Most first-time home buyers might not be aware that a real estate lawyer needs to be involved in their transaction. You may find yourself asking, “Why do I need to pay a lawyer at all?”. A home purchase is likely to be the biggest financial transaction in your life. While a knowledgeable Realtor is essential to a successful real estate transaction, there are certain aspects of the real estate transaction that only a lawyer can help with. For a deep dive into everything you need to know about real estate lawyers in Canada, check out our guest blog on BYVI!
1. They Can Interpret Legalese
Quick - what’s the difference between joint tenancy and tenancy-in-common? Choosing the wrong option can have an immense impact on your estate, potentially depriving your children of their inheritance.
Most of the terminology used by legal practitioners is not intuitive, and meanings sometimes differ between jurisdictions. If you type a legal question into Google, you’re likely to get very interesting answers that are unfortunately only accurate if you happen to live in the United States (perhaps even just one particular American state), and if you rely on that answer, you may get yourself in trouble.
2. They Have Access to Information
Lawyers carefully review the title on your potential property, to determine whether there are issues your Realtor wouldn’t have been aware of before you signed your purchase agreement. There may be liens, access easements, restrictions on the use of the property, zoning issues, mergers with neighbouring properties, and all manner of other issues that only a real estate lawyer can identify. Lawyers can also help you to arrange title insurance to cover issues that cannot be identified before closing, so that you’re covered no matter what issues may arise.
3. They’re Unbiased
Unlike a Realtor, your lawyer gets paid whether your transaction closes or not. This probably sounds like a bad thing! But what it really means is that your lawyer is not incentivized to close a bad deal if it’s not in your best interests to do so. Your lawyer investigates all the possible issues that might turn your dream home into a nightmare. Maybe you found the perfect lakefront building lot, but your Realtor wasn’t aware that a mining company has a perpetual lease registered on title, allowing them to drill for minerals underneath the site of your future home. An unscrupulous Realtor, motivated by commission, may try to talk you into closing anyway. Your lawyer would advise you against building on a site where heavy machinery may enter your land and tear up the earth on a regular basis.
4. They Fix Problems
Lawyers don’t just identify potential issues - they also fix them. Recently, we closed the purchase of a farm property where issues with the septic tank were observed after the Agreement of Purchase and Sale was signed. Our buyers obviously did not want to buy a property with a non-functional septic system, and the Agreement included a warranty that the septic system was in good working order. The sellers’ lawyer tried to assert that the warranty only applied to the date the Agreement was signed, which was nonsense. I pointed out that if our clients withdrew from the deal, the sellers would have to re-list the property with a broken septic system, which would greatly devalue the property and result in a lower sale price for his clients. As the representative of the buyers, we were able to calmly negotiate a resolution in which the sellers agreed to provide an abatement on the purchase price to account for the cost of replacing the septic system.
5. They Protect You When Deals Go South
Sometimes, despite everyone’s best efforts, a deal cannot close. Maybe your appraisal came in too low, and your lender can’t provide the financing you need. Your lawyer can help you arrange an extension to secure alternative financing, and can provide creative options including negotiating a vendor take back mortgage to make up the deficit in funds. Maybe your buyer just has remorse about the price they agreed to pay. Your lawyer can help you coerce the buyer into fulfilling their contractual obligations, or give you advice to best protect your position if you have to seek damages against the buyer.
6. They’re Always Learning
Full-time Ontario lawyers are required to spend at least 12 hours a year continuing their legal education. The rules change a little bit each year, so it is important for lawyers to keep on top of the latest developments. Lawyers are encouraged to attend seminars, interact with colleagues, and keep on top of changes to legislation affecting their practice. You can trust your real estate lawyer to give you the best advice based on the latest developments.
7. They Know About Things Besides Real Estate
Every lawyer spends 3 years in law school and an additional year articling (which is essentially an internship in a law firm). All law students learn a bit of everything - criminal law, property law, torts, contracts, family law, wills and estates, etc. Even though each individual lawyer may not be an expert in every field, all lawyers are aware of how different fields of law interact. Real estate law, for example, has a lot of crossover with family law and estate planning, since your home is usually your most valuable asset, and will play a vital role in family law disputes and division of estate assets. Lawyers are also good at collaborating - so if your particular needs are outside the scope of your real estate lawyer’s base of knowledge, they can refer you to a lawyer who can provide the expertise you need.
Collaborating with lawyers can be a tricky process, which is why we created Doormat to help alleviate the stress involved with real estate transactions. Reach out to us today to learn how we can provide the best possible experience for real estate legal services!