Negotiating and finalizing the terms of a real estate deal may be more complicated than you think - and often that's the easy part! Closing the transaction is a technical exercise that requires attention to detail, thoughtful data analysis and, in certain circumstances, practical problem-solving. Having an experienced and properly trained lawyer to guide you through the closing process is absolutely essential.
At Merovitz Potechin LLP, members of our team are periodically asked: "Why do I need a real estate lawyer for my closing?" Here are a few of the most compelling reasons why:
1) Reviewing the Title Search: Before closing, your lawyer will order a full search and review the property's title, to ensure that when signing the deed you do not unknowingly 'inherit' a title problem. Title searches involve a number of complicated documents that are often difficult to decipher, such as municipal agreements, easements, Plans and restrictive covenants. Title problems vary in complexity, but examples include: an old mortgage that accidentally was not discharged (which you should not be responsible for); an incorrect legal description (which may lead to the purchase of something less than what you bargained for); or an access route that is blocked (which may lead to the purchase of a property that is "land-locked"). Only your lawyer, after reviewing a full title search, will be able to properly identify these issues and protect you in advance of your closing.
2) Handling Funds and The Document Registration Agreement: When handling client funds, your lawyer is required to use a Law Society approved trust account, and to report to you with respect to every penny spent. Furthermore, real estate lawyers across the Province of Ontario enter into a binding document, called a Document Registration Agreement, to ensure that all trust funds are handled appropriately, and that closings always occur in an approved order. Funds (to the Seller) and keys (to the Buyer) are not released until both lawyers have authorized the closing. Closings often involve hundreds of thousands - and sometimes millions - of dollars. By using a lawyer, you can be certain that your money will be protected and, at the appropriate time, handled with care.
3) Know What You're Signing: Before the closing, your lawyer will meet with you to review a series of purchase, title insurance and mortgage documents. During this meeting, your lawyer will explain to you exactly what you are signing, and the implications of each document. For example, your lawyer will review the Deed with you to ensure that title will be transferred correctly, and - if you qualify - the land transfer tax rebate has been properly applied. In the context of your mortgage, your lawyer will review the terms of the mortgage with you, and each of the security documents, to ensure that you are not agreeing to something new, modified or surprising. When you meet with a lawyer, everything is reviewed in advance, and issues are dealt with proactively and decisively.
4) Your Team Captain: Once a Purchase Agreement is firm, your lawyer and our real estate group manages responsibilities, deliveries and documents in consultation with your realtor, your mortgage professional and/or bank, and your insurance professional. We provide a single contact point, through which your team of professionals may easily coordinate. We make sure that everyone is on the same page, and that everything is in place, well in advance, to ensure a smooth closing.
For these reasons and many others, having an experienced and properly trained lawyer - working in tandem with a friendly and accessible team of real estate professionals - is absolutely essential to ensuring a successful real estate closing.