Procedure for Real Estate Transactions

Real estate transactions are detailed processes so it’s important that all parties to the transaction are on the same page.

Lawyers should adhere to the following practice in commercial and residential real estate transactions where title is encumbered by a mortgage or other realty security which requires full or partial release for closing:

• the vendor’s solicitor obtains written permission from the vendor to release the discharge statement to the purchaser’s solicitor,
• the vendor’s solicitor provides the purchaser’s solicitor with a discharge/payout statement from each lender that provides the amount requested to obtain a full or partial release prior to closing,
• the purchaser’s solicitor delivers to the vendor’s solicitor
  • a trust cheque or bank draft in favour of the mortgagee or security holder tendered to the vendor’s solicitor in an amount sufficient to cover the discharge/payout as noted in the discharge/payout statement, and
  • a cheque payable to the vendor’s solicitor or firm in trust for the balance of the money payable in the transaction, and
• the vendor’s solicitor undertakes to
  • remit the discharge/payout amount to the mortgagee or security holder, and
  • obtain a release of mortgage for deposit with the purchaser’s solicitor

Related Topics:

Real Estate Transactions

Payment of Disbursements and Expenses

Commissions and Discounts

Final Reports on Title

Mortgage Fraud – Red Flags

(Posted: June 12, 2020)