Monthly Archives: March 2014

Disclosures By Sellers

In a real estate sale and purchase, there are some voluntary disclosures obligated on the part of sellers. These disclosures must not be taken casually as the impact could lead to serious consequences even after the date of closing. This disclosure could mainly be associated with the following besides others:

Latent or material latent defects– The material latent defects must be disclosed by the seller. If such defects in the listed property are known to the Real Estate Agent or brokerage, then it becomes their obligation to bring such defects to the attention of the prospective buyers.

Stigmatized property– It amounts to disgrace or factors negatively affecting the values of property. These factors may include incidence of murder, suicide in or on the property, or purported existence of ghost. These kinds of situations must be disclosed.

Existence of UFI (Urea formaldehyde foam insulation) – If existed in the property, and known to the sellers, must be brought to the notice of the buyers to avoid any future litigation.

Grow House-illegal growing of marijuana or growing of any banned substance. Such activities typically are associated with residential homes. Some noticeable indications of the house used for grow house could be: excessive moisture, rusting in the furnace and flues and chimneys, unusual staining on walls and floors, bath room alterations, unusual smells, utility line alterations, etc. There are specific regulations and law governing to these kinds of situations and the real estate agents should be careful while processing Agreement of purchase and sale.

Termites: If the property has history of termite issues.

Major repairs– Could be to the foundation, roof or structure of the property.

Water damage and mold– If the home has had a leaky roof, a flooded basement or dampness and mold in certain areas

Although it is not mandatory requirement or selling obligation on the part of the seller to get his home inspected by a certified home inspector, however, as part of good selling strategy and to avoid future litigation it might provide relief to the seller. Any issues pointed out by the inspector, get such observations attended to fix and disclose and let people know what you have done to resolve such issues. It makes you like a serious, honest and conscientious seller.

From legal point of view, the sellers’ strategy must be to avoid any future litigation costing thousands of dollars and let the issues must be disclosed to the prospective buyers which are materially important to decide the market value of the property.

(Please note, these contents of the newsletter are in brief and only for general information and cannot be construed as legal advice. If you have any real estate relating transaction coming up, please contact me in confidence to discuss in detail)


Criminal Background Check

Criminal Background Name Check-RCMP

Criminal background name check might be need for following purposes


Canadian Citizenship


Landed Immigrant Status

Name Change

Visa/ Border crossing/ Foreign Travel/ Work

Volunteer Employment

Please note that if there is a possible criminal record match, the best confirmation could be possible with the submission of fingerprinting.


Family Law

Separation Agreement

Cohabitation Agreement

Marriage ContractsChild Adoption

Custody, Support and Access

Uncontested Divorce

Family Mediation and Negotiations

Real Estate Law

Sale or Purchase of Residential Real Estate-home or condominium

Sale or Purchase of business / Commercial unit

Leasing residential or commercial units

Mortgage refinancing and

Title Transfers

Agreement review

Wills and Power of Attorney

Condominium Status Certificate

What is Status certificate?

Status certificate is a brief report provided by the Condominium Corporation that gives information on the current status of the Condominium Corporation. If you are buying a resale condominium, usually your agreement of purchase and sale is conditional, upon review of the Status Certificate by your lawyer. Status certificate is to be reviewed by the purchaser’s lawyer for the following:

1. Reserve funds-The reserve fund represents the account that will be drawn from for ongoing maintenance and repairs of the building. A well-managed condo should have a healthy amount of cash in its reserve fund at all times

2. Arrears of common expenses for the unit in question-The Status Certificate will mention if the unit you are considering buying is in arrears or if the owner is up-to-date with their payments

3. Increase of the common expenses for the unit since the date of the budget for the corporation for the current fiscal year and reasons for such increase by the Board of Directors

4. Levy of any special assessment (e.g. new roof, replace heating system)against the units in project to increase the contribution to the reserve funds and reasons for the special assessment levied by the Board of Directors- It is important to know whether the current owner paid for these or will you be responsible for this?

5. Any judgment and any outstanding legal actions against the corporation or the Unit the purchaser is intending to buy, against the condo corporation and the status of any legal actions to which the condo corporation is a party. If there are any outstanding legal actions against the corporation you may be responsible for paying for the judgments or other results of these actions. Buyer beware

Condo Corporation is obliged to provide:

1. A copy of the status certificate

2. A copy of the budget of CC for current fiscal year

3. Last annual audited financial statements for the CC

4. Auditor’s report on fiscal statement

5. Copies of current declaration

6. By laws, rules and regulations

7. A copy of the certificate or memorandum of insurance for each of the current insurance policies held by the CC

Closing Adjustments

The Agreement of Purchase and Sale states that that balance of the purchase price on closing date will be paid in cash or certified cheque subject to usual adjustments. Closing amount will include any such adjustments payable on closing.

On a resale home, adjustments consist of items already prepaid beyond the closing date by the seller that benefit the purchaser after the closing date, which are pro-rated, and a credit is given to the seller as an adjustment on closing. Some examples of closing adjustments on a resale home are for prepaid realty taxes, prepaid condominium fees (if the property purchased is a condominium), and fuel oil (if property has an oil furnace). Any bill until the closing date is the responsibility of the seller and after that is the responsibility of the buyer.

On a new home purchased from a builder, closing adjustments are much higher than on a resale home. The adjustments include hydro and water meter installation costs, Tarion New Home Warranty Enrolment Fee, Tree planting, enrolment fee, driveway paving, grading deposit, gas water heater, educational lot levy, land taxes, real property taxes, GST/HST Rebates and many other items which are not normally adjusted when one buys a resale property.

The buyer’s lawyer wills usually advice the buyer about all the closing adjustments.

Avoid pitfalls in Real Estate closing

When it comes to real estate purchase or sale, residential or commercial, sometimes it happens that some steps are taken unwittingly without appreciating the ramifications on the clients or the interest of the agents.

One key aspect to be considered before listing the property on sale and preparing the Agreement of Purchase and Sale is to identify the seller. So let us see who is a seller-?

1.  An Individual-The persons registered on title to the property should be shown

as the vendors in the agreement of purchase and sale. Be careful, a vendor suffering from incapacity does not have the capacity to contract. This situation is subject to legal scrutiny.

2.   A   Corporation-Properties   owned   by   Corporations   must   execute   all documentation by affixing the corporate seal through its authorizing agents, being its officers and directors. The sale transaction must be authorized by a special resolution of the shareholders.

3.   A Partnership-where partnership owns a property, all partners shown on the title of the property must execute the documents.

4.   A Mortgagee-A mortgagee can sell the property under the power of sale once the redemption period has ended. The mortgagee has the authority to execute all the documentations; notwithstanding its only interest in the property is the mortgagee.

5.   A power of attorney- An attorney pursuant to a valid power of attorney has the authority to sell the real property provided the power of attorney includes the sale of the property. Power of attorney should refer to the sale of the property by specifically mentioning the parcel of land by address and legal description.

6.   A receiver appointed by Court- A receiver has the authority to sell a property as the court order provides.

Do you know what happens when the owner of the property dies? It leads to many consequences:

One, if the deceased owner owned a property with another as joint tenants, the property automatically goes to the surviving joint tenant.  The surviving joint tenant should then be registered as the owner of the property to complete the transaction.

Two, if the property is a matrimonial home and title of the property is owned as joint tenants by the deceased owner and a non-spouse, the joint tenancy is severed immediately prior to the death.

If the owner dies without a “will”, known as intestate, the transfer of property is done according to the Law of succession. This is further subject to legal provisions on the subject. However if the owner had a Will, the property is transferred in accordance with the provisions in Will. There are provisions with respect to the power of sale. Check with me on this subject if that is the situation. The role of the Trustee is very important in this matter.

Please note that this is for information only and not to be considered a legal opinion or advice and each situation is different.  You need to check up with me along with details of your case.

Feel free to call me

Balvinder Kumar

Barrister, Solicitor, & Notary Public

201-10 Kingsbridge Garden Cir, Mississauga, ON L5R 3K6

PH: 905 290 7205