property (e.g., plumbing, mould or foundation issues).
Having a lawyer review a builder’s purchase agreement is wise as the terms will favour the builder where possible and you may not agree with all of them. For example, you may not be willing to chance a delayed closing or live in the home while some aspects are still being finished. Your lawyer can advise you about any reasonable terms you can seek to include.
If you are buying a resale home, the deed and lot survey should be reviewed to ensure that everything included (e.g., additions, fences, pools, sheds, carp ports, trees) was built to code with proper permits. You should be clear about what chattels are or are not included to prevent surprises when you move in (e.g., appliances missing).
Having a lawyer review the agreements involved is especially important if you are buying a condominium unit and there are costs (e.g., expenses to rebuild the reserve fund) you could commit to that you are not aware of. A status certificate should be examined to assess if the condominium is financially healthy. Condo regulations should also be examined to see if any provisions stand out that could negatively affect you (e.g., no pets).
Your lawyer can also review the terms of the mortgage documents with you to make sure you are aware of your legal rights and obligations pertaining to the mortgage, including any requirement to obtain a property appraisal, land survey or both. If you will have a high-ratio mortgage instead of a conventional mortgage because you are unable to provide at least a 20 percent down payment, then you are also required to obtain mortgage loan insurance. The Canada Housing and Mortgage Corporation is a major provider of mortgage loan insurance.
Inform You of Government Programs that May Apply to You
As a courtesy, your lawyer will draw your attention to programs that can result in cost savings for you. Under the federal Home Buyer’s Plan (HBP), for example, you can borrow up to $25,000 from your Registered Retirement Savings Plan without paying taxes on the funds if you meet both the HBP and RSP withdrawal conditions. A non-refundable first time home buyers tax credit of $5,000 is also available (line 369) if you or your spouse or common law partner acquired a qualifying home and did not live in a home owned by either of you in the year of acquisition or the four prior years. An additional $750 tax credit applies if you have a disability tax credit certificate.
As a first time home buyer, you are also entitled to a land transfer tax refund of up to $2,000 from the Ontario government. Additional refunds may be available from the municipality where the home is located (e.g., $3,500 from the City of Toronto).
If you are a new home buyer, warranty protection is available from Tarion Warranty Corporation for a limited period.
If you move further than 40 kilometres for employment reasons, you should keep all your relevant receipts as you may be able to claim your moving expenses on line 219 of your income tax return.
It will be necessary to contact Service Ontario as soon as possible (e.g., within 30 days) so your address change will appear on your driver’s licence, vehicle registration and health insurance. Your auto insurer also requires your new address as may other parties or entities.
Legal Protection of Your Interests
It is your lawyer’s role to protect your interests. For example, if you buy a resale home, your lawyer will check to ensure that prior and prorated amounts for the current year are paid by the seller, such as property taxes, condominium assessments and utilities. You will be required to pay any property taxes or utility bills that were pre-paid by the sellers.
Your real estate lawyer will also protect you from losses related to property’s title by searching the records and the title of the property and encouraging you to buy title insurance. If your lawyer arranges for title insurance, you will be insured against loss due to defects or existing liens against the property’s title, encroachment issues, title fraud, and errors in surveys and public records.
Act on Your Behalf to Close the Transaction
Your lawyer will inform you of your closing costs in advance, obtain the mortgage funds needed from your lender and hold the funds in trust until the deal closes. He or she will pay the land transfer tax and any HST if it is applicable. Other costs you will need to pay include your lawyer’s fees and disbursements, title insurance and other closing costs your lawyer will discuss with you.
Once your lawyer delivers the remaining funds due (i.e., less the down payment already made) to the vendor’s lawyer, then he or she will transfer the title to you. Thereafter you will receive a reporting package with a statement of adjustments, the deed to the property, the title insurance certificate and any other applicable certificates.
Contact Feltmate, Delibato, Heagle LLP
A real estate lawyer in Oakville or Burlington at our firm can advise you and act for you for your first home purchase. We have significant repeat business from our clients as we are client focussed and experienced to help you properly from the start.Contact us at 1-800-636-6927.