Purchase Transactions

• Author: Tina Kamakaris/Jane Kamakaris/Louis Kamakaris
• Pages: 641-680

641

Chapter 36 Purchase Transactions

CHAPTER 36

is chapter sets out the process of completing residential real estate purchase transactions and

the role of those who may be involved in the transaction.

STANDARD DOCUMENTS PREPARED IN PURCHASE

TRANSACTIONS

• Verication of identity (individual or organization; see Chapter 2)

• Consent to act re conict

• Letter re title

• Utility letters: water/hydro/gas - when property is not title-insured

• Utility letters: water/hydro/gas - when property is title-insured

• Letter to Building Department - when property is not title-insured

• Letter to Tax Department

• Undertaking and adavit as to residency

• Warranties and bill of sale

• Statutory declaration as to HST

• Declaration of possession

• Document registration agreement

• Letter of requisitions

• Direction re title

• Undertaking to re-adjust

• Acknowledgement and direction re electronic registration

• Acknowledgment and direction regarding title insurance

• Transfer/Deed (receipted sample)

• Land transfer tax statements, electronic

• Land transfer tax adavit, paper

• Prescribed information for purposes of section 5.0.1

• Charge/Mortgage, if applicable

• Standard charge/mortgage terms and acknowledgment

• Direction to lender re funds

• Reporting letter, purchase

PURCHASE

TRANSACTIONS

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642 Legal Office Procedures

BROWN, John omas and May June

Re: Purchase from Green

5 Bundy Drive, Newmarket

Closing Date: November 11, 20--

Mr. and Mrs. Brown have just bought a house from Graham Gerald Green. We are also

acting for CIBC, the rst chargee in this transaction. (Assume that we have already prepared

the charge/mortgage in favour of CIBC.)

Our search of title revealed a charge/mortgage on title in favour of Super Trust Company and

an execution against Graham Gerald Green. In our letter of requisitions, we have requested

the vendor’s lawyers, Castles & Sands, to solve these problems before closing.

THE PURCHASE TRANSACTION

e purchase transaction is commonly referred to as a real estate deal. It may involve the purchase

of a residential or commercial property. In a purchase transaction, your rm acts for the purchaser.

e job of the purchaser’s lawyer is to check, check, and check to ensure that the purchaser will

receive clear title. Closing means the date on which the purchaser obtains title to the property, i.e.

the transfer is registered and the purchaser gets the keys to the property, and the deal is therefore

completed, or closed. In a purchase transaction, the lawyer for the purchaser may also act for the

chargee where the purchaser is taking out a new charge/mortgage. In that case, the lawyer for the

purchaser usually requires the purchaser to sign a consent to act re conict, Precedent 36.1. New

le, agreement of purchase and sale, fees, HST, and conict of interest as in Chapter 35.

Reminders Make the necessary reminders, including the reminders for the closing and

requisition dates, and monitor the dates carefully. ese dates are in the agreement of purchase

and sale. e due date for requisitions is the deadline by which you must write the letter of requi-

sitions to the vendor’s lawyer to x anything that might be wrong on title. e vendor’s lawyer

is not obligated to comply with any requisitions that you make past that due date, except matters

going to the root of title.

Letter regarding title Write this letter, Precedent 36.2. It tells the lawyers for the vendors

what names they should put on the transfer/deed. Instead of a separate letter, some law rms

include the title information and the address for service in their letter of requisitions. Obtain the

following information from the purchasers:

• How they wish to take title, e.g. one name alone, joint tenants, tenants in common, etc.

• eir full names and dates of birth.

• If they are arranging a charge/mortgage, who is the chargee/mortgagee (usually a lending insti-

tution). You might also be acting for the chargee/mortgagee, in which case, you will be prepar-

ing the charge/mortgage.

Search of title Do the search of title well ahead of the deadline for making requisitions.

Your letter of requisitions is based on what the title search reveals. Your search might also reveal

such defects on title that might be best resolved by title insurance. Basically, if you have a PIN,

a municipal address, and the owner’s name, you can input the information in Teraview. You will

get a printout of the parcel register (land titles) or the abstract index (registry). See Chapter 38 for

complete details on how to do a search of title in Registry and Land Titles.

Legal TIP

Be sure you are able to

“read” the agreement of

purchase and sale as all

steps and documents

in a purchase and sale

transaction flow from the

terms and conditions

in the agreement of

purchase and sale.

Copyright © 2022 Emond Montgomery Publications. All Rights Reserved.

643

Chapter 36 Purchase Transactions

Survey If the lender requires an up-to-date survey, order it from an Ontario land surveyor

(OLS). Inform your client of the cost before obtaining it because it is usually unexpectedly high.

Standard agreements of purchase and sale usually require the vendor to produce a survey only if

the vendor already has one.

Utilities Water, hydro, and gas services are collectively known as utilities. Utilities inquiries are

referred to as o-title searches or compliance search letters. In some municipalities, water is a public

utility because it is a municipal government service. As a municipal service, any water arrears consti-

tute a lien on the property, and the purchaser will inherit the debt if the vendor does not pay it.

Hydro and gas services are not municipal utilities because the municipalities contract out the sale

and distribution of hydro and gas to private companies. Any hydro or gas arrears, therefore, are a

personal debt against the vendor, not a lien against the property, and it is up to the private utility

companies to collect any arrears directly from the vendor. If the property will not be title-insured,

lawyers usually write to these services (water, hydro, gas), Precedent 36.3, requesting a search of

their records. e utilities services charge a fee for this information. If the property will be title-

insured, lawyers usually write to these services (water, hydro, gas), Precedent 36.4, only to request a

meter reading (no fee) because title insurance covers any water, hydro, and gas arrears.

Building Department e Building Department is a municipal government department.

Your purpose for writing, Precedent 36.5, is to ensure there are no building and zoning by-law

violations or work orders against the property. If the property will not be title-insured, write to

the Building Department of the municipality where the property is located requesting informa-

tion as to any building and zoning by-laws violations or work orders against the property. If

the property will be title-insured, many lawyers dispense with this inquiry as it does not involve

money, and title insurance covers many building and zoning problems.

Tax Department e Tax Department is a municipal government department which sets

the rate of tax on properties that are within its own municipality and bills the property owners.

It is to be distinguished from the Regional Assessment Oce, which is a provincial government

department that sets the value on which all properties in Ontario are taxed. Property owners pay

property tax for such municipal services as garbage collection, education, etc. Your purpose for

writing, Precedent 36.6, is to obtain a tax certicate so as to ensure there are no unpaid property

taxes because unpaid taxes constitute a lien on the property. is information also enables you to

ensure that the tax adjustment in the statement of adjustments is correct. See Precedent 36.7 for a

sample tax certicate. Since title insurance covers any arrears of taxes, some lawyers dispense with

this inquiry while others write for a tax certicate whether or not the property will be title-insured.

PPSA searches If the purchase price includes chattels, conduct a PPSA (Personal Property

Security Act) search through the Ministry of Government and Consumer Services against the

vendor/s to make sure there are no debts registered against any chattels which the purchaser is

buying from the vendor.

Corporate vendor searches Where the vendor is a corporation, you should do corpor-

ate name and status searches through the Ministry of Government and Consumer Services. e

searches usually establish the legal name of the vendor corporation and whether the corporation

is still in business.

Legal TIP

Keep a handy

list of addresses,

telephone numbers,

and any survey and

fee requirements for

municipalities you

deal with. Address all

off-title searches to the

municipality where the

property is located, e.g.

if the property is located

in Waterwell, write to

Waterwell Hydro, Tax

Department of the City

of Waterwell, Building

Department of the City

of Waterwell, etc.

Legal TIP

Make all off-title

searches before you

write the letter of

requisitions because

if the responses show

any problems, you

must, in your letter of

requisitions, require the

vendor to correct them.

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