Ever wondered if you need a legal professional on your team when it comes to buying a home? Here is a breakdown on the role of a real estate lawyer and why you need one.
By Shannon Moneo | Photo by Belle White
As Andrew Maxwell knows, buying a home is often the biggest purchase in someone’s life. “If you’re spending $1-million on a house, you’re crazy not to spend $2,000 for legal advice,” says the Sotheby’s International Realty Canada agent.
While realtors like him prepare offers to purchase and can offer general advice, they are not legal experts, and, as in all matters where money changes hands, it’s buyer beware. “Getting a lawyer is essential,” Maxwell advises. “Strata laws are mind- boggling, very complicated. And tax laws are always changing.”
B.C., in particular, has had a flurry of new regulations around real estate, including the Speculation and Vacancy Tax and the Land Owner Transparency Act. Throw in the Strata Property Act, Homeowner Protection Act and changes to the Property Transfer Tax, and the necessity for a legal professional is driven home, Maxwell says.
To keep reputations and skills top-notch, reputable real estate lawyers and notaries constantly upgrade their knowledge around provincial and federal tax laws, acts and standards.
The Victoria Real Estate Board’s 2020 president says it’s rare for someone to forgo professional legal services. “In all my years, I’ve never had anybody not use a lawyer or notary,” says Sandi-Jo Ayers, a realtor since 1990.
“Over the last 30 years, real estate purchases have become more complex. People need to be fully aware of all the tax implications,” she stresses.
Eye for Detail
So while there’s no disagreement that a real estate lawyer is practically mandatory, buyers and sellers can choose whether to use a lawyer or notary. “It honestly depends,” says Ayers, who’s partial to lawyers. “The cost can be the same.”
Whether the legal professional charges by the hour or a flat rate with extras added, à la carte, their duties demand accuracy, research and thoroughness, all with an eye to deadlines. Crucial, says Ayers, is checking at the Land Title and Survey Authority of B.C. to ensure no one other than the seller has legal rights to the property and to see if there are registered easements or restrictive covenants. As well, the professional can review the appraisal and building inspection and prepare the Statement of Adjustments. For purchasers with tenants, they can prepare new leases or tenancy agreements.
Urmas Anniko has been practising law for over 35 years, and estimates between one- third to one-half of his business involves real estate transactions. In most cases, the seller is waiting to get paid, so their needs are not overly demanding. It’s the buyer who needs timely assistance. “I encourage people to talk to a real estate lawyer before they write the deal,” Anniko says. “The purchaser is taking all the risk. You have to make sure all the concerns and risks are dealt with.”
IN CASE OF EMERGENCY
Anniko cites a property title that had 12 charges on it, which included easements, covenants and rights of way. Other snafus can include purchasers who want to back out of a deal, such as when they find problems like water ingress. Usually such problems can be solved without resorting to the courts, the lawyer says, noting that 98 percent of sales go through smoothly. Which is why he acknowledges that for basic deals, there isn’t a lot of difference in using a lawyer or notary. Yet if something goes sideways, such as adding changes to the title or the buyer wants to renege on the deal, a lawyer is better positioned to handle emerging problems.
Perhaps as a testament to the infrequency of obstacles, a majority of real estate transactions in B.C. are handled by about 400 notaries in the province, says Morrie Baillie. A Victoria notary since 2013, Baillie explains that more than half of the Society of Notaries Public of B.C. members have completed the Master of Arts in Applied Legal Studies course through Simon Fraser University, making them experts in real estate, which is where much of Baillie’s work lies.
“I live and breathe this every day and am aware of all the pitfalls,” she says. “I do everything from mobile homes to multi-million dollar homes and strata duplexes. I’m very hands- on, approachable.”
Like Anniko’s experiences, problematic deals are rare. In one case a marriage was dissolving, which made for messy work. Another time there was a holdback in funds until a roof was repaired. Other delays can include whether the buyer can get a mortgage or if power of attorney comes into play for a seller, says Baillie.
While Victoria’s real estate market may have cooled by a few degrees, all sides usually want the deal to close fast, Ayers says. “You need a legal professional to have a smooth transaction in a timely fashion.”
Anniko adds, “The contract [of purchase and sale] is the linchpin. The most important thing is to have a sober second look at the contract.”
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