Real Estate

The Land Titles System:

In New Brunswick the government is in the process of converting the land registry system to a Land Titles system. Under the old system, every time a property was sold or mortgaged, a lawyer had to conduct a search at the county Registry Office to make sure that the owner had "good title". Once a property is registered under the new system the provincial government guarantees title and a full title search is no longer necessary. Eventually all properties in New Brunswick will be converted to the Land Titles system.

In New Brunswick, real property is conveyed when a Transfer (formerly called a Deed) is registered in the Registry Office for the county wherein the land is located . For example if you purchase property in the Parish of Douglas you would register the Transfer and any Mortgage documents in the York County Registry Office, as that parish is in York County. After the documents are registered, the Registry Office issues a Certificate of Registered Ownership indicating the name of the property owner(s) and listing all of the encumbrances registered against the property (mortgages, easements, restrictive covenants, etc.) .

Purchasing a Home:

Many people who purchase a new home are assisted by a real estate agent, who helps them find a suitable house, assists with the offer to purchase, and prepares an Agreement of Purchase and Sale. The Agreement of Purchase and Sale is a contract between the vendor (seller) and the purchaser that sets out all of the terms and conditions of the sale, such as the purchase price, the amount of the down payment, whether or not the sale is "conditional" on the purchaser obtaining financing or selling his or her existing home, whether or not appliances are included, and the closing date of the transaction, etc. If a real estate agent is not involved, a lawyer can assist in preparing the Agreement. It is strongly recommended that both parties to an Agreement of Purchase and Sale seek legal advice prior to signing. Copies of the signed Agreement should be given to the vendor, the purchaser, and their respective lawyers.

In most situations the purchaser will be required to arrange financing (a mortgage) from a bank or financial institution. The bank will require a copy of the Agreement of Purchase and Sale and various other supporting documents from the purchaser. Once the purchaser has to obtain financing, that is the mortgage has been approved, the bank will forward mortgage instructions to the purchaser's lawyer.

The vendor's lawyer approves the Transfer and other closing documents, and has them properly signed by the vendor. The purchaser's lawyer reviews those documents to make sure they are correct, establishes that the vendor has good title to the property being conveyed, and prepares the purchaser's Mortgage.

Although the Agreement of Purchase and Sale specifies a purchase price, the actual cost to purchase the property on the closing date will likely be higher or lower due to adjustments for taxes, water rates, oil or propane costs, repairs or other matters. With respect to the purchase of newly constructed homes and in some other circumstances, Harmonized Sales Tax may have to be paid. The final closing figure is negotiated and agreed by the parties' lawyers prior to closing.

Legal Fees and Disbursements:

The purchaser's legal fee and associated costs (disbursements) will vary depending on numerous factors. For example:

• is the property registered under the new Land Titles system?
• does the purchaser require a mortgage? Will there be any secondary financing?
• is the mortgage a "construction mortgage" with multiple advances?
• what are the mortgage provider's instructions to the lawyer?
• does the mortgage provider require a building location survey and/or title insurance?
• is there a mini-home involved?
• is the property commercial or residential or a new construction or a resale home?

Other costs are fixed. Transfer Taxes are 1/4 of 1% of the purchase price or the assessed value of the property, whichever is greater. For example, if the purchase price is $100,000.00, the Transfer Tax which must be paid is 0.0025 x $100,000.00 = $250.00. Registration of a Transfer (Deed) and a Mortgage are each $65.00 (unless more than one property is involved, in which case the cost is $65.00 per property).

The legal fees and expenses for selling a property are generally less than when buying. The legal fee may vary in the event the vendor does not have good title or if a dispute arises between the vendor and the purchaser which must be resolved. There is a fixed cost of $65.00 (per property) to register a Discharge of Mortgage or a Discharge of Judgment, etc. if required.

There are a multitude of intricacies involved in the purchase and sale of property, chains of title to land, different types of mortgages, etc., and many other elements which require the knowledge and skill of experienced lawyers. Whether you are a purchaser or a vendor of residential, commercial or industrial property I have the knowledge and experience to ensure that your interests are properly represented. If you are in the process of purchasing or selling property I would be happy to assist you. Please contact me for more information.