Real Estate

Week 1: May 5, Thur

What is Real Estate?

  • Includes land, anything above the land, and anything below the land, including permanent attachments.

  • Encompasses housing, buying, selling, and commercial real estate.

Real Estate Definition Components

  • Land plus anything above and below it (earth's surface).

  • Ownership involves real estate rights or interests, not direct ownership of the house.

What's Included in a Property Sale?

  • Assessment on a per-file basis.

  • Trees and fences typically included.

  • Car typically not included (considered chattel).

Inclusion Clarification

  • Any items to be sold with the house must be included in the contract.

  • Buyers can negotiate for specific items to be included.

Real Estate Activities

  • Activities saved for next week's lesson include assessing properties online through realtor.ca.

Lawyers and Law Clerks in Real Estate

  • Real estate is a subject area that only lawyers can take off.

Real Estate Firms

  • Firms may specialize in real estate only or handle it with other areas of law.

  • Market volatility affects transaction volume.

Real Estate File Process

  • 90% of the time, the agreement of purchase and sale is already signed.

  • Clients may seek independent legal advice before signing.

  • Involves money and a legally binding contract.

Key Contract Elements

  • Offer and acceptance are key.

  • Consideration (even $1) is required to validate the contract.

Stages in Real Estate

  • Offer, signed agreement of purchase and sale, survey review (mandatory), title search, title insurance, document preparation, document exchange.

Importance of Title Search

  • Conducted multiple times to ensure clear title.

  • Confirms seller's ownership and identifies claims/liabilities.

Title Insurance

  • Protects buyer against title/ownership issues.

  • Lawyers typically require clients to purchase it.

Loss Coverage Types

  • Insurance may cover losses from off-title matters.

Taking Title

  • Buyers specify how they wish to take title (e.g., tenants in common, joint tenancy).

Document Preparation

  • Both seller's and buyer's lawyers prepare and exchange documents, and then the parties sign.

Preparing for Closing

  • Lawyers exchange documents and transfer for registration.

Final steps

-Buyer's lawyer conducts last-minute searches before ownership changes.

Closing date

  • Transactions are registered and ownership changes hands.

Post-Closing Requirements

  • Notifying relevant offices of title change (now client responsibility).

  • Addressing outstanding payments.

  • Lawyer follow-up on undertakings (personal promises).

Real Estate Purchase Startup

  • Starts with an offer by buyer signed by real estate agent and presented to the real estate agent of the seller.

Parties in Agreement

  • Seller and buyer agree to transfer title on closing date.

  • Agreement includes terms and conditions of sale.

  • Adam Painting Example.

Roles of Lawyers

  • Seller's lawyer responds to buyer's concerns.

  • Buyer's lawyer ensures title is transferred as promised.

  • Buyer's lawyer typically has more work.

Surveys

  • Land surveys confirm property boundaries and compliance with zoning requirements.

  • Surveys may be unavailable, but title insurance can mitigate issues. Discuss more in detail later.

Zoning Considerations

  • Government zoning dictates land usage.

  • Each area of land is designated to specific uses and this dictates development or business purposes.

Title Search Key Points

  • Verifies seller owns the land clear of claims/liabilities.

  • Correct defects or buyer advised against purchase.

Title Insurance Policy Information

  • Protects buyer from title-related losses.

  • Is purchased for a one-time payment.

Insurance Continued Info

  • Lender may require it if providing a mortgage.

  • Different policies with varying coverage.

  • Exclusions apply, so coverage isn't guaranteed.

  • What is meant by on title to be determined.

Taking Title Continued Info

  • Lawyers discuss with clients of other co-owners to take property.

  • Co-owners could be splitting the ownership 50/50 or 80/20.

  • Could be tenancies in common vs having point tenancies which will discussed later.

Document Preparation continued Info

  • Seller's versus buyer's Lawyers are doing the different preparation and then the parties sign the documents.

  • Preparing for Closing in now the next stage where documents are exchanged or signatures need to be verified on docuSign.

  • Last Minute Searches occurs to assure all aspects of the property is where the parties agreed it would be.

  • The lawyer gets satisfied that the parties are going through with the transfer and the transfers are being registered now.

Closing Key Terms to be Defined

  • What docs are expected?

  • Meaning of Terror review and Release?

  • Different sub-searches that can occur when doing a report?

  • Talk about registrations?

  • Mortgages as well on this transfer?