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Sale and Purchase of Real Estate

ON

A complete matter management solution for practitioners running a busy conveyancing practice in Ontario.

2 Matter Plans

Overview

The sale and purchase of real estate commentaries cover all the common and less frequent issues that arise in conveyancing matters. Each step of the transaction is outlined in sequential order, with all required precedents conveniently located, along with links to the relevant sections of the comprehensive commentary.

The Reference materials folder includes guidance on electronic signing and remote witnessing, and the Getting the matter underway folder contains essential compliance and client engagement documents. The comprehensive Retainer Instructions ensure that all necessary information is gathered from the client at the outset of the matter.

Precedents in this publication include:

  • A full suite of letters to:
    • clients;
    • real estate agents; and
    • lenders.
  • Library of additional clauses;
  • Declaration of trust for a purchaser;
  • Mutual termination agreement.
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2 Matter Plans Included

  • Item icon ALERTS - Nil
  • Item icon Full Commentary - Sale of Real Estate (ON)
  • Folder icon Reference materials
    • Item icon AI Prompts
    • Item icon Electronic Signing and Remote Witnessing
    • Item icon Further information
  • Item icon Overview
    The purpose of a real estate transaction is to transfer the title and use of real property from one party to another. Despite the trend toward making it adversarial, the purchase and sale of real estate are generally not meant to be confrontational. This is primarily due to warranties and the ...

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  • Item icon Summary of the process
    The usual steps in a sale of real estate matter are:

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  • Folder icon A. Getting the matter underway
    • Item icon File cover sheet - Sale of real estate
    • Item icon To do list - Sale of real estate
    • Item icon First steps
    • Item icon Client details, verification, and source of funds
    • Item icon Retainer instructions - Sale of real estate
    • Item icon Conflict of interest check
    • Item icon Initial letter to client enclosing retainer agreement
    • Item icon Initial letter to client enclosing retainer agreement and authority
    • Item icon Initial letter to client enclosing retainer agreement and authority precontract
    • Item icon Retainer agreement - Ontario
    • Item icon Scope of work - Sale of real estate
    • Item icon Authority for records
    • Item icon Initial letter to vendor
    • Item icon Initial letter to purchaser's lawyer
    • Item icon Affidavit - Identification by video conferencing
    • Item icon Time and costs estimates
    • Folder icon If required - Costs disclosure update and a non-engagement letter
      • Item icon Letter to client updating costs disclosure
      • Item icon Non-engagement letter
    • Folder icon General deeds, agreements, execution clauses, and statutory declarations
      • Item icon Deeds and Agreements
      • Folder icon Deeds
        • Item icon Confidentiality deed
        • Item icon Deed for general use
        • Item icon Deed of assignment of agreement
        • Item icon Deed of gift
        • Item icon Deed of guarantee
        • Item icon Deed of release
        • Item icon General deed of indemnity
        • Folder icon Library of standard clauses for deeds
          • Item icon Amendment clause
          • Item icon Confidentiality clause for defined information - All parties
          • Item icon Confidentiality clause for defined information - One party
          • Item icon Confidentiality clause for terms of agreement - All parties
          • Item icon Confidentiality clause for terms of agreement - One party
          • Item icon Costs clause
          • Item icon Counterparts clause
          • Item icon Dispute resolution clause
          • Item icon Events beyond control clause
          • Item icon Governing law and jurisdiction clause
          • Item icon Interpretation clause
          • Item icon No assignment clause
          • Item icon Notices clause
          • Item icon Severance clause
          • Item icon Waiver clause
          • Item icon Whole agreement clause
      • Folder icon Agreements
        • Item icon Agreement for general use
        • Item icon Heads of agreement
        • Item icon Non-disclosure agreement - Formal
        • Item icon Non-disclosure agreement - Informal
        • Folder icon Library of standard clauses for agreements
          • Item icon Amendment clause
          • Item icon Confidentiality clause for defined information - All parties
          • Item icon Confidentiality clause for defined information - One party
          • Item icon Confidentiality clause for terms of agreement - All parties
          • Item icon Confidentiality clause for terms of agreement - One party
          • Item icon Costs clause
          • Item icon Counterparts clause
          • Item icon Dispute resolution clause
          • Item icon Events beyond control clause
          • Item icon Governing law and jurisdiction clause
          • Item icon Interpretation clause
          • Item icon No assignment clause
          • Item icon Notices clause
          • Item icon Severance clause
          • Item icon Waiver clause
          • Item icon Whole agreement clause
      • Folder icon Execution clauses
        • Item icon Execution clauses - Agreements and contracts
        • Item icon Execution clauses - Deeds
      • Folder icon Statutory declaration
        • Item icon Statutory declaration
      • Item icon Standard annexure note for documents
  • Folder icon B. Initial considerations
    • Item icon Information for vendors - Preparing for closing
    • Item icon The two-lawyer rule
      The same lawyer cannot act for the vendor and the purchaser except in limited circumstances, which include:

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    • Item icon Client consent for firm to act for both vendor and purchaser
    • Item icon Matrimonial home sales
      The matrimonial home has special significance in real estate transactions. Under the Family Law Act, R.S.O. 1990, c. F.3, a spouse who is not on title must consent to the sale of the matrimonial home. A matrimonial home can only be transferred legally with the consent of the spouse not on title. A ...

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    • Item icon Implied contract terms
      Courts generally uphold the principle of freedom of contract. This means courts are reluctant to interfere with the terms that parties have freely agreed upon. Courts cannot add or imply terms into a contract that are inconsistent with its express provisions. However, there are exceptions when a ...

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    • Item icon Selling tenanted property
      When selling a tenanted property, the vendor has 2 options. They can either terminate the tenancy and provide the purchaser with vacant possession at closing, or they can sell to a purchaser who is willing to assume the existing tenancy.

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    • Item icon Joint tenants and survivorship
      Joint tenants is a manner for holding title to property where two or more people have an equal and undivided interest in the property. Joint tenants obtain their interest under the same transfer or deed and at the same time, meaning they are all transferees in the same transaction. A key feature of ...

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    • Item icon Vendor preparations before listing for sale
      Before listing their property for sale, a prospective vendor may contact a law office to seek advice on how best to prepare for the sale. This initial contact presents a valuable opportunity for the lawyer to introduce themselves to a new client or reaffirm an existing client relationship. Often, ...

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    • Item icon Letter to vendor with preparation instructions for sale
    • Item icon Working with realtors
      A prospective vendor typically works with a realtor to find a purchaser for their property. The relationship between the vendor and the realtor is governed by the Ontario Real Estate Association (OREA) Listing Agreement (Form 200), also called the Seller Representation Agreement. In commercial real ...

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    • Item icon Private deals
      A vendor may choose to sell their property without the services of a listing brokerage. These transactions are commonly referred to as private deals. In a private deal, the vendor typically works more closely with their real estate lawyer from the outset, beginning with the receipt of the deposit. ...

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    • Item icon Non-resident vendors
      Vendors must be advised of the tax consequences flowing from the disposition of real property in Canada by non-residents. Under s 116 of the Income Tax Act 1985, a non-resident vendor is required to apply to the Canada Revenue Agency (CRA) for a Certificate of Compliance, commonly referred to ...

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    • Folder icon If required - Terminating a tenancy
      • Item icon Terminating a tenancy
        Under the Residential Tenancies Act 2006, a tenancy may be terminated in several ways:

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      • Item icon Agreement to end the tenancy (Cash for keys agreement)
      • Item icon Tenant Certificate of Independent Legal Advice
      • Item icon Agreement to End the Tenancy
      • Item icon Form N12 notice
        In the context of a real estate transaction, a landlord can give the tenant a Form N12 - Notice to End your Tenancy when:

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      • Item icon Notice to End Your Tenancy Because the Landlord, a Purchaser or a Family Member Requires the Rental Unit
      • Item icon Application to End a Tenancy and Evict a Tenant or Collect Money
      • Item icon Certificate of Service
      • Item icon Tribunals Ontario Portal
    • Folder icon If required - Assuming existing tenancy
      • Item icon Assuming a tenancy
        An alternative to terminating the tenancy is for the vendor to find a purchaser who is willing to assume the existing tenancy at the property. In such cases, the agreement of purchase and sale must include a clause confirming that the purchaser will assume the tenancy. Before agreeing to assume ...

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      • Item icon Direction regarding rent
      • Item icon Assignment of tenancy
      • Item icon Tenant acknowledgement
      • Item icon Acknowledgement of landlord
    • Folder icon If required - Survivorship application
      • Item icon Survivorship application
        When a property held in joint tenancy is sold following the death of one of the joint tenants, the surviving joint tenant must submit a survivorship application to remove the deceased's name from title. This application transfers full ownership to the surviving joint tenant. Once registered, the ...

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      • Item icon Survivorship affidavit
    • Folder icon If required - Estate sales
      • Item icon Estate sales
        In a real estate transaction when the sole titleholder is deceased, there is a 2 step procedure to complete the sale. The first step involves the registration of a transmission by personal representative-land. This is followed by the second step, which is registration of the transfer by personal ...

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      • Item icon Affidavit of administrator for estate sale
      • Item icon Affidavit of executor for estate sale
      • Item icon Beneficiary consent to sale of estate property
  • Folder icon C. Contract considerations
    • Item icon Contract considerations
      The contract between a vendor and purchaser is the primary document that sets out the parties’ rights and obligations in a real estate transaction. In Ontario, residential property transactions commonly use the Ontario Real Estate Association (OREA) standard form agreement, specifically the OREA ...

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    • Item icon Forming the contract
      Form of contract While the form of a contract conveying or creating an interest in real property is not prescribed by law, certain requirements are mandated for it to be valid and enforceable. To comply with these conditions, the contract must be in writing and signed by the party against whom it ...

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    • Item icon Electronic signatures
      Electronically signed contracts have become a common practice, particularly when parties or their lawyers face tight deadlines or are geographically distant, and where delays could be problematic. Electronic signing resolves these types of issues efficiently. Electronic signatures are different ...

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    • Item icon Ontario Real Estate Association's standard form agreements
      The Ontario Real Estate Association's (OREA) standard form agreement of purchase and sale is the commonly used contractual document in most resale freehold home, condominium, and commercial real estate transactions. The standard form agreement outlines essential terms and conditions. It offers a ...

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    • Item icon Residential - Agreement of Purchase and Sale (Form 100)
      The OREA agreement of purchase and sale, form 100, is for most residential real estate property transactions, excluding condominium and common element condominium sales. Vendors and purchasers use this form for freehold property transactions.

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    • Item icon Condominium - Agreement of Purchase and Sale (Form 101)
      The OREA agreement of purchase and sale, form 101, is for resale condominium property transactions. Any applicable schedules are attached to the agreement, with a blank Schedule A provided. Form 101 is similar to the form 100, which is used for resale freehold transactions. One key difference ...

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    • Item icon Commercial - Agreement of Purchase and Sale (Form 500)
      The OREA agreement of purchase and sale, form 500, is for commercial real estate transactions. Any schedules are attached to the agreement with a blank Schedule A provided.

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    • Item icon Considerations for commercial properties
      Building condition assessment A building condition assessment is a central part of the due diligence before finalizing an offer to purchase commercial property.

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    • Item icon Property
      Identification Identifying the property being purchased is not always a straightforward task. Those who believe that a mistake in this area is unlikely may overlook the importance of accurately identifying the property.

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    • Item icon Deposits
      The Ontario Real Estate Association's (OREA) standard form agreements require that the deposit be paid to the deposit holder within 24 hours of the offer's acceptance, at the time of offer, or according to another arrangement specified in the agreement. The deposit is held in a ...

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    • Item icon Inclusions
      In real estate transactions, inclusions refer to items of personal property that remain with the property after closing. The Ontario Real Estate Association (OREA) standard form agreement provisions require the parties to explicitly list chattels that are included and fixtures that are excluded ...

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    • Item icon Conditions
      Conditions are clauses within an agreement that outline specific requirements or conditions that must be met or fulfilled for the transaction to proceed further. These conditions must be included in the agreement or its schedules and agreed upon by both parties. When an offer includes conditions, ...

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    • Item icon Representations and warranties
      The agreement in writing clause, also called the entire agreement clause, is a standard provision in the Ontario Real Estate Association's standard form agreements. This clause stipulates that the written agreement and any attached schedules represent the entire agreement between the parties. This ...

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    • Item icon Condominiums
      Purchase transactions involving condominium units are subject to unique legal considerations due to the distinct nature of condominium ownership. These considerations arise from the fact that a condominium functions as a corporation, complete with a management team, board of directors, rules, ...

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    • Item icon Co-operatives, co-ownership, and crown land
      Co-operative title – Shareholding in a corporation A non-profit housing co-operative is an ownership structure in which a co-operative corporation owns the land, building, and units in a residential complex. The people living in the complex are shareholders in the corporation. Being a shareholder ...

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    • Item icon Tax considerations
      The tax consequences of ownership should be considered with each purchase and sale.

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    • Folder icon If required - Tax considerations
      • Item icon Harmonized sales tax (HST)
        On July 1, 2010, Ontario replaced the goods and services tax (GST) and provincial sales tax (PST) with the harmonized sales tax (HST) at a rate of 13%, which consists of a 5% federal portion and an 8% provincial portion. HST is applied to the sale of property or services in Ontario. This ...

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      • Item icon Purchaser’s Warranty, Undertaking and Indemnity Regarding HST
      • Item icon Capital gains tax
        The federal Income Tax Act 1985 provides that a capital gain or loss is made when a property is sold or considered to have been sold. A property is considered to have been sold when it is exchanged for another, is a gift or is transferred to a trust, or there is a use change, for example, from a ...

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      • Item icon Principal residence exemption
        Capital gains tax is not payable on the sale of a home if it was the vendor’s principal residence for the entire period of ownership. However, the capital gain on the property must be reported for any years that the property was not designated as the vendor's principal residence. To qualify as a ...

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      • Item icon T2091IND Designation of a Property as a Principal Residence by an Individual (Other Than a Personal Trust) – Government of Canada
      • Item icon T2091IND-WS Principal Residence Worksheet – Government of Canada
      • Item icon T1255 Designation of a Property as a Principal Residence by the Legal Representative of a Deceased Individual – Government of Canada
      • Item icon Federal residential property flipping rule
        Under s 12(12) of the Income Tax Act 1985, a housing unit in Canada that is sold within the first 365 days of ownership is treated as the taxpayer's inventory and the gain from the sale is deemed to be business income for tax purposes, instead of a capital gain. This deeming rule applies to ...

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      • Item icon T2125 Statement of Business or Professional Activities – Government of Canada
      • Item icon Section 116 non-resident tax holdback
        When the vendor is a non-resident of Canada, they are required to obtain a tax Clearance Certificate, also called certificate of compliance, from the Canada Revenue Agency (CRA) when they sell real property in Canada: s 116 of the Income Tax Act 1985. The vendor must report the sale to the CRA ...

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      • Item icon Letter to Canada Revenue Agency with section 116 notice of disposition package
      • Item icon Request by a Non-Resident of Canada for a Certificate of Compliance Related to the Disposition of Taxable Canadian Property
      • Item icon T2062A Request by a Non-resident of Canada for a Certificate of Compliance Related to the Disposition of Canadian Resource or Timber Resource Property, Canadian Real Property (Other than Capital Property), or Depreciable Taxable Canadian Property – Government of Canada
      • Item icon NR301 Declaration of eligibility for benefits (reduced tax) under a tax treaty for a non-resident person – Government of Canada
      • Item icon NR302 Declaration of eligibility for benefits (reduced tax) under a tax treaty for a partnership with non-resident partners – Government of Canada
      • Item icon NR303 Declaration of eligibility for benefits (reduced tax) under a tax treaty for a hybrid entity – Government of Canada
      • Item icon Letter to Receiver General for Canada to remit holdback for section 116 clearance certificate
      • Item icon Vendor’s lawyer’s undertaking to holdback funds for Section 116 Certificate of Compliance
      • Item icon Underused housing tax
        The underused housing tax is an annual 1% federal tax on residential property owned by affected owners. Individuals required to pay the tax are primarily non-resident, non-Canadian owners of homes that are vacant or are not rented for more than 180 days in a calendar year. The tax is outlined in ...

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      • Item icon Vacant home tax
        The vacant home tax, also known as the vacant unit tax, is a municipal tax levied on residential properties left vacant for a period of time during the previous taxation year. The following municipalities have implemented a vacant home tax:

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      • Item icon Non-resident speculation tax
        The non-resident speculation tax (NRST) is a tax imposed on the purchase or acquisition of an interest in residential property in Ontario by individuals who are not citizens or permanent residents of Canada, as well as foreign corporations and taxable trustees: see Non-Resident Speculation Tax for ...

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      • Item icon Land transfer tax
        Land transfer tax is a tax levied on the transfer of land, calculated on the purchase price or the value of consideration for the transfer. The tax is payable at the time of registration in the land titles system and applies to the conveyance of residential properties. There are 2 types of ...

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      • Item icon Land Transfer Tax Affidavit
      • Item icon MLTT Affidavit
      • Item icon Ontario Land Transfer Tax Refund Affidavit for First-Time Purchasers of Eligible Homes
      • Item icon Ontario Land Transfer Tax Refund or Rebate Affidavit
    • Folder icon If required - Tenanted property
      • Item icon Tenanted property
        If the property is tenanted, the purchaser may include terms in the agreement of purchase and sale that require the vendor to provide vacant possession at closing or terms that confirm the purchaser is assuming the existing tenancy. See the Selling tenanted property section of this commentary for ...

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      • Item icon Direction regarding rent
      • Item icon Assignment of tenancy
      • Item icon Tenant acknowledgement
      • Item icon Acknowledgement of landlord
    • Folder icon If required - Power of attorney
      • Item icon Powers of attorney in real estate transactions
        Real estate transactions are the most common transaction types where a power of attorney (POA) for property is used. These transactions are particularly susceptible to fraud because of their fast turnaround time and the one-off nature of such matters. When a party in a real estate transaction uses ...

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      • Item icon Due diligence in real estate transactions
        Not every real estate transaction involves an attorney acting on behalf of another person. While the use of a power of attorney is not common in every deal, it does occur frequently enough that it can be mistakenly treated as a routine matter. When representing an attorney in a transaction or when ...

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      • Item icon Power of attorney for property review checklist
      • Item icon Power of attorney interview sheet - Grantor
      • Item icon Power of attorney interview sheet - Attorney
      • Item icon Acknowledgement of power of attorney
      • Item icon Continuing power of attorney for property for client 1
      • Item icon Continuing power of attorney for property for client 2
      • Item icon General power of attorney for client 1
      • Item icon General power of attorney for client 2
    • Item icon Harmonized sales tax
    • Item icon Initial letter to purchaser's lawyer
    • Item icon Letter to purchaser's lawyer enclosing property survey
    • Item icon Letter to purchaser's lawyer seeking amendment to agreement
    • Item icon Letter to client requesting appointment to sign agreement and provide loan details
    • Item icon Method of offering and accepting contract
      A contract can be offered and accepted through various means of communication, including in-person, by courier, fax, or email, especially when the parties, lawyers, or realtors are geographically distant from one another. In these cases, the lawyers or realtors typically exchange signed and ...

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    • Item icon Letter to purchaser's lawyer enclosing signed agreement
    • Folder icon If required - Corporate resolutions
      • Item icon Corporate resolution for vendor - Commercial real estate sale
      • Item icon Corporate resolution authorizing the sale
    • Folder icon If required - Library of additional clauses
      • Item icon Development clauses
      • Item icon Board approvals
      • Item icon Competition Act approval
      • Item icon Estoppel certificate
      • Item icon Planning Act consents
      • Item icon Representations and warranties
      • Item icon Rezoning condition
      • Item icon Severance condition
    • Folder icon Library of other agreements
      • Item icon Agreement to assign contracts
      • Item icon Agreement to assign due diligence material
      • Item icon Agreement to assign encumbrances
      • Item icon Agreement to assign leases
      • Item icon Agreement to assign rights and warranties
      • Item icon Agreement to assume existing agreements
      • Item icon Agreement to assign agreement of purchase and sale
      • Item icon Agreement to amend agreement of purchase and sale
      • Item icon Assumption of covenant
      • Item icon Consent to assignment of agreement
      • Item icon Non-merger agreement
      • Item icon Realty tax agreement
      • Item icon Reconveyance agreement
      • Item icon Restrictive covenant agreement
      • Item icon Agreement for sale of chattels and fixtures
  • Folder icon D. Mid transaction
    • Item icon Initial letter to purchaser's lawyer
    • Item icon Title searching
      Title searching is the process of investigating the title to a parcel of land to determine who owns it and if it is subject to any work orders, deficiency notices, charges, claims, or encumbrances. A lawyer determines the state of title by completing an investigation using the parcel register in ...

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    • Item icon Teraview
    • Item icon Vendor's authorization to government authorities to provide information
    • Item icon Requisitions and replies
      In a real estate transaction, requisitions are formal requests made by the purchaser to the vendor. These requests are intended to seek information about the property, request the delivery of documents like a survey or warranty, clarify any issues related to the property, resolve title defects, or ...

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    • Item icon Letter to purchaser's lawyer replying to requisitions
    • Item icon Letter to purchaser's lawyer replying to requisition letter if possible unresolvable cloud on title
    • Item icon Letter to purchaser's lawyer replying to requisition letter with enclosures
    • Item icon Letter to purchaser's lawyer replying to requisition letter with enclosures and delivery of closing funds instructions
    • Item icon Discharges
      A discharge involves the payment of an amount secured by a registration on title in favour of a chargee or lien holder. It results in the deletion or release of the chargee or lien holder's interest in the property, confirming that the debt has been paid and that no further claim for payment ...

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    • Item icon Letter to current lender requesting mortgage discharge statement
    • Item icon Letter to current lender requesting mortgage discharge statement from institutional lender
    • Item icon Letter to current lender's lawyer requesting mortgage discharge statement from private lender
    • Folder icon Library of requests for a discharge statement
      • Item icon Letter to creditor requesting general payout statement
      • Item icon Letter to creditor requesting discharge statement for execution on title
      • Item icon Letter to creditor requesting payout statement for execution against vendor's name
      • Item icon Letter to grantor requesting discharge statement for Notice of Security Interest
      • Item icon Letter to lienholder requesting discharge statement for general lien on title
      • Item icon Letter to condominium corporation requesting discharge statement for condo lien on title
    • Item icon Real estate commission statement
      The vendor's lawyer is responsible for requesting the commission statement from the listing brokerage. If it is not immediately available, the lawyer contacts the deal administrator at the listing brokerage to request that a copy be forwarded without delay. The commission statement is required to ...

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    • Item icon Letter to vendor's real estate brokerage requesting commission payout statement
    • Item icon Notice and cautions
      To protect an unregistered agreement, estate, equity in land, or other proprietary interest, a party must register it on title. A registration can include a notice or caution. Registration is required due to how the land titles system operates. Under this system, any unregistered interests that are ...

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    • Item icon Notices
      A notice is a registration on the title designed to protect rights under an unregistered agreement, estate, interest, or equity in land or a charge. A notice can be registered under s 71 of the Land Titles Act 1990. For instructions on how to register a notice, refer to the Electronic ...

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    • Item icon Cautions
      A caution is a registration on the title to protect a party's proprietary interest in the property or charge. Authority to register a caution is provided under ss 71 and 128 of the Land Titles Act 1990. Refer to the Electronic Registration Procedures Guide for instructions on how to register a ...

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    • Item icon Planning Act, zoning, and land severance
      Planning Act The Planning Act 1990 regulates the use of land and its subdivision in Ontario.

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    • Item icon Title insurance
      Title insurance is an insurance policy that protects owners and lenders against loss or damage resulting from problems with the property's title or ownership. Title insurance covers events that occurred before the title insurance policy was purchased. This could include a collection notice for a ...

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    • Item icon Tarion warranty documents
      When selling a property that is less than 7 years old, the purchaser will often request a copy of the Tarion New Home Warranty Plan documents provided to the vendor by the builder at the time they were given possession of the property. This request is made because the purchaser can still ...

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    • Item icon Letter to purchaser's lawyer enclosing Tarion warranty documents
    • Item icon Letter to purchaser's lawyer stating vendor does not have Tarion documents
    • Item icon Insurance and risk
      The risk of property damage before closing, the vendor's obligation to maintain insurance, and the purchaser's rights in the event of substantial damage to the property can easily lead to litigation. It is essential to understand the vendor's responsibilities and the purchaser's rights, as outlined ...

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    • Folder icon If required - Insurance and risk - Substantial damage
      • Item icon Insurance provision in standard form agreements
        The OREA standard form agreements include an insurance provision that departs from the common law, shifting the responsibility for the risk of property damage to the vendor until closing. According to this clause, the vendor is required to maintain insurance on the property and hold the insurance ...

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      • Item icon Substantial damage
        Substantial damage is assessed on a case-by-case basis. It is not determined solely by the cost of repair. In addition to repair costs, factors like the quality, character, and consequences of the damage must also be considered. This approach ensures that the impact of the damage on the property's ...

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      • Item icon Letter to purchaser's lawyer notifying of damage to the property without details
      • Item icon Letter to purchaser's lawyer notifying of damage to the property with details
      • Item icon Letter to purchaser's lawyer enclosing insurance coverage details
      • Item icon Letter to purchaser's lawyer with dates purchaser can inspect damage
      • Item icon Letter to purchaser's lawyer confirming date and time of inspection
      • Item icon Letter to purchaser's lawyer with insurance claim details
      • Item icon Letter to purchaser's lawyer with repair costs and claim coverage amount
      • Item icon Letter to purchaser's lawyer disputing substantial damage characterization
      • Item icon Letter to purchaser's lawyer requiring purchaser's election to proceed or terminate agreement
    • Folder icon If required - Options
      • Item icon Options
        An option is a contract term in which the optionor agrees to sell property to the optionee if the optionee chooses to purchase it during a specified time frame. The optionee can convert the option into a purchase agreement by complying with the conditions outlined in the option contract. During the ...

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      • Item icon Put and call option agreement
      • Item icon Option to purchase agreement
      • Item icon Option notice
      • Item icon Nomination notice
    • Folder icon If required - Assignment of mortgage
      • Item icon Assignment of mortgage
    • Item icon Letter to other side with notice of waiver or satisfaction of condition
    • Item icon Letter to other side giving notice of termination
    • Item icon Mutual termination agreement
  • Folder icon E. Claims and disputes
    • Item icon Claims and disputes
      Claims and disputes can arise before closing, prompting both the vendor and the purchaser to evaluate whether they are in a position to refuse to close the transaction. The options available to both parties depend on the terms outlined in the agreement of purchase and sale, as well as the specific ...

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    • Item icon Purchaser refusing to close
      In Tse v. Sood, 2015 ONSC 755 (CanLII), the court outlined the 4 main legally acceptable justifications for a purchaser refusing to close a real estate transaction. These justifications are as follows:

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    • Item icon Claims
      If the purchaser is unable to close, the vendor may claim deposit forfeiture and seek additional damages. Additional damages include the price differential between the original contract price and the price the vendor is able to sell the property for to a third party, as part of their efforts to ...

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    • Item icon Anticipatory breach
      Anticipatory breach occurs when a party indicates, through words or actions, that they do not intend to perform their obligations under the contract. For anticipatory breach to be established, the court must find:

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    • Item icon Letter to purchaser's lawyer electing termination or repudiation following purchaser's anticipatory breach through words and conduct
    • Item icon Letter to purchaser's lawyer regarding purchaser's anticipatory breach through no funds to close
    • Item icon Substantial damage and termination
      The Ontario Real Estate Association (OREA) standard form agreements include an insurance provision that departs from the common law, shifting the responsibility for the risk of property damage to the vendor until the closing. According to this clause, the vendor maintains the insurance on the ...

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    • Item icon Letter to purchaser's lawyer notifying of damage to the property without details
    • Item icon Letter to purchaser's lawyer notifying of damage to the property with details
    • Item icon Letter to purchaser's lawyer enclosing insurance coverage details
    • Item icon Letter to purchaser's lawyer with dates purchaser can inspect damage
    • Item icon Letter to purchaser's lawyer confirming date and time of inspection
    • Item icon Letter to purchaser's lawyer with insurance claim details
    • Item icon Letter to purchaser's lawyer with repair costs and claim coverage amount
    • Item icon Letter to purchaser's lawyer disputing substantial damage characterization
    • Item icon Letter to purchaser's lawyer requiring purchaser's election to proceed or terminate agreement
    • Item icon Vendor’s primary obligation
      In a real estate transaction, the vendor’s primary obligation is to deliver good and marketable title to the property at closing. The purchaser is required to close when the vendor is able to convey substantially what the purchaser contracted to purchase.

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    • Item icon Letter to purchaser's lawyer denying new damage to property and credit or holdback
    • Item icon Vacant possession
      Under the Ontario Real Estate Association (OREA) standard form agreements, the vendor is required to provide the purchaser with vacant possession of the property at closing unless the agreement explicitly states otherwise. If the purchaser has not agreed to assume any existing tenants, the tenants ...

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    • Item icon Letter to purchaser's lawyer confirming vacant possession at closing
    • Item icon Letter to purchaser's lawyer denying additional visit to confirm vacant possession
    • Item icon Letter to purchaser's lawyer to schedule final visit
    • Item icon Letters to purchaser's lawyers disputing refusal to close as property not to be vacant on closing
    • Item icon Not clean and broom swept
      The agreement may include the typical warranty stating that the vendor will leave the property in a clean and broom swept condition at closing. However, if no such warranty is included in the agreement, the vendor is only obligated to provide vacant possession at closing. The vendor is not required ...

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    • Item icon Letter to purchaser's lawyer confirming property will be left in same condition as it was at contract formation
    • Item icon Letter to purchaser's lawyer confirming that property will be in a clean and broom-swept condition at closing
    • Item icon Letter to purchaser's lawyer denying their right to refuse to close because property is not clean and broom swept
    • Item icon Appliances not in working order
      The agreement may include a warranty stating that the appliances will be in good working order at closing. If the appliances are not functioning properly at closing, this does not give the purchaser grounds to refuse to close. Instead, the breach of this warranty entitles the purchaser to make a ...

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    • Item icon Letter to purchaser's lawyer confirming appliances in same condition as at time of agreement
    • Item icon Letter to purchaser's lawyer confirming appliance repair obligations will be fulfilled before closing
    • Item icon Letter to purchaser's lawyer denying their right to refuse to close because appliance repairs are incomplete
    • Item icon Tendering
      Tender refers to the act of offering to perform one's contractual obligations. In a real estate transaction, tendering by the purchaser could include presenting the balance due on closing, for instance by sending a copy of the certified cheque to the vendor's lawyer. The significance of tendering ...

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    • Item icon Tender letter to purchaser's lawyer
    • Item icon Time is of the essence
      The Ontario Real Estate Association (OREA) standard form agreements include a time limit provision stating that time is of the essence. This means that time shall be of the essence in all respects, unless otherwise specifically stated in the agreement or agreed to by the parties' lawyers. Time is ...

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    • Item icon Letter to purchaser's lawyer with terms for extension to closing date
    • Item icon Entire agreement clause
      The Ontario Real Estate Association (OREA) standard form agreements contain an agreement in writing clause, also referred to as an entire agreement clause. This clause explicitly states that the written agreement is the only agreement between the vendor and the purchaser. The agreement, including ...

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    • Item icon Letter to purchaser's lawyer responding to MLS listing discrepancy
    • Item icon Letter to other side with notice of waiver or satisfaction of condition
    • Item icon Letter to other side giving notice of termination
    • Item icon Mutual termination agreement
  • Folder icon F. Through to closing
    • Item icon Adjustments
      Adjustments refer to the accounting between the vendor and the purchaser that determines the balance due on closing. They account for any credits owed to either party. The vendor is credited for any payments made that are the purchaser's responsibility starting from the closing date. The purchaser ...

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    • Item icon Statement of Adjustments
    • Item icon Letter to client enclosing statement of adjustments
    • Item icon Supplementary property taxes
      A supplementary property tax bill is issued for newly constructed properties, showing the property taxes payable for both the land and the structure starting from the time the occupancy permit was issued. It can take several years for this supplementary tax bill to be issued, during which time ...

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    • Item icon Letter to purchaser's lawyer denying holdback for supplementary property taxes
    • Item icon Letter to purchaser's lawyer confirming holdback for supplementary property taxes
    • Item icon Undertaking regarding supplementary property tax holdback
    • Item icon Letter to purchaser's lawyer with direct deposit instructions for closing funds
    • Item icon Closing documents
      The documents required to close a real estate transaction are prepared by both the vendor's lawyer and the purchaser's lawyer. Typically, the purchaser's lawyer will prepare the documents they need the vendor to sign and include them with the requisition letter sent to the vendor's lawyer. However, ...

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    • Folder icon Vendor’s documents
      • Item icon Vendor’s documents
        The vendor's lawyer normally prepares the following documents to complete a real estate transaction:

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      • Item icon Transfer or Deed of Land
      • Item icon Discharge of Charge or Mortgage
      • Item icon Document General
      • Item icon Document registration agreement (two-party) - Law Society
      • Item icon Multi-Party Document Registration Agreement (MDRA) – Law Society Ontario
      • Item icon Direction regarding funds
      • Item icon Redirection regarding funds
      • Item icon Undertaking and Direction regarding mortgage payout
      • Item icon Direction regarding real estate commission payout
      • Item icon Direction regarding sale proceeds
      • Item icon Direction by vendor regarding proceeds of sale
      • Item icon Vendor's general undertaking
      • Item icon Bill of Sale
      • Item icon Vendor warranties
      • Item icon Warranties and Bill of Sale (combined)
      • Item icon Acknowledgement and Direction - Transfer
      • Item icon Lawyer's undertaking to discharge
      • Item icon Vendor signup appointment checklist
      • Item icon Statutory Declaration - Vacancy Tax Toronto
      • Item icon Undertaking to Discharge
      • Item icon Vendor Document Package
      • Item icon Letter to client enclosing closing documents for signing
    • Folder icon If required - Vendor's lawyer's undertakings
      • Item icon Lawyer's undertaking to discharge
      • Item icon Vendor's lawyer's general undertaking
      • Item icon Vendor's lawyer's undertaking to holdback funds for repair items
      • Item icon Vendor's lawyer's undertaking to use best efforts
      • Item icon Vendor's lawyer's undertaking to pay debts after closing
      • Item icon Vendor's lawyer's undertaking to holdback funds for Section 116 Certificate of Compliance
    • Folder icon If required - Assumption of tenants
      • Item icon Assumption of tenants
        When the purchaser is assuming a tenancy at the property, the agreement of purchase and sale includes an assumption of tenancy clause outlining the documents, if any, the vendor is required to provide to the purchaser at closing. In addition to a copy of the lease agreement and the tenant's ...

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      • Item icon Direction regarding rent
      • Item icon Assignment of tenancy
      • Item icon Tenant acknowledgement
      • Item icon Acknowledgement of landlord
      • Item icon Tenanted property adjustments
        When the purchaser assumes an existing tenancy at the property being purchased, there are several additional adjustments that must be included in the statement of adjustments, including the following:

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    • Folder icon If required - Private mortgage discharge
      • Item icon Private mortgage discharge
        The purchaser will not accept a vendor's lawyer's undertaking to discharge a private mortgage from title. Instead, the parties must enter into a multi-party document registration agreement (MDRA) with the private mortgagee's lawyer. The private mortgagee's lawyer will provide the vendor's lawyer ...

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      • Item icon Letter to current lender's lawyer requesting mortgage discharge statement from private lender
      • Item icon Multi-Party Document Registration Agreement (MDRA) – Law Society Ontario
      • Item icon Undertaking to purchaser's lawyer to forward funds to private mortgagee's lawyer
      • Item icon Letter to private current lender's lawyer enclosing payout funds and requesting immediate discharge
      • Item icon Letter to purchaser's lawyer with particulars of discharge of private mortgage
    • Folder icon If required - Corporate vendor
      • Item icon Corporate vendor documents
        If the vendor is a corporation, the requisition letter includes a request for the vendor's lawyer to provide the following documents on or before:

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      • Item icon Corporate resolution authorizing the sale
      • Item icon Certificate of incumbency
      • Item icon Ontario Business Registry – Corporate Certificate of Status – ServiceOntario
    • Folder icon If required - Purchaser's documents
      • Item icon Purchaser’s documents
        The purchaser's lawyer normally prepares the following documents to complete a real estate transaction:

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      • Item icon Purchaser’s undertaking to readjust
  • Folder icon G. Closing process
    • Item icon Closing process
      For both the purchaser's and vendor's lawyers, the closing process involves receiving and reviewing the required documents, obtaining funds, and registering the transfer. The day of closing can go smoothly when there is clear communication and detailed instructions exchanged between both lawyers ...

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    • Item icon Vendor closing checklist
    • Item icon Documents to deliver
      On closing, the vendor's lawyer is responsible for delivering a package of documents to the purchaser's lawyer. These documents are typically transmitted electronically, in accordance with the communication instructions set out in the purchaser's initial letter.

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    • Item icon Letter to purchaser's lawyer enclosing closing package
    • Item icon Documents to receive
      The vendor's lawyer must receive the following from the purchaser's lawyer:

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    • Item icon Letter to purchaser's lawyer confirming all deliveries are satisfactory
    • Item icon Teraview electronic registration process
      In the Teraview system, electronic documents are signed with electronic signatures. The vendor's lawyer prepares the transfer document and signs it for completeness. Only a lawyer can sign a document for completeness, and the system will not allow a document to be signed if any required information ...

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    • Item icon Teraview
    • Item icon Acknowledgement - Receipt of closing funds
    • Folder icon If required - Delayed closing
      • Item icon Delayed closing
        A delayed closing occurs when one of the parties is unable to complete the transaction on the scheduled closing date. In most cases, it is the purchaser who causes the delay, usually because they need more time to secure financing. However, the vendor may also cause a delay, for example, if they ...

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      • Item icon Letter to purchaser's lawyer with terms for extension to closing date
      • Item icon Letter to other side's lawyer confirming extension of closing date
      • Item icon Delayed closing escrow agreement
      • Item icon Letter to purchaser's lawyer confirming gap coverage and closing
    • Item icon Holdback agreement
    • Item icon Completion and the doctrine of merger
      The common law doctrine of merger states that, upon the completion of a real estate transaction, the agreement and the parties' rights under it merge into the deed of conveyance. After closing, the parties can no longer rely on the terms of the agreement but must instead rely on the deed for any ...

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    • Item icon Transaction levy filings
      When a lawyer or law firm represents a vendor in a real estate transaction, they are required under the Law Society of Ontario's By-Law 6 to pay a real estate transaction levy for each transaction. The transaction levy surcharge is $65 per transaction. If this expense is passed on to the ...

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    • Item icon Post-closing and reporting to vendor
      Once the transaction is complete, the firm prepares and sends a reporting letter to the vendor, forwards funds for any required payouts, and notifies the relevant third parties, including the tax authority and condominium management, if applicable, about the change in ownership. It is advisable to ...

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    • Folder icon Post closing letters and reporting to vendor
      • Item icon Letter to vendor reporting
      • Item icon Letter to vendor's real estate brokerage with commission payment
      • Item icon Letter to vendor's real estate brokerage requesting refund of balance of deposit
      • Item icon Letter to lender enclosing mortgage payout
      • Item icon Letter to municipal office advising change of ownership
      • Item icon Letter to municipal property tax office to change ownership
      • Item icon Letter to municipal office to change ownership
      • Item icon Letter to condominium corporation to change ownership
      • Item icon Letter to lender following up discharge of mortgage
      • Item icon Letter to purchaser's lawyer confirming discharge of mortgage registered
      • Item icon Outstanding undertakings diarization
      • Item icon Letter to tenant with notification of sale
  • Folder icon H. Finalizing the matter
    • Item icon Letter to client finalizing the matter
    • Item icon Invoice recital - Sale of real estate
    • Item icon Closing the file
    • Item icon File closing checklist
  • Item icon Comments and suggestions for By Lawyers

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