Our quotes include all the registration costs, professional legal fees, disbursements and taxes required to complete a standard transaction. For all other possible expenses that may apply please click here to view a complete list. If you are unclear as to whether any additional expenses will apply to your particular transaction please feel free to contact us directly.
Your closing funds, typically the remainder of your down payment and the various fees and costs to complete, must be deposited in one of our firm’s trust accounts. Law Society of BC accounting practices dictates that non-guaranteed funds cannot be deposited into a trust account, since these funds must be paid out upon the completion of the transaction, and therefore there is no time for a personal cheque to clear through normal banking clearing procedures. For this reason, closing funds cannot be paid with a credit card either.
If more than one person is to be registered on the title to a property, the names of each of these persons may be registered as either joint tenants or tenants in common. Prior to closing, our legal assistant will inquire as to how you intend to be registered on title. Please note that if only one person is to be on title this issue does not arise. The basic difference between registering title as joint tenancy vs. tenancy in common is that in the event of the death of a joint tenant, the interest of the deceased person will automatically transfer to the survivor(s) or whereas, in the event of the death of a tenant in common, the share of the deceased person passes to his or her beneficiaries as part of his or her estate. Although all adults should have a will, this is particularly important if you choose to hold title as Tenants in Common. If you want to hold an unequal interest in a property in relation to any other person or person on title, then you can only hold title as Tenants-in-Common. Joint tenant ownership can only be equal percentages. (i.e. 4 persons on title as joint tenants means that each own a 25% share of the property). In a purchase transaction, are you representing me or the bank?
If you are getting a mortgage for the purchase of your residential property, Kearns & Company legally represents you as well as your financial institution (the “Lender”) in the transaction. The only caveat is that if a conflict arises between you and the Lender, we would then be unable to advise you or them as to the legal issues at hand, and both parties would have to seek alternate legal counsel. In practice, this situation is extremely rare and the convenience and economics of having only one lawyer represent both the purchaser and the Lender in the same transaction far out-weighs the risk of a conflict of interest.
Using a lawyer for your real estate transaction gives you the benefit and piece of mind that you are receiving legal representation and advice during the conveyance process. If a legal dispute arises between the vendor and the purchaser, we can deal with the issues immediately in hopes of resolving the issues with your best interests in mind. A notary public is not a lawyer, and by law, faced with a legal issue, they are required to advise their client to seek legal advice in order to have the situation resolved. The fees that a notary charges are comparable, or often times higher, than our fees at Kearns & Company, but does not allow them to offer any legal advice. As lawyers we are able to advise you as to the legal ramifications of issues such as breach and anticipatory breach of contract, fraud, deficiency holdbacks, to name a few.
In order to protect the integrity of your transaction and to satisfy the identity verification requirements of most bank and credit unions, government issued photo ID is required by all of our clients. Your personal information is kept in strict confidence under the rules of solicitor – client privilege. To review what identification is considered acceptable please click here.
A holdback of a certain amount of funds from the purchase price due to the vendor not meeting a condition is only allowed if a provision for such a holdback was included by your realtor in the contact. However, Kearns & Company will negotiate on your behalf with the Vendors lawyer or notary and assist you with whatever issues arise during your transaction.
Typically, we receive a copy of your contact from your realtor’s office upon the removal your subjects. At that point the contract is legally binding. Once we have received the contract as well as your mortgage instructions (if applicable) our legal assistants will start preparing your documents. Upon completion of your file we will contact you to set up a lawyer appointment to go over transaction and to sign all the necessary documents. Ideally this appointment will be set two to three days prior to your completion date.
Your Contract of Purchase and Sale will make reference to three very important dates. The completion date, the adjustment date and the possession date. Once your land transfer documents and your mortgage documents have been successfully filed in the Land Title Office, our office will receive a registration number which we will then forward to the vendors lawyer (along with full payment) and to your realtor. This indicates that your property purchase has been successfully completed at which point your realtor will arrange for transfer of the keys at noon (or otherwise stated on your contract) on the possession date. This date is typically one day following your completion date.
As the vendor is responsible to pay all realtor commissions on the sale of a property, we recommend that you find a realtor that you are comfortable with to represent you in your purchase. While you may use the same realtor as the vendor, it is advisable to have your own realtor who is representing only your interests. If you are in a situation where both you and the vendor have agreed to do a private sale in which neither of you use a realtor, Kearns & Company can be retained to draw up the Contract of Purchase and Sale and act on your behalf. In the event that you do enter into a private sale with the vendor and have Kearns & Company act on your behalf, we will hold the deposit on your new property in our trust account until the time of closing.
Upon completion of your transaction our office waits for the vendor’s lawyer to discharge and remove from title any mortgages that the vendor may have had on the property. Once this has been completed the vendor’s lawyer will inform us of same, at which time we will then order a State of Title Certificate which will show you as the new registered owner along with your registered mortgage (if applicable). We will then send a closing package containing a copy of your registered mortgage along with your State of Title Certificate to both you and your financial institution.
As an owner of a strata lot, you own the airspace within the boundaries of the walls, floor and ceiling of your unit. The land and the building itself (the “common areas”) are owned by you and all other owners of strata lots in your complex. As such, you and all the other strata lot owners form what is called a “Strata Corporation”. The Strata Corporation is like a small government. It taxes you (maintenance fees), it makes laws (bylaws) and, like any other government, can impose penalties for failure to comply with its laws. As a strata lot owner you have the right to attend meetings of the Strata Corporation and to vote on matters of business. You may wish to keep informed of the issues before the Strata Corporation and exercise your voting rights*. In particular, the bylaws of the Strata Corporation are very important. They may restrict the use of your strata lot with respect to rentals, children, pets, and other matters. Part of your strata maintenance fees will be applied toward the payment of premiums to provide insurance for the land and buildings, including public liability insurance. As a strata owner you should ensure that the coverage is adequate – otherwise, if a claim is made against the Strata Corporation which exceeds the insurance coverage, you, and all the other owners of strata lots, will be personally responsible for the payment of the claim to the extent it exceeds the insurance coverage.
Title Insurance is a form of insurance that protects purchasers and mortgage lenders from a number of potential risks. These risks are usually matters which are not covered by a traditional lawyer’s opinion. Briefly summarized, these added protections include the following:
Defects that would be revealed by a site survey. In the absence of an existing survey, Title Insurance may be ordered in lieu of a new survey. Please note that this assumes that a new survey must be ordered. If the vendor is able to provide an older survey or if the applicable city hall has a survey certificate, these often may be utilized. Title Insurance covers any defects to the title that would normally be revealed by looking at a survey, such as boundary encroachments and buildings that have been constructed on a municipal right of way or easement. Title insurance would pay to rectify these defects on a “no fault” insurance basis.
Fraud, Forgery or False Impersonation. A title insurance policy is not qualified by “the authenticity of the title documents obtained.” What this means is that if an innocent person acquires an interest in a property in good faith from someone who is acting in a fraudulent manner (for example the seller does not actually own the property), that person can be compensated. The lender is also insured in the event of lawyer or third party fraud. Please note that the BC land title registry system is has a very high level of integrity and this kind of fraud is extremely rare.
Errors in Public Records. While this is not as relevant in British Columbia given our Torrens System of electronic land registration, title insurance does cover errors in public records, including incorrect information on tax certificates.
The Property Transfer Tax is a tax payable to the provincial government by purchasers of real estate. The tax applies to all types of real estate, whether residential, commercial or industrial. The amount of the Property Transfer Tax is 1% on the first $200,000 of the property’s fair market value and 2% on the remaining amount.
For example: If the fair market value of a property is $250,000, the tax payable will be $3,000.00 (1% on the first $200,000 = $2,000 and 2% on the remaining $50,000 = $1,000 therefore $2,000 + $1,000 = $3,000).
“Fair Market Value” is best described as the price that would be paid for a property on the open market (which is usually the actual purchase price paid for the property). If the transfer of property is taking place without the exchange of money, the fair market value must be the fair value of the property if same was sold on the open market. In some situations, the fair market value is determined by the recent Assessment received from the Assessment Office.
There are a number of exemptions available to purchasers so that the tax is not payable. The most common is the exemption for “First Time Home Buyers.” To understand how to qualify for an exemption to the Property Purchase Tax as a First Time Home Buyer, please click here. Other exemptions exist as well, such as a transfer of a principal residence between certain family members. For details on this and other exemptions, please visit http://www.rev.gov.bc.ca/RPT/ and pick the “Property Transfer Tax” button located on the right hand side on the screen.
Property Transfer Tax should not be confused with Property Tax. The Property Transfer Tax is a one time tax paid to the provincial government by purchasers of real estate. The property tax is the tax paid on an annual basis to the local city/municipality.
Adding or removing a person from title occurs by submitting a new Form A document into the Land Title Office, registering the property in the names and tenancy to which you have agreed. We will advise you on the Property Transfer Tax ramifications of your transaction, and submit any/all tax payments to the government on your behalf. If you are removing someone from title, make sure that you also have them removed from any mortgages or other encumbrances that they may have been responsible for as owner of the property and that you honour any additional agreements that you and the party being removed from title may have. If you are contemplating a title transfer (either adding or removing someone from title) please contact us and we will be happy to act for you and answer any further questions that you may have.
Often one of the greatest financial priorities for our clients is to reduce or pay off their mortgage as quickly as possible. By doing so, they save substantial amounts of money in interest charges alone. Remember that mortgage interest is not tax-deductable in Canada (unless the mortgage is for a business purpose), and payments are made with after tax dollars.
In order to assist our clients better, we recommend the following Government of Canada website which offers very helpful information about how you can reduce your mortgage faster. The website covers accelerated payments, increasing the amount of your payment, making extra lump sum payments and paying extra on your payment dates.
To view this article, please click here.
Unless your mortgage money is being borrowed for a business purpose, mortgage interest is typically not tax-deductible in Canada. In other words, interest on borrowed money can be tax deductible if the money is borrowed to earn investment or business income only.
This information has been provided for you as a courtesy only and is not to be taken as tax advice. Please speak to your accountant or contact us and we will be happy to refer one to you.
Having a Will is a key element of estate planning. It allows you to provide for an orderly distribution of your assets in accordance with your desires and in a way that can minimize the tax burden and probate fees on your estate. A Will is a document that gives substance to your estate plan. It pulls together your assets and your personal desires, it will nominate your executor(s), name a guardian(s) for your children (if applicable), and most importantly, consist of how and to whom you wish your assets to be distributed. In short, having a Will offers you peace of mind by knowing that you have taken responsibility for what happens to your estate after your death and not let the status of your affairs be left to the decisions of others.
When a person dies without a Will, the Estate Administration Act establishes the people who have a right to administer the estate.
In order of priority they are: Spouses, providing the spouse has not lived separate and apart from the deceased person for more than one year immediately before death, and includes a common law spouse (including a same gender spouse), providing the common law spouse has lived with the deceased person in a marriage-like relationship for a period of at least 2 years immediately before death. Children, grandchildren (or a guardian on their behalf) Parents Siblings and children of predeceased siblings Nieces and nephews Next of kin of equal degree of relationship.
Any one of the heirs to an estate can administer the estate with the consent of the other heirs. If there is no next of kin willing then the Public Guardian and Trustee as Official Administrator for BC may administer the estate. The Public Guardian and Trustee will not usually administer estates with assets less than $5,000 as this is neither practical nor cost effective.
In order for a Will to be valid, it must consist of the following:
Although it will be legally valid even if it is not dated, it is advisable to ensure that the Will also includes the date on which it is signed. As soon as the will is signed and witnessed, it is complete
A Will only covers your affairs once you pass away whereas a Power of Attorney is only effective when you are alive.
The bank’s Power of attorney allows the person named to manage your assets deposited with that bank only.
A power of attorney allows the appointed person, the “attorney” to act on your behalf when signing important documents when you are unavailable to sign for yourself. It can also be drafted to allow your attorney to sign for you and make certain financial decisions when you are mentally infirm and are unable to act on your own. For real estate transactions, the POA must be registered at the Land Title Office and then can be used for buying, selling or refinancing your property. You may also restrict the scope of the POA and or limit the period of time that it is valid.
There are two types of Power of Attorney.
A Continuing Power of Attorney or a Power of Attorney for Property deals with your personal possessions and finances.
A Power of Attorney for Personal Care deals with your personal health care decisions such as hygiene, shelter and consenting to medical treatment.
The term “attorney” refers to the person you give the authority to and should not be confused with your lawyer.
Who do you want to manage your finances?
What instructions will you give them?
Will it be limited or general?
Do you want more than one attorney, If you do want more than one, are they to act jointly or jointly and severally?
If your attorney can’t act or continue to act, do you want to name a substitute?
As long as you have capacity, you can revoke any Power of Attorney you have signed. The procedure for doing so depends on the type of Power of Attorney in question.
Kearns & Company uses state of the art computer systems that allow us to electronically file most land title documents on line. Our staff is highly trained and knowledgeable in all aspects of real estate conveyancing and is available to assist you throughout your transaction.
If you have any questions that we have not addressed in this section, please contact our firm and we would be happy to assist you.