Allan A. Greber
Stringam Law LLP
Mark – what is the role of a lawyer in the sale or purchase of a residence?
Allan – The role of the lawyer is to review the real estate contract, review the title to the property, determine whether or not there is things in the contract, or things on the title that create a problem, and address those problems as between the buyer and the seller, as well, on a purchase, the lawyer for the buyer is going to be reviewing the mortgage instructions typically, preparing the documents necessary to convince the bank to forward mortgage money in order to allow the buyer to buy the property.
Mark – can you tell me the difference between a term and a condition?
Allan – Terms isn’t he contract in the real estate deal are typically things the seller is to do in regards to the property, and that’s to leave the property in the same general repair and cleanliness as when the buyer looked at it and decided to buy it, ensure the appliances are in normal working order, sometimes there will be terms about making repairs or cleaning the property before the closing date, those are typically terms, they are usually obligations to the seller, the buyer’s terms in a real estate contract typically fall down to simply as much as once the deal is unconditional, pay the money on the closing date.
Conditions are typically buyer’s conditions, and typically subject to financing, so even though at the time the agreement is made the buyer may have a pre-approval, but a pre-approval isn’t anything until their financial institution has reviewed the real estate contract, and only then will the bank say, or a mortgage company say that they will lend the buyer the money to buy the house. So that’s the typical condition. There’s also usually conditions subject to a home inspection, where hopefully the buyer gets a professional home inspector to review the house and to confirm the house is sound.
Mark – Real Property Reports (RPRs) and Title Insurance, lots of talk of that after you’re looking to buy or sell real estate, can you hit on that a little bit.
Allan – A real property report is basically a drawing of the house on the land, with a couple of exceptions, real estate is the purchase of land and everything attached to it. So an RPR is designed to show us that the house is sitting on the land that you’re buying. Title Insurance has been around for a few years now, and historically we’ve used it to deal with when there is no real property report available. The historical reason is to replace an RPR in the minds of both the buyer and the bank, where if it turned out there was an issue, title insurance will take care of that issue. Now it is an insurance company, but that’s the premise.
Title Insurance also covers a few other things, it covers lack of any owner of the property obtaining the permits for renovations or basement developments, it basically says it will pay to put things to code in terms on if there’s been work done to the property without the appropriate permits, done incorrectly, then the City of Grande Prairie, or the what ever other municipality made the buyer or the home owner fix something.
Mark – so they will actually come in and pay for it then
Allan – It is an insurance company, so you always have those issues where they will look for ways not to pay, but that’s the idea.
Title Insurance will also cover for fraud and forgery issues where if someone stole your identity and took out a second mortgage or forged your name in a transfer of land.
Mark – you can close a deal on a real property report or title insurance, is that correct?
Allan – Correct, technically you can close without either, but you are left without some protections.
Mark – Will Title Insurance suffice?
Allan – we see that pretty regularly that the realtors are writing in that the seller will provide either a real property report with municipal compliance or title insurance, and the good news is, that sometimes sellers are unclear as to whether or not the document they have is a real property report or what is being asked for so when the contract says “or title insurance”, it does give the sellers a little bit of protection.
Mark – Like a Survey Certificate for example?
Allan – Correct, Grande Priaire lawyers are typically good with accepting survey c
ertificates instead of real property reports, but sometimes Edmonton and Calgary lawyers, are not so much.
Mark – “For Sale By Owners” vs Realtors. Can you go into that a little from the lawyer’s perspective?
Allan – We see “For Sale By Owners” from time to time, and the reality of it is, my view of it has always been this, a Real Estate Agent is trained to deal with what is the market value of a house, what are the market conditions that are out there that might affect the ability to sell a house as quickly a seller might want to sell the house, and the premise I always live by is that someone can sell a house on there own without a realtor, but it’s sometimes a little like you doing your own dental work, you can do it, it might hurt.