Selling a home, strata (condo) or any real estate can be complex and overwhelming. At Sherry Anderson Notary Public we strive to make the process of selling real estate easier.
- When will I receive the sale proceeds?
- What is a Clearance Certificate?
- What Is a Form B Information Certificate?
- How do I recover a portion of the annual property taxes I pay?
- Should I let the Buyer of my property assume my mortgage?
- Who is responsible for payment of the real estate commission?
- When should I cancel my Home Insurance on the Property I am selling?
- What legal costs am I responsible for?
- What is a Property Condition Disclosure Statement?
Typically, in BC you will receive your sale proceeds on the Completion Date set out in your contract after the transfer documents are submitted for registration at the applicable Land Title Office.
A Clearance Certificate (also known as a “Certificate of Compliance”) is confirmation from the Canada Revenue Agency that the proceeds of the sale of a property in Canada by a person who is not permanently residing in Canada (a non-resident of Canada) has paid the tax relating to the sale of the property or the sale proceeds are not to be allocated for income tax or withholding purposes. A Clearance Certificate is required anytime a seller is, or becomes, a non-resident of Canada before the title to their property transfers to another party. Address this issue with your Notary if you think it might be an issue.
This is a certificate that your Notary under the Strata Property Act of British Columbia obtains from the strata corporation in the month that the transaction is closing. This certificate is formal confirmation, that acts as evidence, that no contributions, assessments or fees of any kind are overdue from the seller, the owner of the unit. It also discloses certain details about the corporation’s expenses, bylaws, and contingency reserve fund.
Property taxes are adjusted by your Notary in the normal course of the closing of your deal. The Seller will be compensated by the Buyer for any over payment made on a pro rate basis. However, the Seller will be giving the Buyer a formal credit for any underpayment of taxes that may be involved.
Unfortunately, there is no easy answer to this question. It boils down to whether the lender will consent to the assumption of the mortgage by the Buyer and agree to release the Seller, from all liability if the Buyer does not fulfill what were the Seller’s obligations.
It is important to understand that a mortgage can be assumed by a Buyer but the Seller not released from all liability under the mortgage. It is recommended that you contact a Notary or lawyer to review all the issues involved prior to agreeing to let someone assume your mortgage.
Briefly, a Seller may benefit from a Buyer assuming their mortgage in certain situations. However the Seller should always ensure that the lender consents to the assumption of the mortgage and will release the Seller from all liability. If the Seller is locked into the mortgage and would have to pay a penalty for early payout the Seller may benefit if the mortgage is assumed. This is because the Seller would not have to pay the penalty if their mortgage was assumed by a Buyer.
A Buyer may want to consider assuming your mortgage if the current interest rates available to the Buyer are substantially higher than the interest rate set out in the Seller`s mortgage. It should be noted that not all mortgages are assumable. Whether or not a mortgage is assumable, will depend on the terms of the mortgage. Some mortgages may be not be appropriate for assumption, for example, where a mortgage is registered security for an existing line of credit, or in support of a guarantee, or as security for all obligations of the borrower to the lender.
Generally payment of the Real estate commissions is the responsibility of the Seller. When the listing contract is signed by the Seller, the Sellers direct that the commission will be paid from the proceeds of the sale. As a result the Notary will pay any outstanding commission as part of the closing process.
Your Contract will outline the date and time that risks pass to the Buyer. Normally risk passes at a specified time on the Completion Date. However, it is recommended not to cancel the insurance on the property until both the date and time of risk outlined in the contract has elapsed and you have received the proceeds of sale.
In British Columbia most contracts stipulate that the Seller bears all costs associated with clearing the title. For example the Seller’s Notary will make arrangements to have all financial charges paid out and discharged from the title. The Buyer bears all costs associated with arranging and registering the new mortgage loan and costs of transferring title.
This is a document that contains a series of questions about the property that have been answered by the Seller. If the property has been listed with a Realtor, it will usually include a Property Disclosure Statement. Sellers are required to disclose known material latent defects about their property to a buyer. This is a defect that cannot be discerned through a reasonable inspection of the property. It is recommended that the Seller disclose any known material latent defects about their property on the Property Disclosure Statement. This provides written confirmation that the known material latent defects were disclosed by the Seller.