Buying Real Estate in Nova Scotia

The contract

When buying property in Nova Scotia, you need a written contract, or an agreement of purchase and sale. The Nova Scotia Real Estate Association has developed various standard forms of agreement that may be used by Realtors. Most lawyers use the same agreement as it is well drafted with input from lawyers.

It is always advisable to consult an experience real estate lawyer to review the agreement prior to being bound. You may add a "lawyer review clause" to protect your interests.

The conditions

There will be certain conditional clauses you will want to have in your contract. The most common ones are:

• Financing - You will need time to arrange financing before you are bound to the contract. Allow five to ten banking days for this. If you are not successful in arranging financing, make sure the Seller is notified before the time expires. Otherwise, you may become bound to the agreement even though you are not able to obtain the financing to buy.
• Inspection - If you are buying a home, it is advisable to hire a building inspector who will be able to advise you on the condition of the home. The law in Nova Scotia is "buyer beware" or "caveat emptor". Allow approximately five days to have this done and ensure the contract provides you can terminate the agreement if you are not satisfied with the inspection.
• Insurance - Insurance Companies have become more particular about the properties they are prepared to insure. It may be impossible to obtain insurance in certain cases so give yourself some time in the contract to make sure the property is insurable.
• Property Condition Disclosure Statement or PCDS - This is a standard pre-printed form used in Nova Scotia in which the Seller discloses information about the property such as water supply, electrical services, plumbing; water leakage issues, easements, rights of way and building restrictions. The information is based on the Seller's knowledge. It is not meant to be warranty as to the condition of the house.
• Water tests - If the home is serviced by a Well, the lender will require that there are no coliform in the water. In Nova Scotia, it is common to test for arsenic and uranium. You may want to add a clause regarding water quantity as well.
• Other clauses- There are many other standard clauses which define the responsibilities of the parties and protect the Buyer. Also, each contract is drafted with the required additional clauses under the particular circumstances.

Your Real Estate lawyer

If you contact your lawyer before signing your Agreement of Purchase and Sale or before the conditions have expired, your lawyer will be better able to respond to any specific concerns you may have and protect your interests. Your lawyer must also represent the interests of the mortgage lender you have selected.

Land Ownership

Recently, the Province of Nova Scotia has converted to a Land Titles system of ownership. The title to land will be based on how the ownership of a parcel of land changes. The older Registry system records transfers of ownership of land between people and such transfers are indexed under the name of the owner rather reference to the parcel.

Nova Scotia Closing Costs - Those Nickels and Dimes

Unanticipated expenses can be an overwhelming setback to an otherwise positive experience. Your real estate lawyer will review all the expenses relating to the closing of your purchase. Here are some usual closing costs:

• Deed Transfer Tax - Most municipalities charge a fee called a "Deed Transfer Tax" before you are permitted to register your deed. The tax varies from Municipality to Municipality. The tax for the Halifax Regional Municipality is 1.5% of the purchase price.
• Registry Fees - There are fees payable to the Registry of Deeds to register the deed and record the mortgage. The current fee (2005) to register a document is $74.50 per document.
• Adjustments - These include the cost of the oil tank (approx $650 at May 2005) and/or propane tank (size dependent) fill up, the cost of property taxes which have been "prepaid" by the Seller and are to be reimbursed to the Seller as addition to the price on closing.
• Location Certificate or Title Insurance? - The lender will require confirmation that the home is located on the land described in the deed and mortgage. This can be achieved by a location certificate prepared by a Nova Scotia Land Surveyor. Alternatively, the lender will usually accept a Title insurance policy. Consult with your lawyer about the two options available to you.
• Other closing costs - There will, of course be legal fees charged by your lawyer as well as some office expenses often referred to as disbursements, and HST on fees and disbursements.

On closing you pay the down payment and closing costs by bank draft on closing to your lawyer's firm "in trust". The mortgage company will send your mortgage funds directly to your lawyer, and so on the closing day, your lawyer will have all the funds required to purchase your property on your behalf.

Your lawyer records your Deed and the Mortgage at the Registry of Deeds after the closing and will report in due course to you and the mortgage company.

What about HST?

HST is payable on new houses and substantially renovated houses as well as in some other situations; it is not payable on the price of existing used homes. There can be HST charged on vacant land in certain situations. Consult your lawyer about HST before you sign the contract.