The pandemic has dramatically changed how home buyers and sellers close their property deals


thestar.com
Bob Aaron
Bob Aaron bob@aaron.ca

Posted On: Saturday, November 14, 2020
Anyone who has bought or sold a property since the COVID-19 state of emergency was declared in Ontario last March will have experienced a sea change in how these deals are legally closed.

Prior to the pandemic, buyers and sellers of houses and condominiums would go to their lawyer’s office to sign hard copies of the necessary documents to prepare their deals for closing.

Personal visits were necessary because some closing documents — such as affidavits or statutory declarations concerning HST and residency — had to be sworn in the presence of a lawyer or paralegal authorized to administer an oath.

When COVID-19 hit Ontario, it suddenly became risky if not impossible for lawyers to administer the necessary oaths in person. The Law Society of Ontario immediately issued a statement interpreting the legislation to mean that the lawyer, or paralegal, could use videoconferencing and did not have to be in the physical presence of the client. The government subsequently amended the legislation to the same effect.

And with that, 200 years of precedent changed overnight and clients no longer had to meet their lawyers in person to swear affidavits or declarations.

Buyers, sellers and lawyers had to quickly learn how to do videoconference-signing meetings using Zoom, WhatsApp, FaceTime, LawyerDoneDeal, Microsoft Teams and other platforms. After closing documents are signed remotely, buyers and sellers have to scan and return them by email, fax, courier or personal delivery.

This presents challenges for some clients who are not computer literate. For instance, one client of mine was in a nursing home without a computer and with a no-visitor policy.

In another transaction, I had nine family members selling a piece of land to a municipality which refused to accept anything but ink signatures. We all met in my driveway, everyone wearing masks and socially distanced, and signed one at a time on a TV tray.

The exchange of house keys, done by courier before COVID, is now done using lock boxes at the properties.

In the pre-COVID days, buyers would deliver closing funds to their lawyers in person by certified cheques or bank drafts. Sellers would receive funds the same way, or by direct bank deposits. With some exceptions, bank wires have become commonplace. This has created its own set of problems since the wiring of funds can be problematic. It turns out that wiring funds is not instantaneous, and some transactions have had to be postponed due to delays when funds go missing in cyberspace.

In one case, I wired closing proceeds to a seller client. After a week when the funds failed to arrive, I asked the bank to return the money to me. Within a couple of days, the funds appeared in my trust account and the client’s account at the same time. It took another week to straighten that one out.

While it’s certainly more convenient to meet electronically, many of my clients tell me they miss the personal touch. So do I.

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Bob Aaron is a Toronto real estate lawyer and frequent speaker to groups of home buyers and real estate agents.
He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818.

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