do you need a lawyer to buy or sell a house?

Do You Always Need a Lawyer to Buy or Sell a House?

The short answer is yes, but let’s talk about the basic reasons why. First, the transfer of real property (land) in Ontario is controlled through a land registration system. The system records who the legal owners of a property are and details previous items which have been registered for that property. For the vast majority of properties, Transfers of land are electronic documents that can only be signed by lawyers, and except in very limited circumstances, two lawyers are required to complete a transfer, one representing the seller, and one representing the purchaser. 

Beyond the technicality of needing a lawyer to complete the transfer, almost every agreement of purchase and sale states that the transfer of funds from purchaser to seller must occur through lawyers’ trust accounts. This is a measure of protection against fraud as there are strict rules governing the use of trust accounts and each lawyer has a duty to identify the client(s) they are representing. As you can imagine, simply sending the purchase funds to a person claiming to own a property without any system in place would be quite a risky move.

There are other duties performed by a lawyer to protect your interests, including drafting and reviewing closing documents, having them executed, and exchanged with the other party. Most importantly, a purchaser’s lawyer will make sure the purchaser is obtaining an interest in the property free from unwanted claims (for more see Assurance of Title).  On closing, lawyers deal with registration of new mortgages and the discharge of old ones. We won’t go into all the things a lawyer does here, as this is just the short answer – you do need a lawyer to buy or sell a house in Ontario.