While it may be tempting to DIY the homebuying process and save on legal fees, there are many benefits to hiring a lawyer, including having a faster and lower stress experience.
It is springtime and the start of homebuying season is here. If you are thinking of buying a home, you may be wondering whether you need a lawyer to help you through the process. With the rise of online homebuying platforms, it may seem tempting to DIY the homebuying process.
Technically speaking, you can buy a home without a lawyer. But there are many reasons why you shouldn’t. Below are three legal considerations you should know about during the homebuying process in Alberta and the benefits of having a lawyer guide you through them.
Searching the Land Titles Office
Every property in Alberta is registered with the Land Titles Office, which is a provincial government office created by the Land Titles Act. The Land Titles Office keeps all original Certificates of Title, which show who owns the property and all mortgages and other restrictions registered against the property. The Land Titles Office also keeps copies of other documents related to properties, including mortgages, caveats, encroachments, condominium plans, etc.
If you want to buy a property, you should do a search at the Land Titles Office to see who the current owners are and what restrictions are registered against the property, such as a mortgage or caveat.
While you can request your own title searches, would you know what to look for? A lawyer’s help is critical in making sure there are no liens, encumbrances, or ownership disputes associated with the property. A lawyer can conduct thorough title searches to uncover any potential issues.
Registering your ownership with the Land Titles Office
If you buy a property, you must register a Transfer of Land and other legal documents with the Land Titles Office. The registration process can take weeks or even months before the office issues a new Certificate of Title showing you as the new owner. There are also strict technical rules to follow to make sure the registration is successful.
To tackle unpredictable registration timelines, lawyers can use the Western Law Societies’ Conveyancing Protocol. This Protocol outlines standard procedures and best practices for residential property transactions in the province. It sets out a strict process for lawyers to follow, ensuring a consistent and efficient transaction while protecting the interests of everyone involved.
Notably, the Protocol allows a transaction to close on a date the buyers and sellers choose even if the Land Titles Office has not completed the registration. For example, your lawyer can send the documents for registration to the Land Titles Office on or after the closing date and then follow-up with you weeks or months later once the registration is complete. You become the property’s owner on the closing date, and the lawyer bears the risk of making sure the registration goes through.
The Protocol can apply to the transaction of most single-family houses, condominiums, and even some new builds. The Alberta Real Estate Association’s (AREA) standard contract allows lawyers for buyers and sellers to use the Protocol if they agree to it.
While you can register the transaction with the Land Titles Office yourself, without a lawyer, you do not have the benefit of the Protocol to make the process more efficient. You would not be able to close on the purchase until the Land Titles Office has registered the transaction and issued a new Certificate of Title for the property in your name.
Furthermore, if you are taking out a mortgage to buy the property, the lender will require a lawyer to handle the transaction according to the Protocol.
Reviewing and preparing legal documents
Purchasing a home also involves many legal documents such as purchase agreements, real property reports (RPR), mortgages, title insurance, and more. These documents can be complex, with legal or technical jargon and clauses that are difficult to understand. Any mistakes, misinterpretation or oversights involving these documents could have significant consequences such as financial losses for you as the homebuyer.
Real estate lawyers specialize in property law and can provide invaluable advice and guidance when buying a home. They ensure that you meet all legal requirements in the transaction process and help you understand your rights and obligations under those legal documents. For example, lawyers can review an RPR for potential issues like land use violations and encroachments.
Legal fees may seem like an additional expense, but they can save you money by preventing costly errors or disputes arising from the buying process and related legal documents.
The bottom line
Hiring a real estate lawyer can save you time, money, and stress overall, ensuring a smooth and successful homebuying experience.
There are very limited circumstances where you may be able to buy a home without a lawyer – for example, if you are purchasing a home without a mortgage and are fine with taking the major risk (and potential consequences) of slogging through legal documents and land titles registrations yourself. But while it may be possible to buy a home without a lawyer, it just isn’t practical at all.
Remember, buying a home is one of the most significant financial transactions you will make. So, it is best to proceed with caution and seek the guidance of a real estate lawyer to protect your interests.
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DISCLAIMER The information in this article was correct at time of publishing. The law may have changed since then. The views expressed in this article are those of the author and do not necessarily reflect the views of LawNow or the Centre for Public Legal Education Alberta.
About Judy Feng
