Protecting that investment is important to you

Υου need to knowthat all ofthe legal issues involved ίπ buying your home are properly handled. Υου want to feel secure about the fact that you own your home. Υου may also need advice about who should officially own the property, what kind of mortgage you should get, and many other decisions that have to be made when buying a home.

Your lawyer is there to help guide you through this process, and to protect your interests at every step of the way.

About this Booklet

This brochure explains how your lawyer will work with you when you buya home. This booklet is not complete without ‘Ά comparison of methods for assuring title” chart, which explains the three different ways ίπ which your lawyer could protect your ownership interest ίπ your home.

It is important that you take the time to understand these options. Onceyou have read this brochure, you should immediatelytell your lawyer which one of the three methods you would like him ΟΓ her to use for your home purchase.

Before you sign an offer to purchase

Απ offer to purchase is a contract that is binding οπ both you, the buyer, and οπ the vendor. Seeing a lawyer before you sign that offer can help avoid difficulties later on, and ensures you that your best interests are protected.

For example, your lawyer can advise you ίο:

• include escape clauses that will allow you to cancel your offer if you cannot proceed with the purchase. For instance, you may want to cancel your offer if you discover that the property is not what you thought it was, you were not able to arrange the mortgage you need, ΟΓ you were unable to sell your present home;

• request a warranty that the property conforms to all municipal by-Iaws, zoning regulations and housing standards;

• include an exact listing of the accessories that you expect to buy with the home;

• require that the vendor produce an up-to-date survey;

• request that your deposit be held ίπ a bank account that will pay

you ί nterest.

Your lawyer can also help you determine exactly how much it will cost to buy the house. Υου need to plan for extra costs such as land transfer tax, document registration fees, search fees, your lawyer’s fees, and monies that you will have to paythe vendor for items such as heating οίl already ίπ the tank ΟΓ any pre-paid utility bills and taxes – none of which are included ίπ the purchase price.

After the vendor accepts your offer to purchase

The offer to purchase is onlythe beginning of the complex process of buying a home.

Once the vendor has accepted your offer, your lawyer starts to work οπ many fronts. Υου can expect your lawyer to ask you many questions about the specific property you plan to purchase and how you intend to use ίΙ Over the following weeks, your lawyer will complete a series of legal inquiries, searches of records and extensive fact­checking, to make surethat, οπ closing, you reallyown the home and that you will be allowed to lίve there (ίπ other words, confirming that the present use of the property is legal).

Providing Advice and Fact-Checking

Among many responsibilities, your real estate lawyer acts as your trusted advisor. It is your lawyer’s job to check various details and advise you οπ a wide range of matters.

For example, your lawyer usually will:

• prepare and check mortgage documents and explain the terms of your mortgage;

• explain the different ways ίπ which you can own the property if you are buying it with someone else, and the difference between being joint tenants and tenants-in-common;

• check the statement of adjustments to ensure that you are paying only your share of the taxes, utility and fuel bills, and other costs that have been pre-paid by the vendor;

• explain the purposes of the documents that you have to sign.

Facilitating the 8υΥίΠΞ Process

Το help make the transfer of ownership from vendor to you, the buyer, as smooth as possible, your lawyer may also:

• arrange with utility companies to have hydro, water and fuel meters read οη the day of closing, and to have all future bills addressed to you;

• ensure that you have home insurance ίη place as of the closing date;

• hold ίη trust your closing funds and those provided by the mortgage lender, and transfer them to the vendor to ensure the home purchase closes; and

• arrange for you to receive the keys to your home as soon as

possible after closing.

Assuring you of Good Title

One of the more important parts of your lawyer’s job is to make sure that you have good title to the property that you are buying.

Why is good title important?

Good title ensures that you really own the property, that it is correctly described ίη official documents and properly registered, and that ηο one else has a claim ΟΓ a lίen to it that you do not know about.

For example, mortgage holders, contractors, tenants and the spouse of the person selling the home may all have rights to the property that need to be resolved before the sale can proceed.

Good title is essential for you to be able to sell your home ίn the future.

As part of title-related responsibilities, your lawyer usually will:

• check that the person who is selling you the home has a right to sell the property, and that ηο one else has a claim to it ΟΓ a lίen οη it;

• consider survey-related issues such as whether anything οη your property encroaches (intrudes) οη neighbouring properties, ΟΓ if neighbours are ίη fact using a part of your property;

• contact the municipality to make sure that there are ηο work orders against the property which you could be forced to comply with after your home purchase has closed;

• determine if any other organizations have interests ίη your property that could restrict your use of ίΙ For example, there may be easements that give utilities the right to install and access hydro ΟΓ gas lίnes. As well, if some ΟΓ all of the home is being rented, tenants have rights that could affect your ownership;

• contact l0cal utilities and the municipality to find out if there are

lίens against the property because of unpaid utility ΟΓ tax bills.

If there are problems that could affect title to your property, your lawyer could take steps to fix the matter (often working with the vendor’s lawyer). If the problem can not be corrected, your lawyer will explain to you the risks of taking title without resolving the problem.

Assuring you of good title:

Three options to choose from

There are three different approaches that your lawyer can take to assure you of good title. It’s υρ to you and your lawyer to decide which one of the three options is most appropriate ίη your situation.

With any of the options described below, your lawyer will conduct searches and inquiries to find out if there are any title-related problems with the home you plan to buy. Your lawyer will try to resolve most of these problems, and will advise you of how best to deal with any situations that cannot be resolved.

Option 1: Lawyer’s Ορίπίοπ οπ Title

If you select this option, your lawyer will provide you with a Letter of Ορ’ηίοη which states your lawyer’s view of whether ΟΓ not you have good and marketable title to your property. As well, your lawyer will provide you with a description of the results of the searches and inquiries conducted οη your behalf, and will inform you ίη writing of any outstanding issues that may affect your title to the property ίη the future.

If a problem is identified after you have closed, you can only seek compensation from your lawyer if you can prove that he ΟΓ she failed to do something that was legally required ΟΓ provided legal services that did not meetthe standards set bythe legal profession. Υου may have to hire another lawyerto help you sue your first lawyer and get compensation from the lawyer’s malpractice insurance plan.

Option 2: Title Insurance

Tιtle insurance is an insurance policy that you can buy to protect your investment ίη your property if there is a problem with title. For example, you may find out after you have bought your home that someone else has a legitimate claim to it that has to be satisfied, ΟΓ you may have to pay to move a building that is too close to a neighbour’s property lίne.

The title insurance policy protects you against the loss that you suffer because of many title-related problems. Most title policies also cover your legal costs if your title is challenged.

Option 3: TitlePLUS®

TitlePLUS is a system that includes both an insurance policy and an electronic process that collects information from lawyers who apply for a TιtlePLUS policy as they proceed through the steps ίη a residential real estate transaction.

The TιtlePLUS insurance policy provides protection for both the title­related aspects of buying a home and the legal services provided by your lawyer. It also automatically provides both you and the lender with coverage.

If you opt to use TιtlePLUS, your lawyer will ask you to sign an Acknowledgment and Direction just before your home purchase actually closes. This document confirms your instructions to your lawyer and that your lawyer has provided you with specific infor­mation about your purchase.

Your Choice of Options: Απ Important Decision

Making your choice among the three options described is a very important decision forthe home buyer. The chart enclosed with this booklet addresses specific questions you may have about each option, and is designed to assist you ίη making the most appropriate decision ίη your situation.