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Conveyancing Docs List

In Canada, residential sale/purchase transaction usually involves lawyers as a trustee to handle payments, land title transfer and mortgage issues.

Lawyers for the buyers' side and for the sellers' side will be responsible for preparing different documents and taking care of different work in the process of a real estate transaction, but they also need to work cooperatively to deliver a seamless result.

Here we introduce the documents that lawyer from each side should prepare.

Buyer in a Cash Deal

  • Affidavit Re Value : For the purpose of land title transfer, this is the only document that buyer needs to sign and submit. For remote signing, please note the document generated by e-conveyancing software may not be updated to the new requirement. You need to use this template instead.
  • Direction re Title, also known as "Direction Re: Buyer Description" : Buyer to authorize his/her lawyer to transfer the land title.
  • Direction re Encumbrances, also known as "DIRECTION RE: TITLE (ENCUMBRANCES)" : Buyer to acknowledge and agree the permitted encumbrances on the land title.
  • Direction to Pay : Buyer to agree to pay purchase price (except for the deposit(s) that have been paid), taxes, government charges, utilities and legal fees and disbursements.

There are also three fee calculation sheets that lawyer will prepare for clients:

  • Statement of Adjustments : It's sellers' lawyers job to prepare this SOA, but usually buyers' lawyers will also prepare their version to double check the final figures match with each other.
  • Estimated Funds Needed to Purchase : The purpose of this sheet is to tell buyer the total amount he/she needs to bring to lawyer's trust account to close the transaction. In this example, we see the final amount includes the legal fees and disbursement.
  • Estimated Account : This is the breakdown of legal fees and other disbursements.

Buyer with a Mortgage

There are two other documents specific for mortgage deal (No, they are not mortgage documents, which we will discuss in another post):

  • Consent to Representation (mortgagee) : In a real estate transaction involving a mortgage, buyer's lawyer is also representing the lender, so they need a consent from the buyer to represent both parties. In case of the interest conflict between the lender and the buyer, "it may be necessary for us to decline to further act as solicitor in this matter, requiring both parties to seek other solicitors."
  • Statutory Declaration - No Secondary Financing : In most mortgage agreements, the lenders will ask lawyer to procure a statement from buyer that there will not be a second mortgage on the very target property.

There's a slight possibility that the funds from mortgage lender cannot not be advanced on closing, but the buyer still desires to take the possession of the property. Seller may agree (but is not obligated) to release the keys if the buyer makes some undertakings. Here below are the documents for such undertakings:

  • Tenancy at Will : Buyer to acknowledge the possession of the property is not a normal lease, and will expire in 10 days. Plus, buyer will pay an interest of the money to close from the possession to the actual payment of funds.
  • Assignment of Mortgage Proceeds : Buyer to agree the proceeds of his/her mortgage funds be paid to seller's lawyer trust account.
  • Covenant to Restore : Buyer to agree to transfer back the land title back to seller, and agree to discharge new mortgages, if any.
  • Transfer Back : This is a set of land transfer documents that a seller would sign and provide. If buyer were registered as the owner of the land title, buyer would be the new seller in the former mentioned documents.

There are also three fee calculation sheets that lawyer will prepare for clients:

Seller documents

  • Transfer of Land : This is the key documents for the transaction. In this sample, you will find "Transfer of Land" and its "affidavit of execution for witness". Together with the documents of Affidavit Re Value signed by buyer, these three documents are good enough for land title transfer registration, if sellers are two or more owners of the land title. If the buyers are tenants in common, you may need to list the share percentage for each buyer. Check out this template.

  • Consent of Spouse : If seller is the only owner of the land title and he/she is married, we usually need seller's spouse to sign this document. Furthermore, a lawyer needs to provide a certificate as an identification evidence.

    One more issue you need to pay attention: "Consent of Spouse" should be on the same page as the Transfer of Land (you may have already noticed the redacted part on the document. I did so to draw you attention to the transfer content, but consent content should be there if in real practice). If you are going to use a separate page to have the spouse to sign the consent, lawyer needs to provide a confirmation letter to the Land Title Office, certifying the connection between the consent and the property.

    In some very rare situations where the property is not resided by couples, spouse consent is not required by laws as to the disposition of the property. Seller can sign a Dower Affidavit instead. If seller is single/unmarried, then he/she can sign another version of Dower Affidavit.

For the purpose of land title transfer registration, the above documents are good enough. Here below are other supporting documents either for record or required by buyer side.

  • Certificate of Exempt Supply : In a resale transaction, buyer will need this document as proof that he/she does not need to pay GST.
  • Statutory Declaration RPR : This is the seller's promise that the RPR of the property is clean and there's no encroachment to a third party interest.
  • Notes to Seller : This in a document of to-do list for seller, reminding he/she of the work to do before closing.
  • Direction to Pay : Seller to authorize lawyer pay mortgage payout, taxes, and legal fees and disbursements to relevant parties out of trust account, and the final balance to seller.
  • Statutory Declaration re Canadian Residency : If Seller is non-resident, lawyer has an obligation to withhold a large amount of money in the trust account to clear taxes before settlement. By checking seller's ID and signing of this declaration signed by seller, lawyer can release balance without holding back.

There are three fee calculation sheets for seller as well:

  • Statement of Adjustments : It is seller lawyer's job to provide the SOA. The two main adjustments to the price usually will be property tax split and settlement on closing on pro rata basis, and any Home Association Fees or condo fees.
  • Estimated Net Sale Proceeds : Here we see a large portion of the sale proceeds was used to payout existing mortgage. Furthermore, in residential transaction, the practice is that seller pays commisions (both sides), so there's a settlement of commission on this sheet as well.
  • Estimated Account : legal fee and other disbursements.

Seller's lawyer is responsible to produce a trust package to the other party. This package include the Transfer of Land, Dower Consent, Certificate of Exempt Supply, Canadian Residency Declaration, Statement of Adjustments, RPR, and of course, the following letter:

  • Trust Letter : If seller/lawyer is going to give any undertakings, this is the document where these undertakings should be.