Select Page

Purchasing a Home


PLEASE NOTE: This memorandum has been prepared and is intended for your general information only. It is not held out and is not to be construed as advice with respect to your particular sale. Specific problems relating to your sale should be referred to your solicitor’s office. However, it is hoped that the information contained herein will be of benefit to you in understanding some of the more common aspects of a real estate transaction.

Agreement of Purchase and Sale

A lawyer should always be consulted before signing the agreement of purchase and sale. The lawyer will advise the client about the terms of the agreement and possibly become involved in the negotiation or even drafting of the agreement. Inasmuch as the agreement of purchase and sale is a binding contract, all rights flow from this important contract. Whether or not you are represented by a real estate agent we urge you to discuss the terms of the agreement before signing the document.

    Nonstandard Additions to the Agreement

    Nonstandard additions to the agreement should be discussed between the lawyer and client. For example, whether or not the purchase is conditional upon the purchaser’s sale of his own home or conditional upon the purchaser’s obtaining financing is important. When representing the vendor, it is important to continue to allow the vendor to offer the home for sale so as not to take the property off the market. What assets are included with the purchase (i.e. fridge, stove, etc.) and fixtures not included have to be identified. The purchaser may insist upon the right to have a building inspection done on the property and would make the purchase conditional upon receiving a satisfactory report.

    Property Survey

    One of the most important problems involved in the sale is whether or not a survey exists that is reasonably up-to-date. If there is no additional clause to the agreement the purchaser would be responsible for obtaining such a survey which currently costs approximately $1,000.00. If the clause was inserted it would be the vendor’s responsibility.

    Additional Considerations

    Several other considerations often arise outside the agreement but may be just as important to the vendor. The total cost of the transaction including fees and disbursements should be explained. Whether or not a “double deal” should take place on the same day for the sale and purchase of a new property or whether or not bridge financing should be obtained for a more leisurely move may be important to some vendors.

    The Lawyer’s Role in Sale of a Property

    We will explain what we expect of the client and what you can expect of us as your lawyers. You will have to provide us with all title documents, tax bills, and any other pertinent documents. The client will have to advise if there have been any additions to the property since the date of the original survey to determine whether the survey is reasonably up-to-date. We will inquire of the client as to what adjustments are to be made on closing such as municipal taxes, and whether or not an oil tank should be adjusted for. Lastly the typical procedure on closing day will be discussed as to how much money the client will receive after the payment of all fees, adjustments and commissions.


    We will respond to any pertinent requisitions received from the purchaser’s lawyer. Any title problems revealed from the requisition letter must be solved before closing. Normally these problems are rectified between the lawyers without any difficulties. The client will be advised not to cancel insurance on the property until the day after the transaction has been completed and if necessary we will obtain a release from the mortgage company to allow the policy to be cancelled.

    Mortgages on the Property

    Any mortgages that are presently on the property will have to be discharged. A payout statement will be obtained from the mortgage company and a direction will be signed authorizing sufficient proceeds from the sale to go to the mortgage company to discharge the outstanding mortgage. Our undertaking will be given to the purchaser’s solicitor to register a discharge after closing.

    Statement of Adjustment

    A statement of adjustments will be prepared and reviewed by both the client and the purchaser’s solicitor prior to closing. The statement takes into account the deposit, the mortgages to be discharged, the tax adjustment, adjustments for oil tank (in any) and any other adjustments that may be necessary. A direction of proceeds will be signed by the client authorizing the payment of any outstanding mortgages, and the balance paid to this law firm in trust. In addition to the mortgage, any other items to be paid will customarily be paid by this firm including the real estate commission.

    When to Sign the Documents?

    Several days before closing an appointment will be made with the client to have all documents signed by the Vendor. These would include the Transfer (formerly the Deed), Declaration of Possession, and/or Closing Certificate, Undertaking, Bill of Sale if applicable. These documents will be reviewed by the lawyer with changes to be made, if applicable, before witnessing the vendor’s signature. It is customary that a key to the front door be provided to the lawyer at this time to be given to the purchaser on the actual closing. It is suggested that all other keys be left in the property and that under no circumstances should a key be given directly to the purchaser.

    Closing The Transaction

    After the Transfer and other documents are signed, the key(s) and relevant documentation are sent to the purchaser’s lawyer in exchange for funds and relevant documentation. Each lawyer holds their material in trust until the transaction closes. In Ottawa real estate transactions are closed electronically from the lawyer’s office.


    However, registration can only take place when the local Land Registry Office is open, which for the purposes of closing is between 9:00 a.m. and 5:00 p.m. Since the purchasers have to arrange for financing and other matters the actual closing tends to take place later in the day. We cannot therefore guarantee when a cheque will be available to be picked up by the vendor, in some cases the funds are not available until the morning after closing.

    Who Informs the Utility Companies?

    It should be noted that it is the client’s responsibility to inform the various utilities that the meters should be read on closing and all final bills should be sent to the client’s future address for payment. We recommend that you jot down the meter numbers in the event there is any discrepancy.

    After the Closing

    Approximately four to eight weeks after closing a full report, trust statement and statement of account together with copies of all documentation will be provided to you. We will ensure that any undertakings given on the closing are complied with including the discharge of any outstanding mortgages.

    We trust that this brief memorandum will be helpful and would ask you to keep in mind that the memorandum is not intended to be exhaustive nor does it cover every situation that occurs in real estate transactions

    Source: Nancie-Anne Heaphy, Edward G. Manthorp, Sean B. Kelly, Elisha M. E. Kelly

    For more information contact The Wilson Team or call 1-855-695-9250

    Join Our Newsletter