Humber Real Estate - Course 2, Module 20, Completing Real Estate Transactions| 76 questions and answers.docx

Yes, to ensure the property is protected. Is it mandatory to be present at any third-party inspections at the home? - A buyer representation agreement or a buyer customer service agreement - The accepted agreement of purchase and sale - The FINTRAC form for identification verification and Receipt of Funds for the deposit At the time an offer is accepted, what documents must be provided to the brokerage? The conditions are historical evidence of the progress of the parties in carrying out their various obligations. Why might a lawyer advise caution when using a waiver? True. Additional visits to the property should be negotiated in the agreement of purchase and sale. True or false? In most jurisdictions, a specific clause in the agreement is required for the buyer to attend the property prior to closing. Pre-closing visit A ___________________ is negotiated in the offer and typically limits the visit to a shorter time period for the purpose of a final viewing only. Within the week of closing, but the seller's need to pack and vacate the property may impact when this is completed. When is a pre-closing visit usually done? - Contacting Canada Post to forward mail to the new address - Change of information for any government documents such as a driver's license - Transferring existing accounts such as telephone, television service and setting up accounts on the new property for other utilities What are some additional considerations for a buyer when moving? - Ensuring negotiated repairs are completed by the seller and receipts of the completed work are obtained - Reminding the buyers to call the utility company to transfer account names on closing day - Ensuring there have been no changes which would affect the buyers' mortgage or insurance approvals Once the buyers have a firm and binding agreement, most duties are handled by the buyers' lawyer. However, the buyers' salesperson will still be required to observe due diligence in what matters? - Maintaining contact with the seller - Coordinating with the seller's lawyer - Assisting the seller in fulfilling their obligations - Confirming appointments for additional inspections of the property - Making the seller aware of moving obligations - Removing the sold sign What are some of a seller salesperson's due diligence until day of closing? - This permission only extends to the time the seller is the owner of the property, so therefore it would be removed by closing day - Local municipal zoning bylaws or a community association's rules may also dictate the length of time a sold sign will be allowed to remain on a property - If requested by the seller, the sold sign should be removed earlier What dictates the length of time a "sold" sign can remain on a property? - Being available - Resolving issues after closing - Delivering keys to the buyers (sellers will typically provide one set of keys to their lawyer which are then passed on to the buyer once the transaction closes ... additional sets are sometimes left inside the locked property or provided to the buyer's salesperson. If the law office can't deliver the keys, the responsibility may fall to you.) What are the duties of a salesperson on closing day? An encumbrance or claim that affects title to real property, it's any gap or error in the chain of title in the Registry System. What is a 'Cloud on Title'? sub-search The buyer's lawyer will perform a title search more than once. Prior to closing, a _________ is done to determine if there has been any change to the integrity of the title. An inquiry, typically referred to as a requisition letter, prepared by the buyer's lawyer to the seller's lawyer, concerning title matters (questions such as finding out if the seller is or is not a non-resident). What is 'Requisitioning'? - Statutory declaration that a seller is not a non-resident. This is required to assure the buyer that there will be no need to withhold funds on closing to satisfy the non-resident seller's obligation to pay capital gains tax - Declaration for payment of funds on closing - Direction for payment of funds on closing - Seller's undertaking to pay tax levies, charges, penalties, utility accounts and provide vacant possession - Evidence of no executions, no contraventions of the Planning Act, and no unregistered liens, rights-of-way, tax arrears, expropriations and construction liens - Discharges of any liens, mortgages or encumbrances other than those to be assumed by the buyer - Compliance of buildings and other improvements with zoning bylaws - Statement certifying that the sale of the land and premises is exempt from harmonized sales tax, or otherwise, depending on the circumstances Requisition items may include: An assurance or promise given by a lawyer regarding unresolved items at closing. What is an 'Undertaking'? Client: An assurance by the client (typically given through the lawyer) Best Efforts: The lawyer will diligently take the necessary steps to ensure that specific assurances are carried out Personal: A personal assurance by the lawyer that something will be done Undertakings may be necessary to resolve last-minute issues arising at closing and are considered one of the following types: Discharges A frequently encountered undertaking involves assurances that an existing mortgage will be ____________ within a reasonable time after closing. The seller's lawyer. The statement sets out in balance sheet form all credits to the seller (e.g. purchase price, prepaid taxes, and prepaid utilities), and all credits to the buyer (e.g. deposits and arrears in taxes prior to the date of closing), and the balance due on closing. Who prepares a statement of adjustments itemizing the financial history of the transaction? Land Registry Office The traditional system of registration for title involved the lawyers attending the _______________________. Individuals who are provided access to the system may register documents electronically from their offices, use a kiosk in the applicable Land Registry Office, or request assisted service by a staff member in the Land Registry Office. Not all documents can be registered electronically. What are some eRegistration Methods? - Refers to title documents being created, submitted and maintained in electronic form - Initiated by means of dockets and messaging - A docket includes registration documents prepared by one lawyer with subsequent forwarding (messaging) by secure transmission to another user through the Teraview gateway software What is the eRegistration Procedure? The buyer's lawyer Who completes the land transfer tax statements, which are information found in the Land Transfer Tax Affidavit that accompanies the Transfer/Deed of Land? Completeness and release What 2 types of signatures are required on the final eRegistration document? POLARIS Upon registration, a registration number is assigned to the transfer by the ______________ database. This sets out the particulars from the seller's perspective, such as the statement of adjustments, details of any seller take back mortgage, the discharge of any existing mortgage, and payment of real estate commission. The seller's lawyer prepares a final reporting letter for the seller following the closing of the transaction. What is the purpose of the final reporting letter? - Property tax - Fuel - Metered utilities - Insurance - Rent - Condominium fees What items are apportioned in the Statement of Adjustments? Take the total taxes for the year and divide it by 365 days (366 days if it's a leap year). This gives a per diem, or per day, tax amount. The seller is responsible for the property taxes for the number of days that year they owned the property. What is the method of adjusting property tax? Closing If a property is heated by oil or propane, the seller will have the tank filled, typically the day before _______. The seller will then receive a credit for a full tank of fuel at market price from the buyer at the time of closing. Typically the seller will order a meter reading to coincide with the date of closing. Consequently, no adjustment is required. Some areas within Ontario may have bulk charges for services provided to residents. Here's an example for how to adjust for those utilities: If a seller paid $100 on January 1 as a flat charge for water usage during the calendar year (not a leap year), the credit allowed to the seller is $50.68 ($100 ÷ 365 x 185) for a June 30 completion date. If the amount has not been prepaid by the seller, the buyer will receive a credit for the seller's share (on the statement of adjustments) and the buyer will pay the full amount when billed. How are metered utilities dealt with at closing? No. Property insurance is not transferable, so the buyer must arrange their own insurance to take effect on the closing day. The seller is required to maintain insurance on the property until the transaction has closed, thus no adjustment will be made on the statement of adjustments. Is insurance included on a statement of adjustments? The buyer would receive credit for pre-paid rent accruing from the closing date to the next rent due date. How is rent accounted for in the statement of adjustments? In the same way pre-paid taxes are handled - on a daily basis. How are pre-paid condo fees handled on a statement of adjustments? Within a few weeks of the closing of the sale. When will a seller's discharge of mortgage typically be registered on title? Annual Pre-Paid Property Taxes ÷ 365 x Days Buyer Will Live At Property Including Closing Date I.e. $1425 ÷ 365 x 109 = $425.55 Since the seller has paid taxes for the year, the seller receives a credit of $425.55 from the buyer on closing. If you have to calculate pre-paid taxes for a statement of adjustment, use what formula?