Most Common Real Estate Disbursements

photo of a Real Estate lawyer's desk, a common place to find a Real Estate lawyer or legal assistant working on a number of aspects of a real estate purchase or sale for a client

Our latest article outlines the most common disbursement fees you can expect in a traditional residential real estate transaction. For more information, contact Safi Law Group today at (780) 760-7234.

One of the most popular questions asked of any real estate lawyer is how much are the total legal fees when buying or selling a property.

Most lawyers will quote a flat rate plus GST and disbursements.  So what are these disbursements and how much are they on a typical transaction?

Real estate disbursements are costs and additional fees that are paid by your lawyer to 3rd parties in order to facilitate your real estate transaction. They can apply whether you’re buying a property or selling a property.

This article will help you understand some of the more common real estate disbursements.  For more information, remember that you can always use our Contact Us page or call (780) 760-7234 to have your questions answered.

Title Search Fees

A title search can disclose  the following among other things:

  • Ownership;
  • Outstanding mortgages;
  • Lien charges;
  • Other encumbrances on title;
  • Potential fraudulent activities

The results of a title search inform your real estate lawyer of any red flags that could hinder a sale. When buying a home, it’s important to ask the seller to remedy any issues before a sale moves forward.

Fortunately, most encumbrances can be cleared up before it’s time to close.  Our Edmonton real estate law firm is here to help you with the title search process.

A basic title search with the Alberta Land Titles Office costs $10, which is one of the most common disbursements seen on a typical real estate transaction.  In many cases, a lawyer is required to do at least two title searches, one at the beginning of the transaction and one at the end.  In addition, if a lawyer is required to conduct a further search to pull a lien, for example, there could be further search fees.

Tax Search Fees

A tax search ensures that a property is paid up and current on all property taxes.  The previous owners are responsible for making sure all outstanding taxes are paid up until the closing date.  Typically there is an adjustment made by the lawyers for current year’s taxes, as the tax bill is usually not due until June 30th.  Whoever is the owner of the property on June 30th pays the entire calendar year’s tax bill.  As a result, you would want to make sure that your lawyer adjusts for taxes, otherwise, you could be stuck with paying the entire year’s bill!

A tax search is typically conducted with the municipality where the property is located.  The City of Edmonton typically charges $15 plus GST for a tax search.  Other municipalities might charge more or less.

Registration Fees

By far, the biggest disbursement that individuals incur on a typical real estate transaction are registration fees.  The Alberta Land Titles Office charges very specific fees to register your name on title.  In addition, if you have a mortgage, the mortgage also needs to be registered on title.  If you are selling, you will be obligated to discharge any mortgages on title before the transaction can close.

To register your name on title, the typical fee is $50 + $2 for every $5,000 of the value of the home.  To register your mortgage on title, the typical fee is $50 + $1.50 for every $5,000 of the loan principal amount.  A discharge typically costs $10.  These charges are paid directly to the Alberta Land Titles Office.

Depending on your transaction, you may have to incur further registration fees.  As a result, it is best to engage a real estate lawyer early on in the process so that you can get a very good idea of the total costs.

Real Property Report / Title Insurance Policy Fees

If you are selling a house in Alberta, you are required to provide the buyer with a current Real Property Report.  If you do not have a current Real Property Report, you will need to obtain a new one which can cost several hundred dollars.  Alternatively, parties can agree to use a title insurance policy instead of obtaining a new Real Property Report to close the deal.  A title insurance policy typically costs $120+ depending on the value of the home.

In addition, if you are buying with a mortgage or refinancing your property, your bank may require you to purchase a title insurance policy.  As a result, it is quite common to see this disbursement on many purchase transactions that are financed by a mortgage.

Runner/Courier Fees

Lawyers typically utilize runners and couriers to deliver trust cheques, transfer documents and other materials in order to effectively close a real estate transaction.  Each time a runner or a courier is used, a lawyer typically has to pay $10+.  As a result, it is not uncommon to see runner/courier fees of approximately $50+ on a typical transaction.

Office Charges

In addition to 3rd party disbursements, a lawyer also has to cover certain administrative in-office charges in order to effectively close a transaction.  Some of the standard fees include:

  • Postage
  • Photocopies
  • Faxes
  • File administration/opening/closing/storage charges
  • Conveyancer software surcharge
  • Secreterial fees

Keep in mind that these types of charges aren’t “extra” fees.   They are charged to recover certain expenses that a law firm has incurred in order to close your transaction more efficiently.

At the conclusion of a transaction, the bill you receive represents the legal fees and disbursements you’ve incurred when buying or selling a property.

Do You Need an Edmonton Law Firm for Real Estate Transactions?

While it’s difficult to anticipate every disbursement, this list covers the most common disbursement fees you can expect in a traditional residential real estate transaction.

The path to closing requires many steps. Make sure you have someone looking out for you during this very delicate process.

Our law office offers support for both buyers and sellers in Alberta.

Call our office today at (780) 760-7234 today to book your consultation.