1. How to Prepare Closing Documents in a Residential Real Estate
Transaction
Print Version
Updated June 2012
This How-To Brief outlines the steps to take when preparing closing
documents in a residential real estate transaction.
Step 1: Interview the client
Step 2: Gather the information
Step 3: Prepare the closing documents at the earliest opportunity
Step 4: Be aware of which documents are usually prepared by the
vendor's solicitor
Step 5: Be aware of which documents are usually prepared by the
purchaser's solicitor
Step 6: Review all documents received or messaged from the other
side in a timely manner and inform the other side well in advance of
closing if you require changes to the documents or if you intend to
amend the documents
Step 7: Send your documents (or the other side's amended
documents) to the other side
Step 8: When documents are to be electronically registered, contact
the other law firm to determine who will prepare the Transfer/Deed
of Land and give written instructions as to whom the draft
Transfer/Deed of Land should be messaged
Resources
Statutes and Rules
1Interview the client

2. Confirm the seller(s) as set out in agreement of purchase and sale
is/are on title. If the seller’s spouse is recently deceased, a
survivorship application may be required. If the agreement of
purchase and sale is executed under a power of attorney, the power
of attorney may need to be registered.
If you are acting for more than one seller, obtain consent to act for
both parties.
Determine if any of the sellers is a non-resident and be prepared to
holdback 25% of the proceeds of sale (based on the total sale price,
not just the amount after paying out a mortgage).
Send an engagement letter to the client(s) to outline your retainer
and things the client(s) need to do.
Obtain identification and information to comply with the "know your
client" rules (By-Law 7.1, made under the Law Society Act, Part III,
Client Identification and Verification). (See the link to By-Law 7.1 in
the Resources section of this How-To Brief.)
Acting for the buyer(s):
Have a thorough client intake sheet so you are prepared to ask as
many questions as possible.
If you are acting for more than one buyer, obtain consent to act for
both parties.
Send an engagement letter to the client(s) to outline your retainer
and the things the client(s) need to do.
Confirm whether the client is engaging you to provide an opinion
regarding a potential future use of the property.
Determine if the buyer(s) are obtaining a mortgage to assist in the
purchase of the property.
Receive the mortgage instructions promptly and review them.
Confirm with the lender that all conditions have been met and it’s
okay to proceed.
Obtain the "standard charge terms" and any additional schedules in
the instructions.

3. If a mortgage broker is involved, obtain the mortgage commitment
and any direction(s) re: the proceeds of the mortgage.
If it is a private lender, send an engagement letter to the client to
outline your retainer and the things the client needs to do.
If it is a private lender, obtain identification and information to
comply with Part III of By-Law 7.1.
If it is a private lender, complete Forms 9D and 9E in accordance
with By-Law 9
Acting for the seller(s):
Have a thorough client intake sheet so you are prepared to ask as
many questions as possible.
Acting for borrower(s) and lender:
Do all of the above.
Consider whether independent legal advice (ILA) is appropriate,
and advise the client early so they can make arrangements.
Consider whether you can act for both sides in accordance with the
Rules of Professional Conduct, rr. 2.04 (11)–(12).
Obtain consent to act for all parties in accordance with the Rules of
Professional Conduct, r. 2.04.
Self-directed RRSPs lenders are not trust companies, and you
cannot act for a borrower and a self-directed RRSP lender unless
you fall within the exceptions in r. 2.04.
2Gather the information
Title search
Order your title search on behalf of the buyer(s) and review for the
following issues:
Planning Act
ownership (have all owners executed the agreement of purchase
and sale).

4. registry/land titles non-conversion
road access/environmental protection/other agreements
existing encumbrances:
When you act for the seller(s), the clients may not know their line of
credit is registered against their house, and this may affect the
mortgage instructions.
Even if not required by any of the parties, you should have a
deleted instruments search to help flag any mortgage fraud issues.
Other information
The following are other things you should obtain:
Personal Property Security Act (PPSA) searches, if applicable
execution certificates for the seller(s) and the buyer(s)
discharge statement for any mortgage that will be paid out and
removed from title on behalf of the seller(s)
property tax information
property insurance information
title insurance coverage options
building and zoning compliance letters
environmental searches or reports
Corporate parties
In addition to the above, you will want to obtain
a certificate of status
an incumbency certificate
confirmation of authority to borrow/lend
authority of the person giving direction to bind the corporation
a letter of opinion from the corporate solicitor
3Prepare the closing documents at the earliest opportunity

5. Prior to preparing the documents, carefully review the agreement of
purchase and sale.
As soon as possible upon being retained, obtain from the client all
the information required to complete the documents.
Whenever possible, prepare documents well in advance of closing
and send or message them to the other law firm.
4Be aware of which documents are usually prepared by the
vendor's solicitor
Subject to the terms of the agreement of purchase and sale, and
unless otherwise agreed upon, the following documents are usually
prepared by the vendor's solicitor:
electronic Transfer/Deed, if the parties have agreed and the
agreement of purchase and sale provides that the document will be
prepared by the vendor's solicitor (except the electronic Land
Transfer Tax Affidavit — Purchaser)
Polaris form Transfer/Deed (except the Land Transfer Tax Affidavit
— Purchaser)
statement of adjustments
sample form work sheet for calculating the statement of
adjustments (for the vendor's solicitor's own use)
direction re: funds
direction re: Charge/Mortgage to be given back to the vendor (if
applicable)
solicitor's redirection re: funds
mortgage discharge statement, if you are acting for a private
mortgagee and the mortgage is not being assumed (an institutional
mortgagee will usually prepare the mortgage discharge statement)
mortgage statement for assumption purposes, if you are acting for a
private mortgagee and the mortgage is being assumed (an institutional
mortgagee will usually prepare the mortgage assumption statement)
declaration re: writ of execution
statutory declaration in support of compliance with law statements that
are made by the vendor's solicitor

6. Polaris form Discharge of Charge/Mortgage
electronic form Discharge of Mortgage
solicitor's undertaking re: discharge of institutional mortgage and
letter to financial institution enclosing certified funds necessary to
discharge the mortgage
acknowledgments and directions for documents to be electronically
signed and registered by the vendor's solicitor
solicitor's undertaking to pay arrears of condominium common
expense payment
solicitor's undertaking to pay arrears of hydro
directions to tenants, tenants’ acknowledgements, and assignment
of leases, if tenancies are being assumed
solicitor's undertaking to pay arrears of realty taxes and letter to
municipality enclosing cheque covering outstanding arrears
document registration agreement (DRA) if closing in the electronic
registration system—it is not uncommon for the vendor's solicitor to
also prepare and forward a DRA to the purchaser's solicitor
purchaser's undertaking to re-adjust items in the statement of
adjustments, if necessary
(See the links to the sample documents in the Resources section of
this How-To Brief.)
5Be aware of which documents are usually prepared by the
purchaser's solicitor
Subject to the terms of the agreement of purchase and sale and
unless otherwise agreed, the following documents are usually
prepared by the purchaser's solicitor:
electronic Transfer/Deed if parties agree and the agreement of
purchase and sale provides that the purchaser's solicitor will
prepare the document

7. Planning Act statement in the Transfer/Deed of Land
affidavit of residence and value of consideration (Land Transfer Tax
Affidavit)
GST/HST certificate
declaration of possession
declaration re: accuracy of the survey
statutory declaration in support of compliance with law statements
that are made by the purchaser's solicitor
Polaris form Charge/Mortgage to vendor, if acting for the mortgagee
or if the mortgage is being given back to the vendor
electronic Charge/Mortgage, if acting for the mortgagee or if the
mortgage is being given back to the vendor
standard charge terms and acknowledgment of receipt of standard
charge terms
direction to lender re: funds
statutory declaration regarding the Family Law Act, the Income Tax
Act and residency status
warranty re: UFFI
guarantee (where applicable)
certificate of independent legal advice for a guarantor, if required by
the financial institution and the Rules of Professional Conduct
amortization schedule for the mortgage
direction re: title
purchaser's acknowledgments re: non-conforming use, title
problems, survey etc.
DRA
acknowledgment and direction for documents to be electronically
signed and registered by the purchaser's solicitor
undertaking to re-adjust and bill of sale
acknowledgement re title Insurance for signature by the purchaser
acknowledgement re conflict of interest when acting for both
purchaser and financial institution.
6Review all documents received or messaged from the other side in
a timely manner and inform the other side well in advance of closing
if you require changes to the documents

8. When reviewing documents, ensure that the documents comply
with the agreement of purchase and sale and that they do not
extend the vendor's responsibilities under the agreement of
purchase and sale.
7Send your documents (or the other side's amended
documents) to the other side
This will ensure their acceptability
avoid problems closer to or on the day of closing
When documents are to be electronically registered, contact the
other law firm to determine who will prepare the Transfer/Deed
of Land and give written instructions as to whom the draft
Transfer/Deed of Land should be messaged
8Where documents are to be electronically registered (absent a
specific provision in the agreement of purchase and sale
requiring one of the parties to prepare the Transfer/Deed of
Land), you should contact the other law firm as soon as possible
after being retained to confirm who will prepare the
Transfer/Deed of Land and to whom the draft Transfer/Deed of
Land should be messaged.