Realty Glimpse 8

Allan A. Greber
Stringam Law LLP
Lawyer, Partner

 

Mark- Can a buyer and seller, in residential real estate, can they both use the same lawyer?

Allan – for the most part, the buyer and seller can both use the same lawyer. Now there are occasional banks that make it their own internal rule that they don’t. The issue with using the same counsel is it can be done as long as everyone understands what the lawyer can and can’t do. What a lawyer can’t do is ever get in the middle of a squabble between buyers and sellers. Frankly, squabbles are extra anyway, so no one ever misses losing any. Second thing the lawyer can’t do, is from a seller’s perspective, the seller can’t tell the lawyer something wrong with the house and expect the lawyer not to tell the buyer, now that’s usually not a big issue.

Mark – Where that could happen if it was different lawyers, one for the buyer, and one representing the seller.

Allan – True, now at the end of the day, the majority of squabbles that might happen in a real estate transactions happen after the deal closes. So what’s lost is that neither the buyer or the seller can hire the law firm that acted for them to take any action against the other party.

Mark – Verbal agreements – so sometimes the buyer will make a verbal agreement with the seller, if they agree to that verbally, are they both bound by that verbal agreement?

Allan – A verbal agreement is nothing. A verbal agreement without something more is nothing when it comes to residential real estate, or commercial real estate for that matter. There’s something call the Statute of Frauds that basically says that for an agreement to be enforceable, with respect to land, remember all real estate is totally land, is only enforceable if it is in writing.

Mark – so it actually has to be in writing for it to be enforceable?

Allan – correct, there are a couple of exceptions, but those exceptions are really uncommon.

Mark – Forest fires in Fort McMurray, the question is, if I have signed an agreement where I’m going to sell my home to somebody, or say I’d agreed to buy a house, and now it’s burned down, and it’s before I’ve actually closed, so the conditions have been removed, but it’s before closing, who owns that house, how does that work?

Allan – the seller still owns the house. There’s no good news in that scenario, but the seller would have his own insurance, and ultimately the insurance company will be dealing with it. A fire like that, which would basically destroy the house or destroy a lot of the house would make the deal void. In that circumstance no one would be liable to anybody, the deal would be frustrated by the event of the fire.

Mark – Could I ever expect a big property tax bill after I have purchased a house? Maybe the last people didn’t pay the taxes.

Allan – there are two parts to that question. The first part is, one of the lawyers jobs for the lawyer for the purchaser, their job is to ensure that the taxes are paid to the possession date. The thing about right now, we would be determining for the purchasers sake, that the taxes for 2015 have been paid. There will also be an adjustment, one of the other jobs of the lawyer is to determine that there’s been an appropriate adjustment for taxes dealt with within the real estate closing. Basically the adjustment for taxes, taxes run from January 1 to December 31, they’re typically paid in the middle of the year in the county of Grande Prairie and the city of Grande Prairie, they’re paid in the middle of the year, June 30th, Sexsmith, Beaverlodge, Wembley, and Hythe are typically the 30th of July, but because the taxes are for the calendar year, before the taxes are due, the buyer will typically get a credit against the seller’s portions of those taxes, when the deal closes after the taxes have been paid, in that circumstance, the buyer is reimbursing the seller for having paid the taxes in full. The answer to the question though, could you expect a very large tax bill, I saw a client this morning, and his tax bill on the 30th of June is going to be $4,500, and he got a credit for about 1800 or 1900, as against his purchase price this morning, but he will have a bill coming pretty fast, just because of the time of the year, and when the taxes are due, and closing date.