Making the FINAL payment on your Land Purchase

Hi There!

If you’re reading today’s post you may be in the final stages of your land acquisition journey.

This post will walk you through the process of making the final payment on your land purchase. If you have not read the “What to expect from my attorney” post, click the following link http://what to expect from your attorney to have a read before continuing with this post. After reading that post, you will be more knowledgeable about the lead up to making the final payment to your lending agency.

Let’s get started!

The lawyers (for the vendor and buyer) will request additional funds to complete the property purchase after the Sale and Purchase agreement, the Conveyance and the Mortgage documents have been signed. In most instances, you will be required to meet with the disbursement officer at the lending agency to release the funds.

You are finally at the finish line! Congratulations you are making the final payment on your land purchase.

FINAL DRAWDOWN MEETING BEFORE YOUR LAND PURCHASE

There are two things to note before we begin. Firstly, this meeting will be a lengthy one (at least it was for us) and secondly, there will be a number of documents to sign in order to finalize the transaction.

Your meeting will follow a process similar to the one below:

LAWYER’S SCHEDULE OF FEES & FINAL PAYMENT ON LAND PURCHASE

Our account manager and disbursement officer presented to us our attorney’s bill or schedule of fees. It was my belief that the lawyer would have presented us their bill when we had our final meeting with them, but this was not the case for us. Did you receive the lawyer’s invoice from your lawyer? The schedule of fees outlined the three key things:

After this, we signed the drawdown sheet to acknowledge the additional disbursements of funds by the credit union to settle the transaction.

Two cheques were written from our account:

The first cheque paid the legal fees for both parties (seller and buyer) and the mortgagor’s disbursements. It also paid the stamp duty and property transfer tax on the transaction. The stamp duty and property tax were subtracted from the final funds to be paid to the vendor. The seller usually pays these taxes.

The second cheque, issued to the vendor’s lawyer, paid the balance of funds to complete the sale. In our case, we paid for the cost of the land (the deposit -the property tax – the stamp duty on the transaction).

See the figure below which shows the breakdown of attorney’s fees.

PROMISSORY NOTE FOR THE FINAL PAYMENT ON PROPERTY

Our account manager explained the mortgage document to us. She went over the terms and conditions of the contract and explained the binding nature of the contract. We also signed another promissory note for the additional funds borrow, which outlined the new terms and condition expected. The terms and conditions spoke to the new interest rate which would be applied to the land loan, the duration of the loan and the new amount due monthly. You should expect to always receive updated terms and conditions for every drawdown taken from your loan.

END OF THE BRIDGING LOAN

This also meant the end of the bridging loan for us. We signed our mortgage agreement in June 2019, with the full mortgage amount expected to take effect from the month ending of July 2019.

SUMMARY

In summary, you should expect:

1. To meet with the lending agency to have the final funds disbursed to complete the land purchase.
2. A cheque to be drafted to the vendor’s attorney.
3. A cheque to be drafted to the buyer’s attorney for lawyers’ fees.
4. To sign a promissory note outlining the new terms and conditions of the additional funds disbursed.
5. To sign a drawdown sheet acknowledging the disbursement of funds.
6. The end of your bridging period, if one exists.