Are Legal Fees Deductible?

Posted on May 7, 2012 by admin

Within the context of Family Law, legal fees paid by the Recipient’s spouse of support are deductible.  Specifically, as of October 1st, 2002 the Canada Revenue Agency has stated that the following legal fees are indeed deductible by the Recipient’s spouse:

1.       To obtain an Order for child and spousal support;

2.       Enforce an existing Order for child or spousal support;

3.       Vary an existing Order for child or spousal support;

4.       Defend or respond to an Application by your former spouse to a reduction of child or spousal support.

If you are successful in obtaining an Order that the Payor is required to reimburse part of your legal fees, the cost award that you receive represents a lessening in the legal fees you can deduct.

Those spouses that are paying child or spousal support, in this author’s view, very unfairly do not enjoy a similar deduction.

Legal Fees with respect to custody, property division, negotiating a Separation Agreement and lump sum spousal support rights are not deductible.

So there was a curious inconsistency.  If you spend $5,000.00 to successfully negotiate a Separation Agreement to settle issues of your receipt of spousal and child support, you may not deduct that $5,000.00.  Conversely, if you spend $5,000.00 by pursuing a court application that results in an Order for child or spousal support, that is deductible.

The author makes no apologies for the intertwining, inconsistent and illogical framework as set out above, but that is the Law as of the spring of 2012.

The rules with respect to deductibility are evolving and are frequently the subject of litigation between tax payors and the Minister of Revenue.  From time to time, CRA issues interpretation bulletins.  It is important that one speaks with both an experienced Family Law Lawyer or an accountant with this area to receive up to date advice on this point.

By: Fred Streiman

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THE NEW TORT OF INVASION FOR PRIVACY

Posted on March 29, 2012 by admin

The Ontario Court of Appeal in 2012 in the case of Jones v Tsige, has created a new cause of action or a basis for suing someone.  The exotic title of this is called intrusion upon seclusion.  The technical components of this new basis for suing someone civilly is:

1.     An intentional or reckless conduct on the part of the Defendant.
2.     An invasion of the Plaintiff’s private affairs without lawful justification, and
3.     An invasion that a reasonable person would regard as highly offensive and that causes the Plaintiff distress, humiliation or anguish.

While this case is of great interest to experts in privacy law, it potentially has large ramifications for family law.

The facts in Jones v. Tsige are based in a family law environment.  Jones, was a customer at the Bank of Montreal.  Ms. Tsige, worked at the Bank of Montreal and had a dispute with her common law spouse who had earlier been married to the Plaintiff, Ms. Jones.  Tsige, rather than learning from  her common law spouse how much support he was paying, without authorization, accessed Ms. Jones’ banking records.  The bank became  involved, and disciplined Ms. Tsige who apologized.

This fact situation has lead to the birth of a new basis upon which to sue someone, namely an intrusion upon seclusion, also known as the new tort for invasion of privacy.

It is extremely common in family law circumstances, for a spouse to go rooting around in the private papers of the other, when a marriage comes crashing to an end.  A relationship based upon absolute trust, quickly changes into one of absolute distrust and disbelief.  Emails are intercepted, private records and letters are opened, all in an effort to discover evidence or to gain a factual upper hand.  Lawyers must be careful in what they advise their clients as to what they can do and whether or not their advice may leave their clients or relatives open to an additional law suit for damages arising from an intrusion upon the other spouse’s seclusion.  It will be interesting to see how this area of law evolves.

The Court of Appeal set some limits to ensure we realize that we are not in Kansas or the wild west of the other 49 United States.  The court set an upper range of damages at $20,000.00 and in the Jones v Tsige case, it awarded damages of $10,000.00 and no costs.  It would be prudent for lawyers, in the appropriate circumstances to add additional grounds of damages of intrusion upon seclusion.  Another example of that is for intentional infliction of mental distress or assaults at the hands of the other spouse.  For more information, please fee free to contact the family law group at Dale, Streiman and Kurz LLP.

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A ring, No thing, You can still get dinged

Posted on March 19, 2012 by admin

EVEN WITHOUT A MARRIAGE LICENCE YOU CAN STILL BECOME A SPOUSE AND BE SUBJECT TO THE PROPERTY RIGHTS OF THE FAMILY LAW ACT

            In Ontario, marriages are governed by The Marriages Act.  The Marriages Act, sets out the formal requirements of a marriage such as eligibility and  who may perform the marriage.  One of those formalities is getting a marriage licence which is obtained from the clerk of the municipality where one of the parties resides.  You need that licence to get married.

However, for various reasons, some parties proceed with a religious solemnization of their marriage without observing the formality of obtaining a marriage licence.  One would have thought that the lack of a marriage licence would have invalidated the marriage and in turn barred one from enjoying or suffering the property rights that are imposed by the Family Law Act on married couples. One must recall that property rights for married and common law couples are very different.

However, Section 31 of the Marriages Act contain a proviso that if the parties to a marriage solemnized in good faith and intended to be in compliance with the Marriages Act, are not legally barred from getting married AND live together as a married couple, the marriage is valid.

This in turn would require a careful examination of the facts as to why the parties went through the wedding ceremony, why they did not get a licence and how is it that they intended to be in compliance with the Marriages Act.

There have been a few cases in Ontario that deal with this matter.  In the Reaney , a High Court decision of 1990, Justice Granger found that the marriage ceremony was clearly not enough.  The groom had still not gotten divorced and as such did not meet that part of Section 31 of the Marriage Act, that the parties were not legally disqualified to marry.  In a related case by Judge Naismith in 1983, a couple that participated in a religious ceremony alone, were found not to be legal spouses  as the bride, after pre-wedding consultations with a lawyer and two rabbis, chose to be only committed spiritually rather than legally, as she did not want her “husband” to be in a position to make any property claims against her.

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What is The Common Law and how is that different from other parts of the world

Posted on February 29, 2012 by admin

All of Canada, (with the exception of Quebec, which maintains a civil law system) is a common law jurisdiction.  The common law is a legacy of the British empire.  Spread across the world all of those formerly pink coloured former members of the British empire,  continue to maintain a common law system of justice.  The United States, with the exception of Louisiana is a common law jurisdiction.

The main feature of a common law judicial system is that it is a body of law at least partially derived from judge made decisions rather than solely from statutes or constitutions.

In common law jurisdictions, it is not unusual to see contracts, wills, and other agreements from widely separated parts of the world bear remarkable similarities.  I have seen wills drafted in India, South Africa, parts of the Caribbean and all over the United States, bear many resemblances to a Will drafted in Ontario, despite the fact that the laws of wills and estates are provincially distinct.

One of the primary characteristics of the common law is that statutes and laws are passed by the legislature, however, they are relatively general in their provision.  It is for judges to interpret these laws to expand upon them and at times, to create them.

The common law has long historical roots.  Torts, which are a civil action for a wrong, are not a closed set.  The courts from time to time create brand new areas of civil wrong which can be sued upon.  The most recent in Ontario in 2012 was the tort of intrusion upon seclusion, also commonly known as the invasion of privacy.

Civil law, primarily a derivative of the Napoleonic code, attempts to avoid the lack of clarity and predictability of the common law.  The civil law attempts to produce a code which is all encompassing and specific.  It is an attempt to create a detailed code in which the answer is available by reading that code rather than seeking a judge’s interpretation.

The common law conversely is rooted in judicial history.  Previous judge’s decisions  are interpreted and followed.  The principle of the case is absorbed into the common law.  A prime example of common law is that of negligence and the standards of conduct by which persons, companies and indeed even governments are to conduct themselves.  When ones conduct crosses the civil line of appropriate and safe behavior and acts in a negligent fashion, this creates a tort which in turn is the basis for a civil law suit.  Almost all of these rules are judge made.  They remain until trumped by a higher court or the legislature passes a specific law to amend it.  An example is the Ontario Occupier’s Liability Act in which the government clarified various rules and set standards.  In turn, the Occupier’s Liability Act, contains many general provisions.  Those general provisions are interpreted by judges and create new judge made laws which are followed and evolve.

This long winded explanation of the differences between common law and civil law, while legally highly entertaining, is to a degree, one of the reasons why lawyers often cannot give absolute predictions as to how a case will be decided at a particular point in time.  The decisions are driven by both the facts and the court’s interpretation of those facts and the law.  The law is made both by the Government and Judges.  Cases are recorded and are now far more readily accessible in various computer databases.  I can assure you that there are few exercises more frustrating then attempting to find an earlier decided case, which contains the very same fact situation as the one presented by your client.  One of the most troubling of all such circumstances is when a set of facts that the lawyer is absolutely certain is as common as hot dogs at a baseball game, has never had a recorded case directly on point.  It is the lawyer’s task and a reflection of their ability to draw similarities from non similar cases and to use their powers of persuasion to convince a court as to why their client should be successful.

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Summary Judgment Motions in civil matters

Posted on February 14, 2012 by admin

The government and the courts have been striving with limited success to reduce legal fees and to shorten the court process.

There has been available for a long time, the ability of a litigant* to bring a motion for summary judgment.  It gives any party to a civil litigation action, the opportunity to ask the court before trial, to make a final decision on all or part of a law suit.  As an example, a frivilous lawsuit brought with no foundation could be successfully defended at an early stage by bringing a motion for summary judgment seeking to have the Plaintiff’s case dismissed.  Alternatively, a Plaintiff who has a rock solid case, such as the collection of debt to which only a paper thin defence filed solely to delay matters has been filed.  In those circumstances, a party can ask the court in the context of a motion for summary judgment, to grant a Judgment on a motion (almost always based solely upon written material and argument by lawyers), rather than at trial.

Recently, Rule 20 of the Rules of Civil Procedure was dramatically changed and the Ontario Court of Appeal recently released its decision in five cases heard simultaneously.  All of these cases dealt with the court’s interpretation of the new Rule 20.  The test that the court imposed as to whether or not a motion for summary judgment should be granted, turned upon the phrase, “the full appreciation test,” expanded by the court asking, “…can the full appreciation of the evidence and issues as required to make dispositive findings be achieved by way of summary judgment or can this full appreciation only be achieved by way of summary judgment or can this full appreciation only be achieved by way of a trial?”

To clarify a not particularly clear direction, would the motion judge be satisfied that there is no need for this matter to proceed onto trial, that the judge feels that he or she has all of the facts and a solid understanding of a case that does not require the time and expense of a trial.

While summary judgment motions have existed for a long time, the recent rule change and the Court of Appeal’s decision, generally referred to as Combined Air Mechanical Services Inc. v. Flesch, represents a fresh page in this evolving area of law.

Dale, Streiman and Kurz LLP has appeared numerous times, both prosecuting and defending motions for summary judgment

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Real Estate Newsletter

Posted on January 31, 2012 by admin

Why you need to use a lawyer for Real Estate Purchases and Sales:

I often meet with clients to discuss representing them in their purchase and/or the sale of their residences or even commercial properties.

Condominiums: Such real estate may include a condominium sale which has many issues such as financial status of the condominium corporation, the reserve fund that is required under the provincial legislation of the Ontario Condominium Act and rules and regulations with respect to pets and type of automobiles that may be permitted to park on the designated parking spots, if in a garage in the case of a high rise condominium or in or outside of a garage in a townhouse condominium development. There are a myriad of issues to discuss and the first order of business if I am acting for a Purchaser of such condominium property is to obtain and review the Status Certificate which sets out the Declaration, Bylaws, Rules/Regulations, Financial statements and insurance and other issues.

Then on such purchases as in regular purchase of freehold property, i.e. detached, semi-detached houses, we have to review with the client the layout of the property and in freehold, obtain and review a survey to ensure that the fences are located on the property line, that there are no encroachments or easements that were not disclosed in the Agreement of Purchase and Sale which should have been reviewed in the first instance before such Offer or Agreement is signed. At such time the realtor should have recommended a home inspector and report should have been given with requisite conditional period for approval of such inspection report, financing and solicitor’s approval conditions, if any, should have been waived if the Purchaser were satisfied with the responses and information given for compliance with such conditions.

Manner of Taking Title may be taken in the case of husband and wife, as joint tenants, and that is the normal and usual way of being registered on title so that in the event of death of one of the co-owners, the surviving titled owner will automatically obtain title subject to a survivorship application being registered on the title to the property after the death of the co-owner, In such case and in every real estate transaction, our firm recommends that the client(s) consider preparation of a Last Will and Testament and under the l995 Substitute Decisions Act of Ontario, Powers of Attorney for Property so that the Ontario Government does not assume control of the client’s property in event of his/her disability and also a Power of Attorney for Personal Care and Health including the “living will” clause for non-rescussitation. These can be discussed at any time. The other manner of holding title is in percentages i.e. tenants in common as opposed to joint ownership with right of survivorship and such undivided interest can be devised or left to family/spouse under a Last Will and Testament.

There are creditor issues and issues under the Family Law Act to discuss with the client. If one spouse is at risk to being sued now or in the future by any creditors either existing at present or in the future, it is recommended to take title in the spouse/partner who is not at such risk but it is prudent to review with your mortgage lender or mortgage broker if that will be permitted and for parties with less than 20% down and CMHC insurance fee is required, the taking of title in one party’s name may not be permitted. Family Law issues: If you are married, the property is the family residence under the Family Law Act and subject to exceptions among others, e.g. if source of funds derived from resources or sale of another property, then this will be a family asset to be divided equally. If the parties buying are common law spouses, then a cohabitation agreement under the Family Law Act deemed a domestic contract, or if married, a Marriage Contract is recommended and one of the Family Law specialists at Dale, Streiman & Kurz (DSK) can assist with an interview and instructions can be received and options considered.

Financing: It is important to deal with your financial institution or broker and obtain financing on a purchase with either a variable rate mortgage, fixed rate, with a line of credit or as many banks and other lending institutions offer, a combination of the two. If the sale of the client’s property is later than the purchase, a bridge loan is to be obtained from a bank or other lending institution. These issues are to be reviewed at the early stage of retainer of the real estate specialist at Dale, Streiman and Kurz and estimate for costs for the purchase and other issues will be given. Our Website sets out various estimates for fees and disbursements and you may feel free to discuss same with the real estate practitioners at DSK.

For Sales, the client should attend and deliver all documents in his/her possession, the existing transfer/deed, tax bill if not paid through the first mortgagee, house insurance, utility bills, contact and names, addresses of any mortgage to be discharged and it is important at the early stage of retainer of DSK’s real estate practitioners to determine if the client is to be charged any penalty and discharge processing fees on the sale and discharge of any existing mortgages. Discharge penalties can usually be 3 months’ interest penalty or interest rate differential, whichever is the greater. There are techniques that DSK has managed to advise clients on how to reduce such mortgage prepayment penalties and waive any discharge processing fees, bridge loan costs and appraisal processing fees. Please feel free to consult one of our practitioners and clerks who would be able to assist you in your questions on any of the above issues raised above.

To be a client of Dale, Streiman and Kurz is to be an educated client not just in this area of law but we at Dale, Streiman and Kurz wish to be helpful in many other areas with 6 lawyers and one associate lawyer able to provide services including litigation area and with a special emphasis on family law. This latter reference includes rights of spouses in business and shared family assets.

We would be pleased to receive any comments and meet with any prospective clients to “educate” such clients in any of the above areas of law.

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Wrongful Dismissal

Posted on January 10, 2012 by admin

Your termination of employment may be justified if the employee’s behaviour includes verbal threats of violence or physical misdeeds.

In June 2010, the Ontario government changed Ontario’s Occupational Health and Safety Act. These amendments, which are described as Bill 168, place upon the employer a positive duty to deal with workplace violence and harassment. In a recent arbitrator’s award arising from a union grievance procedure, the arbitrator upheld the dismissal of a problematic employee who had over the years displayed anger management problems. There was no history of physical violence, but threats and intimidating behaviour were repeated. The employee who had twenty-eight years of seniority, was terminated by the City of Kingston after a heated discussion with a co-worker and the employee’s union president about the very issue of the employee’s return to work. The employee, who clearly had no control over her behaviour, eventually ended the argument with the union president by making an oblique death threat. The threat was reported to the City’s management team, who investigated. The City came to the conclusion that there was no choice but to terminate the employee who grieved the termination.

The arbitrator concluded that, “the Bill 168 amendments to the Occupation Health and Safety Act have changed the law of the workplace in a significant way.”

It appears that the law of wrongful dismissal has been amended, though it must be interpreted on the facts of each individual case. Termination is not an automatic knee jerk response to every example of violence or threat, but it is to be strongly taken into account in the determination as to whether or not the dismissal is with cause.

The formula that the arbitrator produced and which will be followed closely in wrongful dismissal actions is, “to what extent is it likely that this employee if returned to the workplace, can be relied upon to conduct himself or herself in a way that is safe for others?”

If the employer cannot reasonably fulfil its obligation to provide a safe workplace under the law, the employer’s justification in terminating the loose canon of an employee will be justified.

Dale, Streiman and Kurz LLP regularly provides advice to both employers and employees in a non-union environment on wrongful dismissal matters.

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Wills and Power of Attorney

Posted on December 12, 2011 by admin

The following summary is for information purposes and very important to all Ontario residents, for Simple Wills and Powers of Attorney for Personal Care/Health and for Property are required in Ontario and if you fail to have such documents prepared, then it is a most costly exercise to have your property and/or estate left and administered by spouse or family members.

For example, a Last Will and Testament is prepared in the event of death of the person executing the will, i.e. the testator; in such a Will, the testator would name his or her spouse or family member, one or two persons to act as the Estate Trustee/Executor to manage the estate and distribute the assets of the Testator after his or her death. You may wish to name an alternative person if the first named Estate Trustee/Executor cannot act or predeceases you. Normally after payment of debts and funeral expenses, then a bequest is left of all the property of the Testator i.e. the residue of the estate after payment of debts, funeral expenses and no need to list the type of property either real estate or investments, furnishings etc. Such residue of the Testator is then left/bequeathed to his or her spouse, then if the spouse did not survive, or predeceased the Testator would normally leave the residue of the estate to the children referred to as issue per stirpes, meaning that the children if underage would be left the property, and an age of responsibility when such children should receive their share of the Testator’s estate is then inserted, such as l8, 2l, 23, 25 years or other age. The Estate Trustee is authorized to hold that child’s share and invest such proceeds and use it for the care, maintenance, education/tuition of the child, and then when the child reaches the age as selected by the parent, the child would get the monies remaining in trust. If such child predeceased the parent, the “per stirpes” expression would apply and if for example there were 3 children, one died and left 2 children, i.e. grandchildren, such grandchildren would get their father/mother’s share of the grandparent’s estate being l/3rd share and other 2 children would get their l/3rd share each. There are other clauses, such as appointment of guardian to get custody and raise children under the age of majority, common accident clause if no one survived, a Family Law Act clause so that if one of the children received share in their parent’s estate, this share or bequest would not be shared with their spouse or claimed as a Family Asset under the Family Law Act of Ontario.

If you fail to have a will, then it is a costly exercise to appoint an estate trustee, usually a member of the family with possible insurance bonds. The will with the powers of attorney documents can be amended at any time, but clients are warned that if one spouse died, the other survived, and the children are no longer dependents, i.e. they are no longer in school and working, then the surviving spouse can revoke the will and cut out the children as beneficiaries and leave the estate to a third party. This can be protected if the spouses have a marriage contract. There are other issues such as cohabitation with common law spouses and property and other issues need protect just as in a Marriage Contract and that would be contained in a Cohabitation Agreement under terms of the Family Law Act of Ontario. All clients should know that if they remarry, a pre-existing will is revoked and such domestic contract under such Act is recommended.

For Powers of Attorney under the l995 Substitute Decisions , the parties should name the spouse as their prime attorney and name alternates or substitutes for the spouse in the event that the spouse cannot act or predeceased the person giving the power of attorney, i.e. the donor.

It is also important not to designate your estate but rather your spouse, and then even your children or other relation as a contingent beneficiary under any life insurance, pension, or RRSP’s or RRIF’s if such institutions permit so as to avoid the large cost of probating a will.

There are 2 separate forms of powers of attorney, one for personal care or health, whereby the appointed attorney or substitute is authorized to make personal care, health decisions, consents to operations, blood transfusions, decisions as to where the “donor” wishes to reside or is institutionalized, if the donor suffers from a mental disability e.g. Alzheimer’s disease. This personal care power of attorney form also includes the “living will” clause which can be broadened but generally states that the donor does not wish any medical procedures or extraordinary prolongation of life, or resuscitation in the event that there is no brain activity.

Property power of attorney is important in Ontario whereby the donor would name the spouse and as substitute for the spouse, 2 persons/children/relations acting jointly to handle and administer the donor’s property, since if the donor or person granting the power of attorney becomes disabled, then the Office of the Public Guardian and Trustee of the Ontario Government will in most cases assume control of the donor’s property, house, bank accounts, during such person’s disability.

The costs for such wills and powers of attorney are set out in our website and we would be pleased to meet with any parties wishing such documents prepared.

By: Elliott Dale

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The Importance of Incorporating Your Business

Posted on November 21, 2011 by admin

Often clients come to meet me and discuss business opportunities, methods of business registration and the liabilities which they can incur. From the outset of the meeting, I try to establish: the goals of the client, the reason for starting up a business, and the liability exposure that they can undergo on a personal basis. This can mean that their principal residence or home and other assets can be seized by creditors in the event that the business becomes insolvent or bankrupt or if creditors pursue claims for unpaid debts.

There are several methods to register a business. If the client is a sole proprietor, or is partners with one or more individual, then such registration can be completed with the cost of registration very low. Such registration of a name does not protect the use of the name, since only a trademark or copyright agent can complete a registration of such name, process or invention.

By taking this route, the individual(s) are exposed to personal liability. If the individual(s) instructs to incorporate a company, proper NUANS search for names of similar businesses across Canada would be conducted, name approved and then company incorporated. In a limited company, being incorporated, the individual is limited as to liability. However, such individual(s) such as the director(s), officers and/or shareholder(s) of the corporation can be liable for any trust monies unpaid, such as GST, withholding taxes to Canada Revenue Agency, WSIB premiums, sales taxes provincially and if any misdeed occurs, then the corporate veil can be pierced and the individual held liable.

In any corporation, the appointed person(s) are the director(s) and officers such as President, Secretary and Treasurer and then there are shares to be issued. Most companies incorporated provincially in Ontario are private corporations, and the names of the shareholders are not revealed by any filings with Companies Branch so such shareholders can be withheld from most public inquiry as to ownership of the company. Shares can be issued in varieties such as the voting or Common shares, or shares having some return or restriction, such as Special Shares. There are other options to incorporate on a Federal basis and these can be discussed with the lawyer handling the file.

In each and every instance of either registering an unincorporated entity or an incorporated entity, it is recommended that the clients immediately consult their own Accountant or Tax expert to obtain their own advice as to their tax situation, both in business and on a personal basis since both overlap. In such situations, there may be certain tax and estate planning that are necessary. Of course, with such business registration or incorporation of a company, it is recommended that Wills and Powers of Attorney for Property and for Personal Care/Health Decisions be prepared and executed in view of the requirement for these forms of powers of attorney under the provisions of the Substitute Decisions Act of Ontario in force since 1995 and applicable to all residents in Ontario and others.

With the start up of a business, if there are partners, then the Partnership Act of Ontario applies and a partnership agreement for the parties is strongly recommended to be prepared. In a company, if more than one party is involved, either as director or shareholder, then a Shareholding Agreement is recommended to be prepared and executed at the onset of the business to avoid any later disputes that cannot be settled by mediation or arbitration. Of course all of the above legal work is completed by our firm and costs are set out in our website and can be obtained by the relevant lawyer retained to do such work, either Elliott Dale as senior partner practising since l97l or Steven Klein, associate lawyer with more than l0 years experience in business, corporate, and insolvency practice of law.

What is important to note to all clients is that to run a business is to run a risk and how to minimize such risk to such clientele is the important issue to all clients of Dale, Streiman and Kurz. To be a client of Dale, Streiman and Kurz is to be an educated client not just in this area of law but we at Dale, Streiman and Kurz wish to be helpful in many other areas with 6 lawyers and one associate lawyer able to provide services including a litigation section and with a special emphasis on family law. This latter reference includes rights of spouses in business and shared family assets.

We would be pleased to receive any comments and meet with any prospective clients to “educate” such clients in any of the above areas of law. Feel free to Contact Us with any inquiries you may have.

By: Elliott Dale

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Buying Your First Home

Posted on September 20, 2011 by admin

Despite the economic doom and gloom in the rest of the economy, the real estate market in Peel Region is alive and well. Realtors and mortgage professionals report of an upswing in activity. The combination of historically low interest rates and plentiful inventory of quality resale homes at slightly depressed prices has enticed many buyers off the sidelines and into the market. Many of these buyers are first time home buyers. Both the Federal and Provincial levels of government have tried to encourage the purchase of homes by first time homebuyers, by introducing the Home Buyers Tax Credit (allowing a maximum tax credit of $750 for qualifying individuals) and providing a $2,000 land transfer tax credit for first time home buyers of resale property.

If you have decided to purchase your first home, the process can seem daunting.  Here is an outline for you with the simple steps you need to take to make for a smooth and easy buying process.

Step 1- Find out how much of a mortgage you can afford

The first step in the process is determining your budget. While there are many tools on the internet and elsewhere, the best and safest way to determine your house price budget is to consult a mortgage professional. Most of the major banks now have mobile mortgage specialists, who will come to your home to process the paperwork to qualify you for a mortgage. While home appointments are convenient, the mobile mortgage specialist can only talk about the products and services available by that particular bank. On the other hand, using the services of a mortgage broker allows you to shop for the best rates and terms from a number of different lenders. Many mortgage brokers deal with 30-40 lenders, rather than one. Many people shy away from using mortgage brokers assuming that they are more expensive than going directly to a bank or are only for people with poor credit. Both of these assumptions are untrue. Many of the banks give discounts to mortgage brokers that may not be available at a branch. Moreover, mortgage brokers are generally paid their fees by the lenders directly, resulting in no out of pocket cost to you for using their services. Whether you want to deal directly with a bank or use a mortgage broker, always try to get a referral to a mortgage professional from someone who has used that professional in the past as you want to be sure that the level of service they provide will be to your satisfaction.

Step 2- Hire a Realtor

Now you have your approval and budget from the bank. It’s time to go shopping for a home. The best way to do this is to hire a realtor who is familiar and works extensively in the area you wish to live. The realtor will know the homes that will meet all your needs, whether its access to schools, parks, shopping or recreation. The realtor will also know what homes are a good value and which ones are not. The most important thing to do is to hire your own realtor. Never use the services of a realtor who is also acting for the seller of a home as you want your realtor to only be concerned with your needs and not have to balance the needs of the sellers as well. Once again, get a referral to a realtor and interview several realtors before deciding on the one you wish to hire. Be wary of realtors who offer deep discounts on their commissions as you may not get the level of service you expect.

Step 3- Find the Home and Make an Offer

So, you’ve got your budget, you’ve hired your realtor and now you found the home you wish to purchase and make an offer. Now what? Your realtor will recommend the price and the terms of the offer to purchase the home. If your offer is accepted, you will have to give a deposit to the seller in an agreed upon amount within twenty-four hours of mutual acceptance of the offer. Once the deposit is given, if there are conditions in the offer, each of the parties will take whatever steps they need to satisfy the conditions contained in the offer for their respective benefit. Once all conditions are satisfied, the offer then becomes firm and binding on both parties. Your realtor will prepare all the paperwork necessary in this respect.

Step 4-  Hire a Lawyer

You’ve now got a firm and binding agreement to buy the home. Now, you will need a lawyer. The lawyer will in most cases be acting for you and the lender. The lawyer’s job is to check title and other issues related to the purchase of the property and advise you on any issues that may arise and complete the transaction on your behalf. How do you find a lawyer? The best way to find a lawyer is by referral from someone you trust who has experience with the lawyer. Retaining a lawyer who will charge you the least amount may not necessarily result in getting the service level you expect or want. Shop around, interview several lawyers and then decide which one to hire. Ask lots of questions of the prospective lawyers such as hours of service, years of experience in residential real estate, the portion of the practice devoted to residential real estate, prices and fees charged, availability of free parking and whether they will give you a written quote for the services to be provided.  You can also call the Law Society of Upper Canada’s Lawyers Referral Service. They will refer you to a lawyer in your area for free who will give you a free 30 minute free consultation.

Step 5- The Closing

As the date for completion of the transaction approaches, your lawyer will contact you to set up an appointment to sign the documents for the transaction and require you to bring in the funds necessary to pay the lawyer’s fees and charges and to pay the balance of the purchase price of the home. Often this takes place several days prior to the actual date of closing. You will be asked by your lawyer to bring in either certified funds or a bank draft of the funds required to complete the transaction. If your bank is one that does not have branches, like ING Bank or President’s Choice Financial, it will take several business days to prepare a bank draft or certified cheque, so let your lawyer know this well in advance of the closing so that they can provide you with the closing figures in sufficient time for you to get your certified cheque from your bank.

Step 6- The Day of Closing

Now that the papers are signed, the day of closing has arrived.  The process to close a transaction involves each of the seller and buyer delivering the closing documents and funds or keys (if you are the seller) to the other party’s lawyer.  Make sure that you are available throughout the day by cell phone or otherwise so that your lawyer can contact you with any questions they may have or information they need.

For more information on the buying and selling process, visit our website at www.dsklaw.com.  Dale, Streiman & Kurz LLP has also put together a comprehensive DVD outlining the most common issues that may arise during a real estate transaction including:

  • An overview of the process of buying and selling residential real estate
  • The myths about mortgage brokers and how they help clients save thousands of dollars in interest on their mortgages
  • What is title insurance and how does it help you
  • Family law issues related to buying a home
  • Home inspections and why you need one before buying a home.

This DVD has a retail value of $19.99.  Contact Elliott Dale for your complimentary copy.

By: Elliott Dale

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