Real Estate FAQs
As a seller, what fees can I expect to pay at closing?
In addition to the fees for legal services, you can expect to pay the following from the proceeds of the sale of your home:
Realtor commissions – The seller is responsible for paying the commissions for both the buyer’s and seller’s agent on closing. These fees are also subject to GST.
Mortgage balance – If there is a mortgage on the property you’re selling, the balance owing will be paid out of the proceeds, including any applicable prepayment penalties. It is advisable that you reach out to your mortgage lender prior to selling your home in order to determine what those penalties may be in order to avoid a surprise down the road.
Property taxes – If you have any balance owing for property taxes, this will also be paid from the proceeds of the sale.
Adjustments – Adjustments will be determined by your lawyer and the buyer’s lawyer with respect to expenses such as property taxes, condominium fees, utilities and rental income if applicable. These amounts will be pro-rated to the date of the closing.
What is a co-ownership agreement?
A co-ownership agreement is recommended any time multiple people purchase a property together if they are not spouses or common law. The agreement will set out the form of ownership, each party’s responsibilities, obligations and will also determine methods for handling eventualities such as the sale of the property or the resolution of disputes. Addressing these factors through a legally-binding document grants certainty and peace of mind for all parties and can also help to avoid costly litigation down the road should a disagreement arise.
What is the difference between joint tenancy and tenants in common?
Joint tenancy is when each party on title is an equal owner of a property. Each name on title is entitled to an equal share in the proceeds upon sale, and ownership cannot be apportioned otherwise. Most importantly, if one party in a joint tenancy dies, the ownership of the property transfers by right of survivorship to the other party or parties on title. A joint tenant may not leave a share in the property to beneficiaries in their Will.
Tenants in Common means that the owners of a property can apportion shares of the ownership based on financial contributions or other determining factors. For example, if one person is paying 70% of the cost of the home, the ownership can be structured so that they own 70% of the property and the other party owns 30%. Further, each share is owned independently, and can, therefore, be sold independently or passed down to beneficiaries in a Will.
Estate Planning FAQs
When should I update my Will?
A Will should be reviewed periodically to ensure that no changes are required in order to reflect new circumstances in the testator’s life. There are myriad changes that might require an update to the Will, including:
The death of a person named as executor;
A new child;
A new marriage or divorce;
The acquisition of a recreational property such as a cabin;
A new or closed business; and
A change in the testator’s wishes with respect to asset distribution among the named beneficiaries.
A Will that is not up to date is vulnerable to challenges, and it may be an obstacle with respect to obtaining probate from a court. It is recommended that you review your Will regularly, update it as necessary, particularly if any of the major life changes listed above become applicable.
What is the difference between an Enduring Power of Attorney and a Representation Agreement?
An enduring power of attorney is a document that gives an individual, or multiple individuals, the legal right to make financial and legal decisions on your behalf if you are unavailable to act on your own behalf. A power of attorney can be broad or specific, limited to a particular transaction or type of transaction, or it can be unlimited, depending on your needs. It is important to note that a power of attorney will terminate if you become mentally incapable to make decisions. For this reason, it is recommended that people obtain an enduring power of attorney, which grants authorization to your selected attorney(s) to continue to act on your behalf even in the event of your permanent incapacity.
A representation agreement grants the authority to someone you trust to help you make, or make on your behalf, decisions regarding your personal and health care. A representative appointed under such a representation agreement is legally obligated to act in accordance with your expressed wishes, or in your best interests if your wishes are unknown. For this reason, it is advisable to also execute an advance directive, which will detail your wishes with respect to medical care in writing and act as a guideline for your representative should it become necessary.
What is an advance directive?
An advance directive is a written and binding plan that reflects the medical treatments a person wishes to consent to, or refuse, based on their personal beliefs and values. The document is intended for use if a person is unable to express their wishes due to lack of capacity. A representation agreement can form part of an advance directive.
Estate Administration FAQs
Is it mandatory to obtain a Grant of Probate for an estate?
In most cases, yes. A Grant of Probate is necessary for an executor to access and secure the assets of the deceased, including bank accounts, personal property and real estate holdings. In rare circumstances where all of the assets are held jointly or designated to specific beneficiaries, it may be possible to avoid probate, but most estates are not designed in this way.
What is a Grant of Administration?
In cases where a person dies without a Will (intestate), or where there is a named executor in a Will but that person is unable or unwilling to act as executor, it will be necessary for a new executor to apply to the court for a Grant of Administration. Once approved, the executor can step in to complete probate and distribute the assets of the estate in accordance with the will, if there is one, or in accordance with the laws of succession if there is not a valid will in place.
If I am named as an executor in a Will, am I required to fulfil the role?
No. If you are unable or unwilling to act as an executor, you are allowed to refuse the responsibility. A new executor will be required to obtain a Grant of Administration from a court in order to act in the capacity in your place. For those who wish to have an experienced estate lawyer act as executor in their place, Cherkowski Marsden LLP offers executor services as part of our regular estate administration practice.
What can I expect to pay for probate fees?
Fees are waived for any estate valued at less than $25,000 and are not charged on the first $25,000 of an estate valued higher. When the assets are valued at more than $25,000, fees are calculated as follows:
For the first $25,000-$50,000 in value, $6 for each $1,000 (or part of $1,000), plus
For any value over $50,000, $14 for each $1,000 (or part of $1,000).
For example, if an estate has a total value of $500,000, the probate fee calculation would be:
The first $24,999 = $0
The value from $25,000 – $49,999 ($6 x 25) = $150
The value from $50,000 – $500,000 ($14 x 450) = $6,300
Total probate fee = $6,450