Purchase of a Residential Property in British Columbia

Purchase of Residential Property

1. Initial Client Interaction

1.1 Opening the File

  • Obtain the signed Contract of Purchase and Sale (CPS).
  • Verify the buyer’s identity and collect necessary details.
  • Confirm how they wish to hold title (sole, joint tenancy, etc.).
  • Determine if the buyer is a first-time homebuyer (for PTT exemption).

1.2 Reviewing the CPS

  • Identify key terms, including price, deposit, closing date, and subject clauses.
  • Ensure financing conditions are met (if applicable).

2. Conducting Due Diligence

  • Obtain a State of Title Certificate through LTSA.
  • Check for mortgages, easements, liens, or other encumbrances.

2.2 Reviewing Property Tax and Utility Payments

  • Confirm outstanding property tax balances.
  • Determine any prepaid utilities requiring adjustment.

3. Preparing Closing Documents

3.1 Essential Documents

  • Statement of Adjustments: Calculates property tax adjustments, deposit credits, and total payable by the buyer.
  • Form B (Mortgage, if applicable): Required if the buyer is financing the purchase.
  • Property Transfer Tax (PTT) Return: Filed online through the BC government portal.
  • GST Certificate (if applicable): Needed for newly built properties.

4. Closing the Transaction

4.1 Signing Appointment with the Buyer

  • Explain all documents before signing.
  • Verify the buyer’s ID.
  • Confirm mortgage instructions if financing is involved.

4.2 Payment and Fund Transfers

  • Receive mortgage funds and buyer’s balance via trust account.
  • Ensure funds are sufficient to cover the purchase price and legal fees.

4.3 Registering the Transfer

  • Submit Form A (Transfer) and Form B (Mortgage) through LTSA.
  • Confirm registration before releasing funds to the seller.

4.4 Reporting to the Client

  • Provide a final report with the registered title, mortgage details, and financial adjustments.
  • Advise on property tax and strata fee responsibilities.

Best Practices & Risk Management

1. Managing Client Expectations

  • Set realistic timelines and communicate delays early.
  • Provide clear explanations of legal terms.
  • Ensure transparency in legal fees and disbursements.

2. Avoiding Liability

  • Keep thorough documentation of all communications.
  • Verify all title and financial information meticulously.
  • Use proper trust accounting practices.

3. Troubleshooting Common Issues

  • Title Issues: Seek client instructions and liaise with LTSA if discrepancies exist.
  • Funding Delays: Communicate with the lender and buyer to expedite resolution.
  • Non-resident Sellers: Ensure compliance with CRA withholding tax requirements.

Software and E-Filing Guidance

1. LTSA & E-Conveyance

  • Use myLTSA for title searches, document filings, and obtaining State of Title Certificates.
  • Ensure Form A and Form B submissions comply with LTSA requirements.

2. Property Transfer Tax (PTT) Filing

  • File through the BC Government’s eTaxBC system.
  • Ensure first-time homebuyers’ exemption eligibility is confirmed.

This manual provides a comprehensive, step-by-step guide to conveyancing for both sale and purchase transactions in British Columbia. Adherence to these procedures will ensure a smooth and legally compliant process for all parties involved.

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