Our Land Titles Office (LTO) continues to experience huge delays in registering documents. Currently, they predict it will take 3.5 months for regular registrations and 2.5 months for the survey/subdivision plan registration side of things.
If your buyer is moving into the property and planning to stay forever, that delay isn't an issue. But, here's a problem. Three recent buyers decided to sell their properties. They are now sellers, but they aren't on title yet. Their purchase documents are still in the queue at LTO. So, although they are not on title yet, they already have a contract to sell to a third-party buyer.
That new buyer applies for financing and gets an unconditional approval. Then, very near the closing date, it comes to the lender's attention that the seller is not yet on title.
Without any real explanation, the lender refuses to fund, the deal dies, and the lawsuits start! Or, there is a frantic search for a new lender who won't object to the fact that the seller is not yet on title.
This is one more reason why you always get a current title search when working on a serious deal. If the proposed seller is not yet on title, make sure any new lender knows about this early in the mortgage application process. If this is a dealbreaker for them, at least you know early and can move on to a new lender.
Be proactive. DO NOT let this be discovered near the funding date.
Protect yourself.
Cheers,
Barry
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