Ever wonder what your Lawyer's role in the Real Estate transaction is? Let's take a look..
The listing and selling of real estate is tied to ownership. Listing agreements and agreement of purchase and sale must clearly set out what extent of ownership is being marketed and sold. Current legislation, procedures, and terminologies affecting ownership arise from centuries of English law and tradition. In the last couple of decades, we have seen alot of developments in legislation, regulations, and rules that directly or indirectly affect how property titles are described, registered, and transferred.
Land Title is described as "The lawful ownership of property, as well as the means of evidence by which the owner has lawful ownership thereof."
When you buy land, for example when you buy a house and the land it sits on, you are really buying the "title" to that land. In Ontario, the original system of land division was the Land Registry system. There are 66 Land Registry offices in Ontario. The conversion from the antiquated registry format to the "land titles" system is concurrently underway. Ontario Realtors now routinely make use of the Geowarehouse system when researching properties for clients, as well as to provide a first-line of defense againt title theft by ensuring that clients attemping to sell a property are the legal owners of it, and all legal owners are signing the listing agreement.
The key to automated registration lies in the parcelization process. Every property in Ontario will ultimately be identified geographically and assigned a parcel number. That number becomes the central reference for a host of property details. While e-registration is the immediate goal, this new approach speaks to exciting opportunities in how properties are listed and marketed in the future. With a few mouse clicks, for example, practitioners can confirm who is the registered owner, what financing exists, and any issues that might affect selling the property. Such information, when combined with assessment information and GIS data, will revolutionize the entire process.
Your lawyer's job is to ensure that you are receiving "Good Title", "free of encumbrances", when you purchase a property. There can be a number of encumerances on the land, such as tax not paid by a previous owner, land severances started but not completed, or building structures on the land which are not in conformity with the Ontario Building Code and with local zoning regulations. If you are looking at a property that you think might have some issues (for example, it has been vacant or abadon for a while), stop by City Hall and talk to the folks in the bylaw department, to ask them about that address. For $80 or so you can get a "Letter of Compliance" that will tell you about any outstanding work orders or other issues with the property. Run over any items you find with your lawyer before starting the process of putting in an offer to buy. Many such properties will have problems you don't want to get into dealing with.
Another issue might be the previous owner had some outstanding utilities bills (gas, hydro) that the service-providing companies will come after you for.
You will be sheltered from many such potential problems with title insurance, but you still need to ensure that you are working with a lawyer who is experienced in Real Estate and knows what to look for to protect your interests.
Century 21 Heritage Group works with the legal firm of Rutman and Rutman. If you need a lawyer for your real estate transaction, you can contact them at 1-866-456-9969, or info@rutmanlaw.com.
Interested in learning more about Land Ownership in Ontario? You can access Mark Walma's thorough treatment of the subject on Google Bookshelf: "Advanced Residential Real Estate Transactions" (click here to access it now).
