Whether you are buying or selling real estate, you will be presented with a lot of information in a short period of time. These checklists can help you organize your thoughts and make sure you don’t forget about the essentials. You may well add your own concerns and special matters to these lists, which are based on our own experiences and the comments of our clients over the years. There is a Vendor’s Checklist, Purchaser’s Checklist, and a Moving Checklist. To access the checklists, just scroll down, or click on the appropriate one:
|Vendor’s Checklist||Purchaser’s Checklist||Moving Checklist|
Review of the Agreement of Purchase and Sale
You will have many conversations with realtors, purchasers, and other parties concerning the Agreement of Purchase and Sale to be signed between you and the Purchaser. This document is the most important document surrounding your sale. Some of us are more likely to carefully look at documents and do so as a matter of habit, whereas others are more comfortable communicating verbally and will tend to assume that the documents will reflect the conversations we have had and assumptions we make. The period prior to signing the actual agreement is one occasion when it is important for everyone to review the actual agreement and make sure they understand all aspects of it. If there is any element of the agreement which you do not understand, or if you are not used to signing documents of this kind, it is important that you seek professional advice concerning the contract through a lawyer to make sure that your agreement means exactly what you think it does. Alway remember that the document must not only be accurate, but complete. Parties in a real estate transaction will often erroneously assume that verbal comments and promises that have been made to them are as enforceable as those which are in the contract. If an aspect of an agreement is important enough to you that you consider it legally binding upon the other party, then it should be specifically set out in writing in the contract.
Chattels and Fixtures
Make sure that the agreement specifically sets out the chattels and fixtures included in the Agreement of Purchase and Sale (i.e. appliances, window coverings, light fixtures, pool accessories, etc.). Also ensure that if you want to take something with you that can arguably be a fixture (i.e. it is attached), make sure that this is specifically excluded in the contract.
Are there any warranties on the house or fixtures which can be assigned to a Purchaser? This can be a selling fixture if there are. Also make sure you supply any plans, surveys or sketches associated with the house and property. These items should be brought to the realtor’s attention. Make sure these items are actually available before promising them. It is a good idea to attach them to the offer and refer to them “as attached”.
Most Agreements of Purchase and Sale indicate that you must supply whatever survey materials you have to the Purchaser. You need to be very careful if your agreement refers specifically to a survey. Many sellers sign agreements indicating that they will supply a survey to a Purchaser thinking that their out-of-date or incomplete survey (or photocopy of one) meets the contractual criteria stated in the Agreement. In our view it is preferable to simply supply a copy of what you have to the realtor, and not to promise contractually to supply anything else at all. If you do feel compelled to sign anything in the Agreement concerning a survey, you should only promise to supply “materials as attached only”. Remember that a photocopy of a survey is not technically a “survey”.
Ensure that you put conditions in that are important to you. Conditions are clauses that say that the contract will not be binding until certain things happen. For example, as a seller you may wish to make the sale conditional upon your finding a new home within some reasonable period of time. If there is anything in the agreement you do not understand and the contract is being signed at a time when you can not get advice, make the agreement conditional upon review by your solicitor.
Make sure that you have not committed to sell your house or property within a time frame that is impractical. Will you be able to arrange for packing and moving yourself within the time allotted? Will your solicitor have enough time to prepare documentation on your behalf? You should know the answers to these questions before signing the agreement.
Real Estate Commission
Make sure you understand the amount of real estate commission payable to the agent, and that you have taken this amount into account in your financial calculations. GST is always payable on real estate commission.
Make arrangements to have all utilities read and accounts changed/cancelled as of the closing date. This should also be done with respect to items which are not utilities, but services to the premises, such as telephone, cable television, etc.
Your insurance will need to be cancelled upon the sale but make sure it is not cancelled until you actually transfer ownership of the home. Further to this, you should be aware that if you allow the Purchaser to move in early, or put items in your home early, any injury occasioned by the Purchaser or their helpers, or any property loss of the Purchaser, may well not be covered under your policy.
Municipal Property Taxes
Make sure your property taxes are paid up-to-date and discuss with your lawyer how this account will be taken over by the purchaser and adjustments made.
Existing Mortgages (Encumbrances)
If you have any mortgages or liens against your home, make sure that you know what the balance due is, before committing to any sale. Make sure that you have a clear understanding of any early payment penalties which may be due under such mortgages or liens and the administrative costs of the institution holding the security, so that you have a clear picture of the financial effect of discharging these encumbrances on closing.
Review of the Agreement of Purchase and Sale
You will have many conversations with realtors, purchasers, and other parties concerning the Agreement of Purchase and Sale to be signed between you and the Vendor. This document is the most important document you will execute with respect to your Purchase. Some of us are more likely to carefully look at documents and do so as a matter of habit, whereas others are more comfortable communicating verbally and will tend to assume that the documents will reflect the conversations we have had and assumptions we make. The period prior to signing the actual agreement is one occasion when it is important for everyone to review the actual agreement and make sure they understand all aspects of it. If there is any element of the agreement which you do not understand, or if you are not used to signing documents of this kind, it is important that you seek professional advice concerning the contract through a lawyer to make sure that your agreement means exactly what you think it does. Alway remember that the document must not only be accurate, but complete. Parties in a real estate transaction will often erroneously assume that verbal comments and promises that have been made to them are as enforceable as those which are in the contract. If an aspect of an agreement is important enough to you that you consider it legally binding upon the other party, then it should be specifically set out in writing in the contract.
Chattels and Fixtures
Make sure that the agreement specifically sets out the chattels and fixtures included in the Agreement of Purchase and Sale (i.e. appliances, window coverings, light fixtures, pool accessories, etc.), and that you are agreeable to any fixtures that are specifically excluded in the Agreement. Do not assume that anything you have been verbally promised will be included unless you specifically set it out in the Agreement of Purchase and Sale with as much accuracy as possible. This can be time consuming and tiresome, especially if you are buying the contents of a cottage for example. If you choose to simply say something to the effect “contents as viewed”, then do not expect to be able to enforce the contract as against the seller if anything is missing. Your contract will simply be too non-specific to give you any legal ground to stand on. If there is more than one item of the type being included (i.e. two fridges or stoves), make sure that you specifically set out the one to which you intend to refer.
If the house you are purchasing is covered under the Ontario New Home Warranty Act, or if there have been recent improvements on the home, make sure that you have the Vendor ensure and promise in writing to provide you with an assignment of his rights with respect to these. Ask if there are any plans with respect to the home or any additions that have been made. If the house was recently built and you are advised that it was not insured under the Ontario New Home Warranty Plan, you should be asking why this is the case. If recent additions or improvements have been made, see whether or not these are shown on any survey materials you are provided and if not, find out if building permits were obtained for the work done.
Make sure that you have provided yourself with reasonable time limitations for the things you expect to do. For example, if the agreement is conditional upon financing, have you discussed with your lending institution the time required for paperwork to be done, so that there is a reasonable expectation of your meeting the date by which the condition needs to be satisfied? Have you discussed with your solicitor the time frame normally required for the type of work to be done? This will especially be important if there is some unique aspect to the purchase and sale. For example, if the property is outside your lawyer’s normal jurisdiction, more time may be required either for your lawyer to do the work or arrange for someone else to do it. Is someone who is a party to the Agreement of Purchase and Sale likely to be away or on vacation? Think through the Agreement with a calendar before you sign it.
Conditions to the Agreement
In the event that you are signing the Agreement at a time when professional advice is unavailable, you may want to make the Agreement conditional upon the review of same by your lawyer. This will definitely be the case in the event that there is some aspect of the Agreement that you do not understand, or with which you are uncomfortable. If there is some aspect of the property which is important, but which is as yet undeterminable because further information needs to be acquired, do not “guess”, make the offer conditional upon your being given a reasonable time frame to find out the information required. If you find a vendor refuses to give you this opportunity, you should be wary.
You will need to arrange property insurance for yourself as soon as your agreement becomes binding, and advise your lawyer as to who will be insuring the property, especially in the event that you are getting financing, since your lender will provide proof of insurance. Advise your insurance representative which lawyer is representing you as the insurance agent will need to send a document called a “binder” to the lawyer, confirming that you have obtained insurance.
Utilities and Other Services
You will need to ensure that utilities have been transferred into your name as of the date of closing, and arrange for telephone and cable T.V. installation, as well as any other services you wish to have at your home from your time of occupancy.
Municipal Property Taxes and Other Charges
The amount of the annual taxes is shown on the real estate listing. Be careful when you look at the listing that you ensure that it is up-to-date in this regard. Sometimes when listings are signed old tax bills are used, and annual rates of taxes shown can therefore be out-of-date. You should also ensure that you are aware of any local improvement charges or special imposts that the Municipality may charge on the property you are purchasing, which are not specifically annual property taxes, but which could represent significant ongoing costs to you.
Your Agreement of Purchase and Sale may indicate that you are going to assume a mortgage, that is take over the Vendor’s existing mortgage. If this is the case, you need to be very careful that you know exactly the amount that is going to be taken over by you, the terms of the existing mortgage (these will need to be reviewed by your lawyer) and most importantly, whether or not the mortgage is actually assumable. If there are any costs to having the mortgage assumed (i.e. special charges from the lending institution) you should make sure whether you or the Vendor are responsible for payment of same. If you are obtaining your own financing, do not waive any condition in your contract relating to financing until you have written confirmation from your lending institution that they are prepared to lend you the amount of money you require. Make sure that you fully understand all the costs associated with borrowing, both legal (lawyer’s fees) and directly from the lender (i.e. CMHC or other insurance costs, plus PST, appraisal costs, administration costs, tax holdbacks, etc.).
Use of Property
Make sure your Agreement of Purchase and Sale clearly indicates the use you plan for the property (i.e. year-round residential, seasonal residential, etc.) and that the Vendor warrants that there are no legal impediments to your using the property as you anticipate.
|The foregoing articles are meant for informational purposes only and are not to be taken as legal advice. In the case of any questions, issues or needs arising from the above please contact us at Admin@deacontaws.com, Phone: (705)526-3791 or Fax: (705)526-2688|