The Role of a Real Estate Lawyer in Ontario: What to Expect During the Closing Process

When buying or selling property in Ontario, one of the most important steps in the process is closing the deal. This is the final phase of a real estate transaction, where ownership is officially transferred from the seller to the buyer. While the process may seem straightforward, it involves a series of legal steps that require the expertise of a real estate closing lawyer to ensure everything goes smoothly. In this blog, we’ll explore the essential role of a real estate lawyer in Ontario during the closing process and what you can expect when working with one.

What Does a Real Estate Lawyer Do in Ontario?

In Ontario, the law requires buyers and sellers to have a real estate lawyer involved in the transaction, particularly during the closing process. The lawyer’s role is crucial in protecting the interests of their clients, ensuring all legal requirements are met, and preventing any future legal issues. While real estate agents handle many aspects of the sale, such as negotiating the price and organizing viewings, a real estate lawyer focuses on the legal details of the transaction.

Here are the key responsibilities of a real estate lawyer during the closing process:

1. Title Search and Title Insurance

One of the first tasks your real estate lawyer will undertake is performing a title search. This is a critical step to ensure that the seller is the rightful owner of the property and that there are no outstanding liens, claims, or encumbrances on the title. In Ontario, a title search involves reviewing public records and property deeds to verify the legitimacy of the property’s ownership.

If any issues are discovered during the search, such as an unresolved lien or dispute over ownership, the lawyer will work to resolve these issues before the deal can close. They will also recommend title insurance to protect the buyer against future claims or disputes over the property title. This insurance provides additional peace of mind for the buyer and ensures they are covered in case any unexpected problems arise post-closing.

2. Reviewing the Agreement of Purchase and Sale

Another key responsibility of a real estate lawyer in Ontario is reviewing the Agreement of Purchase and Sale (APS). This document outlines the terms of the sale, including the agreed-upon price, closing date, and any conditions that need to be met before the transaction can be finalized.

Your lawyer will carefully examine the APS to ensure that it complies with all relevant laws and regulations in Ontario. They will also check for any potential issues that could cause delays or complications during the closing process, such as missing or ambiguous clauses. If needed, the lawyer may advise on revisions or additions to the agreement to protect the interests of their client.

3. Preparing Documents for Closing

As the closing date approaches, the lawyer will prepare the necessary documents for the transaction. This includes the deed of transfer, which officially transfers the property from the seller to the buyer, as well as other legal documents required by Ontario law. The lawyer will also calculate adjustments for things like property taxes, utilities, and other expenses that need to be settled before closing.

For example, if the seller has already paid property taxes for the year, the buyer will be responsible for reimbursing them for the portion of the year they will own the property. Your lawyer will ensure that these adjustments are accurately calculated and incorporated into the closing statement.

4. Handling Funds and Payments

One of the most important tasks of a real estate closing lawyer is managing the financial side of the transaction. This includes holding trust funds, ensuring that the buyer’s deposit is applied correctly, and verifying that the required payments are made on time. Your lawyer will also work closely with the lender (if the buyer is financing the purchase) to ensure that the mortgage funds are available and properly applied to the transaction.

In addition to handling payments, the lawyer will also ensure that the necessary taxes, such as the Land Transfer Tax, are paid. The Ontario Land Transfer Tax is a tax levied on the buyer when purchasing property, and it must be paid before the deal can close. Your real estate lawyer will ensure that all payments are made accurately and on time.

5. Registering the Property Transfer

Once all financial matters are settled, the lawyer will oversee the registration of the property transfer with the Ontario Land Registry. This is a crucial step, as it officially records the change in ownership and protects the buyer’s legal rights to the property. The lawyer will ensure that all documents are correctly filed with the Land Registry office and that the buyer receives a copy of the registered deed.

In some cases, the lawyer will also facilitate the mortgage registration process, ensuring that the buyer’s mortgage is officially recorded on title. This ensures that the lender’s interest is protected, and that the buyer’s mortgage is legally binding.

6. Disbursing Funds and Finalizing the Sale

On the closing day, the lawyer will oversee the final disbursements of funds. This includes paying off the seller’s existing mortgage (if applicable) and ensuring that all outstanding costs, such as real estate agent commissions and legal fees, are settled. Once all funds are disbursed, the lawyer will officially finalize the sale by handing over the keys to the buyer and providing them with a copy of the registered deed.

7. Ensuring Compliance with Ontario’s Real Estate Laws

Throughout the entire closing process, your real estate lawyer in Ontario will ensure that the transaction complies with all relevant laws and regulations. Ontario’s real estate laws are complex, and failure to adhere to legal requirements can result in costly mistakes or delays. By having a lawyer involved, you ensure that the transaction follows the correct legal procedures and that your rights are protected.

What to Expect from Your Real Estate Lawyer During Closing

During the closing process, you can expect your real estate lawyer to be your legal advocate, guiding you through each step with transparency and efficiency. Here’s what you can expect when working with a lawyer:

• Clear Communication: Your lawyer will keep you informed at every stage of the process, explaining the legal aspects in a way that’s easy to understand.

• Timely Updates: You’ll receive updates on the status of the title search, document preparation, and any other critical aspects of the transaction.

• Problem-Solving: If any issues arise, your lawyer will work to resolve them quickly and effectively, ensuring that the transaction proceeds smoothly.

• Legal Guidance: Your lawyer will provide expert advice on any legal questions or concerns you have, ensuring you make informed decisions.

Conclusion

The role of a real estate lawyer in Ontario during the closing process is vital to ensure that everything goes smoothly and that you are protected throughout the transaction. From title searches and contract reviews to handling payments and registering the property transfer, a real estate lawyer’s expertise ensures that all legal requirements are met and that any potential issues are resolved promptly.

Whether you’re buying or selling a property in Ontario, having a skilled real estate closing lawyer by your side can provide you with peace of mind and confidence that your interests are being protected. By understanding what to expect during the closing process, you’ll be better prepared to navigate the complexities of real estate transactions with ease.