Real estate FAQs

What is an Occupancy Closing?

Occupancy closing generally occurs only for new construction Condominiums (commercial and residential). Pursuant to the Agreement of Purchase and Sale, the Seller may require the purchaser to occupy their unit before the title can be transferred to their name. This is called an Occupancy Closing. During an occupancy closing, a Purchaser must assume the occupation of their unit and pay the occupancy fees until the final closing (i.e. the transfer of title to the Purchaser’s name). For a new construction Condominium, a Condominium Corporation has to be created before title of a unit can be transferred to a purchaser. Until the Condominium Corporation is created, the title to a unit cannot be legally transferred and a mortgage cannot be registered. Developers do have rights to extend occupancy dates and final closing dates in accordance with the provisions of the Agreement of Purchase and Sale, the Condominium Act, and Tarion provisions (for residential units). Commercial and industrial condominiums usually contemplate the delivery of shell units to Buyers at the occupancy closing. Buyers are then expected to finish the units themselves.

What are Occupancy Fees? 

During an Occupancy Closing, the Purchasers are required to pay Occupancy Fees until the title to their unit can be transferred to their name. Occupancy fees are the fees that a Purchaser must pay for the time period between taking occupancy date and the final closing date. Occupancy Fees are generally a combination of the estimated common expenses as provided in the builder’s/condominium’s Disclosure budget, estimated realty/property taxes for the unit, and interest (as provided in the Agreement of Purchase) on the unpaid balance of the purchase prices due on final closing. AS a purchaser of a new construction condominium unit, it is important to know that occupancy fees are not credited against the final purchase price to be paid by a Buyer, unless otherwise mentioned in the Agreement of Purchase and Sale.

What is Title Insurance? 

Title insurance is an insurance policy that protects both lenders and owners of a residential or commercial against any losses that are related to the title of a property. The policy will protect the purchasers as long as they own the property that the title insurance was purchased for, and will cover losses up to the maximum coverage set out in the insurance policy.

There are two main types of title insurance policies: an Owner’s policy and a Lender’s Policy.
The owner’s policy sets a maximum amount of coverage and protects the property owner(s) from various title related losses that are listed in the insurance policy, for as long as the property is owned. A lender’s policy provides coverage for the amount of the mortgage and protects the lender from losses in the event that the property’s mortgage is invalid or unenforceable due to any title related losses.

A title insurance policy protects against unknown title defects. Unknown title defects could be title issues that prevent a purchaser from having a clear title or ownership of the property; such as: ·

  • Existing Liens: Title insurance offers protection against existing liens against the title of a property. For example: There could be a situation when a previous owners has unpaid utility debts, unpaid mortgage debts, unpaid property taxes or unpaid condominium charges secured against the property. ·
  • Encroachment issues: Generally if a survey is unavailable and the lawyer is unable to provide legal advise in the absence of a survey, then a title insurance policy protects purchasers against issues such as a structure on the property needs to be removed because it is on a neighbouring property ·
  • Errors in surveys and public records ·
  • Other issues related to the title of a property that could possible affect affect a purchaser’s ability to sell or mortgage their property in future.

What is a Statement of Adjustments? 

During a real estate transaction, the seller’s lawyer provides a Statement of Adjustments to the purchaser’s lawyer. A Statement of Adjustments is a document that outlines all costs to a buyer and adjustments to those costs; if any. The statement of adjustments is prepared to ensure proper accounting of the financial obligations of the seller and the purchaser, and to calculate the exact amount that a purchaser has to pay to the seller on the closing date. For example: Let’s assume that you have purchased a property for $500,000.00, you have paid a $10,000.00 deposit for this home and it is set to close on June 19, 2019. Therefore, the statement of adjustments will reflect the purchase price of the property, the deposit paid and the seller’s share of the property taxes up until the date of closing. However, the list of items will vary depending upon a transaction and the type of property you are purchasing and can includes items such as: common expenses, HST on the purchase prices and HST rebate and mortgage amount.

What does it mean to hold title for a real property?

Title is the legal term that means being a registered owner of a property.

What are the different ways of holding title for a real property in Ontario?

  • Sole Ownership: If an individual purchases a property alone, he/she would take the title in their own name as a sole owner.
  • Joint Tenants: When the purchasers of a property are registered as joint tenants, each owner of the property owns the whole of the property.
    That is, if purchaser A and purchase B own the property as joint tenants, then purchase A owns 100% of the property and purchaser B also owns 100% of the property. As joint tenants, the purchasers have a right of survivorship. 
    What this means is that if purchaser A dies then purchaser B becomes the owner of the property irrespective of what the Will of purchaser A might say and vice versa. This is the reason why it is important to get legal advise or consult a lawyer prior to purchasing a property or signing an agreement of purchase and sale for purchasing a property. This type of title is the most common form in which married spouses hold title for a property