Legally Speaking

The Purchase Contract

When you purchase or sell a property, you will enter into a Contract with the other party. The law in British Columbia provides that a contract respecting land must be in writing. Once the Contract is signed by all parties with all subject conditions removed (as explained below), it is legally binding. Changes cannot be made to the Contract without the agreement of the other party. It is very important that you do not sign the Contract unless you understand its contents and effect.

What are subject conditions?

You can insert subjects in the Contract which must be either fulfilled or waived before a specified date before the Contract is legally binding on the parties. A common subject is the buyer's subject of obtaining satisfactory financing.

What does it mean by completion date, possession date, and adjustment date?

Completion Date is the date when closing documents are registered at the Land Title Office. It is the date when ownership changes hands and when the purchase price is paid.

Possession Date is the date when the buyer takes possession of the property. It is usually a day after the Completion Date as most sellers are reluctant to give up possession until they have received the purchase price.

Adjustment Date is the date when items such as property taxes, utilities, strata maintenance fees, are adjusted. The buyer is responsible for paying these items starting on the Adjustment Date. It is usually the same date as Possession Date.

The conveyance procedure

It is recommended that you retain a lawyer to work with your real estate agent before you sign the Purchase Contract to ensure it reflects your wishes and addresses your concerns. Your lawyer will explain to you your legal rights and obligations, as well as the contents of the Contract and their legal effect. Once you have committed to the Contract, your lawyer will handle the conveyance procedure for you, which involves the following:

If you are buying:

• Determining ownership - if there are joint owners, you can own the property with the other owner(s) as joint tenants (meaning if one owner dies, that owner's interest will be transferred to the other owner) or tenants in common (meaning if one owner dies, that owner's interest will be transferred in accordance with his/her Will or if there is no Will, in accordance with legislation)
• Obtaining and reviewing the title search and property tax search
• Arranging for house insurance and survey (to ensure compliance with by-laws)
• If the property is a strata lot, obtaining the necessary information and forms for registration from the strata corporation or the property manager
• Preparing closing documents
• Preparing mortgage documents
• Attending to your execution of the documents
• Registering the closing documents at the Land Title Office
• Disbursing funds including mortgage funds to the seller's lawyer
• Ensuring you are given clear title of the property
• Obtaining the State of Title Certificate which is the provincial government's guarantee of your ownership

If you are selling:

• Obtaining and reviewing the title search
• If you have a mortgage or other financial charges on title, obtaining a discharge statement from the chargeholder
• Receiving and reviewing closing documents prepared by the buyer's lawyer
• Attending to your execution of the closing documents
• Paying out the chargeholder and registering the discharge at the Land Title Office

The above is a general overview of the conveyance procedure. Variances occur on a case-by-case basis. Please remember to allow more time if the following applies:

• You are selling a property and you are a non-resident of Canada
• You will not be in town to sign closing documents
• You are buying new property

If you have any questions on legal matters, please contact the professionals at Cohen Buchan Edwards, Barristers and Solicitors. We also serve clients in Cantonese and Mandarin.