Dotting the i’s

The primary role of a lawyer representing a seller is to ensure that the change in legal ownership occurs properly and that the sellers are paid according to the terms of their contract, less all adjustments that must be made.

To properly change over legal ownership of property, the seller is obligated to convey "marketable title" to the purchasers. The seller’s lawyer must conduct a number of searches in order to determine if any legal problems exist with either the property or the seller themselves.

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Once the seller’s financial obligations are identified and arrangements to satisfy the payment of any debts are complete, the seller’s lawyer must prepare a legal document called a "Transfer Authorization."

This document transfers or conveys ownership of the property from the seller to the purchaser. The Transfer Authorization must be signed by the seller and then forwarded to the purchaser’s lawyer.

The purchaser’s lawyer is responsible for submitting the Transfer Authorization to the Land Titles Office after it is shown that all funds needed to complete the sale are available and adequate fire insurance has been arranged by the purchaser.

The seller’s lawyer will also prepare a document called a "Statement of Adjustments." This document is sent to the purchaser’s lawyer along with the Transfer Authorization. It will tell the purchaser’s lawyer how much money they must send the seller’s lawyer once the Land Titles Office has completed the registration process and created a new Title.

Once the seller’s lawyer receives the money requested from the purchaser’s lawyer in the seller’s Statement of Adjustments, that sum is used to pay out all instruments affecting title and any other adjustments left owing by the sellers. The remaining net sale proceeds are then forwarded by the lawyer to the sellers, as instructed.

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If the seller performed renovations to the property but had not paid the contractor, despite the fact the work was completed, the contractor may have registered a Builder’s Lien against the seller’s Certificate of Title. The Builder’s Lien is referred to as an "Instrument" registered against the Certificate of Title encumbering the property to the extent still owing for the renovations.

For example, if the amount owed to the contractor is $5,000, then $5,000 out of the sale proceeds would have to be used to pay back the contractor so the Builder’s Lien could be removed off the Certificate of Title. The purchaser is not responsible for the debt – it must be dealt with before ownership can properly transfer.

The same is true for any Mortgage or similar financing arrangements registered on the seller’s title by way of a Caveat. Each financial institution must be paid back in full before it will release its security in the seller’s property and allow either its Mortgage or Caveat to be discharged from the Certificate of Title. The seller’s lawyer coordinates the pay out of any such debts and ensures these instruments are removed.

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If any Writs of Execution are registered against a seller's title, the seller’s lawyer will contact the seller immediately to arrange for payment of the amounts outstanding. It is important you do not ignore a Court Order or Judgment requiring you to make payment for outstanding debts. Doing so may delay the timing of being able to sell your home. In some cases this has prevented a seller to transfer clear title and the deal may fall through.

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