THOMAS BUTLER LLP
PROPERTY BUYER’S GUIDE
AND
INSTRUCTION SHEET
Basic Information
1.
If you haven’t yet provided the following personal information, please provide us
with this as soon as you are able to do so:
a. the full names of all parties that will become the owners of this particular
property (use the names that appear on your regular ID such as drivers
licence or birth certificate),
b. their dates of birth,
c. the occupation of each person that you would like to appear on the
certificate of title to the property
d. your address if you will not be living at this property,
e. a phone number or numbers where you can be reached, and
f. an email address - if you have one and check it regularly.
2.
If the purchase was negotiated privately, please provide us with a copy of the
contract of purchase and sale as soon as possible. If the purchase was arranged
through realtors, they will send us the contract; you don’t have to do so.
3.
If more than one person will become the owner, let us know if you wish to appear
on title as joint tenants or tenants-in-common. Under joint tenancy, the property
passes automatically to the remaining party if one of them dies. In contrast, if a
tenant-in-common dies, their half interest in the property passes to their estate
and is distributed according to their last will and testament.
Although joint tenancy is common, it may not be appropriate in all circumstances.
For example, if you are planning your estate or are purchasing property with a
business partner, you may wish to discuss this in more detail with us.
4.
If this is an investment property, are you considering using or incorporating a
company to make the purchase instead of yourself personally? If so, let us know
as soon as you can so that we can prepare the purchase documents in the name
of your company. If you don’t already have a company, we would be happy to
make the arrangements but you have to let us know as early in the process as
you can so that we have the name or number of the company to fill out the
transfer and registration documents.
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5.
If you are a first time home buyer and wish to determine if you are eligible for a
Property Transfer Tax exemption, please notify us so that we can review the
rules with you. Those rules and information requirements can be found on the
Ministry of Small Business and Revenue website
http://www.sbr.gov.bc.ca/rpt/ptt/FormsandGuides/0269.pdf
Some of the basic rules are that you must borrow at least 70% of the value of the
home to qualify, you must have been a resident of BC for at least the preceding
12 months, and you must live in the home.
If there is more than one person on title but only one of them qualifies, let us
know and we may be able to arrange the ownership of the property to maximize
the tax savings.
Financing the total purchase price
6.
We need to know as early as possible if you are going to finance the purchase
and if so, how much, with which lender, and when.
Obtaining financing for your property purchase is often the most critical step in
the purchase and the one that, if done at the last minute or if not completed on
time, can lead to substantial problems for everyone involved – buyer, seller, real
estate agent, lawyer, etc.. The seller may not agree to provide you more time
and consequently you may lose the purchase.
Don’t underestimate the time required to complete the documentation for your
financing. We encourage our clients to have their financing in place at least two
weeks prior to closing.
7.
Provide your lending institution with our contact details:
Kelly Cairns at
Thomas Butler LLP
#700 – 1708 Dolphin Avenue
Kelowna, B.C.
V1Y 9S4
250.763.0200 (main)
250.870.3830 (cell)
250.762.8848 (fax)
kacairns@thomasbuterllp.com (email)
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8.
If you are selling a home prior to purchasing this home, and we are not your
lawyers on that sale, provide us with the name of the lawyer who is acting for you
so we can request that the proceeds be directed to us to fund the purchase of
your new home.
9.
If you are providing some or all of the funds directly to us, we will provide you
with an exact figure a few days before the scheduled completion date. Typically,
you will need to bring a certified cheque or bank draft for that exact amount,
payable to “Thomas Butler LLP in trust”, to our office a few days before
completion.
10.
BC’s Property Transfer Tax (“PTT”) can sometimes surprise buyers. Don’t forget
to factor it into the total amount of money that you will need to complete the
purchase. It is 1% of the first $200,000 of the purchase price and 2% of the
remainder. For example, a purchase price of $500,000 will attract $8,000 in PTT.
11.
If you are buying a newly constructed home, HST of 12% on the entire purchase
price will likely be payable. If you are a GST registrant (or if the buyer is a GSTregistered company), there may be an opportunity to defer the HST but the rules
can be complex. Please discuss this with us or your accountant well in advance
of the completion date.
12.
The total final purchase price is normally affected by a number of adjustments
such as property tax (the seller may have prepaid the year’s property taxes),
utilities (similar situation), appraisal costs associated with financing, legal fees
and disbursements, and the like. We will calculate those adjustments for you
and let you know exactly how much money is required to complete the
transaction.
13.
If you are buying your home prior to the first week in July in any year, you may be
responsible for paying the property taxes for the year. Especially if the
transaction takes place in May or June, there is a chance that you may not
receive the property tax notice from the City or Regional District. It is your
responsibility to enquire with the City or RD as to what is owing and when. So
although you may receive credit for the seller’s share of the taxes, it is important
that you pay the taxes on time so as to avoid any late payment penalties.
Insurance
14.
Arrange insurance to take effect the day before the completion date so that there
is no gap of insurance should the seller’s insurance somehow not cover the
entire period between completion and possession.
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15.
Provide us with the name of your insurance company and contact details. If you
are arranging a mortgage, the lender will not authorize the release of funds to
purchase your property unless the lender is added as a party to your insurance
coverage. You will have to arrange this with your insurance company who will
fax us confirmation that this has been done so that we can advance the funds to
the seller.
Legal advice and signing Documents
16.
Please make an appointment with me – ideally during the week leading up to the
completion date - so that we can review the transaction and ensure it meets your
expectations and sign the documents necessary to complete the purchase.
17.
PRIOR to the SUBJECT REMOVAL DATE, you may have questions about
whether the non-financial charges that appear on title (easements, restrictive
covenants, building schemes, etc.) materially affect the value of the property or
your future use and enjoyment. To answer those questions, please contact us so
that we can obtain copies of those charges and translate them into plain
language so that you can make an informed decision as to whether or not the
charges will affect your offer to purchase.
IN ADDITION TO REVIEWING THE TITLE, YOU MUST SATISFY YOURSELF
AS TO THE FOLLOWING:
Land:
a. that the property described in the Contract of Purchase and Sale is the same
property that you viewed prior to making an Offer to Purchase;
b. the boundaries and dimensions of the property;
c. that the buildings are situate within the property lines and boundaries of the
lot (the usual way of doing this is by a Surveyor's Certificate);
d. that you have legal road access to the property;
e. that you have apprised yourselves with respect to all matters concerning the
zoning covering the property and have consulted with the appropriate
authorities in that regard;
f.
that if the property is served with a municipal disposal system you have
apprised yourselves as to the whereabouts and access for the system, as
well as the state of maintenance of same;
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g. that if the property is served with a private disposal system, you have
apprised yourselves as to the whereabouts and access for the system, as
well as the state of maintenance of same; and
h. that you are aware of the nature of the water source servicing the property
with water and the quality and quantity of such water.
Strata Properties:
The following are important aspects of strata unit ownership:
a. When the strata plan is registered, a strata corporation is automatically
created by statute. The owners of the various strata lots are members of
the strata corporation. In a strata development consisting of all residential
units, one vote per unit may be cast at meetings of members. In the case
of joint owners only one of them may cast a vote in respect of their unit.
b. The members of the strata corporation elect a strata council annually. The
first council is elected at a meeting which is required to be held when 60%
of the units have been sold by the original owner developer but not later
in any event than 9 months after registration of the strata plan.
c. The strata council has wide powers and exercises the powers and duties
of the strata corporation subject only to restrictions imposed by the
owners at a general meeting. These powers include passing rules and
regulations concerning the use of common property and common facilities
such as changing or regulating the use of recreational facilities, changing
the use and designation of parking area, and regulating or prohibiting pets
within the development.
d. The by-laws of the strata corporation together with rules and regulations
passed by the members or strata council, if any, govern the operation of
the development and the use and enjoyment of it generally. The by-laws
affecting a strata corporation are those contained in the Schedule to the
Strata Property Act as amended from time to time under the Act.
Amendments to by-laws require special resolutions in all cases and
unanimous resolutions in some limited circumstances, except for
amendments made by the owner-developer and approved by the
Superintendent of Real Estate prior to registration of the strata plan.
e. Each owner of a unit is personally liable in respect of every judgment
awarded against the strata corporation in proportion to the unit
entitlement of his/her strata lot. Therefore, it is imperative that you ensure
that adequate liability insurance is maintained by the strata corporation
and it would be wise for you to carry additional personal liability
insurance.
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f.
The strata corporation is required to maintain fire and comprehensive
coverage insurance on a replacement value basis for the buildings within
the condominium development including the individually owned strata
lots/units except in the case of bare and strata plans. Your unit is not
within a bare land strata plan. You should consult with your insurance
agent to obtain appropriate additional insurance with respect to the
condominium unit that you are purchasing.
g. All strata lots are individually assessed for property taxes just like single
family residences on fee simple lots. If you are purchasing your strata lot
from the owner developer of the project or if you are buying a new home
constructed on a bare land strata lot the Strata Property Act requires that
a holdback be withheld for a period of 55 days following the transfer of
title to the strata lot to you. This is to protect you against builders' liens
being registered subsequent to your purchase.
h. If you are purchasing property with a building or other improvements that
are currently under construction or renovation, or such have just recently
been completed, please advise us immediately in order that we may take
steps to protect you from possible claims under the Builder's Lien Act.
18.
Each registered owner will need to bring one government-issued photo
identification such as a driver’s licences or passport and one other piece of
identification.
19.
We will provide you with a binder in which all the legal documents related to your
house have been organized. It will also contain sections for later insertion of
your annual property assessment as well as annual property tax bill and
homeowner’s grant.
Completion, possession, and adjustment dates and practical advice
20.
The completion date is the day the transfer is registered in the Land Title Office
and the purchase money is provided to the seller’s lawyer.
The possession date is the day you can legally move in or take possession. Any
arrangements to the contrary must be made between buyer and seller. Take
note that this date is often different than the completion date.
The adjustment date is the date used to calculate the amounts owing between
the parties for all property taxes, utilities, etc. For example, if the vendor has
already paid the entire year’s property taxes, the buyer will owe the seller for the
property taxes from the adjustment date until the end of the year.
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21.
Possession dates - We have occasionally seen delayed completion dates caused
by a variety of unforeseen reasons, such as a lack of an occupancy permit, which
means that your move-in date will be delayed. Although everyone involved does
their utmost to ensure you move in on your possession date, there always
remains a possibility that you may not be able to move in at that time. If you
have a truckload of household goods arriving on your possession date, this can
be a stressful situation. Although this rarely happens, we recommend that you at
least turn your mind to this possibility, have a backup plan in case your move-in
is delayed and discuss this with your realtor.
Thank you for choosing us. Please do not hesitate to call or email me or
our staff (Lucy Stephens – lstephens@thomasbutlerllp.com or Sherry
Deubner – sherryd@thomasbutlerllp.com if you have any questions about
the tasks on this list).
Kind regards,
Kelly A. Cairns
250.763-0200 (main)
250.870.3830 (cell)
250.762.8848 (fax)
kacairns@thomasbutlerllp.com (email)
www.thomasbutlerllp.com (website)
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