Here’s what to ask your real estate lawyer
Insurance claims against Ontario real estate lawyers cost their insurance company an average of $20.7 million per year, according to a fact sheet published this month by LawPRO, the Law Society’s insurance company. LawPRO provides mandatory errors and omissions insurance coverage to Ontario lawyers.
The fact sheet is intended to assist lawyers so they can avoid insurance claims, but it is also useful as a guideline for purchaser clients on what they can expect from their lawyers to avoid problems in real estate transactions — which are typically single-family, owner-occupied homes or condominiums. Based on the LawPRO document, here are some questions clients should be asking their real estate lawyer:
Will you review the land survey to show me the lot size and to discuss any risks or problems it reveals?
Will we be reviewing the title search and the subdivision or reference plans together?
Will we be discussing any plans I have for future use of the property, such as rebuilding the house or putting in a swimming pool?
Will you tell me whether it is legal to have a home-based business or more than one dwelling unit in the house?
Do you conduct a title search on adjacent properties to make sure that there has been no violation of the subdivision control rules in the Planning Act?
Will you be explaining the title insurance policy to me so I will know what risks are covered and what are excluded? Can you explain standard coverages, exclusions and property-specific exceptions?
Will we be going over every line on the Statement of Adjustments together to make sure the numbers are correct and there are no clerical errors?
Will we be reviewing the condominium plans together to ensure that the unit, parking and locker I am buying are the same ones shown in the agreement and on the deed and that they match my understanding of the locations of each? Does my unit overlook the lake or the parking lot?
Will you review the condominium’s status certificate for me and bring any deficiencies to my attention?
If my purchase is a multiple-unit dwelling or a commercial property, what additional searches will you be conducting?
Should real estate clients expect a personal meeting with their lawyers? LawPRO tells real estate lawyers that they should meet clients in person at least once.
“Take the time,” it tells lawyers, “to meet with the client in person to review the transaction and understand client instructions, particularly with respect to the client’s intended uses of the property. Not every matter is straightforward and you don’t want to have to be addressing a problem that was only noticed the day of closing, or never noticed at all.”
Real estate transactions involve far more than the clerical processing of paperwork, a quick sign-up meeting and handing over keys or money.
But it is also useful to remember that of all lawsuits against Ontario real estate lawyers, only 16 per cent result in a claims payment. Bob Aaron is a Toronto real estate lawyer. He can be reached at bob@aaron.ca, on his website at aaron.ca and on Twitter @bobaaron2.