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[BUYING AND SELLING REAL ESTATE IN CANADA - ONTARIO]
lands, and if so, whether an exemption under the Planning Act applies. A few years ago, a significant amendment introduced through S.50(22) of the Planning Act allows for optional statement to be included in the transfer document by the seller and their solicitor and by the buyer's solicitor regarding compliance with the Planning Act . When these statements are completed, any prior contraventions of the subdivision control provisions of the Planning Act , that would otherwise have voided the transfer, are deemed to be no longer and never to have had this effect, effectively curing the breach. Because these statements are not mandatory by default, it is advisable to include a requirement for them as a term in the agreement of purchase and sale to ensure they are completed during the transaction. 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 protect new home buyers from defective and faulty construction by the builder. All builders and all new homes have to be registered under the Act . The Home Construction Regulatory Authority (HCRA) licenses and regulates builders/vendors while Tarion , a not-for- profit corporation administers the warranties and is responsible for 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 home where the buyer is not purchasing a new build.) However, HST is payable for the purchase of new homes and substantially renovated homes, where 90% or more of the interior has been renovated and was inhabited for less than one year. Since May 7, 2022, HST is also applicable to all assignments of agreements of purchase and sale for new houses and condominium units and is chargeable by the assignor and payable by an assignee on the portion of the assignment purchase price representing the assignor's profit, over and above what the
ILN Real Estate Group – Buying and Selling Real Estate Series
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