What a Seller's Lawyer Does When You Sell a Home in Alberta

Once you accept an offer, the sale moves from the realtor's world into the legal one. Dates, documents and money all have to line up before the buyer gets the keys.

This article walks through what a lawyer generally handles for you between the accepted offer and possession day, so you know what to expect and what to have ready.

This article covers the law of Alberta.

Where the lawyer fits in the sale

Your realtor helps you market the home and negotiate the offer. Your lawyer takes over the legal side: reviewing the accepted contract, confirming who owns the property, preparing the documents that move ownership, and handling the money on closing day.

Many sellers contact a lawyer only after the offer is firm. It can help to ask earlier, especially if the title has more than one owner, you are married, or the property belongs to an estate.

Transferring title

Alberta uses the Torrens system under the Land Titles Act, and land is transferred by registering an Application for Transfer of Land. Every document submitted for registration also needs a Document Registration Request (DRR) form. Alberta.ca strongly suggests getting legal help with these forms because they are legal documents with legal consequences, especially for ownership changes.

Since the Land Titles Act amendments that took effect April 1, 2021, a Pending Registration Queue (PRQ) lets a transaction close once documents are received, before registration is complete.

Some sellers need something different. If the seller is an estate, a transfer to a personal representative is a transmission of land and uses its own form rather than the Application for Transfer of Land. If you own with someone else, how title is held matters. A transfer must specify joint tenancy to create it, and otherwise buyers automatically take as tenants in common. Under joint tenancy the survivor takes the whole property, while under tenancy in common a deceased owner's share goes to their estate. Your lawyer checks how title is held so the right people sign.

Getting the mortgage off title

If you have a mortgage, how it is dealt with on closing depends on your contract and your lender, so your lawyer can confirm the steps. The Registrar discharges a mortgage or encumbrance when given a discharge in the prescribed form (Form 7) signed by the lender. Your lawyer arranges for the lender to sign it so the mortgage comes off title when the sale closes.

Alberta.ca offers separate forms for a full discharge and for a partial discharge, as well as a Statutory Declaration Re Mortgage Levy Adjustment. Which of these applies depends on your situation, and your lawyer can tell you. Whether any charge applies for paying out your mortgage early depends on your mortgage terms, so it is worth asking your lender for a payout figure early and reviewing it with your lawyer.

Spousal consent and the homestead

Under the Dower Act, a married person cannot dispose of the homestead during the lifetime of either spouse unless the spouse consents in writing or the Court has made an order dispensing with that consent. This applies even if only one spouse is on title. A seller's lawyer must therefore deal with the spouse's consent when a married seller sells the homestead.

The homestead is a parcel containing your residence. In a city, town or village it is a limited number of adjoining urban lots in one block, and outside those it is up to one quarter section. Disposing of a homestead without the required consent is an offence, with a maximum penalty of a $1,000 fine or two years' imprisonment.

There is an exception. A married owner can apply to the Court for an order dispensing with consent on grounds such as spouses living apart, a spouse whose whereabouts are unknown, a prior dower release agreement, or a spouse who is mentally incompetent without a legal decision-maker. The Court may grant the order if it appears fair and reasonable under the circumstances.

Adjustments, closing funds and tax

The figures at closing, including any adjustments between you and the buyer, depend on your contract and your situation. Ask your lawyer to walk you through them before closing day, and to explain how the mortgage discharge fits into the closing.

How the sale money is handled on closing day also depends on your contract and your lender, so your lawyer can explain the steps. Tax is a separate matter. If you sold your principal residence, you must report the sale and designation on your tax return for the exemption to apply. A housing unit in Canada sold on or after January 1, 2023 that you owned for less than 365 consecutive days is generally deemed business income instead of a capital gain, and the principal residence exemption does not shelter it. Exceptions apply for certain life events, including the death of the taxpayer or a related person, and the destruction or expropriation of the property. A tax professional can confirm how this applies to you.

What to do next

• Gather your title information, mortgage details and the accepted contract.
• Tell your lawyer if you are married, separated, or share ownership with anyone.
• Ask your lender for a payout statement.
• Find out whether the property is held by an estate.
• Confirm your closing and possession dates.
• Ask a tax professional about reporting the sale.

Frequently asked questions