Selling Real Estate in Ontario

Selling a home or other property involves more than signing an Agreement of Purchase and Sale and handing over the keys.

Your real estate lawyer helps complete the legal transfer of ownership, address mortgages and other matters registered on title, prepare the closing documents, receive the sale funds, and deliver the net proceeds after the transaction closes.

Nobari Law Professional Corporation assists sellers with residential and select commercial real estate transactions throughout Ontario.

You may contact a real estate lawyer before or after signing the Agreement of Purchase and Sale.

Having the Agreement reviewed before it becomes binding may help identify concerns involving:

• the purchase price and deposit; 
• the closing date; 
• fixtures and rental items; 
• conditions and warranties; 
• vacant possession; 
• inclusions and exclusions; 
• condominium-related terms; and 
• other obligations affecting the sale. 

If the Agreement has already been signed, it should be provided to your lawyer as soon as possible so the legal work can begin and any important deadlines can be identified.

The seller’s lawyer manages the legal work required to complete the transaction.

Depending on the property and the terms of the Agreement, the seller’s lawyer may:

• review the Agreement of Purchase and Sale, amendments, title, and ownership information;
• communicate with the buyer’s lawyer and other parties involved in the transaction;
• prepare the transfer and other closing documents;
• obtain mortgage payout information and arrange for registered mortgages to be discharged;
• prepare the statement of adjustments;
• complete the electronic closing and registration process;
• pay mortgages, commissions, taxes, legal fees, and other authorized amounts from the sale proceeds; and
• deliver the remaining net proceeds in accordance with the seller’s written directions.

To begin the legal work, the seller should generally provide:

• the signed Agreement of Purchase and Sale; 
• all schedules, amendments, waivers, and notices; 
• two pieces of valid government-issued identification; 
• a recent property tax bill; 
• mortgage or secured line-of-credit information; 
• condominium information, where applicable; 
• details of any rented equipment, such as a furnace or water heater; 
• information about tenants or leases, if applicable; 
• a copy of any survey in the seller’s possession; 
• keys, access codes, and other access information; and 
• information about any judgments, liens, construction claims, court orders, or other issues affecting the property. 

Additional documents may be required depending on the transaction.

Do not send original documents, identification, complete account numbers, passwords, or other sensitive information unless requested by Nobari Law Professional Corporation. If requested, please use the document-sending method confirmed by the firm.

If a mortgage or secured line of credit is registered against the property, the seller’s lawyer will generally request a payout statement from the lender.

The amount required to pay out the mortgage may include:

• the outstanding principal; 
• accrued interest; 
• a prepayment penalty; 
• discharge or administration fees; 
• amounts owing under a secured line of credit; and 
• other charges imposed by the lender. 

The payout amount may therefore be different from the balance shown on a recent mortgage statement.

The seller should contact the lender before closing if they want information about penalties, portability, or other mortgage options.

Paying the mortgage balance does not automatically remove the mortgage registration from title.

After the required payout funds are delivered, the lender must provide or register a discharge. 

The seller’s lawyer may be required to hold back funds or provide an undertaking while awaiting the discharge.

The timing depends on the lender and the circumstances. A discharge may sometimes be registered after the sale has closed.

The statement of adjustments is a financial calculation used to determine the amount payable on closing.

Certain property-related expenses may be adjusted between the buyer and seller based on the closing date. These may include:

• property taxes; 
• condominium common expenses; 
• prepaid rent; 
• rental deposits; and 
• other amounts addressed in the Agreement. 

For example, if the seller has paid property taxes covering a period after closing, the buyer may reimburse the seller for the applicable portion.

The adjusted purchase price is then used as part of the calculation of the funds required to complete the transaction.

A condominium sale may involve additional information and closing adjustments.

The seller may be asked to provide:

• the condominium corporation’s legal name; 
• the unit and level numbers; 
• parking and locker information; 
• current common-expense information; 
• details of any arrears; 
• information about special assessments; 
• notices received from the condominium corporation; 
• details of rented parking or locker spaces; and 
• the status certificate, if one has been ordered. 

The Agreement should clearly identify the unit, parking space, locker, and any items included in the sale.

If the property is occupied by a tenant, the seller should inform the lawyer at the beginning of the transaction.

The Agreement should address whether:

• the buyer will assume the tenancy; 
• vacant possession is required; 
• rents must be adjusted; 
• a rent deposit has been collected; 
• keys and lease documents must be delivered; and 
• any landlord and tenant notices have been served. 

A real estate closing does not replace the requirements of Ontario’s residential tenancy legislation. Separate advice may be required concerning termination of a tenancy, eviction, notices, or disputes involving a tenant.

Before the closing date, the seller will generally need to:

• provide the required documents and information; 
• review and sign the closing documents; 
• confirm mortgage and secured-debt details; 
• arrange for vacant possession where required; 
• remove items that are not included in the sale; 
• maintain property insurance until the lawyer confirms that the sale has closed;
• coordinate with the listing representative to ensure that lockbox codes, keys, and any other required access items are available for release after closing; 
• complete any repairs or other obligations required by the Agreement; and 
• advise the lawyer promptly of any damage or significant change affecting the property. 

The seller should not cancel property insurance until the transaction has closed and the lawyer has confirmed that the sale was completed.

On the closing date, the buyer’s lawyer delivers the closing funds and completes the required closing steps.

The lawyers exchange the necessary documents and electronically register the transfer of ownership. Ontario’s electronic land registration system is used for most transfers and other land registrations. 

Once the transaction has been completed, the seller’s lawyer may:

• pay out registered mortgages and secured debts, if applicable; 
• pay the real estate commission, if applicable; 
• pay outstanding property taxes or other authorized amounts, if applicable; 
• deduct legal fees and disbursements; 
• confirm that the transaction has closed so that the agreed key or access arrangements may be released; and 
• disburse the remaining net sale proceeds in accordance with the seller’s written directions, including applying them toward a related purchase where applicable.

Closing times vary. Sellers should not make financial commitments or schedule dependent transactions based on receiving the proceeds at a particular hour unless arrangements have been confirmed.

The amount the seller receives is not the same as the purchase price.

The net sale proceeds are generally calculated after accounting for:

• adjustments under the Agreement; 
• mortgage and secured-debt payouts; 
• lender penalties and discharge fees; 
• real estate commission and applicable HST; 
• outstanding property taxes or condominium expenses; 
• legal fees and disbursements; 
• required holdbacks; and 
• other authorized payments relating to the transaction. 

The lawyer will prepare a trust statement showing the money received and the amounts paid from the sale proceeds.

Part of the sale proceeds may need to be held back where an issue cannot be completed or confirmed on closing.

Examples may include:

• an outstanding mortgage discharge; 
• unpaid property taxes; 
• a construction lien or other title matter; 
• an unresolved adjustment; 
• damage to the property; 
• missing keys or access items; 
• a requirement under the Agreement; 
• the seller is or may be a non-resident of Canada for income-tax purposes and the required CRA Certificate of Compliance has not been obtained; or 
• another matter requiring funds to remain available after closing. 

Where a seller is a non-resident of Canada for income-tax purposes, Canadian tax law may require part of the sale proceeds to be withheld and remitted to the Canada Revenue Agency. Funds may therefore be held in trust pending receipt of a Certificate of Compliance and completion of the applicable tax requirements. The seller should obtain advice from a qualified accountant or tax professional as early as possible.

The amount and release conditions will depend on the Agreement and the particular issue.

Ontario land transfer tax is generally payable by the purchaser or person acquiring an interest in land, rather than by the seller. 

A seller may still have other tax considerations, including possible income tax or capital-gains consequences. Questions about taxation should be reviewed with an accountant or qualified tax adviser.

Where a registered owner has died, additional legal steps may be required before the property can be sold.

The estate trustee should advise the lawyer:

• whether a Certificate of Appointment of Estate Trustee has been issued and provide a copy, if available; 
• whether the deceased owned the property alone or with another registered owner; 
• whether more than one estate trustee was appointed; 
• whether the property is to be sold or transferred to a beneficiary; and 
• whether there are any mortgages, tenancies, liens, or other known matters affecting the property. 

The Certificate of Appointment is generally the main evidence of the estate trustee’s authority where probate has been obtained. The lawyer will review title and prepare the necessary transmission, land-registration, and closing documents. 

The documents and legal steps required will depend on how the deceased owned the property and whether probate has already been obtained.

Learn more about estate title transfers and probate with a Will in Ontario or probate without a Will in Ontario.

All registered owners will generally need to participate in the sale and provide instructions.

The sellers should advise their lawyer of:

• their marital status; 
• whether the property is a matrimonial home; 
• any separation agreement or court order; 
• whether all owners agree with the sale; 
• how the net proceeds should be divided; and 
• whether one owner has given authority to another person under a Power of Attorney. 

Additional documents or independent legal advice may be required depending on the ownership and family circumstances.

Nobari Law Professional Corporation provides legal assistance with residential real estate and select commercial sales in Ontario.

Our services may include:

• reviewing the Agreement of Purchase and Sale; 
• reviewing title and ownership information; 
• preparing and reviewing closing documents; 
• communicating with the buyer’s lawyer, lender, and real estate representatives; 
• obtaining mortgage payout information; 
• preparing the statement of adjustments; 
• arranging for the payment and discharge of registered mortgages; 
• completing the electronic closing; 
• paying authorized amounts from the sale proceeds; 
• reporting to the seller following closing; and 
• delivering the remaining net sale proceeds. 

Every transaction is different. The legal work required will depend on the property, title, mortgage arrangements, Agreement of Purchase and Sale, and surrounding circumstances.

Legal guidance can help a seller understand the Agreement, prepare for closing, and complete the transfer of ownership properly.

Contact Nobari Law Professional Corporation to discuss the sale of a house, condominium, or other residential property in Ontario.