Subject Removal to Keys: What Your Lawyer Does Before Completion Day in BC

Most buyers remember the exciting parts of a purchase: the showing, the offer, the day the subjects come off. Then the file goes quiet. Your realtor steps back, and a lawyer or notary you may never have met before asks for identification, insurance details and a large bank draft.

That quiet stretch is where the legal work happens. This article walks through what a real estate lawyer does between subject removal and completion day in British Columbia, what you will be asked to provide, and the three things that most often catch buyers by surprise.

Where the lawyer comes in

Once the subject conditions in your contract are removed, the deal is firm. From that point the job is no longer finding a property or negotiating a price; it is moving title and money safely from one side to the other on the day the contract says. In BC that is done by a lawyer or a notary public, and the buyer and the seller each normally retain their own.

The earlier your lawyer has the contract, the smoother this goes. Many problems that surface in the last week, such as a charge on title nobody mentioned or a lender requirement that was not anticipated, are easy to fix with three weeks' notice and stressful to fix with three days'.

The weeks before completion

Behind the scenes, a purchase file moves through a fairly predictable sequence:

• Title search. Your lawyer pulls the current title from the Land Title Office and reviews every charge registered against it: mortgages that must be paid out, easements and rights of way that will stay, restrictive covenants, builders liens, and anything unexpected.
• Strata documents. For a condo or townhouse, the lawyer obtains the strata's Form B (information certificate) and Form F (payment certificate), and checks for unpaid levies or special assessments that could follow the unit.
• Statement of adjustments. Property taxes, strata fees, utilities and any rent are prorated to the adjustment date so that each side pays only for the days they own the property. The result is the exact figure you need to bring to closing.
• Mortgage documents. Your lender sends instructions to the lawyer, who prepares the mortgage for registration and confirms the lender's conditions, including proof of home insurance in place for completion day.
• Property transfer tax return. The lawyer prepares the tax return filed with the transfer and claims any exemption you qualify for, such as the first time home buyers' exemption or the newly built home exemption.
• Signing appointment. Usually a few days before completion. You bring two pieces of identification and the balance of funds, typically by bank draft or wire into the lawyer's trust account, and sign the transfer, mortgage and tax documents.

Completion day itself

On the completion date the two lawyers exchange documents and money under formal undertakings, which are binding professional promises about what each will do and when. Your lawyer registers the transfer and the new mortgage electronically at the Land Title Office, releases the purchase funds to the seller's lawyer, and the seller's lawyer uses those funds to pay out the seller's mortgage and clear it from title.

Keys are released on the possession date set out in the contract, which is often the day after completion. Afterwards your lawyer reports to you and to your lender with the registered documents and a final accounting of every dollar that moved.

Three things buyers most often do not expect

1. The size of the property transfer tax

Property transfer tax is payable when the transfer is registered. The general rate is 1% of the fair market value up to $200,000, 2% on the portion from $200,000 to $2,000,000 and 3% on the portion above $2,000,000, with a further 2% on the residential portion of value above $3,000,000. On a typical Vancouver purchase it is one of the largest single closing costs.

If you qualify as a first-time buyer, the exemption can remove most or all of that tax. For transfers registered on or after April 1, 2024, a full exemption is available where the fair market value is $835,000 or less, with a partial exemption between $835,000 and $860,000. The eligibility rules are specific, so this is worth confirming with your lawyer early rather than at the signing table.

2. The rescission period is already over

Since January 3, 2023, buyers of most residential property in BC have had a home buyer rescission period of three business days after the offer is accepted, during which they can back out by paying the seller 0.25% of the purchase price. Buyers sometimes assume this is a safety valve that lasts until closing. It is not. It runs from acceptance of the offer, and once it has passed and the subjects are removed, you are bound by the contract.

3. The closing figure is not the purchase price

The amount you bring to the signing appointment is the purchase price less your deposit and mortgage, plus property transfer tax, adjustments, Land Title Office fees, legal fees and disbursements, and sometimes a holdback. Your lawyer gives you this figure a few days before completion. Ask for an estimate as soon as the subjects are removed so the funds are in place.

Sellers have a closing too

On the other side of the table, the seller's lawyer obtains the mortgage payout statement, prepares the transfer for signature, delivers the signed documents to the buyer's side on completion, receives the funds, pays out and discharges the mortgage, pays the real estate commission, and sends the seller the net proceeds. A seller who is not resident in Canada, or who is selling within two years of buying, has additional tax matters to raise with their lawyer well before completion.

Buying or selling in Vancouver? Line up your lawyer before the subjects come off

Our real estate lawyers handle purchases, sales and refinances across Metro Vancouver. Send us the contract as soon as you have it and we will review the title, estimate your closing costs and confirm which property transfer tax exemptions apply to you.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.