What does a Real Estate Lawyer do for a Seller?

Get an Instant Quote

When selling a property, a real estate lawyer plays a crucial role in ensuring a smooth transaction by handling legal documents, coordinating financial settlements, and facilitating the title transfer. Their job is to protect the seller’s interests and ensure that all legal and financial obligations are met before closing.

From reviewing the purchase agreement to ensuring mortgage payouts and handling mortgage documents, a real estate lawyer ensures that the process is legally compliant and stress-free. In this article, we’ll explore the key responsibilities of a real estate lawyer when representing a seller, highlighting how their expertise helps you navigate the legal issues that can arise during a real estate sale with confidence.

Agreement of Purchase and Sale

The Agreement of Purchase and Sale (APS) is the most important document in a real estate transaction. It outlines the terms agreed upon between the buyer and seller, including the purchase price, deposit, closing date, and any conditions that must be met before closing.

In Ontario, real estate agents typically draft the APS, but having a lawyer review it before signing can help identify potential legal issues and ensure that the seller’s rights are protected. Once the agreement is signed, the seller’s lawyer reviews it again to ensure compliance and to prepare for the closing process.

If there are conditions in the agreement, such as financing or home inspection, your lawyer will guide you on your obligations and timelines to avoid any potential breaches of contract.

Statement of Adjustments

A key financial document in a real estate sale is the Statement of Adjustments, which outlines the final amount the buyer must pay on closing. The seller’s lawyer prepares this statement to ensure that financial responsibilities, such as property taxes and prepaid expenses (e.g., condo fees), are properly adjusted.

For example, if the seller has already paid property taxes for the year, the buyer must reimburse the seller for the portion covering the period after the closing date. This ensures a fair and accurate financial settlement between both parties.

The seller’s lawyer will also review the buyer’s closing adjustments and ensure that all calculations are accurate before finalizing the transaction.

Get an Instant Quote

Mortgage Payout

If there is an existing mortgage on the property, the seller’s lawyer is responsible for obtaining a mortgage payout statement from the lender and ensuring the mortgage is discharged from the title upon closing.

Before the sale is finalized, the lawyer will calculate the exact amount required to pay off the mortgage, including any penalties or discharge fees. On closing day, the necessary funds will be sent to the lender, and once paid, the mortgage is removed from the title, ensuring a clear transfer to the buyer.

In cases where there is more than one mortgage or other financial encumbrances (such as a secured line of credit), the lawyer will coordinate the full discharge of all obligations to provide the buyer with a clear title.

Closing Documents

The seller’s lawyer prepares and reviews several closing documents, ensuring they are accurate and in compliance with real estate law. These typically include:

• The Transfer Deed – the legal document that officially transfers ownership to the buyer.
• Statement of Adjustments – detailing financial adjustments between the buyer and seller.
• Direction Regarding Funds – instructing how the seller wants to receive their sale proceeds.
• Declarations and Undertakings – confirming the seller’s obligations are met and ensuring no claims remain against the property.

Additionally, the lawyer ensures that any land transfer tax obligations are properly documented and accounted for, as this can be a crucial consideration depending on the nature of the transaction.

Once these documents are finalized, the seller will meet with their lawyer for a signing appointment, which can be done in person or virtually.

Get an Instant Quote

Receiving Funds

On closing day, the buyer’s lawyer transfers the required purchase funds to the seller’s lawyer, who then distributes them accordingly. This includes:

• Paying off any remaining mortgage balance.
• Paying outstanding property taxes or utilities (if applicable).
• Deducting legal fees and any other agreed-upon expenses.
• Sending the remaining sale proceeds to the seller via direct deposit or certified cheque.

Ensuring that all financial aspects are handled correctly protects the seller from future disputes and ensures a clean break from the property.

Releasing Transfer Deed

Once the seller has received their sale proceeds and all financial obligations are settled, the Transfer Deed is released to the buyer’s lawyer for registration. This final step officially completes the transfer of ownership in the Ontario Land Registry System.

Before the deal is finalized, the seller’s lawyer will also review the title search to confirm that there are no outstanding liens or unexpected registrations against the property.

The seller’s lawyer will also ensure that any mortgage or financial encumbrances have been discharged from the title, providing proof of a clear title to the buyer. Once registered, the buyer is legally recognized as the new owner, and the seller’s obligations related to the property end.

In some cases, the seller may need to provide additional documents, such as an HST Declaration (if applicable) or a Non-Resident Declaration under Section 116 of the Income Tax Act. The lawyer ensures that any necessary forms are completed and filed correctly.

Get an Instant Quote

Summary

A real estate lawyer plays a vital role in protecting a seller’s interests throughout the sales process. From reviewing the purchase agreement to preparing financial adjustments, coordinating mortgage payouts, and handling mortgage documents, their expertise ensures a legally sound and stress-free transaction. By managing the title searches, financial disbursements, and land transfer tax considerations, a real estate lawyer provides peace of mind and ensures a smooth transfer of ownership.

Having a real estate closing lawyer oversee the sale reduces the risk of legal issues, financial disputes, and delays. They ensure that all funds are properly handled, documents are accurately prepared, and title insurance options are considered where necessary. Whether dealing with mortgage discharges, tax obligations, or finalizing closing paperwork, a seller’s real estate lawyer is essential for a successful property sale.

Contact Us

If you have questions about the real estate sale process or any other real estate legal matter, we're here to help. As real estate law specialists, our mission is to provide the clarity and direction you need to protect your property rights.

Contact us today to schedule a free consultation.