Real Estate Lawyer FAQs
Pre-Closing FAQs
What’s the difference between mortgages obtained through an independent broker versus mortgages obtained directly through a bank branch?
Mortgages obtained directly from one of the big-five banks (TD/Scotia/CIBC/RBC/BMO) have a much simpler legal closing process. In contrast, mortgages obtained from independent mortgage brokers have a much more complicated legal closing process which may incur additional legal fees. However, some lenders are available only through mortgage brokers, and mortgage brokers can shop the same application to multiple lenders without the borrower having to deal with each lender directly.
When should we set the closing date?
We recommend avoiding the popular dates around the end of a month, beginning of a month, and on Fridays. Resources on popular closing days for all parties involved (mortgage funding departments, bank fund transfer departments, law offices, moving companies, etc.) are stretched thin.
All transactional adjustments are calculated to the day prior to closing, so mathematically there is no difference closing on off-dates such as the third Tuesday of the month.
Having a leeway in logistics ensures a smoother closing process. Avoid closing right before a weekend or long weekend as any delays may extend the transaction to the next business day.
Should we purchase and sell on the same day?
We generally strongly recommend avoiding purchasing and selling on the same day. The sale must happen first to fund the purchase. Any delay in the sale may jeopardize the purchase. There are many elements outside everyone’s control, such as banking delays and wire delays.
Although most combo closings complete without difficulty, the few that experience delays can cause significant headaches. Alternatives include closing the purchase first with a bridge loan or selling first and negotiating a short-term lease-back. If neither option is possible, arrange alternative lodging in case of delays.
The buyer and seller are friends/family members — can we use the same lawyer to save costs?
The Law Society has strict rules about a lawyer representing multiple parties on a real estate transaction. In limited circumstances it may be permitted only if there is no mortgage involved. If there is a mortgage, it is almost never approved for a lawyer to represent both the buyer and the seller.
How do I select a real estate lawyer?
Residential real estate lawyers require volume to offer competitive fees and to process the transactions efficiently. Transactions are typically handled by a team including the lawyer, law clerks, legal assistants, and support staff. A well-rounded team is essential for efficiency and accuracy.
Clients should consider:
- Is the lawyer insured to practice real estate? (Check the Law Society of Ontario directory.)
- Does the lawyer carry sufficient Errors & Omissions insurance? Standard is $1 million; a lawyer should carry higher limit if they are handling transactions higher than $1 million.
- How many professionals will handle your file? A well-structured team keeps fees reasonable and reduces errors.
- Will a lawyer supervise the progression of the file?
- Will the client have access to the lawyer for issues beyond the clerk’s scope, and will the lawyer sign with clients directly on closing?
- Does the lawyer primarily practice real estate? Real Estate transactions are increasingly complex and requires dedicated focus.
Do we pay legal fees in advance or separately from closing costs?
No. Save and except for the initial retainer deposit, legal fees and disbursements are typically rolled into the final closing costs calculation.
Do we have to meet in person for final closing?
Not typically. We can facilitate closings if clients are not physically present so long as the client has access to reliable internet. However, in certain circumstances, other parties to the transaction such as mortgage lenders or builders (for new construction purchases) may have special requirements that demand physical signatures.
Do I need to find a lawyer local to where the property is?
It depends. For general single-family residential dwellings connected to municipal services (water, sewer) located within urban boundaries, we can generally close the transaction anywhere in Ontario.
Things get a bit trickier if we’re dealing with very remote cottage/seasonal properties that might have particular localized title issues, in that circumstance, we would recommend hiring a local lawyer.
You have retained us
Why do you need so much information when I sign up as a client?
Real estate transactions have become increasingly complex, and lawyers are required to collect detailed information to comply with several legal and regulatory obligations. The questions we ask help ensure we meet requirements under:
Land Transfer Tax rules
Anti–Money Laundering (AML) rules
Vacant Unit Tax requirements
HST and tax rules
Law Society of Ontario identification and verification rules
Gathering this information upfront protects you, reduces the risk of delays, and ensures that your transaction can be completed smoothly and in full compliance with current laws.
Why do you require us to agree to a retainer agreement and pay a retainer deposit?
We ask clients to sign a retainer agreement and provide a retainer deposit because real estate transactions are complex and high-value. The retainer agreement outlines the scope of work and identifies any additional costs if the transaction requires services outside the standard process.
Opening a new file involves title search, administrative, software, and other third-party costs. The retainer deposit is applied toward your legal fees and helps cover these expenses if you withdraw after we have already incurred costs (for example, if you change your mind and decide not to proceed, or if the deal falls through due to financing or inspection issues). This approach ensures clarity, transparency, and a smooth start to your real estate transaction.
During Closing FAQs
Can I receive all of the amounts required for a purchase file immediately after hiring a lawyer?
No. The amounts required for final closing are typically not available until 1–2 weeks prior to closing. They depend on seller-side adjustments, mortgage amounts, and the searches required for your transaction.
The final amount required from the law office is different from my mortgage advisor’s calculations — why?
Mortgage advisors often estimate based on a percentage of purchase price and approved mortgage amount. These estimates do not include closing costs and adjustments such as property tax adjustments, land transfer tax, legal fees, title insurance, tax certificates, writ searches, status certificates, and other closing costs. Lawyers calculate based on actual amounts owed, not percentages.
Why is the registered mortgage amount and interest rate different from what the bank told us?
Banks and credit unions often approve borrowers for home equity loans rather than conventional mortgages. These may include a conventional mortgage plus secured lines of credit. Lenders often register a higher limit and interest rate range on title to allow borrowers to obtain future loans without incurring legal fees — as long as borrowing stays within the registered limits.
Is title insurance legally required to close a purchase transaction? Can I opt out?
Title insurance is not legally required but is functionally necessary in Ontario. Legal fees are generally based on the assumption that title insurance replaces the need for a lawyer’s title opinion. Title opinions are costly and do not cover future title fraud. Title insurance offers lower closing costs and fraud protection, making it the practical choice for almost all purchasers. If there is a mortgage involved in the transaction, title insurance is almost always required by the lender.
When is the latest we need to obtain mortgage financing?
The mortgage process generally follows these steps:
- Collection of preliminary borrower and deal information
- Pre-approval
- Collection of additional borrower info and property appraisal
- Final approval
- Execution of documentation with the borrower
- Lender prepares instructions and sends them to the borrower’s lawyer
- The lawyer performs searches, collects information, arranges title insurance, and prepares security documents
- Clearing business and legal conditions
- Funds are sent to the lawyer’s trust account
Important: There is a misconception steps 6–9 can happen in one day. In practice, they usually cannot. If lender instructions arrive the day before or day of closing, funding may not arrive in time. Only certain big-bank direct loans can be rushed — and even then, this is the exception. Clients should arrange financing early and may consider parallel applications with multiple lenders if there are no upfront costs.
Post Closing FAQs
What happens if I receive notices of water arrears, tax arrears, or notices to comply after closing?
In residential transactions, seller water/tax arrears are typically covered by the buyer’s title insurance (assuming standard undertakings were obtained). Buyers should pay the arrears to stop interest, send the notice and proof of payment to their lawyer to request a re-adjustment from the seller.
If the seller refuses, the buyer may file a title insurance claim. Work orders and notices to comply are also typically covered if they were already on file with the issuing authority prior to closing.