Real Estate Transactions: APS, Title, Land Transfer Tax, and Closing Mechanics
What the Exam Tests in Real Estate Transactions
The Real Estate domain tests the mechanics of residential and commercial conveyancing in Ontario: the agreement of purchase and sale (APS), title and registration under the Land Titles Act, the Planning Act consent rules, land transfer tax, and the interaction of solicitor and client duties at closing. Questions often turn on which party bears a risk, when time is of the essence, and what a requisition date does.
Core Rules and Concepts
- Agreement of purchase and sale. The standard OREA APS sets out the irrevocability period, deposit, completion date, requisition date, and title search responsibilities. The requisition date typically falls a few days before completion, after which the buyer's objections to title are limited.
- Time is of the essence. If the APS states time is of the essence, a party who fails to close on the completion date is in breach, and the other party may terminate and claim damages or retain the deposit.
- Title and registration. Most Ontario land is under the Land Titles Act (land titles conversion). A parcel register shows the current owner, encumbrances, and executions. The Registry Act still governs some older parcels and requires a 40-year search.
- Planning Act consents. Section 50 prohibits conveying a parcel without consent of the committee of adjustment where the conveyance would create a lot that does not front on a public road or would contravene a zoning by-law. A conveyance without required consent is deemed void.
- Land transfer tax. Ontario levies land transfer tax on the purchaser; the City of Toronto adds a municipal land transfer tax. First-time buyer rebates and the graduated rate structure matter on calculation questions.
- GST/HST. New residential housing is subject to HST, with rebates; resale residential housing is generally exempt.
Worked Example
An APS has a completion date of 15 May and a requisition date of 8 May. On 6 May the buyer's solicitor discovers an unregistered easement benefiting a neighbouring property. Because the requisition date has not passed, the buyer may requisition title and require the seller to address the easement; if the seller cannot, the buyer may terminate and recover the deposit. If the buyer had discovered the easement on 10 May, the requisition right would be lost, and the buyer would generally take subject to it.
Traps That Cost Marks
- Treating the requisition date as the completion date.
- Forgetting that a Planning Act consent deficiency renders a conveyance void, not merely voidable.
- Assuming the seller pays land transfer tax.
- Overlooking the Toronto municipal land transfer tax on top of the Ontario tax.
- Missing that a deposit is generally held in trust and may be forfeited on buyer default.