In this article, we will go through the typical pricing and costs of a real estate purchase conveyance, because let’s be honest, money matters, especially when we are talking about Vancouver real estate. Please also see our article covering property transfer tax.
First, we will describe the difference between legal fees and disbursements. Legal fees are the fee you pay the lawyer for completing the transaction, which typically would include reviewing the contract, drafting closing documents, such as the purchase and mortgage documents, facilitating the payment of money to the seller's lawyer, and ensuring that your interests are protected.
Disbursements: Disbursements are fees that the lawyer pays on your behalf to third parties to complete the transaction. Common disbursements include the following (The numbers stated below are rough estimates under the assumption that no rush charges are applied. Trivium Law has no control over these third-party costs, and makes no representations as to the accuracy of the following information. Readers should be aware that such fees are subject to changes by their respective agencies from time to time without notice):
Registration of Transfer – approximately $85
Registration of Mortgage – approximately $85
Property Tax Certificate – $70 to $140
Law Society Trust Administration Fee – $15.75
Insurance Binder Fee – $0 to $100
Title Insurance – $155 and up (scaling according to property purchase price)
Strata Form(s) Fee – $55 to $200 (applicable to stratified properties)
Stewart Assyst Fee – approximately $80 (applicability depends on mortgage provider)
LDD - $34
Land Owner Transparency Registry Registration Fee - $7.50 to $55 (changes depending on the nature of the buyer [individual, corporation, trust, partnership, etc.])
Registration of Assignment of Rents – $85 (applicability depends on terms of the mortgage)
With a few rare exceptions, the fees above are in most cases mandatory.
1. The Registration of Transfer disbursement is a fee charged by the Land titles office to transfer or change the name of the title on the property from the seller’s name to your name.
2. The Registration of Mortgage disbursement is a similar fee to the registration of transfer above. It is a fee charged by the Land title office to register the mortgage the bank is giving you against the property title. If you have a mortgage, this fee is mandatory as the bank will not provide you with a loan for your purchase unless the mortgage is registered against the property.
3. As with every property, there is property tax. When you buy a property, the seller would have either already paid the property tax (after July 1) or the property tax is still owing (before July 1). In order to correctly assess how much property tax should be credited to seller (after July 1) or to the municipality (before July 1), we need to obtain an official tax certificate from the municipality. The property tax certificate also allows us to see the property tax (and often utilities) for your property, and if there are any penalties or outstanding amounts owed by the seller. We then make adjustments in accordance with the tax certificate. For example, if you buy a property on February 1, then you are responsible for paying the property tax for the days between February 2 to December 31, because you will be the owner of the property for those days (note that we assume for the purpose of this example, that the adjustment date is the day following the completion date, which is typical of residential real estate transactions, but can be a date that is completely different depending on how your realtor drafted your purchase and sale agreement). The Seller will be responsible for paying the property tax from January 1 to January 31 as the seller was the owner during that time.
4. The Law society trust administration fee is a mandatory fee the law society of B.C. imposes on every distinct transaction or file. One of its primary functions is to ensure that your money (especially large sums as with real estate purchases) is protected during the course of the purchase transaction and while it is in your lawyer's trust account.
5. Insurance binder fee is charged by your insurance company. Every transaction that includes a mortgage requires an insurance binder. An insurance binder is a cover note stating that the building or property has sufficient insurance coverage, so that if something happens to the building or property, the lender’s mortgage will be paid out.
6. Title Insurance is often a mandatory requirement for many lenders, as it protects the lender from losses associated with the priority and enforceability of the mortgage, title and survey defects, and title fraud. Title insurance also protects you, the buyer, from title fraud, survey and title defects, as well as challenges against your ownership. Title Insurance works for future incidents but also retroactively, meaning that the insurance coverage will also deal with matters resulting from events that have taken place in the past but is only discovered later. Title insurance is a one-off cost that protects you as long as you own the home.
7. In B.C., Strata Form(s) B and F are mandatory if you choose to purchase an apartment, condominium or townhouse. Strata form(s) B and F provide you with specific information such as the strata fees for the month in which you are to move in, if there are any pending court cases against the strata, if the seller owes money to the strata (which, if not paid, will most certainly become your problem), if there are any upcoming by-law changes that could occur (such as rental restrictions), and if you are entitled to a parking spot or storage locker, as well ensure that at the time of the transfer, all relevant strata related liabilities of the seller has been settled.
8. Different mortgage providers have different methods of providing instructions to the lawyers working on your file. Some banks use a pay-per-use third-party platform to electronically manage mortgage instructions, fund requests and other matters in relation to the mortgage issued. If your selected mortgage provider chooses this option, there will be an additional $34 charge from the company providing the third-party electronic mortgage platform.
9. LDD is a digital platform used by BC real estate legal practitioners to conduct real estate purchases and sales. The platform acts as a database on all the real estate brokerages, notaries and real estate lawyers, as well as help facilitate the creation of applicable electronic and paper forms used for land title filing and closing. LDD charges on a per-transaction basis, and such cost will apply to each purchase.
10. Land Owner Transparency Registry (LOTR) Registration Fee is a filing fee paid to the government body designated to oversee the intake of real estate owners' information in British Columbia. As of November 30 of 2020, all new purchases of real estate in British Columbia mandate that a LOTR filing is completed along with the purchase.
11. The Registration of Assignment of Rents disbursement is a filing fee charged by the Land title office in relation to filing of a charge known as "assignment of rents". The assignment of rents charge may be required by the lender in some cases as a part of the condition of the loan. Such charge allows the lender to take the place of the landlord (the would-be borrower in this case) and collect rent money from the tenant of the property in the event that the borrower fails to make payments on a timely basis. This is a common requirement for any investment or rental property, and is frequently a condition required by smaller institutional lenders, credit unions and private lenders.
For more information please contact us at 604-242-1578