Closing costs are fees and expenses that are required to close the purchase of a property. Closing costs may include a variety of items depending on the property you purchase (resale or new build, residential or rural, or an investment property, etc.)
For a resale home, common closing costs are things like adjustments on property taxes, propane/oil tanks (if applicable), condo maintenance fees, Land Transfer Tax, real estate commission, legal fees & disbursements, etc.
For new build homes, closing costs are typically things like the Tarion warranty, property tax adjustment, Land Transfer Tax, tree planting, driveway paving, extension or NSF fees on deposit cheques (if any), the installation of a hydro or water meter, etc). All builders are different so you may want to inquire to see what costs will be payable on closing.
How and when do I provide my closing funds?
Our office will communicate with you in advance of your signing appointment to advise you the amount required to close your property on its scheduled closing date. These funds are typically provided to our office by bank draft or certified cheque.
Title Insurance is an insurance policy that protects the legal owner(s) and lender(s) of a commercial or residential property from financial losses resulting from defects in a title to a property or other issues that can arise in relation to the property. Title insurance will cover losses up to the maximum coverage set out in the policy as long as you own, or have an interest in your property. It can also cover most legal expenses related to reinstating or correcting your property’s title.
There are two types of title insurance: lender’s title insurance and owner’s title insurance. Most lenders will require the borrower to purchase a lender’s title insurance policy in order to protect the lender from any problems in transferring the title of ownership.
Although title insurance is not a legal requirement in Ontario, it will provide protection and cover losses such as:
Unknown Title Defects
These are title issues that prevent you from having clear ownership of the property.
Existing Liens Against The Property’s Title
This can happen if the previous owner had unpaid debts from any utilities, mortgages, property taxes or condominium charges secured against the property.
This happens when a percentage of a structure that is on your property has crossed the property line to your neighbour’s and needs to be removed.
Title Fraud occurs when a scammer impersonates a homeowner to falsely assume the title of a property in order to financially gain from either the sale of that property or by remortgaging the property.
Survey and Public Records Errors
Erroneous surveys, flawed public records or other title-related issues that could affect your ability to sell, lease or mortgage your property in the future.
To fully understand what type of protection title insurance can provide you, speak with us to discuss your specific situation and whether title insurance is a good option for you.
Land Transfer Tax (LTT) is payable to the province anytime you acquire land or a beneficial interest in land. If you acquire land or a beneficial interest in land in the City of Toronto, you may be subject to their municipal land transfer tax (MLTT).
To help you prepare for your closing costs, use the calculator link here to see how much LTT and/or MLTT you may be required to pay.
If you are a First Time Home Buyer, you may be eligible for a refund on all or part of the LTT.
To qualify for a refund, you the purchaser:
must be at least 18 years old.
must occupy the home as their principal residence within nine months of the date of transfer.
cannot have ever owned an eligible home, or an interest in an eligible home, anywhere in the world, at any time.
If the purchaser entered into an agreement of purchase and sale before December 14, 2007, the home must be a newly constructed home and the purchaser must be eligible for the Tarion New Home Warranty.
If the purchaser has a spouse, the spouse cannot have owned an eligible home, or had any ownership interest in an eligible home, anywhere in the world, while he or she was the purchaser’s spouse. If this is the case, no refund is available to either spouse.
A title transfer is a process in which a person is either added to or removed from the property ownership or title by the owner. In Ontario, transfers of title are completed by lawyers.
In Ontario, there are two common types of ownership: tenants-in-common and joint tenancy. The main difference between the two types of ownership is the survivorship rights, meaning what becomes of the ownership upon the death of one of the owners.
Tenants-in-common ownership determines that upon death, the two or more people who own a property keep their own interest. Consequently, if one person dies, their share of the property will be added to their estate and be dispersed according to their will.
When owners are registered as joint tenants, if one person dies, the other automatically assumes ownership of the entire property and it is not considered a part of the deceased’s estate. Each person is a 100% lifetime owner of the property and cannot sell their share without consent of the other individual.
Joint Tenancy is the most common ownership structure among legally married spouses in Ontario. When one spouse dies, the successor assumes sole ownership of the property. If the couple has children, the property will likely pass to them when the last spouse dies, through their will.
If you pass away without executing a Last Will and Testament you are said to have passed away “intestate”. If your passing is deemed to be an intestacy your assets will be distributed according to a rigid formula set down by the laws of intestacy. Furthermore, with an intestacy you will have no say in who administers your estate or who may be appointed as a guardian of your children if they are under eighteen (18) years of age.
A Power of Attorney is a legal document in which you grant a person (called your “attorney”) the right to make decisions on your behalf, if and when, a number of circumstances arise. For example, you are no longer able to (due to capacity) look after matters on your own.
There are two types of Power of Attorney:
Power of Attorney for Personal Care:
The person you name as your attorney has the ability to make decisions about your health care, housing, and other aspects of care (such as meals and clothing) if you become mentally incapable of making these decisions.
Power of Attorney for Property:
The person you name as your attorney has the ability to make decisions about your financial affairs (including paying your bills, collecting money owed to you, maintaining or selling your house, or managing your investments).
A Beneficiary is a party who is receiving a gift from the testator. Beneficiaries can be people or organizations.
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