While certain industries are regulated federally, property laws are a provincial responsibility. Many of the provinces have similarities in their property laws, but even those are not exactly the same. What happens when a buyer or seller resides in one province and the home being bought or sold is in another province?
The parties to the transaction will both need to retain a lawyer in the province where the property is located. Only real estate lawyers in the province where the home is located will be able to do the legal work and convey the property to the purchaser. Lawyers in other provinces are not licensed to practice law in Ontario (unless they have written the Ontario Bar Exam and maintained their qualifications in Ontario) and cannot transfer Ontario properties.
If the seller of an Ontario property resides in another province, for example, British Columbia, the Ontario lawyer will have to prepare all the legal documents early and have the documents sent to a notary or a lawyer in British Columbia. The seller would then sign the documents in front of the notary or lawyer and the original documents would be sent back to the Ontario lawyer to arrive before the closing date.
Being in Ottawa, we see several transactions a year where the seller resides in Ottawa and is selling a Quebec property. Even though we are close to the border, the laws of the two provinces are very different. The seller would have to use a notary in Quebec to complete the transaction. Depending where the property is in Quebec, the Ontario resident could choose to drive to meet their notary in Quebec to sign the documents, or the notary in Quebec could have the documents sent to an Ontario lawyer to be notarized and sent back.
Sellers have an option that can simplify the paperwork logistics. They can sign a Power of Attorney for Property to authorize someone to sign the legal documents on their behalf. If the seller knows they will be out of the province at the time of the sale, the seller can attend the Ontario lawyer’s office early to meet with the lawyer and prepare a power of attorney. With a power of attorney, the attorney will sign the legal documents on the seller’s behalf and the documents will not need to be notarized and couriered back to Ontario.
Buyers have similar requirements. If the property is in Ontario and the buyers are living in another province, again the documents will have to be prepared early, sent to the buyers to sign in front of a notary or lawyer, and sent back to the Ontario lawyer. The buyers should inform their lender that they will have to notarize the documents out of the province so that the mortgage documents will be prepared early, allowing time for the documents to be signed, notarized and couriered back before the closing date.
Power of Attorney is not as straight forward for buyers as for sellers. Banks very rarely allow buyers to use a Power of Attorney to sign on their behalf on a purchase due to the amount of real estate fraud in the recent past. Therefore, if the buyers are hoping to use a Power of Attorney to sign the purchase documents, they will need to inform the bank early to see if the Power of Attorney will be accepted and if the bank will require any additional steps for verification. If the bank refuses to allow a Power of Attorney, the purchasers will have left themselves enough time to make alternate arrangements.
Buying and selling property in Ontario while residing in another province is not complicated, but it does take additional coordination and time. If you find yourself in that situation then speak with all the professionals working on your transaction (banks, mortgage broker, lawyer and real estate agent) so that everyone is able to meet the time lines for the closing date.
Originally published by Jacques Robert, in the Ottawa Sun Oct 07, 2016