At MBLAW Professional Corporation, we pride ourselves on offering comprehensive legal services for real estate transactions in Ontario. One of the most important documents you will receive at the end of your transaction is the Final Report. This document summarizes all essential information related to your transaction, including legal details, financial adjustments, and important documents you need to keep for future reference.
Whether you are purchasing, selling, or refinancing a property, understanding the Final Report is crucial for ensuring that all elements of your transaction have been completed correctly. In this article, we will explore what a Final Report is, what documents it typically includes for different types of real estate transactions, and the significance of each document.
What is a Final Report?
A Final Report is a legal document prepared by your lawyer at the end of a real estate transaction. This report consolidates all important information and documents related to your transaction, ensuring that everything is in order. It serves as your record of the transaction and provides you with the legal assurances that your interests were protected during the process.
At MBLAW, we provide the Final Report within 30 days after the closing date, delivered electronically via email. If you signed documents electronically, your digital documents are considered the originals. For clients who signed documents in person at our office, you can either pick up your Final Report, including original documents, in person or request that we send them to you by mail.
The Final Report typically includes a detailed summary of the transaction, copies of all critical legal documents, financial statements, and any instructions for future actions you may need to take. The report varies slightly depending on whether the transaction involves a purchase, sale, or refinance of a property.
Final Report for Purchasers
When purchasing a property, the Final Report is a crucial document that provides you with a complete overview of your transaction, ensuring that all legal and financial details have been properly addressed. The Final Report includes several key documents and summaries that offer important information about your new home and your obligations as a homeowner. These documents typically include the following:
Copy of Registered Transfer (Deed)
The Registered Transfer, often referred to as the Deed, is the document that officially transfers ownership of the property from the seller to you. It is registered with the Land Registry Office, making it the legal record that you are now the rightful owner of the property. This document is essential because it serves as proof of ownership, which you may need to provide in various situations, such as securing financing or resolving disputes over property boundaries.
Title Insurance Policy
Title insurance is a critical protection for homeowners, safeguarding you from potential issues related to the title of your property. This policy covers risks that may arise from defects in the title, such as outstanding liens, unpaid property taxes, or zoning violations that occurred under previous owners. Title insurance ensures that if a problem with the title is discovered after your purchase, you are protected from financial losses associated with resolving these issues. It is an essential safeguard that provides peace of mind for new homeowners, knowing that their investment is secure. Read more about Title Transfer.
Mortgage Documents
If you financed your purchase with a mortgage, the Final Report will include copies of all relevant mortgage documents. These typically consist of the mortgage agreement, which outlines the terms of your loan, such as the principal amount, interest rate, and payment schedule. Additionally, it will include any standard charge terms that apply to your mortgage. Understanding these documents is vital, as they detail your obligations to the lender, including the consequences of missed payments or early repayment of the loan.
Statement of Adjustments
The Statement of Adjustments is a detailed financial document that outlines all the monetary adjustments made between you and the seller at closing. This statement includes prorated amounts for property taxes, utilities, and other ongoing expenses associated with the property. For example, if the seller prepaid property taxes for the year, the Statement of Adjustments will show how much of that amount you, as the buyer, owe the seller for the period you will own the property. This ensures that both parties fairly share the costs incurred up to the closing date.
Statement of Account
The Statement of Account provides a breakdown of all fees and expenses incurred during the transaction. This includes legal fees, disbursements, and other costs that were settled as part of the closing process. The Statement of Account allows you to see exactly how funds were handled and ensures that there are no surprises regarding costs. It serves as a transparent record of the financial aspect of your transaction, confirming that all fees have been accounted for and paid.
Statement of Receipts and Disbursements
The Statement of Receipts and Disbursements is a comprehensive document that tracks the flow of funds throughout your transaction. It shows where money came from (receipts) and how it was distributed (disbursements), ensuring that all financial aspects of the purchase were handled correctly. This includes the receipt of your mortgage funds, the deposit, and how those funds were used to pay for the property, taxes, legal fees, and other expenses. This document provides a clear picture of the financial side of your transaction and confirms that all funds were allocated as intended.
Other Important Documents
Depending on the specifics of your transaction, the Final Report may also include additional documents that are relevant to your purchase. These can include Undertaking, Warranty, Declarations, and property insurance information, which confirms that your new home is adequately insured. If any special conditions or agreements were part of your purchase, those documents will also be included in the Final Report.
These documents collectively ensure that you have a complete and organized record of your real estate purchase. They provide the necessary legal and financial assurances that your transaction was handled correctly, protecting your investment and giving you peace of mind as you take ownership of your new home.
Final Report for Vendors (Sellers)
For sellers, the Final Report is an essential document that confirms the successful completion of the sale transaction and the transfer of the property to the buyer. The report focuses on ensuring that all legal and financial obligations have been fulfilled and provides you with a detailed record of the sale. Key documents in the Final Report for vendors include the following:
Transfer of Title
The Transfer of Title is a critical document that confirms the legal transfer of the property from you to the buyer. This document, registered with the Land Registry Office, serves as proof that you no longer own the property. Once the transfer is complete, you are officially released from any ownership obligations related to the property.
Financial Statements Overview
The Final Report for sellers also includes a set of financial documents that provide a complete record of the monetary aspects of your transaction. These documents include the Statement of Adjustments, the Statement of Account, and the Statement of Receipts and Disbursements. Together, they ensure that all financial details, such as credits for prepaid taxes, legal fees, and how funds were distributed, are accurately documented. For a more detailed explanation of these documents, please refer to the section on the Final Report for purchasers above.
Real Estate Commission Statement
If you used a real estate agent to sell your property, the Final Report will include a Real Estate Commission Statement. This document shows the amount of commission paid to your real estate agent and confirms that it was properly deducted from the sale proceeds. It provides transparency regarding the fees paid for real estate services and ensures that there are no discrepancies in the final payment made to your agent.
Mortgage Discharge Statement
If you had an existing mortgage on the property, the Final Report will include a Mortgage Discharge Statement. This document confirms that your mortgage has been fully paid off from the sale proceeds and that the lender has discharged the mortgage from the property’s title. The discharge of the mortgage is a crucial step in the selling process, as it ensures that the property is transferred to the buyer free of any financial encumbrances.
Declaration for HST
The Declaration for HST (Harmonized Sales Tax) is a document that may be required depending on the nature of the property being sold. If the property was used for commercial purposes or if you are not a resident of Canada, you may be required to submit a Declaration for HST. This document clarifies whether HST is applicable to the transaction and ensures that any tax obligations are properly accounted for.
The Final Report for sellers consolidates all the key documents and information related to your real estate sale, ensuring that the transaction was completed correctly and that all legal and financial obligations were met. By carefully reviewing your Final Report, you can confirm that the transfer of ownership has been successfully completed, your mortgage has been discharged, and all financial adjustments have been accurately settled.
Final Report for Refinancing
Refinancing a property involves taking out a new mortgage to replace an existing one. The Final Report for refinancing typically includes documents related to the new mortgage and the discharge of the previous mortgage. Important documents include:
Mortgage Documents
The Final Report will include a copy of your new mortgage agreement, outlining the terms of the new loan, including the principal amount, interest rate, and payment schedule.
Mortgage Discharge Statement
This document confirms that the previous mortgage has been paid off and discharged from the title. It ensures that the new mortgage is now the only lien on the property.
Property Insurance Confirmation
As part of the refinancing process, you may be required to update your property insurance. The Final Report will confirm that your property is adequately insured and that the new lender is named as a beneficiary on the policy.
Statement of Receipts and Disbursements
This statement details how the funds from the new mortgage were used, including the payoff of the previous mortgage, legal fees, and any other expenses associated with the refinancing.
These documents ensure that your refinancing transaction is properly completed and that the new mortgage is registered on title.
Why the Final Report Matters
The Final Report is not just a formality; it is a critical document that consolidates all the important details of your real estate transaction. It provides a clear record of what has been completed, offers legal protection, and helps you understand your financial and legal obligations moving forward.
If you have any questions about your Final Report or need assistance with a real estate transaction, please do not hesitate to contact us. We are committed to providing you with the highest level of service and ensuring that your real estate transaction is a success.
Contact MBLAW today to schedule a consultation with one of our experienced real estate lawyers. Let us help you navigate your next real estate transaction with confidence.
