Ontario land transfer can I do it myself

[Treeguy]

I searched high and low and couldn't find an answer and figured this would be the place to ask.

I want to buy a small hobby property in northnern ontario and wanted to know if I could handle the paperwork and transfer myself. Is it as simple as filling out a form or do I need a lawyer or agent.

[g2020]

No, you need a lawyer. In fact a lawyer will require that both you and the seller have your own legal council unless it is a conveyance "for love and affection" between family members, in which case one lawyer could represent both parties. At one time some of us old boys would buy a batch of 100 deed forms and share them to do our own conveyancing of our tax sale winnings. No more. Today everything is electronic and fraud is rampant. Provided that you are not a lawyer, there is a provision to allow you to register your own paper form. It is complex and not worth the effort. Strictly speaking you are not even required to register your deed - you do it for your own protection. Under the previous tax sale system you got your tax deeds in the mail and it was up to you to take them in for registration. A few years ago I bought some adjoining land that was held by the assessed owner who bought the parcel in King City on a 1955 tax sale and had both copies of the deed in his safety deposit box. He did not realize that you needed to register them. The new act requires the municipality to get tax deeds registered. Between the registrar and I we took a pair of scissors to his tax deed so that it would go onto film. We threw out the old affidavit and attached the new format one that his lawyer prepared. I then merged his parcel with my tax sale purchase that had frontage on Weston Road, bought an access strip from the H.M. Dignam Corporation that they had left from an old tax sale purchase, and again did the registration manually under the electronic system using my own paper forms. This entire parcel is in the Oak Ridges moraine. I could do all this manually because I am not a lawyer and it was a very special circumstance where I was buying two $500.00 additions to make my reputedly valueless tax sale purchase into a building lot. Not just a building lot, but probably one of the most incredible pieces of view land in the entire north Toronto area. Getting a nice level existing entrance onto Weston Road was a real plus. I now know enough to not even think of doing another registration myself under the electronic system. I hope this rambling is of some help.

[Treeguy]

Thank you G2020 for that elaborate response.

I guess the one thing I didn't mention is I am not buying a tax sale, it is not quite family but a friend referral of his relative dumping some land. I know it's legit as the family is old and well established and we'vew known them for 30 years. They didn't have it on the market either and only offered it to me after I expressed interest so I can't see fraud being an issue.

The value is only a few thousand as well so I'm wondering if the lawyer thing still applies or if I should even register it.

[g2020]

I have to respond so that I can once again celebrate getting to 100 posts. Last time I went through 100 and got as high as 103. Then oops. I am back at 99 again, so here goes. There was a post a while back about a Toronto lawyer who would do a purchase for 300 bucks and a sale for 200 The problem is you have to add on the registration fee, the land transfer tax, and the lawyers insurance fee to cover that rampant Land Titles fraud that I mentioned. You could just kick the can on down the road. Just get a lease signed for a small amount plus a clause that you pay the property taxes, and the lease gives you an option to purchase. You would then take your lease into the treasurer, ideally accompanied by the owner, and get the tax bill switched over to you. Maybe others will think of other low cost alternatives. Any ideas anyone? Now I am going to check and see if this gets me to 100. Cheers if it does

[g2020]

Yippee! 100, 5 stars, and platinum - I thank you all!

[Dave2]

Yippee! 100, 5 stars, and platinum - I thank you all!  

I will give you a toast of dihydrogen monoxide so those who do not like beer can join in.  

[Treeguy]

By the looks of it I am better off searching for the $200 lawyer over trying to do it all myself.

I wanted to save and stall the transfer for a while, I would like to pay the owner now and use it for the summer and then if I like it transfer it to my name in the fall for building next year. 

So where is the $200 guy ?

[Dave2]

You could just kick the can on down the road. Just get a lease signed for a small amount plus a clause that you pay the property taxes, and the lease gives you an option to purchase. You would then take your lease into the treasurer, ideally accompanied by the owner, and get the tax bill switched over to you.

G2020: 

Leases are fine for a short term alternative.  For long term you should register them on title and you are back to legal costs again.  6 months a year no problem and I have used them myself particularly in the interim period prior to a sale closing.   

Long term as well you have to deal with changing circumstances.  People die or have a new generation that gets interested in the property.  In an estate situation who knows if a new generation will honour your lease or not.  Unfortunately I think it comes down to do you want the property or not.  Land titles was set up so that only certain people could change the title and unfortunately you have to pay their fee. 

[Treeguy]

So let's hear it from the pros.  What is the average joe looking at when he/she buys a property for a few grand.  A few hundred in legal fees, .5% tax , what else ?

[g2020]

Dave is correct about registration costs of a lease if you were really concerned, but I suspect that you are not. Most of the players in the commercial space do not even register a lease- they just register a "notice of lease". I thought that someone would mention the "agreement of purchase and sale" since it is probably the most powerful, and simplest tool available to you. Once the owner signs the agreement of purchase and sale form, and accepts your deposit, the property is as good as sold. If you go to a lawyer and hand over a signed agreement of purchase and sale document, along with a copy of the vendor's most recent tax bill, you make his/her job so much easier. Yes, you can even register an agreement of purchase and sale document on title which is sometimes done when the closing date is a long way off. You have to pay the land transfer tax at the tie you register the agreement. The nice thing about the agreement of purchase and sale form is that they are readily available and any realtor can help you fill it out. As to lawyers fees, myself and other that I know pay $500 for a purchase or sale and combine our business so that we are providing repeat business every monh or two. We also send mortgage discharges and power-of-sale proceedings to this same lawyer so that he gets to charge a fee to those purchasers to whom we give a mortgage. You will find that many tax sale junkies such as Dave2 take back mortgages when they flog (market) their vacant tax sale plunder. I noticed one of Dave2's ads on tri-target where he is offering vendor financing on some Cobourg area estate lots, although these are much higher quality than the type of thing that one would get on a tax sale. So there you have it - I pay $500 plus disbursements, but nothing if the deal does not close. I would recommend using a lawyer to close your tax sale purchases, and get tile insurance if available, but no one does. I would PM Netpred since he probably remembers who the 2 buck/ 3 buck Toronto lawyer is. I recall that he is downtown. I wrote it all down but am too old to remember where. Oh, and I recommend buying the last lot on the upcoming Trent Hills sale, or better still the big Cochare acreage with buildings to scoop Dave2. He pretends to be a homebody but secretly wants to capture any tax sales within the Cochrane goldfield commuter shed.

[netpred]

Here is a link to your $300 lawyer ($200 for sales!)

http://taxsaleproperty.org/forum/index.php?topic=1421.msg6374#new

Remember, you get what you pay for and I am cheap but I pay double or more these prices. There is a lot more to a land transfer than simply registering a transfer/deed of land. Good luck!

[Dave2]

Remember, you get what you pay for and I am cheap but I pay double or more these prices. There is a lot more to a land transfer than simply registering a transfer/deed of land. Good luck!  

Treeguy:

Standard property costs will /may not apply for land like surveying or legal in tax sales particularly rural tax sales.  Land titles was put together quickly and a lot of old outdated garbage was not cleaned up.  

The municipality only has an obligation to give you a clean title not "CLEANED UP title".  There is a big difference if you want to resell the property as I found out the first time I tried to sell a non cleaned up title and it took me eight months to close the sale. (fortunately the buyer was patient and wanted the property.)

G2020 said it best about tax sales "There is a problem with the owner or with the property". If it is with the title the legal costs will rise.  A good lawyer can also show how a sophisticated buyer can use various more sophisticated techniques to their advantage but this has risks that I didn't appreciate when it brought me to the attention of Revenue Canada.    

What I also didn't realize how sophisticated the search function within the new electronic land titles system is for Government tax authorities.  They have never had this capability before and as a result there is a big day of reckoning coming for a lot of people particularly on HST and capital gains versus income.  It snared me because I kept legal ownership off title and the search function led to questions of what is going on.  

What I am doing is both legal and should have no effect on my taxaction owing, but probably only applies in 1 to 100,000 property transactions and as a result I have to supply a lot of documentation to prove it and hopefully keep Revenue Canada at bay.  

However this whole exercise has wasted a lot of time I could put to better use.   This of course is the true test of Netpred's "remember you get what you pay for"

[paris_wendy]

Dave, I have concerns about the same sort of issue.

Have just sold an estate property with 16 acres. The accountants couldn't decide if we have to pay capital gains on the land portion. If it couldn't be severed, then we didn't have to claim it. To sever the land we could only sell to 1 of our 2 adjoining neighbours. In my opinion that makes the land non-severable. CRA may have a different opinion.

[Frank]

What you are referring to is a severance which is commonly known as a 'lot line adjustment'.  Unlike a true severance where a new lot is created, this a simple transfer of property to be added to a neighbours lot.  The land normally sells to a neighbour for little more than farm land values...unless they have some overwhelming need for it, in which case you should be happy to pay the tax on capital gains.  Also, if your family actively farmed the acreage then they may have qualified for the farmer's capital gains exemption.  Consult with a professional accountant to determine your best course of action.

Dave, I have concerns about the same sort of issue.

Have just sold an estate property with 16 acres. The accountants couldn't decide if we have to pay capital gains on the land portion. If it couldn't be severed, then we didn't have to claim it. To sever the land we could only sell to 1 of our 2 adjoining neighbours. In my opinion that makes the land non-severable. CRA may have a different opinion.

[paris_wendy]

The land was donated to our church the past 10 years. Before that it was rented. With claiming capital gains the taxes were estimated at $30k. Why would we be happy to pay that?