April 18, 2006
Many Americans are flocking to Northern Ontario for the pristine lakes, excellent hunting, fishing and recreational opportunities. The Canadian dollar is still enticing, and prices remain spectacular bargains.
Although the intention of this article is to give you the “heads up” on aspects of the transaction which some of our clients have found different or difficult, we can assure you that our clients tell us acquiring their “little bit of heaven” is well worth the effort. Weilers is always here to help, and we make the experience an easy one.
- Legal Fees
- Contact us. For most transactions we are able to provide you with an up-front quote before you commit to purchasing a property. And, we stick to it.
- Making that Offer to Purchase
- We encourage our clients to have us review their offer before it is submitted to the vendor. Once the ink is dried, the contract is binding. There is no additional charge for reviewing the agreement with you. Since we plan on sticking to the quote we give you, we are every bit as interested in making sure your transaction goes smoothly.
- Title Insurance
- Many American states adopted a system of title insurance that replaced the more traditional title search/government registration of lands. After conquering the American system, title insurers turned their eyes north. In Ontario, a hybrid of the older search-based system and title insurance is what has evolved. We feel this gives our clients the best of both worlds. By maintaining a system of title searches which unearths many significant problems before you’ve paid your money over to a vendor, problems are avoided. Title insurance can cover items that are more difficult to detect, or which have not yet been caught by the authorities we search.
- Short for “Electronic Registration”, E-reg is Ontario’s new system of searching title and registering real estate documents. We are now able to access information for properties throughout Ontario from our desktops, and register documents for our clients directly from our office.
- Land Transfer Tax
- American clients who purchased property in Ontario in the past may have run into the Province’s former whopping 20% tax on foreign purchase of recreational and agricultural properties. We are very happy to report the higher tax rate has been repealed, and our American friends now pay the same rate of tax as Ontario residents – ½ of 1% on the first $55,000 of the transaction, 1% thereafter, except in the case of some transactions, exceeding $400,000 which attract a 1 ½% tax. The amount of tax can mount quickly and must be paid to the Government of Ontario at the time your deed is registered. This tax will likely be the most significant single cost (except for the purchase price) of your purchase transaction.
- Basic Differences
- Many of our US clients find (and we agree) that government plays a more significant role in the lives of Canadians than our counterparts further south. Love it or hate it, bear in mind that we do these searches for one reason – to protect you, the purchaser of the property. The fact is, to add “teeth” to tax legislation, the collection of utilities (often government owned) enforce zoning restrictions and environmental laws, the responsibility for these things will pass on to you if the vendor has not met his responsibilities before closing. We admit the list of searches can be daunting, but the costs of doing the searches are far less than fixing a problem later or taking on a prior owner’s headaches.
- Road Access
- Not all roads in rural Northern Ontario are government owned and maintained. A large network of privately owned or forestry built roads ribbon the region. Not surprisingly, a purchaser who was shown a property accessible by road assumes that access will always be guaranteed. In most, but not all, cases it is. The access to your new property will be the first thing we check when you bring us your offer to purchase the property. If you are counting on being able to drive in, the offer should spell that out.
We have assisted US clients for the past 60 years with tremendous success. The vast majority of purchase transactions go very smoothly and serious title problems are rare.
Word is spreading about the value and beauty of recreational properties in Northern Ontario, but bargains are still out there to be found.
When you do fall in love with that perfect property, give any one of our real estate lawyers a call, and we’ll help you make it yours.