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[BUYING AND SELLING REAL ESTATE IN CANADA - ONTARIO]
lawyer, along with any related instruments such as a mortgage. VII. THE PLANNING ACT The purpose of the Planning Act is to regulate how land can be developed and used. Subdivisions are used to divide one large parcel of land into two or more smaller parcels for further development. Careful consideration must be given to the Planning Act in any conveyance as a violation can be fatal in that that no interest in land is created or passed. S. 50 of the Planning Act pertains to the subdivision of land and prohibits an owner from the sale, transfer or mortgage of a property if they also retain an interest in the abutting lands, unless certain exemptions to the basic prohibition are met. A buyer's lawyer must search the chain of title and adjoining properties to ensure the owner does not own abutting lands, unless an exemption under the Planning Act applies. An important amendment was introduced with S.50(22) of the Planning Act in that there was an inclusion in the transfer document of optional statements by the seller and their solicitor and by the buyer's solicitor regarding compliance with the Planning Act . If these statements are completed on the transfer, any prior contraventions of the subdivision control provisions of the Planning Act , which otherwise would have voided the interest in land, are deemed to be no longer and never to have had this effect; in essence the violation is "cured." The requirement for Planning Act statements ought to be included as a required term in the agreement of purchase and sale as otherwise the statements are not compulsory. VIII. CONSTRUCTION LIENS AND WRITS Construction Liens are governed by the Construction Act . When work is performed or materials are supplied to the property, the party doing so, which can include contractors
and sub-contractors can place a construction lien on title against the property if they are not paid. A construction lien acts as an encumbrance to the title, giving aggrieved parties a right to be paid and a right to sue under the Construction Act . The buyer of the property may be liable to pay if the lien is not removed from title upon transfer. IX. WRITS OF EXECUTION An execution search is automatically conducted against the vendor by the electronic registration system prior to the registration of a transfer. In a lawsuit, the successful party is awarded a judgement in its favour against the other party. The successful party can then obtain a writ to be filed against the unsuccessful party in any district in which the other party owns property pursuant to the Execution Act. The writ of execution allows for the seizure and sale of real property, amongst other rights. Buyers should not close the purchase of lands if the registered owner is subject to a writ of execution, as the property will be noted as being subject to the writ of execution. X. THE ONTARIO NEW HOME WARRANTIES PLAN (ONHW) ACT Defects in newly built homes are subject to the Ontario New Home Warranties Plan Act. The Act was implemented to protects new home buyers from defective and faulty construction by the builder. All builders and all new homes have to be registered under the Act . Tarion, a crown corporation, is responsible for implementing the Act and indemnifying new buyers in case of loss. XI. HST The Harmonized Sales Tax (" HST ") is a 13% tax on the sale of all goods and services across Ontario, with certain exemptions. HST does not apply to used housing (i.e., any residential
ILN Real Estate Group – Buying and Selling Real Estate Series
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