Resale Condo Purchase - Closing Documents explained in Layperson's Terms

By Winnie J Luk

Congratulations on the purchase of your condo! The following are typical closing documents that the Purchaser must sign in a resale condo transaction explained in plain language. The terms Purchaser and Borrower are used interchangeably.

Acknowledgement and Direction (Transfer)

In this document, the Purchaser authorizes the lawyer to transfer ownership of the condo unit to the Purchaser on closing day and to electronically register the Purchaser’s name on the title deed for the condo unit with the Land Registry Office.

Purchaser’s Undertaking & Direction re Title

In this document, the Purchaser provides the Seller and the Seller’s lawyer with an undertaking (ie promise) to readjust for any expenses owed by the Purchaser to the Seller for any prepaid expenses made by the Seller (for eg. prepaid property taxes, prepaid condo fees).

This document also sets out how the Purchaser wishes to take title to the property. It will include the Purchaser’s full legal name, birthdate, and address for service. If there is more than one Purchaser, the manner in which they wish to take title must also be specified (i.e. as joint tenants or tenants and common).

Consent to act re: Joint Retainer (where there are multiple Purchasers)

If there are more than one Purchaser’s, this document should be executed to provide that in the event of a conflict, the lawyer must cease to act for one or both parties depending on the nature and the severity of the conflict.

Acknowledgment and Direction re Title Insurance
This document consents to the procurement of a title insurance policy instead of a lawyer's opinion on title. Almost all residential real estate closings involve title insurance.

Acknowledgement and Direction (Charge/Mortgage)

In this document, the Purchaser authorizes the lawyer to electronically register the mortgage in favour of the lender on the title deed for the condo unit with the Land Registry Office.

Acknowledgment of Receipt of Standard Charge Terms

This document acknowledge’s that the borrower has received a copy of the standard charge terms for the mortgage.

Acknowledgement of Conflict (from Borower)

In residential real estate transactions, it is quite common for the lawyer for the Purchaser to also act as the lawyer for an institutional lender. The borrower must execute an acknowledgment of conflict, which confirms that the lawyer will be acting for both the Purchaser and the lender and that the lawyer cannot keep any information received in connection with the transaction confidential, insofar as the other party is concerned, and that in the event that a material conflict between the borrower and lender materializes that cannot be resolved, then it may be necessary for the lawyer to discontinue acting for one or both parties, depending on the nature and the severity of the conflict.

Direction re Mortgage Funds

This document is executed by the borrower and addressed to the lender directing the lender to make the net loan proceeds payable to the lawyer's trust account.

Land Transfer Tax Affidavit

The Land Transfer Tax Affidavit should be executed by the Purchaser and commissioned. This affirms the validity of the information that the Purchaser is providing to their lawyer, and that the lawyer is relying in to include in the tax statements of the electronic transfer on behalf of the Purchaser.

Statutory Declaration re Owner Occupied

Where requested by the lender, a statutory declaration stated that the condo will be resided by the borrower and not rented out may be executed by the borrower and commissioned.

Statutory Declaration re Form of Identity

Where the names on the Purchaser's identification do not match each other or that on title (for e.g. name change, married versus maiden name), a statutory declaration stating that the identifications with different names refer to the same person must be executed and commissioned.

The law firm Landmark Law Professional Corporation will be pleased to assist with your real estate purchase. For more information, please click here.

Disclaimer: This article does not contain legal advice and only provides general information. It is not intended to replace advice from a qualified legal professional and should not be relied upon to make decisions. In all cases, contact your legal professional for advice on any matter referenced in this article before making decisions. Use of this article does not establish a lawyer-client relationship.

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Winnie J Luk, BA, JD, MBA, founder of Landmark Law, is a seasoned Ontario lawyer practicing in Wills and Estates, Real Estate, and Business Law and frequent speaker of free legal education seminar.