Conveyancing in British Columbia: Step by Step Process for Typical Real Estate Transfer – David Watts Notary Public
Vancouver Notary Public; David Watts, has recorded this 11:30 minute video to describe in a step by step way; exactly what the Conveyancing process is for transferring Property in British Columbia.
While there are many generalizations; you can see how it works by way of flow chart diagrams and David’s explanation. This considers both the Buyer’s and Seller’s points of view as they relate to the real estate transfer, with a new Mortgage for the Buyer and discharging the existing Mortgage for the Seller. There are several variations as all transactions are unique, but our process to make sure we have covered everything is the same. If you have any questions about any parts of our Conveyancing process, feel free to phone or email any time. If you are in the process of buying or selling a Property; or your client is in the process of buying or selling; or perhaps refinancing a Mortgage – we would greatly appreciate the opportunity to do this work for you. Feel free to contact the office of David Watts Notary Public (tel: 604 685 7786 or email: [email protected] ) any time. Thank you for reading this and watching the video. If you liked it – please tell a friend or colleague; please leave comments; and please feel free to post/share using your preferred methods.
Beginning of the Purchase Process – When you start the purchase process, you typically find a Realtor to help you find the perfect Property; and a Mortgage Broker or institutional Lender to lend the money to buy the Property. A Mortgage is the legal charge that is registered against the Property to secure the loan from the Lender. Before going to find properties, it is important to work with a Mortgage Broker or institutional Lender to determine how much of a Mortgage you can qualify for and to make sure that all of the Lender’s conditions can or will be met. Once you are satisfied that you have your financing arranged and Mortgage commitment in place; you know what type of budget you have to work with. The Mortgage Broker puts together the deal between the Borrower(Buyer) and Lender. Realtors act as agents when you buy or sell real estate. In most cases, both the Buyer and Seller will have their own Realtor working for them. In some cases, only one Realtor acts for both parties. The Listing Realtor works for the Seller to market and sell the Property. The Selling Realtor assists the Buyer to evaluate properties, offer their expertise of the local market and buildings in the local market as well as help to negotiate and write up the Contract of Purchase and Sale. The Realtors put together the Contract of Purchase and sale which sets out the details of the transaction including the Property, Price, Dates, Parties involved, as well as any special conditions that may be specific to each transaction. Once there is a Contract of Purchase and Sale where all subjects have been removed; and there is a Mortgage commitment where all conditions have been met; the Realtor’s office sends conveyance instructions, including the Contract and the Lender sends Mortgage instructions to our office and we begin our review of the documents.
Once we receive these documents; we begin our due diligence process. The first thing we review is the Title to the Property. We confirm that the Contract matches the title in terms of making sure the Seller on the Contract is the Registered Owner of the Property and that the Property’s legal description on title is the same as the Contract. We also look for things such as Mortgages, caveats, judgements, liens and other charges on title that are the responsibility of the Seller to pay out and discharge. When you buy the Property, it should be free of financial encumbrances. We also determine if there are any easements, Statutory Rights of Way or other charges that would limit the way a Property can be used. We want to make sure you know exactly what you are buying. We conduct a tax search to confirm that all taxes are paid up to date. We contact the Strata Management Company – if it’s a Condo – to confirm that all strata fees are up to date and to confirm details of any special assessments or other levies that are outstanding. Any charges that have been incurred by the Seller should be paid by the Seller. We make sure this is what happens. We obtain a Form F – Certificate of Payment and a Form B – Information Certificate. We also confirm that there is insurance in place on the Property, whether it’s the building’s insurance or you may need a new insurance policy (if you are purchasing a house); and we confirm that the Lender is named as first loss payable on the policy. If necessary, we will also order a Survey of the Property or Title Insurance; depending on the Lender’s requirements and client’s instructions. With all of this information – we now have what we need to prepare the transaction documents.
We are preparing two sets of documents – one for the Seller to sign; and one for the Buyer/Borrower to sign. For the Buyer/Borrower – we have a set of Mortgage documents, which often includes the Mortgage Commitment, Cost of Borrowing Disclosure Statement, various tax and insurance documents, prepared by the Lender; and the Form B – Mortgage as well as other declarations prepared by us and a set of purchase documents including the Property Transfer Tax Return and Buyer’s Statement of Adjustments. We meet to explain and sign all of these documents, as well as review the title and plan of the Property. At this time we confirm our client’s identification. The Buyer typically also brings a bank draft to the signing appointment for the balance required to complete the transaction. We always email draft copies of all of the documents with a brief explanation in advance of our meeting; including the amount for the Bank Draft. During our meeting – we make sure everything is explained and all questions are answered. For the Seller, we prepare the Form A – Freehold Transfer, Seller’s Statement of Adjustments, HST Certificate, Residency Declaration, Parking Stall/Storage Locker Assignment (if a condo) and Site Survey Declaration (if a survey is available). We send these documents to the Seller’s notary who reviews them, explains everything and signs with their client – the Seller. The Seller’s notary will also have ordered a payout statement for the Mortgage(s) on title and have prepared an Order to Pay to determine how much the Seller will get and how the proceeds will be distributed. They also confirm their client’s identification. Once everything is signed with the Seller, the Seller’s notary returns the executed documents to the Buyer’s notary on the undertaking not to use the signed documents until we are ready to complete and payout the transaction. An undertaking is an irrevocable promise made by one notary or lawyer to another for which we are personally liable. Undertakings are also used to promise to make certain payouts and provide reporting as applicable. Once the documents are all signed by both Buyer and Seller, we can order funds from the Lender, deposit the balance of funds from the Buyer; and confirm we have the excess deposit from the Realtor’s office – we should be ready for completion.
We review the signed Seller’s documents by checking to make sure that everything is signed and correctly witnessed. Often documents are signed outside of Canada so we ensure that they will be acceptable to the Land Title Office. We confirm the results of our Strata information requests. We make sure that we have our Form F – Certificate of Payment as well as our Form B – Information Certificate. We confirm that the Seller (by signing the Seller’s Statement of Adjustments) has agreed to pay any outstanding strata fees, penalties, charges and/or liens. We confirm that we have our insurance binder which names our Lender as loss payable on the building insurance as it pertains to this unit (or on the house insurance). We confirm Property taxes are paid up to date, or that we have an undertaking from the Seller’s notary to pay them from the sale proceeds. We confirm that our Mortgage has funded, or that there are no outstanding conditions to be met prior to funding. Some Lenders will only fund the Mortgage once we have registered it. Once we check everything – we are ready to file our Form A – Application to Transfer ownership of the Property, Form F – Certificate of Payment (assuming it’s a Condo – Strata Property), Property Transfer Tax Return, and our Form B – Mortgage (assuming money is borrowed to finance the purchase). We start with a Pre-registration title search. We confirm that there have been no new charges registered against the Property by comparing it to the search we did when we opened the file. If everything looks good – we then proceed to Efile our document package. This is done by me (the notary) digitally signing the documents in a secure way; and then uploading directly to the Land Title Office computers. This takes a few seconds. We then get confirmation “Document File” numbers that our application has been received and we are able to save copies of the registered documents. We must wait 1 hour to confirm that there have been no other applications registered in the Land Title Office against the Property. We do our Post-registration search to confirm this. Once we have a successful Post – we are ready to report on the transaction and pay proceeds. We call the Seller’s notary to let them know that sale proceeds are available for pick up. We deliver the funds on the undertaking that they will be used to pay any existing Mortgages, outstanding taxes or other Seller accounts. If the Seller is a Non-Resident of Canada – there is an additional process of withholding partial sale proceeds pending receipt of a Canada Revenue Agency – Certificate of Compliance Related to the Disposition of Canadian Real Property by a Non-Resident of Canada. We also send faxes to the listing and selling real estate offices to let them know the transaction has completed. We mail any balance of real estate commissions unless the Realtor’s have advised that they would like to pick up their commission. After receipt of this confirmation – the Realtor’s will go about exchanging keys for the Property and the Buyer will then be able to take possession of the Property. Most times – the possession date is the day after completion. Next we are able to give our final reporting to the Buyer and to the Lender. We give our legal opinion to the Buyer and Lender; that the title to the Property has now transferred and the Buyer is now the Registered Owner; and to the Lender that their loan is secured by a charge registered against the title of the Property in first priority. We send copies of all of the registered documents as well as the copies with signatures to both Buyer and Lender. We scan and keep an electronic copy for our file.
Post Completion When the Seller’s notary receives the sale proceeds – they pay the existing Mortgage(s), any outstanding Property taxes, Builder’s Liens, and anything else that they have given their undertakings to pay or do. They provide the Buyer’s notary with proof and confirmation that they have done so by sending confirmation of the Lender’s receipt of the existing mortgage payout. The Seller’s notary then is able to deliver the balance of funds to the Seller. This usually happens the day after completion; as by the time funds are delivered by the courier and deposited to the bank, and cheques are prepared and signed – it is usually the next day. When the Seller’s notary delivers the Mortgage payout to the existing Lender, they also enclose a Form C – Discharge of Mortgage for the Lender to sign and send back to the Seller’s notary. The Lender must do this within 30 days. The Seller’s notary will then register the Discharge of Mortgage and provide a copy of the registered Discharge to the Buyer’s notary. The Buyer’s notary will then be able to order a State of Title Certificate – which is a document very similar to a title search; but it is signed by the Registrar of the Land Title Office as their guarantee that at the time it was printed; that the Property is owned by the Registered Owner shown on title (the Buyer) and that this ownership is subject to the new Mortgage which is now shown to be registered in first position. Upon receipt of the State of Title Certificate – we scan a copy for file; delivery a copy to the Buyer (now registered owner) and send the original to the Lender. This is the final step in the conveyance process. We would now scan any remaining notes and documents; destroy all paper copies; and close our file. If you have any questions about any parts of our Conveyancing process, feel free to phone or email any time. If you are in the process of buying or selling a Property; or your client is the process of buying or selling; or perhaps refinancing a Mortgage – we would greatly appreciate the opportunity to do this work for you. Feel free to contact me any time. Thank you for reading this and watching the video. If you liked it – please tell a friend or colleague; please leave comments; and please feel free to post/share using your preferred methods. Best regards, David Watts, Notary Public Phone: 604 685 7786 Email: [email protected] Web: www.davidnotary.com