Lawyer necessary for unconditional offer on preconstruction condo?

[gentlepuppies]

Hypothetically, if a building is about to close and time is of the essence, if someone makes an unconditional offer on an assignment (where the development fees are capped), is a laywer even necessary? Since no title exists yet?

 

[TheKingEast]

YES! Can't stress this enough. Get a lawyer that can look through the contract. There's a lot of crap builders put in there. Also, use the cooling off period to have your lawyer to add caps to closing costs. You need to figure out how much you will have to pay at closing. Closing costs can cripple you so yes, get a lawyer.

Edit. I read this again. So you're buying on assignment. Yes, I'd still give it to a lawyer to look at. You have no idea what the purchaser agreed to. Don't just take their word for it.

 

[gentlepuppies]

I sent the lawyer a copy of the agreement before I signed it - he says the fees are capped and encouraged me to make an unconditional offer due to time constraint, which I did and the seller accepted. At this point all we have were phone correspondence and emails - he hasn't been paid for any of this yet. My realtor says I'll still need a lawyer for closing, but I have no idea what the scope of work entails at this stage. No titles exist yet to search for, no liens as stated in the contract... I guess I'm also a bit confused as to what "unconditional" means in this context, because if I'm already stuck with this agreement, what difference does a lawyer make?

 

[Wooba]

You need a lawyer to deal with issues related to closing, registering title, etc. I know there's a thread on here on this very topic if you care to look, but I'm pretty sure it's not possible to close without a lawyer.

 

[AndreaPalladio]

Yes, you need a lawyer to do all the technical things associated with closing the sale. There may well be liens, assuming this is new construction and there are still trades and subtrades waiting to be paid, and other executions. That changes daily, and you will want your lawyer to determine that there are none that cloud your title. Your mortgage lender would not normally advance funds if there were liens on the property ahead of them.

Also, you want a lawyer to give you an opinion that you have clear title to the property without encumbrances - other than your own mortgage, of course. You either need an opinion from a lawyer or title insurance which does the same thing. You can only get these from a lawyer.

 

[gentlepuppies]

The math is scaring me a bit... do these numbers sound right?

I bought a $380K assignment, assignor originally paid $360K, with 25% down ($90K, of which $10K is still due at closing). I pay the assignor $100K ($90K- $10K +(380K-360K)) and my business with him is done.

After that, I owe builder $10K, plus $5K in adjustments, plus $26K HST, plus $7K land transfer tax, plus $3K for laywers. Granted I can rebate $5K of the land transfer tax and all of the HST, but am I really paying $151K upfront for a $380K condo?? Or is the lawyer supposed to resolve this for me?

 

[AndreaPalladio]

How big is your mortgage?

 

[gentlepuppies]

My mortgage is $360k-$90K = $270K...

 

[AndreaPalladio]

Then you are going to need $110K to pay for your $380k apartment, plus closing costs plus Land Transfer Tax plus HST plus your lawyers fees.

 

[gentlepuppies]

So, $151k like I posted above... lol