Sinclair Cragg Lawyers Lawyers and Notaries Public
Phone 403.543.9955

Real Estate Transactions

We take pride in our record of good client service and we strive to make every transaction a positive experience. There is proper lawyer supervision on all files. We carefully review Real Property Reports and other potential problems that may occur and ensure that each issue is dealt with promptly and professionally.

We are available for telephone consultations on any questions about your transactions. For example, we can provide opinions and reviews of Real Property Reports or contractural terms when a transaction is still conditional.

Our office quotes prices for all transactions on a flat rate basis. GST , however, is not included in the flat rate price. We do not bill extra for most disbursements and other charges (such as tax searches, minor land title searches/changes, faxes, photocopies, couriers, long distance and postage).

Buying and selling Real Property is, for the most part, a very straightforward consumer transaction. Your realtor and mortgage specialist will do most of the groundwork for your transaction, but in the end a lawyer is required to conduct the closing.

Home Sales

Our office can handle all kinds of transactions from bareland, existing house properties and condominium Units. Our staff is fully trained to prepare and close your transactions with thorough detail, including the review of Real Property Reports and Condominiums Plans where applicable.

We conduct proper tax/title searches and review of contracts. We ensure that all loans, commissions and other charges are paid out promptly on closing and that a report letter is sent within a reasonable time to our clients.

For more detailed information on the legal aspects of selling a home and the costs involved, please see the paper: Legal Fees Explained - Part One - Sale of Property.

For information on real property reports and how important they are when you are selling your home, please see the paper: Legal Fees Explained - Part Three - Real Property Reports.

Home Purchase

Our office is up-to-date on the best practices for Residential Conveyancing and we are capable of fast and efficient closings for new build construction, existing home and condominium properties. We make use of special closing protocols and title insurance to ensure that our clients not only get possession of their home on time, but also to reduce interim/bridge financing costs. Notwithstanding sometimes lengthy delays in Alberta Government Land Titles registration times, we can minimize or eliminate late interest charges altogether in most cases.

For more detailed information on the legal aspects of buying a home and the costs involved, please see the paper: Legal Fees Explained - Part Two - Purchase/Mortgage of Property.

Mortgages

Whether you are mortgaging a property to purchase a home, refinancing a property for an equity take out/ debt consolidation or completing a construction draw mortgage, our staff is experienced with all residential mortgage lenders.

Because most mortgage instructions are received less than two weeks before a possession date, it is extremely important that you choose a law office like ours that can accommodate these tight time lines. For debt consolidations, we can also coordinate reasonable turn around times and speedy payout of higher interest loans.

Insurance

When buying or selling real property, various kinds of insurance requirements enter into the picture. For many clients - especially the first time homeowner - insurance obligations can be overwhelming.

We outline five main kinds of insurance in real estate transactions and explain basically how they apply.

House Insurance

When a person buys a home, common sense dictates that there must be a Homeowner Insurance policy in place. Homeowner Insurance includes coverage for losses to a structure or personal property due to damage such as fire or theft of property. A Homeowner policy also provides liability insurance for the homeowner in the event that someone is hurt on the property and sues for damages on those injuries.

A Homeowner policy is absolutely required when obtaining mortgage financing to buy a property. The lender will require that they be listed on the policy as a first loss payable in the event that there is a significant damage claim. Often the lender will require that the insurance be stated with a "guaranteed replacement cost" - meaning that if the loss exceeds the stated policy limit, the insurance covers the cost in any event.

It is important to ensure that Homeowner Insurance is set up prior to a possession date and the lawyer has received written confirmation from the insurance broker that it is in place. Keys cannot be released until that happens.

Condo Insurance

A Condominium Homeowner policy is similar to standard house insurance, except that the condo policy mainly insures the inside walls of the unit. A Condominium Corporation is required to maintain structural insurance and liability insurance on the buildings and other common property, but that insurance does not extend to the personal property of a unit owner or the fixtures and improvements in a unit.

Condo insurance is often a fraction of the cost of regular house insurance, but it is something that is an essential part of condo ownership.

Title Insurance

Title insurance is another useful kind of insurance in buying and selling property. In most cases, it is not required to close a transaction because it covers certain ownership and title risks outside of the standard conveyancing process. Nevertheless, our office does recommend title insurance to anyone buying property due to its low one-time cost and broad range of risk coverage.

Common coverage under a title insurance policy for a home buyer includes forgery/fraud protection; zoning/permit violation issues; building location/encroachment problems; tax and utility arrears/condo fees & assessment arrears if not known at time of closing. The typical cost for most homeowners is a few hundred dollars and coverage lasts for the entire time the home is owned by that owner.

When a person lists a home for sale, there is sometimes a concern about potential municipal compliance problems with the building/improvement locations that would be disclosed on a Real Property Report. In those cases, it's important to ask a lawyer's opinion, but a seller may discuss with their realtor the option of negotiating a term in the contract to provide a buyer with an existing copy of an older existing RPR and pay for the buyer to obtain title insurance in lieu of an updated RPR with compliance. The title insurance would provide protection for the buyer in the event that an improvement is later shown to violate municipal compliance rules.

Please note, that this is not a standard term of the real estate contract and it must be negotiated in writing prior to waiver of conditions. In our opinion, it is important that a seller have the facts and make an informed decision in this regard because the alternative of having an RPR with compliance problems can lead to closing delays, holdbacks and potentially serious costs to the seller.

Mortgage Default Insurance

If a person buys a home with less than twenty to twenty-five percent down payment, the mortgage is classified as a "High Ratio" mortgage. For example, a mortgage based on a 5% down payment is considered by all lenders as extremely risky and they would not normally make such loans. Fortunately there is mortgage default insurance - more commonly known as the CMHC/GENWORTH fee - which is added to the total mortgage. This insurance basically guarantees to the lender that in the event of a default of the mortgage by the borrower, all of the lender's costs associated with a foreclosure will be paid by the default insurance if there is not enough equity in the home to cover those costs.

Because the lender has a guarantee they will suffer no loss, they are willing to loan the funds. The borrower, however, is personally liable for any claim that is paid out to a lender by the insurer. Once a claim is paid, the insurer will attempt to collect any funds directly from the borrower.

If a mortgage is assumed by a new buyer and that person defaults on the loan, the original borrower is still liable for the shortfall, so a person would be wise to never allow anyone to assume their high-ratio mortgage.

Life/Disability/Critical Illness Insurance

When someone purchases a home or condo, it is probably the most significant investment they will make in their lifetime. Many homeowners also have spouses or dependent children that may depend on the mortgage payments being made. Because of the risk that a borrower may suffer a critical illness, disability or death resulting in an interruption of mortgage payments, many lenders offer insurance to protect against this.

Often this insurance is packaged with the monthly payment of the mortgage. In the event of a claim, funds are paid to cover the mortgage payments or pay the mortgage in full outright.

Our office strongly recommends obtaining life/ disability/ critical illness insurance wherever possible, but we also advise that it be obtained in consultation with a knowledgeable insurance broker. Obtaining direct insurance as part of the mortgage package is often convenient, but it may not always be the best kind of policy and we always encourage clients to look at various options available, especially in comparing rates and types of coverage.

If you have questions about any of the kinds of insurance discussed above or need more information, we can make it available to you or refer you to a knowledgeable insurance broker for pricing quotes or coverage information.

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