Title Transfers

By Lorne Shuman:

Title transfers involve the transfer of land ownership from one individual to another. This article will discuss several important points that need to be considered if you are thinking about changing the ownership of property through a title transfer.

The first question to be asked is if there is a current mortgage on the property that you wish to transfer. Before you transfer ownership of your property, you’ll need to confirm if you have a mortgage on the property. This is because almost all mortgages contain a “due on sale clause“. This means that your lender can call in the entire amount of the mortgage loan if you transfer the property without the consent of the lender. Therefore your first step should be to obtain the written approval of your lender to the title transfer.

Another important issue is land transfer tax considerations. Even if the property being transferred is subject to a mortgage, transfers between spouses are exempt from payment of land transfer tax. However, if the transfer is not between spouses, land transfer tax will apply to the title transfer. The amount of land transfer tax will depend on a number of factors such as the amount owing on the existing mortgage on the property at the time the property is transferred. If there is no mortgage on the property and the transfer is not between spouses and is a gift, no land transfer tax will apply. However the parties to the transaction should seek the advice of an accountant determine any other tax consequences arising out of the title transfer

Title transfers are done for many reasons and lawyers are often retained to prepare and register the documents for a title transfer. The process is fairly straightforward and can be done quickly assuming there are no unusual complications or unforeseen circumstances.

Courtesy: Shuman Law