What a Lawyer Does When You Sell Your House in New Brunswick

Selling your home is likely the largest transaction you will complete, and the paperwork can feel unfamiliar the first time. Between the signed agreement of purchase and sale and the day the keys change hands, a number of legal steps need to happen in the right order.

This article walks through the parts of a sale that a lawyer generally handles in New Brunswick, and the parts that stay with you. Your own file may differ, so treat it as a map rather than a checklist you can rely on without advice.

This article covers the law of New Brunswick.

Do you have to use a lawyer to sell?

Whether a lawyer is strictly required for your sale depends on your situation, so it is worth confirming with a lawyer. Even so, how registration works is a practical reason to involve one.

Electronic instruments can be submitted only by subscribers, meaning members of the Law Society of New Brunswick who are authorized to practise law and have an agreement with Service New Brunswick, apart from stated exceptions. Paper submission is allowed in limited cases, such as when a registered owner submits the instrument personally. Instruments must also be properly executed and accompanied by all pertinent documents and approvals, and the requirements differ between Land Titles and the Registry of Deeds. How this applies to your sale depends on your situation, so it is worth confirming with a lawyer.

Reviewing the agreement and the deposit

The agreement of purchase and sale sets the price, the conditions, the closing date and what happens if someone defaults. Having a lawyer read it before you sign, or before you accept an offer, lets you ask about unclear conditions while changes are still easy to make.

The deposit is usually held through the real estate agent. An agent who receives a deposit must hold it as trustee for all parties according to their rights under the offer or contract, not as agent for one party. The deposit goes into the trust account without delay, although a cheque received with an offer need not be deposited until the offer is accepted.

• No money may be drawn from the trust account except in accordance with the terms on which it was received, so a brokerage cannot simply release a disputed deposit to one side.
• If the parties dispute the deposit, the agent may, and if necessary to resolve the dispute shall, pay it into court on an interpleader.
• An agent may act for one party and receive the deposit for that party only if the contract says so and every other party acknowledges it in writing.

Who is entitled to a deposit after a failed sale depends mainly on the wording of your agreement, which is another reason to have it reviewed early.

Paying out the mortgage

If you have a mortgage, the lender needs to be repaid from the sale proceeds and the mortgage cleared from title. Under the Land Titles Act, a registered mortgage can be discharged, in whole or in part or as to any of the land, by registering a discharge of mortgage in the prescribed form.

A mortgagee may also release a covenantor from some or all covenants by registering a release in the prescribed form, and that is a separate step from discharging the mortgage. This matters if more than one person signed the mortgage, for example after a separation. Ask your lawyer which documents apply to your situation.

Registration, transfer tax and the land description

The way the land is described on the deed to the buyer matters. Describing the land by its approved Parcel Identifier (PID) is a sufficient description for every transaction relating to it, and the registrar may reject an instrument that does not describe the land by its approved PID.

Real Property Transfer Tax is payable by every person who tenders a deed for registration, and it must be paid before the deed is registered. For deeds tendered on or after April 1, 2016, the tax is 1% of the greater of the consideration or the assessed value. Your lawyer can confirm who pays it under your agreement and whether an exemption applies.

If you or the buyer wants proof of who the registered owner is, a certificate of registered ownership can be required from the registrar on payment of the prescribed fee, and it is evidence in all courts of its particulars as of its date and time.

What stays with you, and what to do next

Some parts of a sale are yours alone. Each person in whose name the property is assessed must pay the property taxes on it, and taxes are due when the real property tax notice is mailed. As an exception, the Real Property Tax Act provides a tax deferral program for seniors (65 or older) who receive the residential credit. Your lawyer can advise how any unpaid or current-year amount is handled at closing.

• Gather your mortgage details, lender contact and the most recent property tax bill.
• Send the signed agreement and any conditions to your lawyer before you accept, or as soon as possible after.
• Tell your lawyer about everyone named on the title or the mortgage.
• Confirm the closing date, and arrange to move out and hand over keys as the agreement requires.
• Ask what funds you should expect, when, and how any deductions will be explained.

Questions about how your particular sale will unfold are best put to a lawyer before you commit to a closing date.

Frequently asked questions