Understanding Conveyancing: A Guide to Closing Your Real Estate Purchase or Sale
If you’re in the process of buying or selling a home, you’ve likely heard the term “conveyancing.” But what does it really mean, and how does it affect your transaction? Conveyancing is the essential legal process that transfers property ownership from the seller to the buyer. Here’s a breakdown of the conveyancing process and what to expect as you move toward closing day.
What is Conveyancing?
Conveyancing is the legal process of transferring property ownership. In British Columbia, a lawyer or notary handles the conveyancing process to ensure all legal and financial obligations are met before the property officially changes hands. Understanding each step will help you prepare and avoid potential roadblocks along the way.
The Seven Steps of Conveyancing
1. Engagement of a Lawyer or Notary
Once your real estate deal is firm (meaning all conditions are met), it’s time to engage a lawyer or notary to oversee the conveyancing. Early engagement is crucial to avoid delays and ensure all necessary documents and searches are completed in a timely manner. Your lawyer or notary may provide an engagement letter outlining their services, responsibilities, and any costs involved.
2. Collection of Client Information
To get started, your legal representative will need to collect specific details from you. This includes:
- Your full legal name, address, birthdate, and contact details.
- A copy of the purchase or sale contract and any amendments.
- Information about your mortgage broker, lender, or insurance provider (if applicable).
- If you are buying with another person, how you want to be registered on title (joint tenants or tenants-in-common).
- For sellers, mortgage or loan reference numbers to ensure any financial obligations on the property are cleared.
Power of Attorney
If someone is signing on your behalf, or you are signing on the behalf of someone else using a power of attorney, notify your lawyer or notary immediately so they can ensure it meets legal requirements. A power of attorney is a legal document that allows another individual (your attorney) to act on your behalf in legal and financial matters. In real estate transactions, the power of attorney must comply with the Land Title Act and be registered with the Land Title Office. Processing times for power of attorney registration can take one to three weeks, so it’s critical to handle this well in advance of closing. If there are any defects in the power of attorney document, they must be resolved before the transaction can proceed smoothly.
3. Searches and Due Diligence
Your lawyer or notary will conduct various searches and due diligence tasks, depending on whether you’re buying or selling:
- For Buyers:
- Title search to confirm ownership and any legal restrictions on the property.
- Tax certificate to check for outstanding property taxes or municipal fees.
- Strata documents (if applicable) to verify financial and legal standing.
- Insurance confirmation to ensure appropriate coverage is in place.
- Personal property searches to ensure no liens exist against the seller.
- For Sellers:
- Title search to confirm ownership.
- Mortgage payout statements to clear financial encumbrances.
4. Preparation and Review of Closing Documents
The buyer’s lawyer or notary will prepare essential closing documents, including the transfer of ownership and mortgage registration (if applicable). The seller’s legal representative will prepare discharges for any outstanding mortgages and ensure the buyer’s closing documents align with the sale agreement. Both parties will review the documents to confirm accuracy before signing.
5. Client Signing Appointment
A few days before the completion date, you’ll meet with your lawyer or notary to sign all necessary documents.
What If You Are Out of Town?
If you are unable to be physically present for the signing appointment, alternative arrangements can be made. You may be required to sign documents in front of a commissioner for taking affidavits, such as a local notary or lawyer in your location. If you are obtaining financing, confirm with your lender whether they allow mortgage documents to be signed out of province or overseas. Some lenders have specific requirements regarding signings outside of British Columbia, so it’s important to discuss this with your legal representative as early as possible to avoid delays.
6. Return of Documents
Once signed, the seller’s lawyer or notary will send the required documents to the buyer’s legal representative. The buyer’s lawyer will ensure that funds are available before proceeding with the transfer.
7. Registration and Closing
On the completion date, the buyer’s lawyer will register the transfer and mortgage documents with the Land Title Office. Once confirmed, funds will be released to the seller’s lawyer, who will ensure any outstanding debts on the property are cleared. The final step is reporting the transaction to the buyer and seller, as well as the involved real estate brokerages.
Why Understanding Conveyancing Matters
Having a clear understanding of the conveyancing process can help you feel more confident as you approach closing day. While your lawyer or notary handles the legal work, staying informed and proactive can help prevent last-minute surprises.
If you have any questions about your upcoming transaction or need recommendations for a trusted lawyer or notary, feel free to reach out. I’m here to help ensure a smooth and successful closing!