Articles & Information

Land Transfer Tax and Provincial Sales Tax

For residential properties, Ontario Land Transfer Tax (LTT) is calculated at a progressive rate on the value of the consideration paid (full purchase price) for the purchase of the property:

0.5% on the value up to $55,000.00;
1.0% on the value from $55,000.00 to $250,000.00;
1.5% on the value from $250,000.00 to $400,000.00;
2.0% on the value of consideration over $400,000.00.

For purchasers of new homes from builders who are registered under the TARION warranty program, qualified first time home buyers may be able to take advantage of the Ontario government Land Transfer Tax Refund Program. For more information on this program, please contact the Ontario Ministry of Finance. Other new home buyers who do not qualify for the Land Transfer Tax Refund should be aware that the "full purchase price" used as the basis for the calculation of land transfer tax is the purchase price NET of GST.

Purchasers should also be aware that Provincial Sales Tax at the rate of 8% may be payable on the value of chattels included in the purchase price.

Siksay & Fraser Participates in Durham College's Co-Op Student Program

Siksay & Fraser is proud to participate in the co-op student placement program offered by Durham College's School of Justice.

The following is the text of an Article by David Siksay that appeared first in the Newsletter of Durham College's School of Justice, and which was reprinted in Durlaw, the newsletter of the Durham Region Law Association.

ATTENTION REAL ESTATE LAWYERS - CO-OP PLACEMENTS ARE A 'WIN-WIN'

I am about to divulge what I consider to be a significant trade secret for real estate lawyers. It's not often, in business, that one has an opportunity to help out and profit, at the same time, but the co-op placement program offered by Durham College's School of Justice allows for just that.

We are a two lawyer firm with offices in Whitby and Port Perry. We largely restrict our practice to real estate and related corporate matters and wills / powers of attorney in a relaxed office atmosphere. Typically, a real estate law practice is very busy during the summer months and less so during the balance of the year. For this reason, real estate lawyers are often faced with either being over staffed (by carrying the staff complement that makes for a balanced work load in the summer), or under-staffed (by carrying a staff complement that is balanced for the non-summer months). Here's how we have solved this conundrum, to the mutual benefit of our firm and some of Durham's co-op students.

In the spring of each year, we notify Lesley Wagner, Durham's Field Placement Co-ordinator, that our firm is looking for a second year student for the spring two week placement, with the proviso that we also want to hire that student for full time employment during the summer school break, and that we also want that student to return to our office for the two day per week third year placement. Lesley posts our notice and invites interested students to contact us. We usually get 3 or 4 resumes in very short order and proceed to interviews. The candidates have always been excellent, and the choice difficult as a result.

Our chosen student arrives for the spring two-week unpaid placement - just before the start of the busy real estate period. The timing is perfect as we have the time to fully acquaint the student with our office and procedures and to complete some training during this intensive two-week placement. To fulfill our obligations under the placement program, this is exactly what we are supposed to be doing - but, coincidentally, of course, we are also training our summer employee, who is then well prepared to valuably assist us during the paid summer months. We want to hire the student for the longest period possible in the summer, and are always prepared to commence paid employment as soon as school is done to continue until schools starts again in September.

During the busy summer months, our co-op student assists us in many meaningful ways - ordering title searches, preparing search letters, preparing introductory letters to clients and reports, completing mortgage discharge follow-up, and banking, to name just a few. The help is invaluable for a busy real estate office.

The student returns for her (and I say "her" because we have never had a "him", but wouldn't be any less welcoming of a "him") 280 hour third year placement - usually, for all day Thursday and Friday, every week, from September to late March. It's a perfect arrangement, since Thursday and Fridays are our busiest days generally. During this placement, the student assists with similar duties as in the summer months. This is an unpaid placement (but we do compensate for gas and there is a "thank-you" bonus at completion).

The benefits to us are obvious and, quite frankly, enormous. The student benefits from a very "in depth" placement, having accomplished a level of experience and expertise that would not be possible if full time summer employment was not included.

We are now in the third cycle of co-op placements following this routine, and we are extremely happy with the results. Our experience with hiring Durham graduates for full-time employment has been very positive as well - we have hired two "fresh" graduates for full time employment within the last 10 years and have been extremely happy with their skill level and performance.

To my real estate colleagues, I urge you to consider participation in Durham's co-op program. Help a student, help yourself. Win, win.

What is an "Up-to-date Building Location Survey"?

Up-to-date", for a survey, doesn't necessarily mean that the survey is recently dated. Rather, a building location survey is up-to-date when it shows all buildings, fences, and other improvements (like pools and decks) located on (or encroaching onto) the subject property as they actually exist at present.

A survey could therefore be five years old and "up-to-date" because it shows all these things as they actually exist at present, or a survey could be two days old and not be "up-to-date" because a pool, deck, fence, outbuilding, or addition or other structure or improvement has been added since the date of the survey to the subject property or a neighbouring property in a location where an encroachment is possible.

To be a "survey", it must be prepared, signed, and dated by an Ontario Land Surveyor as a survey, and all dimensions must be legible. Beware - other documents, like "site plans" and assessment maps can look like a survey, but they are not and cannot be relied upon for survey purposes. Technically, where a survey is called for, an original survey is required, bearing the original seal of the surveyor.

The problems that can arise for a Purchaser when a survey is not up-to-date can be very serious—however, title insurance can "insure over" many of those potential problems in the absence of a survey. A new survey may cost $400.00 to $800.00 or more; title insurance costs $170-$290 (usually less after disbursement savings are offset).

Title Insurance Now the Norm in Real Estate Practice

The real estate industry thought that it might take longer for title insurance to take a foothold in Ontario conveyancing after it first arrived for residential transactions in the late 1990's, but we at Siksay & Fraser can advise that title insurance is now the norm for residential real estate transactions. Nearly 100 per cent of our residential purchasers - and the majority of our commercial purchasers - now instruct us to obtain title insurance for them in closing their transactions.

Why is this happening? There are a number of reasons:

When title insurance first became an option, the Law Society of Upper Canada wisely required Ontario lawyers to advise clients of its availability. We at Siksay & Fraser embraced that professional obligation and have diligently advised and educated our clients relative to the merits of title insurance.
Title insurance is a good deal. Its cost is often (but not always) offset by the savings in disbursement costs that would have to be paid otherwise. In addition, title insurance usually means that no new survey is required, with further savings of $400 -$800 or more.
Title insurance is a "deal closer". By its nature, title insurance serves to "insure over" many minor title defects (and some potentially major and serious ones) that might otherwise put a closing in jeopardy. Clients and real estate professionals like the "increased certainty for closing" that results when title insurance is used.
Title insurers sometimes offer other value-added services that may clients appreciate - like interest free closing cost loans, free Home Service Club Memberships, appliance and equipment insurance packages.
The claims experience has been positive from the client perspective. We have only had to assist one client in making a claim under their title insurance policy, but we can report that the claim was dealt with in a fair and efficient manner and that our client was very pleased with the result.
At Siksay & Fraser, we promote the use of title insurance. For most purchase and mortgage refinancing transactions, we believe that purchasing title insurance is in the best interests of our clients.

Siksay & Fraser have embraced and will continue to embrace the changes in the real estate industry.

Goods and Services Tax and Real Estate Transactions

Does GST apply to real estate transactions? The answer is yes, but with an important exception.

The general premise of the legislation that established the GST is that real estate transactions are subject to the imposition of GST. There is an important exception for what amounts to most sales/purchases of used residential houses and used residential complexes, where the purchase is not from the builder. New homes purchased from a builder are subject to GST, and purchasers should therefore insert a clause in new home purchase agreements that establishes that the purchase price stated in the agreement "includes all applicable GST".

Commercial purchase and sale transactions are subject to GST in virtually every instance and commercial agreements generally require the purchaser to pay the GST on closing, although there is some ability with a properly worded agreement to postpone the reporting and payment of GST by the purchaser in circumstances where the purchaser and vendor are GST registrants. Commercial property purchasers should discuss the GST implications - for applicability, reporting and remittance - with their accountant prior to entering into an agreement of purchase and sale.

Vendors and Purchaser should be wary of the potential for the imposition of GST for some substantially renovated, used residences and used residential complexes where the substantial renovations were completed as part of the business of the vendor.

GST also applies to legal fees and many disbursements. Vendors of real property should also be aware that GST applies to real estate commission.

Electronic Registration

Many Ontario Registry Offices have now been converted from paper to electronic registration, including the Registry Offices in Toronto, Durham Region, and Peterborough. (There are some properties, even in "fully converted jurisdictions", that remain in paper registration for various reasons.)

Electronic registration allows your lawyer to electronically register real estate documents from their desktop computer using a special security key and after obtaining the written authorization from requisite parties. The electronic registration system also allows for the searching of title from a desktop computer.

Because the electronic registration system does not allow for the electronic transfer of closing funds, money must be physically delivered from one law office to the other, usually by courier (although, sometimes, a direct deposit to the other lawyer's trust account can be arranged), and therefore the closing process is not as speedy as the concept of instantaneous electronic registration may imply. Teranet - the electronic registration service provider - is testing an electronic funds transfer system, and lawyers are hopeful that it will be in place in the near future because it will result in much faster closings for real estate clients.

Calculating the Balance Due in a Purchase or Sale Transaction

Purchasers and vendors quite appropriately want to know how much money they will be required to produce to complete a transaction (or how much money is left over for them), at as early a point in a transaction as is possible. We are always willing to assist in estimating this amount, but, regrettably, we are usually unable to provide an exact figure until a few days prior to closing. This is because some of the information that we require to make this calculation is controlled and prepared by other parties - like the vendor's lawyer who prepares the closing statement of adjustments, or the mortgage lender, who advises on the actual amount of mortgage funds to be advanced.

For a sale transaction, here is how we calculate the net equity remaining after all required payments:

Balance Due to Vendor (after closing adjustments for deposit, taxes, fuel, etcetera)
MINUS
Amount Required to Discharge All Mortgages (including interest penalties, interest to the date of closing, discharge and administrative fees of lender)
MINUS
Balance of Real Estate Commission Owing (Net of deposit and plus GST)
MINUS
Other Required Payments (for outstanding realty taxes, fuel, common expenses, liens, executions, equipment leases, etcetera, as applicable)
MINUS
Legal Fees and Disbursements
EQUALS
Net Equity From Sale (Paid as Vendors direct or applied to Purchase, as applicable)

Generally, the amount required to complete a purchase transaction is the result of a fairly complex calculation that could be stated as follows for most purchase transactions:

Balance Due to Vendor (after closing adjustments for deposit, taxes, fuel, Etcetera)
PLUS
Land Transfer Tax, Government Registration Costs, Legal Fees and Disbursements, Title Search and Subsearch Costs, Title Insurance Costs, Etcetera
MINUS
the Net Mortgage Advance on All Mortgages (after all deduction of lender costs, applicable interest adjustment, CHMC premiums and PST on same, CMHC or lender application fees)
MINUS
The Net Equity from Sale Property (calculated as set out above, if applicable)
EQUALS
the Balance Required to Complete the Transaction.

The final balance required in a purchase transaction must be paid by certified cheque or bank draft, payable to Siksay & Fraser, in trust.

Identification Requirements in Real Estate Transactions

Title fraud has been on the rise in Ontario over the past few years (which makes for a good reason to buy title insurance) . In order to combat this fraud growth, mortgage lenders, title insurers, lawyers, and the Law Society of Upper Canada have established mandatory identification requirements for parties involved in real estate transactions.

While these identification requirements vary somewhat from lender to lender and among the other policy establishing entities, it is generally acceptable for a party to a real estate transaction to produce a MINIMUM of two pieces of specified identification (see below). For MOST transactions, we are in a position to accept from our clients identification from the following lists, but only in these combinations - one piece from List A and one piece from List B, or two pieces from List A. It is not sufficient to produce two pieces from List B. Each party to a transaction must comply with the identification requirements and failure to comply will prevent us from completing the transaction.

Identity documents must be current (not expired), and the names must match the names (and pictures, if applicable) of the parties to the real estate transaction. If a name has changed since the date of the identification document, then originals of the document establishing the name change must also be produced - for example, a marriage certificate.

Originals of the identification documentation must be produced to us, and we must retain a photocopy of the identity documents for our records and possible inspection by the mortgage lender or other parties.

LIST A*
Permanent Driver's License Issued in Canada
Canadian Passport
Canadian Citizenship Certificate or Certificate of Naturalization (NOT a commemorative issue)
Permanent Resident Card
Certificate of Indian Status issued by the Government of Canada

LIST B*
CNIB client card with picture and signature
Foreign Passport
Canadian Firearms License
SIN card issued by the Government of Canada
Major credit card with signature
Old Age Security Card issued by the Government of Canada

* Clients must produce 2 pieces of identification—2 from List A OR 1 from List A and 1 from List B—it is NOT acceptable to produce 2 pieces from List B. Ontario Health Insurance cards are NOT acceptable.

What Purchasers Need to Know - Our Initial Client Letter

The following is the text of our introductory letter to purchasers. This is the letter that we send to our purchaser clients after we receive the agreement of purchase and sale - it contains a lot of information that most purchasers find very useful in preparing for closing.

SIKSAY & FRASER are pleased to be acting on your behalf in respect of the above noted real estate transaction. We have prepared this letter in order to explain to you our fee structure, and in order to point out the steps you must take prior to closing.

OUR JOB - YOUR SERVICE OPTIONS

One of the most important parts of our job is to make sure that you have good title to the property that you are buying. Good title ensures that you really own the property, that it is correctly described in official documents, and that no one else has a claim or a lien to it that you do not know about. Good title is essential for you to be able to sell your property in the future. If our various searches uncover problems that could affect title to your property, we will take steps (often together with the Vendor's lawyer) to correct the problems. If the problem cannot be corrected, we will explain to you the risks in taking title without resolving the problem, together with your options in the completion (or not, as the case may be) of the transaction.

There are two different approaches that your lawyer can take to assure you of good title. It's up to you, working with your lawyer, to decide which approach is most appropriate to your situation. Regardless of which approach option you choose, our legal fees will remain the same. However, disbursements will vary somewhat (but not usually significantly)from option to option.

The two approach options are as follows:

OPTION 1 - TITLE INSURANCE

Title insurance is an insurance policy that you can buy to protect your investment in your property if there is a problem with title. For example, you may have purchased without an up-to-date survey and find out after closing that your house is too close to the lot line, and therefore does not comply with the zoning bylaw. The title insurance policy protects you against the loss that you may suffer because of many title related problems and, in most cases, will also cover your legal costs if your title is challenged.

If you have a mortgage, you can buy title insurance just for the lender (this, however, gives you no protection) or for both you and the lender. Often, a mortgage lender will give you the option of buying title insurance for them in lieu of a new survey (surveys cost around $550.00 and up). For most residential properties, the insurance premium to insure both the lender and purchaser will be between $170.00 and $250.00 plus applicable taxes (possibly higher if specific policy endorsements are required - or for example, to insure over a known title defect). However, title insurance eliminates the need for certain off-title searches (such as building and zoning compliance searches, corporate escheat searches, and septic searches, if applicable). The resulting savings usually outweigh the cost of the title insurance premium. For example, the cost of a building and zoning compliance search is around $60.00;and the cost of a septic search is around $125.00. (Prices vary according to the jurisdiction in which the subject property is located.) In addition, the $50.00 levy applied by the Law Society for all Ontario real estate transactions is waived in situations where all parties to a transaction are title insured.

There are a variety of title insurers available to purchasers in Ontario, including, but not limited to, First Canadian Title, Stewart Title Guaranty Company and TitlePLUS. While each company extends comparable services to clients, our office will decide which insurer offers the best value for your particular transaction and to ensure closing is not delayed due to a title-related issue. The vast majority of our clients choose the title insurance option.

Title insurance is not a panacea of coverage for defects in the physical attributes of your property and does not, for example, replace the need or desirability of a home inspection performed by a qualified home inspector. For example, neither option - title insurance or lawyer=s opinion on title (discussed below) - will cover you for construction defects (unless, where there is title insurance, such defects comprise part of a work order or deficiency notice on file with the municipality as of the date of closing).

OPTION 2 - LAWYER'S OPINION ON TITLE

If you select this option, we will supply you with a Letter of Opinion which states our view of whether or not you have good and marketable title to your property and we will provide you with a description of the results from the various searches and inquiries conducted on your behalf. This Letter of Opinion will also inform you of any outstanding issues that may affect your title in the future, usually by reference to your acknowledgement signed prior to closing.

We have to tell you the following in order that you may properly compare the two service options: If you choose this option, and a problem affecting your title is identified after closing which was not disclosed to you prior to closing, you will only be able to seek compensation from us (on our errors and omissions insurance) if you can prove that we failed to do something that was legally required or that we did not meet the standards set by the legal profession. You may have to hire another lawyer, at your expense, in this process. This may be an expensive and time consuming process.

For most purchases, title insurance is the best option. As our procedures and expenditures on your behalf will vary depending on which option you choose, we require that you complete the attached questionnaire [This form is on our website—Downloadable Documents indicating your choice of options (among other things) and return it to us by [Insert date by which questionnaire is to be returned to us]. If we have not heard from you by that time, we will assume that you have decided on Option 1 - Title Insurance, and we will proceed on that basis. Once we have commenced completing a file as a 'title-insured file', we cannot switch to the other option of 'lawyer's opinion on title'.

DUTY TO MORTGAGE COMPANY

In most purchase transactions, we will act for both the purchaser and the mortgage lender, and we owe a duty of care to each of these parties. We therefore must report to any mortgage lender facts which are detrimental to their interest, or we cannot continue to act on a particular transaction for either party. You will sign documentation confirming the nature of this relationship when you execute your closing documents.

PURCHASE OF VACANT LAND

If you are purchasing vacant land - or lands which are not vacant but which you intend to substantially improve - we cannot offer you an opinion that you will be able to use the lands for your intended future use or improvement. You must satisfy yourself on this by appropriate communications with the municipality or municipalities involved - including, without limitation, inquiries as to the amount of any lot, education, or development levies that you will be required to pay as a condition to development of the property. We would urge to hire or consult with appropriate other professionals - such as architects and planners - as you make these inquiries.

ABOUT OUR FEES

The fees we quote on residential real estate matters are block fees. We do not, for example, charge a percentage of the purchase price, nor are our fees based on the number of hours spent working on your file (with the exception of "aggravated title problems" which are discussed below). Fees are quoted separately depending on the services required. For example, in many purchase transactions we will represent a client both in respect of the purchase and in respect of placing one or more mortgage(s) on the property. Because some transactions do not involve the placing of a mortgage, the purchase and mortgage transactions are usually quoted separately in respect of fees. Likewise, if we are also acting on your behalf with respect to the sale of real property, we quote separately for the sale transaction and mortgage discharge transactions, and a separate fee may apply in respect of bridge financing arrangements if applicable.

In a real estate transaction, should a title problem develop, two hours of our time are allotted in the fee as quoted for dealing with such problems. Should the title problem remain unresolved after the two hours is applied to such problem, an additional fee will apply for each hour of time required to satisfactorily deal with such an "aggravated title problem". Our normal hourly fee of $225.00 per hour will apply to time spent above and beyond the two hour allotment. It is relatively uncommon for the two hour allotment to be exhausted. If the problem becomes a matter which requires an application to court (which is very uncommon), then we will advise you, in advance, of the fees and estimated disbursements that will apply.

Of course, GST charges will apply in respect of our fees and many disbursements.

ABOUT DISBURSEMENTS

When you are purchasing real estate, we are required on your behalf to investigate title to the property. For this purpose, SIKSAY & FRASER commissions a title search from a professional conveyancer employed for this purpose by our office. If your property is located within Durham Region or is located outside the Durham area but is of recent construction, it is most likely registered in the Land Titles System in Ontario. Usually, a land titles search will cost in the neighbourhood of $100.00 to $250.00. If your proposed purchase is located in another jurisdiction that has not been converted under the Ontario government=s electronic registration conversion, it may be registered in the Registry System. A title search in this system will normally cost between $125.00 and $300.00, but there is some potential, depending on the nature of the land and the number of owners over the last 40 years, that the search will be more expensive. For instance, the cost of searching executions with the Sheriff is $11.00 per name per previous owner. The cost of the title search, because it varies so widely from property to property, is passed on directly to you as a disbursement made on your behalf. This cost includes the fees charged by the professional conveyancers employed by us to undertake the title search, and all disbursements required to complete the search.

Where the title insurance option is not selected, we are also required to undertake various other searches with levels of government in respect of zoning compliance, tax arrears, water and sewer hook-up and Regional work orders, municipal work orders, hydro easements, hydro arrears, gas arrears, water account arrears, among other required searches. Each level of government or utility may exact a fee for such searches. For example, the Town of Whitby charges $60.00 for a zoning clearance search, $150.00 if a rush response is required. The cost of these searches is charged to you as a disbursement. We do not charge any surcharge: the disbursement charged to you is exactly what we have been required to pay to the local applicable of government, utility or other authority. If you have chosen the title insurance option, the number of searches is vastly reduced - the savings offset the cost of title insurance (in many cases, fully).

Other disbursements in both a purchase and sale transaction include courier charges, long distance telephone charges, photocopying charges ($0.25 per page), charges for facsimile transmissions ($0.25 per page for receipt and transmissions plus long distance charges, if applicable), mileage charges (at $0.275 per kilometre), postage charges, executions searches, title subsearches on the day of closing, report binding costs, electronic search system/technology charges of $8.00 per file and other disbursements made on your behalf (all set amounts referred to herein are subject to change without notice). Each document registration costs $70.70 (electronic) or $60.00 (paper) at the Registry office. These other disbursements, (which do not include the title search fee referred to above) usually amount to around $400.00 (plus the costs of document registration) in the normal purchase and mortgage transaction.

Please remember that Land Transfer Tax is payable on all purchase transactions and is in addition to the disbursements otherwise noted herein. Land Transfer Tax is calculated as follows in most purchase transactions: 1% of the purchase price less $275.00 = Land Transfer Tax payable. Provincial Sales Tax and GST may also apply to certain aspects of your purchase. (For residential purchases above $250,000.00 in value, extra land transfer tax charges apply. For commercial transactions, please confirm the exact amount of the land transfer tax with our offices.)

As well, the Law Society of Upper Canada requires a $50.00 charge per file, plus GST (unless, in the case of a purchase transaction, all parties to the transaction are title insured).

Our final statement of account to you will outline in detail all of the disbursement charges.

THINGS TO DO PRIOR TO CLOSING

There can be no truly complete list of all the things that are required to be done prior to purchasing or selling residential real estate. However, from a legal point of view, we have enclosed a list with this letter of some of the items that you should take care of personally prior to the day of closing—including contacting the applicable utility companies . [This form is on our website—Downloadable Documents]

ABOUT THE DAY OF CLOSING

On the day of closing, we endeavour to have keys to your new property available for you as early as possible; however, you should not count on having keys to the property prior to about 5:00 p.m. Factors which might prevent an early closing of your purchase are the following:

      1. The mortgage advance from your mortgage company was not received from your mortgagee until late in the day;
      2. The vendor's solicitor was unable to close the transaction at an earlier time;
      3. If we are also acting on your behalf in respect of the sale of your current home for closing on the same day, it could be that the purchaser of your current home is not in a position to purchase until later in the day.

There are, of course, other factors which might lead to a late closing. If your transaction is but one in a long series of purchase and sales each dependent on the other to close, it is possible that the transaction may not close at all if one of the prior transactions does not close. We will endeavour to contact you the instant a problem develops so that you may make other arrangements. For this reason, it is important that you provide to us a telephone number at which you may be reached on the day of closing.

WHEN MAY YOU EXPECT OUR REPORT ON TITLE?

Usually you can expect our report on title to be forwarded to you within four to six weeks after closing (sometimes earlier, sometimes later depending on the volume of closings and depending on the date on which your title insurance policy is received by us, if applicable). Should you have any questions about the transaction prior to receiving the final report, please do not hesitate to contact us. Included with the final report will be a copy of the deed, a copy of the mortgage(s) (if any), a copy of any survey of the property, and our statement of account and trust statement, along with copies of other pertinent closing documentation.

SURVEYS

In a purchase transaction, a building location survey can be a very important legal document, particularly where the >lawyers opinion on title= option is selected. If the survey which is available for your property is not an up-to-date building location survey, or of there is no survey, our title opinion to you will be subject to those discrepancies and defects that might be shown by a new and up-to-date survey, and will also be subject to any discrepancies and defects indicated on ant existing survey. An up-to-date building location survey is:

      a) a survey that has been prepared within the last 12 months, and;
      b) a survey which has been prepared, signed, and dated by a qualified Ontario Land Surveyor, and;
      c) a survey which shows all buildings, improvements, fences, and other structures, and all registered easements and all encroachments as they presently exist on the subject property, including those on neighbouring properties which are close to or encroach onto the subject property and;
      d) a survey which is completely legible—that is, you must be able to clearly read each date, signature, word, and dimension.

If no survey is available, or if the survey is not an up-to-date survey, there is some risk that you may not be getting what you think you have bought, and if you do not intend to purchase title insurance (if you choose the >lawyers opinion on title= option), then we would advise that you should immediately obtain a new survey. For example, if the existing survey does not show an addition to the house, it could be that the addition was built over the lot line (and therefore on someone else's property). In addition, since our office uses the survey to confirm compliance with zoning bylaws, it could also be that the addition does not conform to the bylaws of the local municipality, and is therefore an illegal structure. Without an up-to-date survey in this example, we would be unable to certify to you that the house is on the property that you are purchasing or and that it complies with the zoning bylaws. We could also not confirm - and you could not be sure - that the buildings, fences or other structures belonging to the neighbouring owners and constructed after the date of the existing survey, are situate entirely on the neighbouring properties and not on the property you are purchasing. As long as any defects are unknown to you on closing, title insurance will insure over many of the defects that a new survey could potentially show without the requirement and expense of obtaining a new survey.

In choosing the 'lawyer's opinion on title' option and not obtaining an up-to-date survey, you would be taking a risk that any problems which are later revealed in respect of your property, whether by a new survey of the property in question or any neighbouring property, will be your sole responsibility. If you choose the >lawyer=s opinion on title= option and choose to close without obtaining an up-to-date survey, our title opinion will be made subject to any defects, encroachments, or other matters whatsoever that might be revealed by such an up-to-date survey.

A new survey may cost anywhere from $500.00 to $1,000.00 or more (usually, around $550). If you want to have a new survey prepared, it must be completed and in our possession well prior to last date for submission of requisitions to the vendor, as provided for in the agreement of purchase and sale. We would be pleased to offer referrals to local surveyors, at your request. If you choose the >lawyers opinion on title= option or the >title insurance= option and wish to proceed with the purchase using the existing survey or no survey (in cases where your mortgage company consents), then you must sign and return to us, immediately, the "Confirmation Re: Survey Issues and Title Insurance" which is contained in the attached questionnaire. In any event, where you have selected the >lawyer=s opinion on title= option and in instances where we do not receive a signed AConfirmation Re; Survey Issues and Title Insurance@ or a new and up-to-date survey at least 20 days before the last date for submission of requisitions, we shall take the position that you have opted to proceed with the existing or no survey (as the case may be), and our title opinion will be subject to those defects and other matters that might be revealed by a new survey.

WHAT'S THE NEXT STEP?

We would ask you to please FULLY complete the attached questionnaire [This form is on our website - http//www.siksayandfraser.com - under ADownloadable Documents@] and return it to our office in the attached stamped and self-addressed envelope or by fax to 905-666-3233 as soon as possible, and in any event prior to [Insert date by which questionnaire is to be returned to us]. We will be in touch with you shortly before closing in order to arrange a time to meet and review and execute all required closing documentation. At this meeting, we are required (by our liability insurer, the title insurance company and your mortgage lender) to obtain from you copies of at least two pieces of current identification - including acceptable picture identification. Please be sure to bring an assortment of identification with you. We shall advise you at the time the meeting is scheduled of the balance of funds required to conclude the transaction, which must be provided by certified cheque or bank draft, payable to ASiksay & Fraser, in trust@. We shall also contact you should any title problems come to our attention.

The attached questionnaire asks how you wish to take title to your new property. If there are two or more persons purchasing the following options are available: as joint tenants, as tenants in common, or in one name alone. For your information, the main difference between taking title as joint tenants and as tenants in common lies in the right of survivorship. When one joint tenant dies, that owner's interest passes automatically to the surviving joint tenant (subject to rights under the Family Law Act). This is not so if title is taken as tenants in common. In that case, in the event that either owner dies, that owner's portion becomes part of the deceased's estate. However, where title is held as tenants in common, different percentage ownership interests should be specified.

OTHER MATTERS

The federal government has enacted the Personal Information Protection and Electronic Documents Act (PIPEDA). The purpose of this legislation is to regulate the private sector=s collection, use and disclosure of personal information.

In providing services to you, we will be required to collect personal information from you which may include (but is not necessarily limited to) the information received from your realtor, your bank, in some cases your accountant, or requested directly from you in the attached questionnaire or in other communications from or with our office (which will include the collection and retention of a copy of photo-identification for each real estate client as now required by mortgage lenders and the law society). In the process of acting for you, we will need to communicate with the other party and their solicitor, with your home and title insurer, with your real estate agent and broker, potentially with your accountant or financial advisor, with your mortgage company and mortgage broker (if applicable), and with other entities such as, but not necessarily limited to, the registry office and Ontario Ministry of Finance (in respect of Land Transfer Tax issues), Canada Customs and Revenue Agency (for GST or other tax related issues) and as may be required by law or by court order (where applicable). In respect of each of these communications, we will be required to share certain of the personal information which we have collected from you.

We collect and disclose this personal information for one reason: to serve you better in the completion of the services for which you have retained us. From time to time we use our mailing list to prepare and send client newsletters (electronic and by mail) and greeting cards. Our mailing list is used only by our office.

Law firms also need to be concerned about how personal information is shared when a lawyer retires or dies, or firms amalgamate. In order to ensure seamless representation to you, the personal information which is collected from you will form part of the records that are passed to any amalgamated law firm or successor lawyer or firm. Except in these limited circumstances, your personal information will not be sold to other parties. Our current policy is to retain client records indefinitely, but we will likely change that policy as our record storage space is depleted to a policy to retain client records for only as long as the minimum time recommended by the law society.

Please note - if you are purchasing with a mortgage, then it is likely that we will be representing both you and your mortgage company in doing the mortgage work. This is usual in most residential mortgage transactions. We cannot, however, keep any secrets as between you and your mortgage company regarding any issue salient to the mortgage transaction. For example, we are obliged to advise your bank about any changes in the purchase price or your financial situation or in respect of any title, zoning, or other defects that come to our attention regarding the property, among other things.

PIPEDA requires that your knowledge and consent are required before we may collect, use, or disclose your personal information. Your receipt of this letter shall be deemed to be confirmation of your knowledge and consent, unless you advise us immediately, in writing, that you do not agree with the terms stated herein and that you wish to opt out of it. However, if you do wish to opt out of this policy, we will be unable to represent you and you will need to find other legal counsel.

Often, mortgage lenders will require that your void cheque for regular mortgage payments be provided to them, through our offices, on closing, in order to initiate pre-authorized debits of your mortgage payments. ACounter cheques@ - those that do not contain your pre-printed and accurate name and current address - are not acceptable for this purpose. Please ensure that you have set up your bank account for mortgage payment purposes well before closing and that you have pre-printed and not Acounter-cheques@ for closing.

Sometimes, a party may wish to sign by Power of Attorney. If this circumstance applies to you, it will increase legal fees and disbursements - and we must be satisfied of the legitimacy of the Power of Attorney prior to its use. If this circumstance applies to you, please contact David Siksay as soon as possible in order to discuss the implications.

The purchase of real estate - whether for personal use or for investment - is an exciting event in your life and may well be the greatest outlay of cash that you will ever make. At Siksay & Fraser, we take the practise of real estate law seriously.

Please do not hesitate to call if you have any questions with respect to your real estate transaction. You may wish to discuss with us preparation of wills and powers of attorney in conjunction with your purchase.

What Vendors Need to Know - Our Initial Client Letter

The following is the text of our introductory letter to vendors. This is the letter that we send to our vendor clients after we receive the agreement of purchase and sale - it contains a lot of information that most vendors find very useful in preparing for closing.

ABOUT OUR FEES

The fees we quote on residential real estate matters are block fees. We do not, for example, charge a percentage of the purchase price, nor are our fees based on the number of hours spent working on your file (with the exception of "aggravated title problems" which are discussed below). Fees are quoted separately depending on the services required. For example, in many sale transactions we will represent a client both in respect of the sale and in respect of discharging one or more mortgages on the property. Because some transactions do not involve the discharge of a mortgage, the sale and discharge transactions are usually quoted separately in respect of fees.

Of course, GST charges will apply in respect of our fees and many disbursements, and therefore GST will be an extra charge on your bill. As well, the Law Society of Upper Canada applies a levy of $50.00 on each sale transaction.

ABOUT DISBURSEMENTS

Disbursements in a sale transaction include courier charges, long distance telephone charges, photocopying charges ($0.25 per page), charges for facsimile transmissions ($0.25 per page for receipt of transmissions plus long distance charges, if applicable), mileage charges (at $0.275 per kilometre), postage charges, electronic search/technology charges, report binding, and other disbursements made on your behalf. Each document registration costs $70.70 (electronic) or $60.00 (paper) at the Registry office. These other disbursements usually amount to around $150.00 - $200.00 (plus document registration costs) for the normal sale transaction.

ABOUT THE DAY OF CLOSING

On the day of closing, we will endeavour to close your sale as early as possible; however, you should not count on closing taking place prior to 5:00pm, which is the time the registry facilities close. Factors which might prevent an early closing of your sale are the following:

      1. The purchaser's mortgage lender is tardy in providing funds for the purchase;
      2. The purchaser's solicitor was otherwise unable to close the transaction at an earlier time;
      3. If your transaction is but one in a long series of purchase and sales each dependant on the other to close, it is possible that the transaction may not close at all if one of the prior transactions does not close.

We will endeavour to contact you the instant a problem develops so that you may make other arrangements. For this reason, it is important that you provide to us a telephone number at which you may be reached on the day of closing. If it is urgent that you have available the sale proceeds on the date set for closing, you should consider bridge financing under certain circumstances. We would be pleased to discuss the advisability of bridge financing with you, at your request.

THINGS YOU SHOULD DO PRIOR TO CLOSING:

There can be no truly complete list of all the things that are required to be done prior to purchasing or selling residential real estate. However, from a legal point of view, we have enclosed a list [This list available on our website - http//www.siksayandfraser.com - under ADownloadable Documents@] with this letter of some of the items that you should take care of personally prior to the day of closing.

WHEN MAY YOU EXPECT OUR REPORT ON TITLE?

Usually you can expect our report on title to be forwarded to you within four to six weeks after closing (sometimes longer depending on the volume of closings). Should you have any questions about the transaction prior to receiving the final report, please do not hesitate to contact us. Included with the final report will be a copy of our statement of account and trust statement, along with copies of other pertinent closing documentation.

OTHER MATTERS

In providing services to you, we will be required to collect personal information from you which may include (but is not necessarily limited to) the information received from your realtor, your bank, in some cases your accountant, or requested directly from you in the attached questionnaire or in other communications from or with our office (which will include the collection and retention of a copy of photo-identification for each real estate client as now required by mortgage lenders and the law society). In the process of acting for you, we will need to communicate with the other party and their solicitor, potentially with your home and title insurer, with your real estate agent and broker, potentially with your accountant, with your mortgage company and mortgage broker (if applicable), and with other entities such as, but not necessarily limited to, the registry office and Ontario Ministry of Finance (in respect of Land Transfer Tax issues), Canada Customs and Revenue Agency (for GST or other tax related issues) and as may be required by law or by court order (where applicable). In respect of each of these communications, we will be required to share certain of the personal information which we have collected from you.

Sometimes, a party may wish to sign by Power of Attorney. If this circumstance applies to your file, it will increase legal fees and disbursements - and we must be satisfied of the legitimacy of the Power of Attorney prior to its use. If this circumstance applies to you, please contact David Siksay as soon as possible in order to discuss the implications.

WHAT IS THE NEXT STEP?

We would ask you to please FULLY complete the attached questionnaire [This form is available on our website - http//www.siksayandfraser.com - under ADownloadable Documents@] and return it to our office in the attached stamped and self-addressed envelope or by fax to 905-666-3233 no later than [Insert date by which questionnaire is to be returned]. We will be in touch with you shortly before closing in order to arrange a time to meet and review and execute all required closing documentation. At this meeting, we are required (by our liability insurer) to obtain from you copies of at least two pieces of current identification - including acceptable picture identification. Please be sure to bring an assortment of identification with you . At the time of this meeting, we will require one set of keys to the subject property which we will deliver to the Purchaser on closing. You should not release keys to the purchaser prior to closing.

It is very important that you carefully complete the full details of the attached questionnaire. Much of the requested information cannot be obtained from other sources, and inaccurate information has liability implications for you on and after closing. If you do not know the tax information - please call your municipal offices to obtain accurate, up to date tax information (they will NOT release this information to us). If you do not know your mortgage reference number(s), please call your mortgage officer to obtain same.

We thank you for choosing Siksay & Fraser as your real estate lawyers.