Residential and commercial property transactions are governed by the Real Estate Services Act, the BC Real Estate Association and/or the Real Estate Council, and in all cases require the involvement of a legal professional. Critical documents are needed from the time you decide to put an offer on a property through closing, which is why many people opt to use trained real estate agents to help them facilitate these major transactions.
Property transactions of any kind are complex. To protect yourself, you should always have an experienced real estate lawyer advise you from the time you make the offer on a property through closing. Once you sign a real estate contract, if you are not able to keep your end of the contract, court action could be taken against you.
A real estate purchase contract contains basic information about the property, including the property address, the purchase price, the deposit amount and terms, the closing date, when the buyer might take possession and what is included in the purchase price.
Under the terms and conditions section, you can add exceptions, also referred to as ‘subjects’. For example, the contract can be cancelled if you cannot obtain financing or if the inspection shows that the house or commercial building is not structurally sound. While numerous exceptions can be added, it is important to remember that the ultimate goal is to get the seller to agree to them. In most cases, sellers will agree to finance and/or inspection terms.
Special considerations apply to purchases made by non-residents, and for anyone purchasing a second residence.
Before you sign any real estate document that your lawyer has not prepared, it is recommended that you still have them review the document, especially if your deposit is non-refundable.
When you sell a property, whether commercial or residential, you must disclose certain information about the physical condition of the property. This is done through the Property Disclosure Statement, which is completed and signed by a seller before a real estate agent lists the property. Some of the disclosures that must be included are whether the property has a history of flooding; if it has been used in the production or selling of illegal drugs; when the roof was last replaced; if the property has a history of insect infestation; and other obvious or potentially hidden defects.
BC uses three different disclosure forms: one for residential properties, one for condominiums and one for rural properties. The rural property disclosure statement includes disclosures that are more commonly related to issues regarding rural areas including well water and septic systems.
Property sales by non-residents are subject to additional CRA requirements, which will require legal and accounting advice.
If you are selling a property, it is recommended that you have an experienced real estate lawyer on hand to assist. He or she can ensure that you make all the proper disclosures as failure to do so can result in significant legal and financial complications. The lawyer will also review incoming offers and purchase contracts and will help you understand and respond to those documents.
Thank you from the bottom of our hearts for helping us through this challenging experience. We’re so grateful. The peace of mind that I was given after talking at our first visit was more than money could ever buy and I cannot thank you enough for that.
Buying a home has become increasingly more challenging in the past few years, particularly as the cost of real estate has grown exponentially. Changes have been introduced to help ease the constrictions but along with those changes have come other consequences that have made home-buying – and obtaining mortgages – even more difficult. As of September 2019, buyers must now pass a stress test in order to show that – should the market experience significant fluctuations – their financial situation would be solid enough that they could pay higher interest or mortgage rates if need be.
The Canada Mortgage and Housing Corporation also sets rules for mortgage companies. This forces the mortgage companies to pre-qualify you for a certain amount. Pre-qualifying is a necessary step for most first home buyers and is a requirement if you want to qualify for special programs such as the First Time Home Buyer Initiative.
If you are thinking about purchasing a home, it is recommended that you contact a real estate lawyer to discuss your options, including the mortgage laws that affect you and the mortgage programs that might be available to you. Additionally, a real estate lawyer can review mortgage documents on your behalf, which can help minimize your personal and financial risks.
When you want to refinance your mortgage for a lower interest rate, you will end up paying costs in the form of lawyer’s fees and closing costs. You may also trigger a mortgage pre-payment penalty. Depending on the length of time left on your mortgage, your current interest rate, the new interest rate, the size of the pre-payment penalty and other factors, refinancing might not save you much money.
Refinancing a mortgage also requires you to abide by Canada’s new mortgage rules, including taking part in the mortgage stress test to determine if you are able to meet your mortgage payment should the interest rate rise. Before you agree to a refinance contract, speak with an experienced real estate lawyer for advice and information.
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