Anne McFarlane – June 2016
What does it mean to have a “Lawyer Review” for a property transaction?
Whether you are buying or selling, one of the first conditions you will have to meet in your transaction is the lawyer review date. This is an imposed deadline for your real estate lawyer to have their first review of the Agreement of Purchase and Sale and make preliminary searches to ensure this transaction is in keeping with your interests. At this stage of the transaction, our real estate team (including your lawyer and the property paralegal on the file) work closely with your realtor and financial advisor to ensure all parties have met their obligations.
After a detailed review of your file, our real estate lawyers will provide you with information on a number of important pieces of your transaction. Not every transaction is the same, so the list below is a starting point for what you can expect on your Lawyer Review Date:
Schedules: Your lawyer will review any and all schedules to the Agreement of Purchase and Sale and highlight any issues or concerns. Depending on the type of property you are purchasing and what is to be included in the Agreement, there can be a number of schedules to your Agreement. You should review these in detail to be sure your questions are answered on the lawyer review date.
Other Conditions: Your lawyer will review any conditions in your Agreement of Purchase and Sale that require action on your part. These include final deadlines for issues such as financing, inspection, tax confirmation, etc. Your lawyer will highlight these dates in your Agreement and ask you to ensure your obligations are met on or before the deadline. Your lawyer will also become aware of the other party’s obligations, and will ask you to familiarize yourself with these deadlines to ensure they are not missed.
Property Disclosure Statement: If this document has been received by your real estate lawyer, she will review this document and highlight any concerns. This document, completed by the sellers of a property, is meant to disclose any issues with the property (structural, mechanical, electrical, plumbing, etc.) and what work has been done on the property to address these concerns. This document also discloses the sources of heat, water, and sewage, and what, if any, equipment is leased. You should be sure to review this document in detail and address any concerns directly with your lawyer.
Taxes: Prior to the lawyer review date, you should receive confirmation that the property taxes have been paid on the subject property. Your lawyer will review this with you and any possible consequences if the taxes have not been paid by you or another party to the transaction. This will also be confirmed before the final closing date.
Judgments: Your lawyer will perform the necessary searches on the Nova Scotia Property Online system to determine if there are any judgments which may attach to the subject property. As with property taxes, these searches will be completed again on the day of closing. If there are any concerns regarding outstanding judgments, your real estate lawyer will highlight these early on in the transaction, and take the appropriate steps to be sure the creditor is satisfied before the completion of the transaction.
Zoning: On the lawyer review date, your lawyer will have reviewed the zoning map associated with your property to determine which municipal by-laws apply. This will determine the potential use(s) of the property, which can affect a buyer’s willingness to move forward with a transaction. If you have any questions on this particular piece, it is always best to address them with your lawyer far in advance of the lawyer review date, if at all possible.
Condominiums: If you are buying or selling a condominium property, your lawyer review will address a number of additional aspects that are not present in other residential transactions. This includes a brief review of the Minutes and the Declaration or By-Laws as well as information about the Financial Statements and Reserve Fund Study of the condominium corporation. It should be noted that, although your lawyer will see these documents, it is prudent for you to review them in detail. It may also be necessary to hire a financial advisor to assist you in review of the Financial Statements and the Reserve Fund Study.
If you have an upcoming Lawyer Review Date and are not sure where to turn, Anne would be pleased to assist you with your real estate transaction.