VENDOR'S CLOSING CERTIFICATE

Transcription

1 This Document is in the Form approved by the WORKING GROUP ON LAWYERS AND REAL ESTATE ( on January 12, 2017, except for clearly shown changes. Any changes not clearly shown are of no effect. VENDOR: PURCHASER: PROPERTY: COMPLETION DATE: VENDOR'S CLOSING CERTIFICATE IN CONSIDERATION OF AND NOTWITHSTANDING THE CLOSING OF THIS TRANSACTION, THE VENDOR CERTIFIES TO THE PURCHASER THAT AS OF THE COMPLETION DATE: 1. POSSESSION: Subject to the Agreement of Purchase and Sale ("Agreement") in this transaction, the Vendor shall deliver vacant possession of the Property and possession of any chattels included in the Agreement. 2. KEYS: If and as applicable, all keys, entry mechanisms, and access and alarm codes for the Property in the Vendor's control not included with the Requisite Deliveries shall be left on the Property. 3. BILL OF SALE: The Vendor owns the chattels included in the Agreement, and conveys title to them to the Purchaser free and clear of all demands, claims, security interests, liens and encumbrances of any kind whatsoever. 4. PROPERTY TAXES: The Vendor shall have paid the Property taxes and any local improvement rates and other charges included on the tax roll (and any interest and penalties thereon), as shown on the Statement of Adjustments. 5. UTILITIES: The Vendor has paid or will pay on time any utility accounts to the Completion Date that may form a lien against the Property. 6. FUEL: If the Vendor has adjusted for fuel oil, propane or condensed gas, the Vendor has filled the tank(s) to capacity, and paid for same in full. 7. ADJUSTMENTS: If the Statement of Adjustments herein is or becomes inaccurate or incomplete in the Vendor s favour, the Vendor shall readjust and make any appropriate payments forthwith, provided the Purchaser has delivered on closing a reciprocal undertaking. 8. DIRECTION: The Vendor authorizes and directs the Purchaser to pay the Balance Due on Closing as the Vendor's Lawyer in writing directs. 9. DELETIONS FROM TITLE: The Vendor shall pay all amounts and take all steps necessary to cause to be registered at the Vendor's expense a deletion from title of every encumbrance or instrument that the Vendor's Lawyer has agreed in writing to cause to be deleted from title.

2 Vendor s Closing Certificate Page HST: This transaction is not subject to HST as the Property is a personal use property or a used residential complex occupied by the Vendor or persons authorized by the Vendor, and is not a substantially renovated residential complex, under the Excise Tax Act of Canada. The Vendor has not claimed and will not claim any input tax credit for the acquisition, improvement or renovation of the Property. 11. FAMILY LAW: The Transfer delivered in this transaction correctly shows each Vendor's spousal status and address for service. 12. SURVEY: If the Vendor has agreed in writing to deliver a plan or survey, then, to the best of my knowledge and belief, the building(s) and any other structures, fences and other boundary markers on the Property are accurately shown on the attached copy of the plan or survey prepared by, O.L.S., dated, except: 13. CONDOMINIUM: If the Property is governed by the Condominium Act, 1998 of Ontario, the common expenses have been paid as shown on the Statement of Adjustments. The Vendor has not made any material changes to the common elements other than those permitted by an agreement registered on title. The Vendor has not received a notice respecting the termination of the Condominium Corporation, any substantial alteration in or addition to or renovation of the common elements, any substantial change in the assets or liabilities of the Condominium Corporation, or any special assessments against the Property. 14. BINDING: All the statements in this Certificate are binding upon each Vendor and the heirs, successors and assigns (jointly and severally for multiple Vendors) of each Vendor, and are enforceable after closing. 15. RELIANCE: I make the above statements conscientiously believing each one to be true, and having the same force and effect as if made under oath or affirmation, and knowing that the Purchaser will be relying on them. DATED at, Ontario, on, 20. Witness's Signature [VENDOR'S NAME] Witness's Printed Name Witness's Signature [VENDOR'S NAME] Witness's Printed Name

3 Vendor s Closing Certificate Page 3 I/We, the undersigned, HEREBY SOLEMNLY DECLARE that each Vendor is and will be on the closing date not a non-resident of Canada under s. 116 of the Income Tax Act of Canada. (SEVERALLY) DECLARED before me ) at, Ontario ) on, 20 ) ) ) ) ) ) A Commissioner, etc. ) ) ) Commissioner s Printed Name )

4 This Document is in the Form approved by the WORKING GROUP ON LAWYERS AND REAL ESTATE ( on January 12, 2017, except for clearly shown changes. Any changes not clearly shown are of no effect. PURCHASER'S UNDERTAKING & DIRECTION RE TITLE VENDOR: PURCHASER: PROPERTY: COMPLETION DATE: UNDERTAKING If the Statement of Adjustments delivered in this transaction is inaccurate or incomplete in the Purchaser s favour, and if the Vendor has delivered a reciprocal undertaking to readjust, then I/WE UNDERTAKE to the Vendor and the Vendor's Lawyer to readjust and to make any appropriate payments forthwith for any such inaccurate or incomplete item. DIRECTION RE TITLE I/WE AUTHORIZE AND DIRECT the Vendor to prepare the Transfer/Deed of Land in this transaction in favour of: Name Name Date of Birth Date of Birth as [joint tenants OR tenants in common OR as tenants in common as to % and to show as the Purchaser s address for service the address shown in the tendered Transfer/Deed of Land or provided by the Purchaser s Lawyer, and for so doing this shall be your good and sufficient authority. DATED at, Ontario, on, 20. Witness's Signature [PURCHASER'S NAME] Witness's Printed Name Witness's Signature [PURCHASER'S NAME] Witness's Printed Name

5 This Document is in the Form approved by the WORKING GROUP ON LAWYERS AND REAL ESTATE ( on January 12, 2017, except for clearly shown changes. Any changes not clearly shown are of no effect. LAWYER'S DIRECTION RE FUNDS VENDOR: PURCHASER: PROPERTY: COMPLETION DATE: In accordance with the Vendor's Closing Certificate in this transaction, I/WE DIRECT the Purchaser to make the Balance Due on Closing payable by bank draft(s) or certified cheque(s) drawn on a Lawyer's trust account or other means agreed to by the Lawyers as follows: [Municipality] $ [Encumbrancer] $ [Vendor's Lawyer] in Trust $ BALANCE DUE ON CLOSING $ DATED at, Ontario, on, 20 [LAW FIRM] PER: [VENDOR'S LAWYER]

6 This Document is in the Form approved by the WORKING GROUP ON LAWYERS AND REAL ESTATE ( on January 12, 2017, except for clearly shown changes. Any changes not clearly shown are of no effect. LAWYER'S UNDERTAKING VENDOR: PURCHASER: PROPERTY: COMPLETION DATE: I/WE UNDERTAKE to the Purchaser and the Purchaser's Lawyer to take all steps necessary to cause to be deleted from title each of the following encumbrances or instruments, and to advise the Purchaser's Lawyer of the registration particulars thereof within a reasonable time after the closing of this transaction: REGISTRATION NUMBER NAME OF ENCUMBRANCER OR INSTRUMENT IF I/we have agreed in writing to pay property taxes, development charges or other amounts, then I/WE UNDERTAKE to the Purchaser and the Purchaser's Lawyer to deliver satisfactory proof of payment thereof to the Purchaser's Lawyer within a reasonable time after the closing of this transaction. DATED at, Ontario, on, 20. [LAW FIRM] PER: [VENDOR'S LAWYER]

7 This Document is in the Form approved by the WORKING GROUP ON LAWYERS AND REAL ESTATE ( on January 12, 2017, except for clearly shown changes. Any changes not clearly shown are of no effect. VENDOR: VENDOR S LAWYER: PURCHASER: PURCHASER S LAWYER: PROPERTY: COMPLETION DATE: LAWYERS' DELAYED CLOSING ESCROW AGREEMENT IN CONSIDERATION OF THE MUTUAL BENEFITS ACCRUING TO EACH PARTY, THE VENDOR AND PURCHASER AGREE TO CLOSE THIS TRANSACTION IN ESCROW UPON THE FOLLOWING TERMS: 1. ESCROW OCCUPANCY The Parties being satisfied with all other aspects of this transaction save as disclosed herein, the Completion Date of the transaction is extended to (Extended Date) to enable the (choose one) Purchaser/Vendor to: [insert requirement(s)]. 2. STATEMENT OF ADJUSTMENTS: The adjustments shall be calculated as of the (choose one) Completion Date/Extended Date. The Purchaser shall be responsible for the utilities as of the date of taking possession. 3. REGISTRATION: Subject to a subsearch of title and search of executions satisfactory to the Purchaser s Lawyer, and resolution of the reason(s) for the escrow satisfactory to the parties, the Purchaser's Lawyer undertakes that, on the Extended Date, s/he will either (a) register the Transfer/Deed of Land and notify the Vendor's Lawyer of the registration, or (b) notify the Vendor s Lawyer of the inability to register. 4. PURCHASER'S ESCROW: Subject to anything to the contrary in this Agreement, the Purchaser's Lawyer shall hold all Requisite Deliveries (except keys) delivered to him/her in escrow until s/he has delivered to the Vendor's Lawyer notice of registration of the Transfer/Deed of Land. 5. VENDOR'S ESCROW: Subject to anything to the contrary in this Agreement, the Vendor's Lawyer shall hold all Requisite Deliveries delivered to him/her in escrow until s/he has received from the Purchaser's Lawyer notice of registration of the Transfer/Deed of Land. 6. POSSESSION: The Vendor shall permit the Purchaser to take immediate possession of the Property and any applicable keys, entry mechanisms, and access and alarm codes for the Property in the Vendor's control. Such possession shall not constitute a tenancy under the Residential Tenancies Act, 2006 of Ontario. 7. INSURANCE: The Vendor shall not cancel the Vendor's insurance on the Property until after the registration of the Transfer, and shall provide, upon request, proof that such insurance continues in place until then. The Purchaser shall insure the Purchaser s chattels as of the date of possession. The Purchaser and Vendor shall advise their respective insurance companies immediately after entering into this Agreement of the escrow closing. Vendor s Lawyer Purchaser s Lawyer

8 2 8. WAIVER: The Purchaser waives any rights to terminate this transaction by reason of any damage that is not the responsibility of the Vendor occurring to the Property during the Purchaser's possession thereof. 9. INDEMNITY: Upon taking possession and without derogating from any other rights the Purchaser may have in law or contract, the Purchaser shall indemnify the Vendor from any and all demands, claims, liens, causes of action, losses and damages arising from the Purchaser's possession of the Property. 10. PURCHASER'S OBLIGATIONS: Until the Transfer/Deed of Land has been registered and the Balance Due on Closing has been released, the Purchaser shall not improve or change the use of the Property, and shall not assign, lease, part with possession, or encumber the Property in any manner whatsoever, and shall maintain the Property as would a prudent owner. 11. VENDOR'S OBLIGATIONS: The Vendor hereby reserves to itself, its servants, agents, workmen and others authorized by it, or for any municipal, provincial or other governmental authority, the right to enter upon the Property at all reasonable times for the purposes of making inspections, effecting repairs or conducting any work required to complete its obligations under the agreement or to protect the Property. 12. FURTHER ASSURANCES: Each party shall execute all such documents and do all such things as may be reasonably required by the other to give effect to the terms of this Escrow Agreement. 13. NO REGISTRATION: Neither this Escrow Agreement nor any notice of it shall be registered on title. 14. TERMINATION: If registration of the Transfer/Deed of Land does not occur on the Extended Date, and if this Escrow Agreement has not been renewed or extended or if a new Escrow Agreement has not been entered into by the Parties, their respective Lawyers shall forthwith return to the other all Requisite Deliveries received from the other, and the Purchaser shall immediately return possession of the Property to the Vendor together with any applicable keys, entry mechanisms, and access and alarm codes received from the Vendor, and shall leave the Property in the same condition as at the time of escrow possession. 15. TERMS UNCHANGED: Except as amended by this Escrow Agreement, all the terms and conditions of the Agreement of Purchase and Sale shall remain in full force and effect, and time shall remain of the essence. 16. OTHER TERMS: Notwithstanding the foregoing, the Parties agree as follows: 17. COUNTERPARTS: This Agreement may be signed in one or more counterparts. DATED at Ottawa, Ontario DATED at Ottawa, Ontario on, 20 on, 20 AGREED TO BY THE VENDOR BY THE VENDOR'S LAWYER, DULY INSTRUCTED AGREED TO BY THE PURCHASER BY THE PURCHASER'S LAWYER, DULY INSTRUCTED

9 Working Group on Lawyers and Real Estate Ontario Standard Closing Documents Rationale Document The vast majority of residential real estate resale transactions in Ontario close pursuant to OREA Form 100, the Agreement of Purchase and Sale ( APS ), which has been in widespread use since January 1, The APS is now available to all lawyers under agreement with the Ontario Real Estate Association ( OREA ) (see As the rights and obligations of vendors and purchasers are now standard across Ontario under the APS, the Working Group on Lawyers and Real Estate decided to review the standard closing documents already being used very successfully in Ottawa, Barrie, Cambridge, Hamilton, Lincoln/Welland and Windsor with a view to creating standard closing documents for all of Ontario. In drafting them, the Working Group wanted to end the repetitions in the old forms, and delete any statements, declarations and so on that the vendor is not obligated to give under the terms of the APS. The theory is that vendors, and their lawyers, should not be delivering anything that is not required under the APS, as doing so imports liabilities that are not required by the contract. Any purchaser who wants additional statements, declarations and so on may seek to contract for them at the time the APS is negotiated. The original members of the Working Group were: 1. Bob Aaron of Toronto 2. Jill Anthony of Niagara 3. Clare Brunetta of Fort Frances 4. Mark Castle of Dundas 5. Paul Dixon of Hamilton 6. Gerry Dust of Ottawa 7. Diane England of Oshawa 8. Paul Fay of Kingston 9. George Gibson of Barrie 10. Robert Grant of Fergus 11. Claude Lacroix of Sudbury 12. Raymond G. Leclair of Toronto 13. Kim Little of London 14. Richard Parisien of Cornwall 15. Stephen Pearlstein of Toronto 16. Maurizio Romanin of Toronto 17. Jerry Udell of Windsor 18. Bradley Wright of Ottawa 19. Raymond Gouin of Ottawa With assistance from : 20. Lori Swartz of Toronto 21. Hana Tariq, Student-at-law of Toronto 22. Gloria Enge, Student-at-law of Toronto Documents: The following five documents were approved: 1. Vendor s Closing Certificate 2. Purchaser s Undertaking & Direction re Title 3. Lawyer s Direction re Funds 4. Lawyer s Undertaking 5. Lawyers Delayed Closing Escrow Agreement, if required Updated January 2017

10 Working Group on Lawyers and Real Estate Ontario Standard Closing Documents Rationale Document, Page 2 The documents were reviewed and revised by the current Working Group members in 2017 and are available in their final versions at LawyerDoneDeal (RealtiWeb) and Teranet (Conveyancer) have added them to their programs for use in Ontario. Benefits of using standard closing documents: 1. Less paper, no repetition, and more efficiencies, as the content of the documents can easily be confirmed as being either unamended or modified; 2. Less time needed to negotiate the content of closing documents; 3. Adherence to province-wide standards; 4. Clients rights and obligations are protected based on the APS; 5. Either party can easily prepare the documents for the other side; and 6. No need to delete inapplicable paragraphs as they are worded conditionally. Resale Deals Only: These documents are intended for resales of existing residential properties, freehold or condominium. The documents are not intended for new home, commercial and other transactions, although they may be useful as checklists. Terminology: The APS refers to Buyer, Seller and Lawyer. In the standard closing documents, the Working Group opted to continue using Purchaser and Vendor but changed Solicitor to "Lawyer". The words used in the documents reflect their meanings as defined in the APS or the Document Registration Agreement ( DRA ) as applicable. For example, Requisite Deliveries are as defined in the DRA. Headings: Each document has a heading which states: This Document is in the Form approved by the WORKING GROUP ON LAWYERS AND REAL ESTATE on DATE OF APPROVAL, except for clearly shown changes. Any changes not clearly shown are of no effect. Thus, any changes that are required for any particular transaction can be made easily, provided they are made clear on the document such as by handwritten text, BLOCK CAPITALIZED LETTERS, underlining, bolding or by striking out so as to be clearly obvious to the reader. Whichever method is used should remain visible even if the document is scanned, photocopied or faxed (a different colour font or yellow highlighted text is not always visible and is not recommended). Document 1: Vendor s Closing Certificate ("VCC"): In order to avoid having to tailor the VCC, all paragraphs simply refer to the terms of the APS, the Statement of Adjustments or other document, as appropriate. The VCC sets forth that all adjustments for municipal property taxes should be completed on the basis of and after all tax payment arrangements between the vendor and the city have been cancelled. It is the Vendor s obligation to arrange with the municipality to cancel the monthly payment arrangement.

11 Working Group on Lawyers and Real Estate Ontario Standard Closing Documents Rationale Document, Page 3 In reality, fuel oil, propane or condensed gas are usually filled on or about the closing day and payment often follows closing, even if the preference and the obligation in the APS would be to have both the filling and payment occur before closing. This paragraph confirms that the filling and payment have been done or implies an undertaking to do so ASAP after closing. Note that a Purchaser who does not receive a fully paid tank could also require an adjustment to the Statement of Adjustment under the Undertaking to Readjust. Some counties have a practice whereby the Vendor s lawyer retains monies in trust for unpaid utilities or other adjustments if not paid by the Vendor within a reasonable time after closing. This practice is not universal and there is no legal obligation for it in the APS. Thus, the VCC is silent on this issue. To avoid the need to have clients return to the office to re-sign a Direction re: funds, the VCC authorizes all payments to be made as directed by their lawyer. The APS does not resolve the treatment of HST and therefore information is required of the Vendor. The VCC sets out the used residential exemption which will be applicable in almost all cases. Paragraph 17 of the APS requires the Vendor to provide a certificate from CRA or a statutory declaration regarding residency. The VCC has recently been updated to provide for a sworn declaration that the Vendor is not a non-resident of Canada. The Planning Act compliance paragraph has been retained where the lawyer is required to make inquiry in order to sign the Planning Act statements. The survey paragraph has been retained where it would be useful or applicable. The rights of the parties are clearly defined in the APS and therefore there is no need to deal with UFFI again. Putting any UFFI provision in the closing documents raises the possibility of error and exposure to liability. The VCC does not contain a Construction Lien statement. The APS creates no obligation on the Vendor to provide the representation or to indemnify the Purchaser. Instead, Purchasers rely on the Vendor s representation and warranty in the APS that the title is free and clear and on the Purchaser s own building inspection. Document 2: Purchaser s Undertaking and Direction re: Title: The Purchaser's Undertaking mirrors the Vendor' undertaking in the VCC. As the APS does not usually set out the full legal name of the Purchasers, their date of birth or their manner of taking title, a Direction re Title is needed. See Section 67 of the Land Titles Act which states: no person, other than a corporation, may be shown as the registered owner of land or a charge unless the person is described by surname and by the first given name in full, followed by another

12 Working Group on Lawyers and Real Estate Ontario Standard Closing Documents Rationale Document, Page 4 given name, if any, in full. See also Section 48(2) of the Registry Act. As both the Undertaking and Direction would be used in all transactions, they have been combined in one document. Document 3: Lawyer s Direction re Funds: The APS provides that the Purchaser simply needs to tender on closing a bank draft or certified cheque from a Chartered Bank, Trust Company, Province of Ontario Savings Office, Credit Union or Caisse Populaire. However, due to Law Society rules for closing funds and the increasing incidents of fraud, the document provides that funds should be only by bank draft(s) or certified cheque(s) drawn on a lawyer s trust account or other means agreed to by the lawyers. This reflects our long standing practice in dealing with closing funds and the Law Society s rules, and permits flexibility were the individual lawyers are otherwise satisfied with the reliability of the funds they are to receive. Document 5: Lawyers Delayed Closing Escrow Agreement: On the infrequent occasions when this document is needed, time is usually at a premium. This document has been prepared either to serve as proposed or as a checklist. Users should tailor the document as needed. With respect to insurance, the common law provides that the insurable interest of the parties changes once the APS is in place, with the insurance obligation changing from the Vendor to the Purchaser, notwithstanding no closing has taken place. The APS reverses this and requires the Vendor to maintain the insurance in trust for both parties. The Escrow Agreement (1) confirms the Vendor s obligation to maintain the existing insurance, (2) confirms the Purchaser's obligation to insure his/her contents from the date of possession until he/she becomes the owner and, (3) requires both parties to advise their respective brokers or insurance companies of the escrow closing. Translation: The documents are available in English and French.

13 Working Group on Lawyers and Real Estate Ontario Standard Closing Documents User Guide The Ontario Standard Closing Documents have been designed to assist lawyers to be more efficient in closing standard residential real estate transactions. This Guide is provided to assist the users of the Ontario Standard Closing Documents. 1. The Ontario Standard Closing Documents were originally approved as of April 2, 2009 by the Working Group on Lawyers and Real Estate and were updated on January 12, The official versions of the documents are posted in English and French on the Working Group s website at ( The approved documents are: 1. Vendor s Closing Certificate; 2. Purchaser s Undertaking & Direction Re Title; 3. Lawyer s Direction Re Funds; 4. Lawyer s Undertaking; and 5. Lawyers Delayed Closing Escrow Agreement. 2. Each document states at the top, This Document is in the Form approved by the Working Group on Lawyers and Real Estate on January 12, 2017, except for clearly shown changes. Any changes not clearly shown are of no effect. Thus, each document may be relied upon as being in its original approved format, except for matters which are added or modified in a clear highlighted fashion such as handwritten text, BLOCK CAPITALIZED LETTERS, underlined, bolded or struck out so as to be clearly obvious to the reader. Whichever method is used should remain visible if the document is photocopied or faxed. A different colour font or text highlighted in yellow is not always visible when photocopied or faxed and is not recommended. 3. The documents are designed to require no, or a minimum number of, additions or modifications. Inapplicable clauses should not be struck or deleted as they are drafted to apply only if necessary by using such terms as if any, if applicable or in accordance with the Agreement of Purchase and Sale. 4. The documents are based on the OREA Agreement of Purchase and Sale ( APS ) and the generally use the same words as used in the APS. The documents reflect the rights and obligations of the parties as set out in the standard APS. Lawyers should review their clients agreement to determine if any modifications or additions to the usual terms have been made and whether any other changes to the documents need to be made. 5. The documents all have the same heading and only require inserting the name of the purchasers and vendors, the municipal address or legal description of the property, and the Completion Date. All the documents are one page long, except for the Vendor s Closing Certificate, which requires the Vendor s initials on the bottom of the first two pages, and the Updated January 2017

14 Working Group on Lawyers and Real Estate Ontario Standard Closing Documents User Guide, Page 2 Lawyers Delayed Closing Escrow Agreement, which requires the initials of both lawyers on the bottom of the first page. 6. The Direction re: Title has been expanded to show the complete legal name of the Purchasers, their dates of birth and the manner of taking title. Their address for service need not be added as the document refers the reader to the address in the Transfer/Deed of Land. Purchaser s Undertaking and Direction re Title: This document combines the Purchaser's Undertaking and Direction re Title as both should be used in every transaction. The Undertaking mirrors the Undertaking given in the Vendor's Closing Certificate. The Direction ensures that the correct names and manner of taking title of the Purchasers are set forth in writing. Lawyers Delayed Closing Escrow Agreement This document is not truly a standard closing document as it will rarely be used. This document does not replace the DRA, but may be used when a transaction is delayed beyond its original closing date. This document, whether used as drafted or as a checklist, provides lawyers with a useful tool when dealing with a delayed closing. Lawyers should review their clients' situation and modify this document accordingly to reflect the parties rights and obligations.