What Does a Real Estate Lawyer Do? Why You Need One

Buying or selling a home is the biggest business transaction you’ll ever make. The real estate transactions can be complex, time-consuming, and stressful. Moreover, with the complexity of Canadian real estate laws, even a small mistake can cost you money. That’s why you need a real estate lawyer to navigate the legal requirements.

While a real estate agent may seem interchangeable with a real estate lawyer at first glance, the lawyer’s role may not be as clear as your realtor’s role. So, what does a real estate lawyer do?

In this blog, we will unravel the essential roles of a real estate lawyer and walk you through the details of their responsibilities at closing and to the seller. Read on to navigate the lawyer’s role in the Canadian real estate market.

What Does a Real Estate Lawyer Do?

1. Due Diligence

A real estate lawyer can often handle the homework behind a property purchase, saving you money and time by uncovering possible risks related to the purchase.

2. Handles Transactions

A competent real estate attorney is knowledgeable and experienced enough to help you navigate the rules and regulations of real estate transactions. They help you understand leases, contracts, inspections, appraisals, legal documents, and other legal processes in acquiring a property.

Additionally, real estate lawyers can draft and revise documents and assist their clients with the purchase agreement review to ensure they’re not misled. They answer clients’ questions concerning the transactions and review the property offer to ensure the document protects the clients’ rights.

3. Overall Legal Representation

Sometimes, unpleasant legal situations can’t be avoided, and even the most qualified realtor might be unable to give you the right legal advice. Therefore, having a lawyer represent you through the sale or purchase of your home is important.

Real estate lawyers offer legal advice on property disputes and other legal issues like trespassing, encroachment, and injuries. They also represent you in real estate litigation, help draft legal pleadings and documents, file appeals on your behalf, and participate in trials and hearings.

4. Protects Clients’ Interests

A real estate lawyer will represent and safeguard your best interest. They review and explain any unknown legalese so you can sign without any uncertainty. Your legal team also ensures the authenticity of the legal documents involved, ensuring you don’t fall into unseen legal traps.

A real estate lawyer will closely examine all elements of your contract to confirm everything is in order. They can also negotiate your transaction’s terms and conditions on your behalf, which prevents you from having to navigate complicated legal negotiations.

What Does a Real Estate Lawyer Do at Closing?

1. Prepare Closing Documents

The real estate attorney ensures all closing documents are correctly filed. They draft up the initial contract for the property sale and can add additional terms as part of the negotiation. The documents needed for closing include mortgage documents, a sales agreement, information about the broker, a copy of the homeowner’s insurance, and any proof of title search.

2. Conduct Title Search

The property seller and purchaser need a clear title for the real estate property. Therefore, upon receiving a real estate purchase contract or a bank broker or mortgage recommendation, the real estate lawyer checks the title of the marketed property. The title searches reveal the instruments registered against the property, including Notices, a Charge, Transfers, and Bylaws.

Your closing attorney conducts a Title Search in every transaction to ascertain any liens, mortgages, charges, caveats, or notices such as the power to purchase by a bank or notice for sale. The buyer needs to understand the specific limitation of use, easements, encroachments, or if the title is commercial and straightforward for the seller to transfer the property to them.

Suppose the buyer is procuring a loan for the transaction. In that case, the seller will require that an attorney look at the land records before the transaction’s closing and report to the bank any concerns they may have. But suppose the buyer isn’t obtaining a loan for the transaction. In that case, the real estate lawyer will perform a title search, review transfer documents from the seller, and ensure no claims are registered against the property.

After assessing these issues, the closing lawyer will report to the buyer and the seller and provide copies of the Land Registry title. The title search allows the buyer and the seller to evaluate the real estate title and ensure the property issues are handled before the deal closes.

3. Title Insurance

Title insurance protects the buyer and seller against genetic vulnerabilities in real estate titles, which may not be obvious from the title search. Such hidden defects in the title may include missing inheritors, fake deeds, clerical mistakes, condo fees, issues with property tax payment, and the property’s boundary.

After the title search is completed, the closing attorney prepares an argument on the title and presents it to a title company to administer a title binder, which is primary to obtaining title insurance. From the buyer’s viewpoint, title insurance is necessary to safeguard them against claims of rights, liens, and interests on the property. On the other hand, title insurance assures the mortgage lender that the property is in the right hands.

4. Tax Searches

Your closing lawyer may also be responsible for acquiring a metropolitan tax certificate for the property from the city or town where the property is located; this is done to calculate property transfer taxes such as land transfer tax.

If the seller has overpaid their property taxes, the amount will be credited to them, but if the seller hasn’t paid the property taxes, then a credit is given to the purchaser towards their purchase price. The real estate lawyer’s responsibility is to ensure you only pay property taxes for the days you own the property.

5. Review the Agreement of Purchase and Sale

The Agreement of Purchase and Sale is an essential document containing all concerns related to selling or purchasing a home. It includes the property’s price and directions on how to pay, a detailed description of the property, and other conditions of the process.

The real estate attorney must thoroughly analyze the Agreement before the purchaser signs it, and if there are any questions about the Agreement of Purchase, the buyer must ask their lawyer.

6. Facilitates Closing

The closing lawyer is accountable for making arrangements for all closing paperwork, fixing the closing date, ensuring the closing documents are executed correctly, explaining all essential closing documents, and appropriately allocating funds.

After the purchaser and the seller have completed all the closing documentation, the lawyer records the title deed, which is how the seller conveys the property’s title to the purchaser for the determined price. The closing lawyer can then exchange legal documents and keys with the seller’s attorney.

At this point, the real estate transaction will be complete. Your closing lawyer will finish the necessary transaction reports, and after this, their role in the transaction will come to an end.

What Does a Real Estate Lawyer Do for the Seller?

1. Prepare and Review the Purchase Agreement and Other Legal Documents

When representing a seller, a real estate lawyer is responsible for drafting and negotiating the Purchase and Sale Agreement. The Agreement is a legal document formalizing the seller’s accepted offer. It lays out the terms of the Agreement, including contingencies, the purchase price, and any responsibilities and important dates of the parties. The real estate lawyer reviews the Agreement with clients and thoroughly translates the legalese into practical and easy-to-understand language so the clients can understand and agree to everything before signing.

While real estate agents can prepare the purchase agreement, having another party review the contract before sending it to the buyer is still a good idea. A real estate lawyer can spot particular nuances with the property and include conditions or disclosures that might be added to the purchase agreement.

2. Assists with Negotiations

A real estate lawyer can help negotiate the terms and conditions in the purchase agreement during the home sale. For instance, the buyer may want to add on extra conditions, with some being unnecessary and against the seller’s best interests. Without a lawyer, the seller might be unable to personally identify or understand these extra conditions if they’re unfamiliar with real estate law. The lawyer will also negotiate conditions and clauses on the seller’s behalf.

3. Resolve Any Outstanding Legal Issues

Perhaps there are issues arising from a title search, such as encroachment issues and undischarged mortgages or liens that need to be paid. The types of liens that should be addressed before closing include federal tax liens, executions, and municipal liens. The real estate lawyer should help resolve these issues and ensure all legal and financial conditions are met before closing. This also helps the seller avoid the risk of the buyer backing out of the contract.

4. Facilitates Closing

Before closing, the real estate lawyer will prepare and review the seller’s settlement statement with them to ensure they fully understand their closing-related fees, adjustments, and expenses. They will then attend closing on the seller’s behalf under Power of Attorney and sign all other closing documents.

At closing, the seller’s real estate lawyer holds the keys to the home in escrow. They receive the funds from the buyer’s lawyer. Once the money is received, the seller’s lawyer pays off any existing liens, such as unpaid property taxes, a mortgage, or other outstanding debt secured to the property. The lawyer also pays out real estate commissions from the earnings of the sale to the listing and buyer’s agent. The lawyer then sends the remaining amount to the home seller.


In the dynamic and complex landscape of Canada’s real estate market, a real estate lawyer is a huge asset to ensure transactions run smoothly and legally. With the many steps involved in real estate transactions, these legal professionals protect your interests, save you money and time, and ensure your transactions comply with Canadian law. Therefore, having one is a great idea even if it isn’t required by law in the province you are purchasing or selling the real estate.

Featured Image by Tierra Mallorca on Unsplash

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