Close with Confidence
Whether you are buying an existing property, breaking ground on a newly constructed home, or undertaking the construction and development of a new condo building, navigating a real estate purchase can be complex, so you’ll want to choose a law firm with the expertise to protect your interests.
FAQ
What are Closing Costs?
For our purposes, “closing costs” include all monies, both actual costs, and adjustments, which are required to be paid through the lawyer’s office. As such, these amounts will be included with the balance of your down payment which you bring to us shortly before the date of possession.
How much are the Legal Fees?
As all transactions vary, we can provide you with an estimate of the legal fees for your purchase once we have gathered all the information specific to your deal. Close to the completion of the transaction, your file manager will provide you with your exact cost to close the transaction. GST and PST are payable on legal fees.
What other disbursements will I incur on my purchase transaction?
Land Transfer Tax (if applicable)
Land Transfer Tax is calculated on the fair market value of the property. Click here to calculate the exact amount of Land Transfer Tax due on your purchase.
Land Title Fees
There is a land titles fee to register the transfer of title and to register the mortgage (if applicable), and the fee for each is $133.00.
GST and PST are not payable on the land transfer tax or land title costs.
Property Tax Adjustment
An adjustment to the purchase price is made to reconcile each party’s share of the year’s taxes so that each party pays taxes for only that part of the year they owned the property. A common concern is whether you, your lender (if applicable), or the seller are to pay the tax bill and when payment should be made. Property taxes are billed on a calendar year basis from January to December. In Winnipeg, taxes are payable as of the last business day in June. In most rural areas, taxes become due later in the year (August, September, or October). We will provide information about this in our Pre-Closing Notice that you will receive prior to your possession date and at your signing interview.
Title Insurance
Title Insurance protects homeowners and lenders against numerous title-related defects and a policy costs between $190 and $715 for properties priced under $500,000. There are two types of title insurance policies:
1. Owner Policy
In Manitoba, especially Winnipeg, the most serious risk that title insurance covers relates to undisclosed, unpermitted improvements. Most construction or renovation work requires permits. If any such work is carried out without a permit, the City or Municipality can issue an Order to Comply, regardless of who the owner is at the time or if a prior owner did the unpermitted work. This could mean work such as tearing down drywall to expose electrical or plumbing work, removing unpermitted improvements, reconstructing improvements, and so on. This work would all be at a cost to the homeowner. That’s you!
Title insurance also covers a variety of other risks, including unpaid water bills (these can be very large amounts), property tax problems, encroachments, unknown easements, etc. While title insurance has become the norm, it does not solve every problem. It is “a shield, not a sword” and only applies to fend off attacks on your title. Also, it does not cover known title defects disclosed by the seller or physical defects.
2. Lender Policy
A lender policy will often be required by a lender in case the lender has to take over the property upon you defaulting on your loan. It also protects a lender from certain title risks, covers some other risks specific to lenders, and allows money to flow before documents are registered with Land Titles.
For more information on title insurance, please visit fct.ca and stewart.ca
Mortgage Interest
If you are getting a new mortgage, the land titles processing time is such that generally, the money under the mortgage will not be released until 2 to 4 weeks after possession. During this time, you must pay interest to the seller on the mortgage amount at the mortgage rate of interest. However, as the money has not yet been released by the lender, you save having to pay the lender. So, in the end, this is not lost money but merely a matter of “paying the left hand instead of the right”. You will bring in the interest amount owing to the seller as part of the funds required on possession.
Soft Disbursements
Soft disbursements that you will typically pay would be $60.00 misc. costs (photocopying/faxing, etc.) $30.00 title search, $60.00 courier costs, approx. $60 municipal searches and a Software Transaction Charge of $32.00. GST and PST are payable on most disbursements.
How should I take title?
Title can be taken in one person’s name, in two, or more names, or in favour of a corporation. If more than one person is going on title, buyers may choose between three forms of joint ownership: joint tenants, undivided interest, or tenants-in-common. In a joint tenancy, if one owner dies, the property goes to the surviving owner/s, whereas in a tenancy-in-common and undivided interest, the deceased person’s share of the property goes to their estate.