Legal Brief for July, 2013

A Behind The Scenes Look At Real Estate Sales
(or - what your lawyer is actually doing for you!)

In last month's Legal Brief we looked at the standard steps that are undertaken by a lawyer acting on a typical purchase and mortgage transaction in Edmonton.  In this month's Brief we will review the usual steps that your lawyer takes on your behalf on a typical sale transaction in Edmonton.

1. Open a file and prepare an initial information letter to the seller advising them of various important steps required to complete the purchase.

2. Obtain a copy of the existing Certificate of Title from the Land Titles Office to review the current state of the title to the property and identify any issues that may need to be addressed.  If the seller has an outstanding mortgage, obtain a statement from the seller's lender showing the balance owing to payout the mortgage as of the closing date, and then verify the balance owing with the seller after the statement is received from the lender.  

3. Determine the amount of real estate commission that will be owing to the realtor, and make plans for payment of the balance owing from the sale proceeds.

4. Obtain a copy of a Real Property Report (survey certificate) for the property, either from the seller or by ordering a new report to be prepared by a survey company.

5. Obtain a Compliance Certificate from the City of Edmonton Planning Department in respect of the Real Property Report if the seller does not already have a Certificate.

6. If the sale involves a condo unit, obtain what is known as an Estoppel Certificate from the property management company, along with confirmation of insurance coverage.

7. Obtain and review a copy of the property tax account for the property, in order to determine if there are any arrears of taxes owing, and if so to ensure they are paid from the sale proceeds.

8. Prepare the necessary documents required for the sale of the property.

9. Meet with the seller(s) to review the sale documents and to sign them.

10. Issue what is known as a "trust letter" to the purchaser's lawyer, sending the transfer documents to the lawyer for completion of the sale.

11. Receive the closing funds from the purchaser's lawyer.

12. From the closing funds pay the balance owing on the seller's mortgage to the lender, and obtain a Discharge of Mortgage document from the lender.

13. From the closing funds pay the balance owing on the real estate commission owing to the realtor.

14. If applicable, from the closing funds pay any balance owing on the property taxes.

15. Prepare a closing report to the seller and release the sale proceeds to the seller.

16. Prepare a post-closing report to the purchaser's lawyer after the seller's mortgage has been discharged from the Certificate of Title.

As you can see from this listing, selling a property in today's legal environment involves more than just sending a simple Transfer of Land document to the purchaser's lawyer!