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Real Estate 3-day cooling period

Buying a home can be an exciting yet daunting process. As a home buyer, you want to make the best decision while understanding your rights under the law. The real estate market in British Columbia is dynamic, and it’s important to have the support of an experienced real estate lawyer. They will keep you updated on amendments that govern the buying process. One recent amendment of note was made to the Home Buyer Rescission/Protection Period

Starting in 2023, home buyers have the right to cancel a contract within 3 business days after an offer is accepted, even if no subject-clauses are in the contract. If they choose to do so, they will need to pay a 0.25% charge to the seller, which can be deducted from the deposit. 

Home Buyer Rescission/Protection Period

On January 3rd, 2023, the BC Provincial Government put in effect amendments to the Home Buyer Protection Period that allows persons purchasing residential properties a mandatory three business days to withdraw from a contract regarding most real estate purchasing contracts, including detached houses, town houses, and condo apartments. It gives home buyers a “cooling off” period for whatever reason they need before they are bound to the contract. These reasons may include an opportunity to conduct their due diligence, such as consulting with their real estate lawyer, or just simply to ‘sleep on it’ and to evaluate if the purchase is ideal for them after the initial rush of excitement. It also allows you, the buyer, to make arrangements to have the property inspected and source financing although traditional subject-to clauses can also be used to achieve this. 

If, after three business days, you decide to rescind the contract of purchase and sale, you will have to pay the seller a recession fee of 0.25% of the purchase price of the property. If you already paid the deposit, the 0.25% recession fee would be paid to the seller from the deposit, and the remainder of the deposit must be paid back to you in a timely manner. The new amendment was designed to offer some protection to home buyers from being coerced into making a decision too quickly especially in hot market, while the rescission fee also mitigates against frivolous offers for home sellers.

Other considerations

The home buyer protection period supplements but does not replace traditional protections such as subject-clauses. While the 3-day cooling period can grant some peace of mind when making one of the biggest financial decisions of your life, it is not the only legal tool available for home buyers to consider in purchasing a home. In some cases, other legal options are available which may protect your legal rights just as well without the costly rescission fee that accompanies this cooling clause. We recommend that you consult with your real estate lawyer or legal professional to ensure you clearly understand your rights under the revised home buyer protection period

Your Real Estate Lawyer in British Columbia 

Real estate transactions are complex and involve a significant amount of paperwork and legalities. The experienced real estate lawyers at Bernard Lau & Co. can help you navigate the process of buying a home while protecting your interests and ensuring you understand your legal rights. 

Complete our client contact form or call 604.285.5240 to schedule a consultation.

The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Bernard Lau and Co. (or their own legal counsel) regarding any specific legal issues. Bernard Lau and Co. does not warrant or guarantee the quality, accuracy or completeness of any information on this website and should not be relied upon as being proper, accurate, timely or fit for any particular individual’s own circumstances other than for educational purposes.
Accessing or using this website does not create a lawyer-client relationship. Although your use of the website may facilitate access to or communications with members of Bernard Lau and Co. via e-mail transmissions or otherwise via the website, receipt of any such communications or transmissions by any member of Bernard Lau and Co. does not create a lawyer-client relationship. Bernard Lau and Co. does not guarantee the security or confidentiality of any communications made by e-mail or otherwise through this website.

Real Estate and Conveyancing | Bernard Lau and Co.

What Is Conveyancing?

Conveyancing is the legal process of transferring the title to a property from the seller to the purchaser in a real estate transaction. It is a crucial aspect in the buying, selling or transferring of real estate and typically occurs after you’ve already signed a contract to purchase or sell a property. While it may not be as exciting as finding and viewing your dream home, conveyancing is just as important because the title to a property needs to change ownership to make the transfer official. That’s why it’s also important to have an experienced real estate legal professional handle the conveyancing process on your behalf. A lawyer’s legal experience and training in real estate law can help protect your interests and to ensure that the transfer of ownership is completed legally and properly.

The Process of Conveyancing

When selling real estate, conveyancing typically involves the following steps:

  1. Finding and retaining a property lawyer to handle the legal process on your behalf.
  2. Reviewing the terms of the contract of sale between the buyer and yourself (the seller) including price, the completion date and other material terms that may affect your closing.
  3. Review the title search to see what liens, mortgages or charges need to be removed or dealt with.
  4. Reviewing the documents prepared by the purchaser’s legal representative and witnessing your signature on these conveyancing documents including the Form A transfer, explaining the vendor statement of adjustments and the final sale proceeds that you as the seller will be receiving.
  5. Tending to the transferring of ownership of the property to the buyer and receiving the sale proceeds in trust, and releasing the net sale proceeds to you.

When buying real estate, the conveyancing process is slightly more complicated and involves the following:

  1. Instruct your property lawyer to handle the legal process on your behalf.
  2. Reviewing the contract of sale and conducting the necessary title searches to ensure the property is free from liens or making necessary arrangements to remove these liens.
  3. Preparing the transfer documents, which will be signed by the seller and transferred to you (the buyer).
  4. Receiving your purchase funds by bank draft and arranging the mortgage funding with your bank if you have a mortgage.
  5. Registering the Form A transfer at the land title office to officially transfer the ownership of the property to you (the buyer), and sending the sale proceeds to the seller’s lawyer.

The lawyer’s role in due diligence

Your real estate lawyer must perform due diligence to protect you in the transaction. Just as you would not want to purchase a car with a lien attached, a real estate lawyer will carry out searches such as title searches, property tax searches and even strata-related searches if applicable. As a purchaser, once you purchase a property, you are then responsible for all liens, strata arrears or property tax arrears that may attach to the property, so it is your lawyer’s job to conduct his due diligence to ensure that any such liabilities are handled properly, in most cases by the seller, so that you get a clean and clear title subject to your own mortgage if any. Other examples may include ensuring sufficient holdbacks so that is protected from strata liens or even from the CRA if the seller is a non-resident.

The objective of due diligence in conveyancing is to ensure that you get what you bargained for and that your interests as a bona fide purchaser for value are protected throughout.

Your Real Estate and Property Law Lawyer

The experienced team of real estate lawyers at Bernard Lau & Co. has over a decade of experience to guide you through your conveyancing process. We aim to assist clients to undergo the conveyancing process as smoothly, and efficiently as possible and to provide support through all the stages of your transaction while protecting your interests and minimizing legal risks and disputes. While some transactions may be contentious, we have the experience to provide legal support and advice to protect your interests throughout the process.

Call 604.285.5240 or fill out our contact form to schedule a consultation.

The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Bernard Lau and Co. (or their own legal counsel) regarding any specific legal issues. Bernard Lau and Co. does not warrant or guarantee the quality, accuracy or completeness of any information on this website and should not be relied upon as being proper, accurate, timely or fit for any particular individual’s own circumstances other than for educational purposes.
Accessing or using this website does not create a lawyer-client relationship. Although your use of the website may facilitate access to or communications with members of Bernard Lau and Co. via e-mail transmissions or otherwise via the website, receipt of any such communications or transmissions by any member of Bernard Lau and Co. does not create a lawyer-client relationship. Bernard Lau and Co. does not guarantee the security or confidentiality of any communications made by e-mail or otherwise through this website.

tite fraud how to protect yourself

Buying property represents a major milestone in many people’s lives and can often symbolize stability and security. Property ownership often brings a sense of pride and accomplishment, provides a space you can call your own and can represent a significant investment in your future.

However, property owners must be mindful of title fraud. The recent high profile news reports of fraudsters stealing homes in Toronto and in BC have caused much anxiety to homeowners everywhere.

So what is title fraud? Title fraud can mean many things, but in general, it is a type of fraud that typically involves the fraudulent sale of a home or refinancing of a property that does not belong to the fraudster who poses as the real owner. It can result in the rightful owners losing their property or being encumbered with a mortgage that is not their own. Title fraud often goes undetected until it is too late – so let’s look at how you can safeguard your property and protect yourself from title fraud.

What Is Title Fraud?

Title fraud is a type of real estate fraud in which someone falsely claims ownership of a property and then sells or uses it as security for a mortgage loan. Title fraud can be committed in several ways, including:

  • impersonating the rightful owner and selling the property without their knowledge or consent
  • impersonating the rightful owner to borrow money secured  against property to which the fraudster does not actually own
  • creating false documents to support the fraudster’s claim to ownership for nefarious purposes
  • falsifying the history of the property to make it appear that it has a clear title when it has liens or outstanding debts on title
  • fabricating a chain of title to make it look like the fraudster has a legitimate claim to the property

How Can I Protect Myself from Title Fraud?

You would think that the individuals most vulnerable to title fraud are typically first-time homebuyers, the elderly, and those unfamiliar with the real estate purchasing process. While it’s true that these groups can be more susceptible to these scams, the reality is that the risk exists for all homeowners regardless of your experience or your background.

Here are some tips for protecting yourself and your loved ones against title fraud:

  • Conduct a thorough and current title search to verify ownership information before purchasing a property. It’s essential to verify the authenticity of the title deed and any other related documents. This can include searching public records and checking for liens or encumbrances and obtaining a title search from the BC Land Title Office.
  • Engage a qualified real estate lawyer to handle the transfer of title and perform due diligence. Legal professionals have experience to help verify the authenticity of title documents and to protect your interests during the process.
  • Keep your personal information secure to prevent fraudsters from using it to commit title fraud. That includes your social insurance number, passport information and home address.
  • Regularly monitor your credit report to detect any unauthorized activity, such as the opening of a new bank account or line of credit in your name which may suggest that your financial information has been compromised.
  • Purchasing title insurance from a legal professional to compensate you in case you suffer a loss due to title fraud. It’s not too late to buy a policy even if you’ve owned the property for a few years now.
  • You can also apply to the land title office to physically remove the title itself, known as the ‘duplicate title’ but then you’re responsible for storing the duplicate title in a safe place, and you’ll need to re-deposit the duplicate title when you want to sell or deal with the property. If the duplicate title is removed, transactions involving the home cannot take place, however if you lose the duplicate title, you’ll have to go through a very burdensome process to replace it.
  • Sign up for ‘alerts’ on Google or other search engines which will alert you if there are news about your home address. Many properties listed for sale will be published on a realty webpage, and an alert can give you advanced warning if someone tries to list your property, but this method is not fool-proof and is definitely not a replacement for title insurance which protects a lot more than just a home being fraudulently sold. For example, if a fraudster took out a mortgage and borrowed money against your home, that would likely not trigger a google alert and you may still suffer a loss.

What is the impact to innocent home buyers who purchase a home from a fraudster?

  • For now, the legal impact on buyers is, surprisingly, muted. That’s because for innocent buyers who paid fair market value for their homes, their rights as homeowners will in most cases be preserved once they register on title under the current land title system known as the Torrens System. This provides certainty of ownership to buyers, as long as they were not part of the fraud, and as long as they paid a fair price their home, that they have the assurance that the home usually cannot be taken away from them just because a fraudster pretending to be the seller sold it to them.  In other words, this means that registration of the buyer’s ownership provides certainty and is conclusive of their ownership rights, a concept known in law as ‘indefeasible title’ . However, this also means it’s more difficult for the original owners who are victims of fraud, to get their title back once it is registered to an innocent home purchaser.
  •  If the buyers paid fair and good money for the house, in most cases, they would be the ones to suffer the loss if they simply gave the house back to the seller, unless they were compensated. However, in most cases, the seller is not going to want to pay additional monies to re-purchase their own house from the innocent buyer. In theory, the Land Title Office in BC has an insurance fund known as the ‘Assurance Fund’ >which should reimburse the owners in case of property fraud. However, in practice, this route is often time consuming, cumbersome, and the owners face significant hurdles to go through the process to get fully compensated from the Assurance Fund. Buyers are encouraged to purchase private insurance known as ‘title insurance’ which will often compensate the buyers if they suffer any loss as a result of title fraud. Title insurance can be purchased through a lawyer or notary public, and provides more protection in the form of financial compensation to title insurance policy-holders affected by the fraud which could include not just individuals but also the banks who lend mortgages registered against a fraudulent title.

Can owners who are defrauded get their house back?

  • going back to the concept of ‘indefeasible title’, it may be difficult for the original owners to ‘get their properties back’ as long as the buyers were not part of the fraud, and paid fair market value for the properties. Sellers could in theory re-purchase the property back from the innocent buyers with the financial compensation from title insurance, but there is no guarantee that the buyers would be willing to re-sell the house back to the seller. Of course, each case has to be looked at on a case-by-case basis, and if the buyers did in fact collude or co-operate knowingly with a fraudster to purchase the property, then the defrauded homeowner could take the matter to the BC Supreme Court, but that could still involve lawyers and potentially a trial, hence the necessity of title insurance to potentially pay for the legal expense of doing so.

Real Estate Lawyers in Richmond, British Columbia

If you suspect that you are a victim of title fraud, report to the police immediately and consult a real estate lawyer. Reinstating ownership of a property title can be time-consuming and often times, you must act quickly.  At Bernard Lau & Co., we have experience to advise you on protecting yourself from title fraud. If you’d like to learn more about title fraud or would like to order title insurance, call us at 604.285.5242 or complete our contact form to arrange a consultation.

The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Bernard Lau and Co. (or their own legal counsel) regarding any specific legal issues. Bernard Lau and Co. does not warrant or guarantee the quality, accuracy or completeness of any information on this website and should not be relied upon as being proper, accurate, timely or fit for any particular individual’s own circumstances other than for educational purposes.
Accessing or using this website does not create a lawyer-client relationship. Although your use of the website may facilitate access to or communications with members of Bernard Lau and Co. via e-mail transmissions or otherwise via the website, receipt of any such communications or transmissions by any member of Bernard Lau and Co. does not create a lawyer-client relationship. Bernard Lau and Co. does not guarantee the security or confidentiality of any communications made by e-mail or otherwise through this website.

Collapsing Transactions - Seller's Perspective | Bernard Lau and Co. Law

Especially in today’s rising interest rate environment, it’s not always easy to sell a house. Negotiations occasionally fall through even after a contract has been signed. Therefore, it’s essential to hire a real estate lawyer to review and draft legal documents, explain your purchase and sell agreement, look out for your best interests and represent you during the transaction. The reputable lawyers at Bernard Lau and Co. will advise you on your legal rights and obligations under the purchase agreement.

 

 

Reasons a Buyer May Withdraw from a Transaction

Buyers might back out of real estate transactions for a number of reasons, including:

  • Financing problems: Unforeseen changes in buyers’ financial circumstances, like job losses or significant decreases in income, can lead to collapsing transactions.
  • Property issues: During inspections, buyers may discover issues with the property. These can include structural, mechanical or environmental problems such as oil tank discoveries.
  • Market conditions: Buyers may reconsider the purchase due to market conditions. For example, if the market has cooled, buyers may no longer want to purchase the property at the agreed-upon price as they may suffer from buyer’s remorse.
  • Cold Feet: Buyers can get nervous about making large purchases and back out of the transaction for unrelated or unforeseeable reasons.
  • Better deals: If buyers find a property they prefer to the one they’re contracted to purchase or find a similar property at a lower price, they may try to terminate the contract.

How to Protect Yourself During a Real Estate Transaction

There are a few ways sellers can protect themselves in case of or reduce the risk of collapsing transactions. They include:

Requesting a deposit

Requesting a deposit or earnest money from the buyer can protect you from potential financial losses if they back out of the transaction. You can use the deposit as compensation for costs incurred during the transaction or any losses that may arise due to the transaction falling through. You may even ask for the deposit to be paid directly to you as the seller, or ask the buyer to increase the deposit, although be careful asking for too much – too large of a deposit may not be enforceable.

Keeping detailed records

Maintain detailed records of all correspondence and transactions between you and the buyer and his realtor. These records can include emails, text messages and other forms of communication. If a dispute arises, they can help resolve the issue by giving clarity to the circumstances that precipitate a collapsing transaction and sufficient evidence may also deter a buyer from considering backing out of the transaction if it’s clear that he had no legitimate grounds for doing so but simply changed his mind.

Be honest

Buyers may often try to back out of a contract by claiming that the seller was not truthful to him in describing the property by playing down certain risks or even outright lying about the condition of the property. Oftentimes, a seller’s best defence is to be honest about the state of the property and to respond truthfully if any concerns from the buyer are raised. That being said, a seller usually has no obligation to disclose absolutely everything that he knows about the property due to the principle of caveat emptor (or buyer beware). Sellers have an obligation to disclose latent material defects but it can be tricky to know what constitutes such a defect that must be disclosed. Consult with your lawyer if you are unsure about whether certain disclosures are necessary.

Contacting a lawyer

You should immediately seek legal advice if a buyer backs out of the transaction. An experienced property law lawyer can guide you through the legal process and ensure your rights are protected. They can also help you navigate the dispute resolution process and represent your interests in negotiations or court. Furthermore, they’ll identify and mitigate legal risks arising from the transaction.

Are You Looking for a Real Estate Lawyer in Richmond and Metro Vancouver, BC?

If you’re a property seller dealing with a collapsing transaction, contact Bernard Lau and Co.

Our experienced lawyers will review your purchase agreement and all communication between you and the buyer. They will explore all options to get the transaction back on track and protect your interests if it falls through.

Call us at 604.285.5240 or fill out our contact form to schedule a consultation.

The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Bernard Lau and Co. (or their own legal counsel) regarding any specific legal issues. Bernard Lau and Co. does not warrant or guarantee the quality, accuracy or completeness of any information on this website and should not be relied upon as being proper, accurate, timely or fit for any particular individual’s own circumstances other than for educational purposes.
Accessing or using this website does not create a lawyer-client relationship. Although your use of the website may facilitate access to or communications with members of Bernard Lau and Co. via e-mail transmissions or otherwise via the website, receipt of any such communications or transmissions by any member of Bernard Lau and Co. does not create a lawyer-client relationship. Bernard Lau and Co. does not guarantee the security or confidentiality of any communications made by e-mail or otherwise through this website.

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***ATTENTION: We will be moving our office on January 1, 2023. Our new location is at #930-6388 No.3 Rd, Richmond, BC, across from Richmond Centre. Please call us at 604.285.5240 or email us if you have any questions. Thank you***