A house sale and purchase is often a learning process for the everyone involved. Understandable since buyers and sellers do not deal in real estate every day. People come with assumptions about a transaction and a bit of clarity can help clear up some of these misconceptions.
WHAT GETS PAID OUT?
In a standard house purchase transaction people will (understandably) not always know what is managed by the lawyer and what is not. A client could not be blamed for thinking that everything associated with their house will be dealt with in the legal transaction, but that is not always the case. A legal file is structured generally according to the title and to trust conditions imposed between lawyers. From a legal perspective, when title is moved from seller to buyer, title must be “cleared” of any registrations. Anything registered against title will be dealt with and cleared off title. Unless it is a standard utility caveat or there is a special understanding between the parties that something can remain on title (rare). As well, the water account associated with the house is generally dealt with. The reason for title being cleared and water accounts dealt with is that they are attached to, or they are billed to, the title or address, so liability would exist with the new buyer.
WHAT DOES NOT GET PAID OUT?
Other things however are NOT attached to the house and the liability exists with the vendors, and travels with them after the sale. A friendly reminder that things like hydro accounts, loans for household items like hot water tanks, hot tubs, windows, and unregistered renovation lines of credit are not cleared as part of the transaction (normally) unless it is registered on title or specifically brought to the attention of the lawyer.
If you’re ever unsure of how to process works we are always here to help!