Subscribe
Share
Share
Embed
The REALTORS® Association of Edmonton (RAE), founded in 1927, is a professional association of real estate brokers and associates in the Greater Edmonton Area and beyond.
Welcome to the RAEdio Podcast brought to you by RAE, the Realtors Association of Edmonton. So that's the RAE in our radio. We deliver easy to understand market insights, some homeowner tips, perspectives from industry experts so that you can feel informed and empowered wherever you are in your home ownership journey because better decisions start with better information. One of the most important details of a real estate transaction is getting the legal aspects right. And joining us to talk about that is Asa Hagel, who's a partner with Barr LLP, and she specializes in real estate law.
Mark:Hello, Asa.
Asa:Hello, Mark.
Mark:Thanks for joining us. Let's start off by asking you how you got into real estate law. Was it something you chose right away?
Asa:So real estate law was not something that I got into right away. When I was called to the bar, I actually was doing a lot of civil litigation, first, and realized that I did not like arguing for a living. A lot of people think that lawyers argue for a living, but, I decided quickly that I wasn't cut out for that. So I made the switch to real estate, and it seems like most of the time, everybody wants the same thing on both sides of a transaction. So it's been a lot friendlier, a lot easier.
Asa:So that was that was why I made the switch, and I've been enjoying it a lot.
Mark:Was there someone who was maybe a mentor for you or someone who sort of gave you some guidance on the way to this?
Asa:That's a good question. I actually spent a year as an au pair in Switzerland Oh. After my first year of university and didn't really realize what or I didn't I guess I didn't really think about what I was doing that first year of university. I wasn't enjoying it. I wasn't inspired by the classes, so I I decided to leave.
Asa:I went to Switzerland, and I met two lawyers actually from Edmonton, and they kind of told me about what they did. And by the time that year was up, I came home and said, you know what? I think I wanna do that. So I switched programs. I switched universities entirely, worked through my undergrad, and then wrote my LSAT and got into law school, and here we are.
Mark:That's great. It's nice to have somebody who you know has done the work and enjoyed the work, and therefore you think, well, maybe I can enjoy that too.
Asa:Totally.
Mark:Yeah. So let's talk about real estate law and the things that happen when people are buying a house and the real estate transactions begin. What do you think are some common misconceptions that people might have about
Asa:Some common misconceptions about real estate law. I think that I think that people think that it's going to be very intimidating, and sometimes it is. But I think that it really depends on on who's on your team because it is such a big, big deal. It's it's one of the biggest transactions of most people's lives, and it it can be overwhelming. And so to have people on your team that you can, you know, email in the middle of the night.
Asa:I won't reply in the middle of the night,
Mark:but Yeah.
Asa:You can email me in the middle of the night with your questions, your whatever's keeping you up at night, and knowing that you have someone in your corner to support you and not try to pull the wool over your eyes and trick you or, you know, convince you that this is the right thing to do. It's like, I'm on your team.
Mark:Right.
Asa:And I'm here to support you no matter if you are scared or if you're confident or anything like that. It's it can be stressful and intimidating and overwhelming, but it's not it it doesn't have to be, I So
Mark:what are some of those things that people are worried about? What did they send you emails in the middle of the night about?
Asa:There's been a whole lot of things. You know, we've got people who are buying rental properties that are worried about the tenants. We've got people who are stressed out about just the finances of it all, and it's the that's a different story if you're gonna buy outside of your means. But I think a lot of the legal jargon also gets people caught up. Their our appointments take about an hour, and I'm talking almost the entire time, and so I think that often people question or have questions for me after our appointment, and they're like, what What is title insurance again?
Asa:Or or are you giving me the keys? And I'm like, no. I'm not at the house. Your realtor's at the house. I stay in my office.
Asa:That's where I that's where I operate. So there's there are all kinds of questions pop up that I try to reinforce with my clients and my realtors that I'm I'm around if you if you have any burning questions that are keeping you up at night or anything like that.
Mark:Well, I'm sure, you know, being a real estate lawyer is you obviously have to know the law. You have to know the specific things that have to be done to protect your client's rights and all that sort of thing as they go through this transaction. But even just talking about it early on here, it seems like there's a real psychological sort of relationship you have with your client as well to help reassure them about all these things, I would think.
Asa:Totally. Yeah. Like, I do this all day every day, and they're doing it maybe a handful of times in their life. So so I'm here to be the guide, the resource, whatever they need. People joke that we are also part time therapists, but Well,
Mark:that might be something people look for in a real estate lawyer, but so if people are shopping for a lawyer, because, you know, obviously, you might not have a particular lawyer in mind all the time if you're doing a real estate transaction, and if you're buying a house, it might be a once in a lifetime or maybe twice in a lifetime thing. So, you know, what would you say to consumers when they're looking for a real estate lawyer? What should they look for? What are maybe some of the questions they should ask so they feel comfortable with the person they're gonna hire?
Asa:So I think when you're choosing your real estate lawyer, you wanna make sure that you're choosing someone that you feel comfortable with. Buying and selling real estate can be stressful, and it's a lot less stressful when your lawyer is going to be reliable for you. They're gonna pick up your calls. They're gonna answer your emails. And I find often that people want to work with someone who matches their communication level.
Asa:If you're a fairly hands off person, you probably don't wanna be bombarded with calls and emails from me. And on the flip side, if you're nervous about the transaction, you probably would appreciate some steady guidance through that process. So what I like to ask clients is how involved they want to be. Best case, we're communicating early and often. I say early and often is best, but some people are like, no.
Asa:This is, you know, this is my third, fourth time at this. I don't need you to be I don't have any questions that are gonna pop up. I'm good. Thank you.
Mark:Right.
Asa:But I find that the best deals are the ones where the client, the realtor, the lawyer, and the mortgage broker, if there is one, are all CC ing each other in emails. That way, everybody's on the same page. Nobody feels like they're left in the dark.
Mark:When lawyers are are doing their job, everything is gonna go smoothly, but that's not always the case. And that's why you have a lawyer, so that someone says, hey, that money was supposed to be transferred on this day, and it wasn't. We need to act on that, or we need to find out why. That seems to me a really important aspect of being a real estate lawyer, is keeping your eye on the ball when the transaction's actually happening. Am I right about that?
Asa:Totally. Yeah. So I like to be involved early, but it is good to keep pulse on things that are going on, making sure we've got our own spreadsheets to make sure that, you know, we've received documents from the other side or we've received documents from the mortgage broker or the bank. I I like to say that we're part risk manager, part problem solver. So so ideally, there are no hiccups on closing, but if there are, then we're trying to manage that before it comes to a head.
Mark:Right. And and that's where having a lawyer protects you. Right? Mean, that that's the importance of it. That that because you need that you need that protection, really.
Asa:Totally. Yeah. Like, we we do all the due diligence so that the client doesn't have to, making sure that the physical, the legal, and the financial conditions all line up with everybody's expectations of the transaction.
Mark:Well, let's talk about that. That that's some, you know, some terms that people might not be that familiar with, or they know them and they're not sure what they mean. So when buyers hear terms like conditions or waiving conditions, what should they understand about that as they move forward through a transaction?
Asa:Conditions are really they're really important for both sides because conditions give you an out if something isn't isn't what you want. So, yes, they're there for the safety of the buyer usually. Sellers sometimes will have conditions, like the sale of or sorry, the sale of their property, or that they find a new property to live in so that they're not living in the street. But conditions are there as a safeguard for for purchasers. And and even if you've got your mortgage your financing condition or you've got your home inspection condition and everything feels fine, like you've you've passed you've passed those conditions or you've you're considering waiving them, but something just doesn't feel right, then the seller never needs to know why you haven't waived your conditions if you if the inspection looks fine, but you're like, I don't this doesn't feel right, you can still not waive your conditions and get out of it.
Asa:So so conditions are are a safeguard for clients.
Mark:And have you had that it sounds like you had that issue with people that that sometimes a client will say to you, yeah. Everything there's something about this just is sticking in my craw, and I don't think I wanna go forward with it. I I have you had that experience?
Asa:I have had that that experience, and, honestly, I've had it myself too when I I went to Calgary for law school and was looking at buying a condo there, and we had gone and done the inspection, we had the financing all in place, but when we went to go see it a second time, something just felt wrong, and so we didn't end up waiving that condition, the inspection condition, because something just wasn't sitting right, and I couldn't put my finger on it. I ended up in a beautiful historical building in in Downtown Calgary instead, which was kind of I think it was a blessing in disguise, but it's it's it's there for your protection, and it's really important, so it's not something to be overlooked.
Mark:Absolutely. Let's talk about disclosure. What are legal responsibilities that sellers might have that they maybe don't fully realize? Disclosure's one of them, I would think.
Asa:So in your contract, in your real estate purchase contract, a seller is required to disclose all material latent defects. So, obviously, you can't disclose something that you don't know about, but if there is something that you know about, you need to be disclosing it. If it's a material latent defect, if it's material to the transaction, you you need to be telling people. And whether there's a price adjustment or someone's not comfortable with that risk, it's it's really important. There are a few I think either RECA or Aerie released a few things as well about how property if you don't have to disclose if there's a suicide in the property, but you do have to disclose if there's a murder, I believe.
Asa:Woah. Wow. So, yeah, it's I mean, you don't have to disclose if there's ghosts in the property, but if if it's been subject to external violence, I do think you have to disclose that. I'd have to double check, but there there certainly are some some legal requirements for you to disclose things.
Mark:I guess an example or a couple of examples might be, say you had your your furnace looked at a couple months ago, the guy told you, you need to replace this ASAP. That that sounds like that might be something you should disclose. Are you legally obligated to disclose it?
Asa:If it's in good working order, then you should be fine. But I I'm I don't know. I think that honesty is is key. Like, you could probably say to your realtor, it's it's due to be upgraded in the next few years. It's working.
Asa:Yeah. I mean, it's it is still operational, and as long as it doesn't die before closing, you should be okay. But I I do think that transparency and honesty is is most important. And I think it just gives the buyer a heads up too just so that they're aware. And if you don't disclose it, the inspection likely will.
Asa:Yeah. Then you look at the bad guy because you haven't disclosed And
Mark:it may it also may give the person on the other side of the transaction reason to stop everything and say, well, if they're not being honest about that, maybe they're not being honest about other things.
Asa:Exactly. What else is there to be to be leery of? I actually had a a file once. This was during my litigation days where a client came to me and said I they bought a cabin out at I think it was Lac Saint Anne, and they didn't do, an inspection in the property. They bought it, and realized that the whole cabin was infested with bats.
Asa:And they said there's no way that the seller didn't know about this. And, so I said, you know, okay. Let's let's remediate it. We have to have a dollar amount to sue for. And so that ended up with me doing a bit of digging about whether or not an inspection is actually fatal to the claim.
Asa:So it was one of those sorry. Got an itch. One of those beautiful A frame wood cabins that had one of those drop down tiled ceilings installed, and so when when my clients took possession of the property, they ripped out that the drop down tile ceiling because it's a beautiful a frame cabin. Why wouldn't you want it? They realized it was covered in bats.
Asa:The sellers initially took the position that they didn't they were like, we didn't know about it. We had no idea that there were bats. But you know how some people name their cabins? Like, they have some sort of quirky name on the outside. This one was called Wayne Manor, and it had the Batman logo.
Asa:So that was that was pretty damning evidence there, and, yeah, that was that was an adventure for me for sure. But it turns out that a lack of inspection isn't fatal to your claim if an inspection wouldn't have found it. So so it's not like the inspector would have pulled down the whole ceiling and figured out that there were bats in there. So that was that was an interesting litigation file for sure. But inspections are important.
Asa:Even if it's not a condition, get it done. That way, know what to expect when you're buying it, the property.
Mark:No. Absolutely. We we've we've done, you know, an interview with an inspector on this podcast, and it was fascinating with some of the things that he talked about that they look for and also that have been discovered that that really can be, as you mentioned, you know, maybe it's a legal term, can be fatal to the actual transaction going through. Right?
Asa:Yeah. I mean, everybody's got their own level of risk that they're comfortable with. Like, some people might be like, bats are great. I love Batman. It's my favorite movie.
Asa:Those are those are my new pets, and some people might say, no. You know, that's gross. I don't I don't need I don't need the cabin that bad.
Mark:Right. This is a bonus. I'm gonna keep it as a bat sanctuary. There you go.
Asa:Exactly. Yeah. You're you're rehoming. You're rehabilitating these these wild bats.
Mark:So let's talk about some issues that you maybe most often come up with after possession day, and do they come with any warning signs or red flags that sort of realtors can help spot? Because I'm sure you're you're also working with the realtors. Right? And and this podcast is, you know, put on by realtors. So maybe it's some advice for them as well as you as you go through the process.
Asa:Totally. So things that I would say the biggest issue post closing would be wording of holdbacks. And I love when my realtors call me as they're drafting this thing rather than dealing with it after the fact. I'm happy to to get on the phone with a realtor and say, know, this is what we're looking for in terms of holdback wording. We wanna be as specific as possible.
Mark:Let's you know what? First of all, let's let's define what holdback is. What's a holdback?
Asa:Sure. So so a holdback is a dollar amount usually that is held back from the seller because the seller has to fix something, repair something, replace something before a certain date. So Okay. Sometimes you'll see, okay. In the contract, there's going to be a $5,000 holdback because the seller is going to replace the dishwasher, the fridge, the freezer, and the stove.
Asa:Okay. Whatever. And the dollar amount is set by by the realtors based on on their knowledge, and, you know, you can say, oh, the furnace is gonna cost x amount. We're gonna put the holdback amount as as that amount, and the holdback sets out which lawyer is going to hold that money back from the seller until the thing is done. So we like to see that worded as specifically as possible so that we have a deadline for when it's supposed to be done.
Asa:We have an invoice for it. We have installation, whatever the case is, to make sure that all of our t's are crossed and our i's are dotted, making sure that that money is releasable because if it's not releasable to the seller, if the seller hasn't done the thing that they were supposed to, it gets released to the buyer to then do the thing.
Mark:I see. Okay. Yeah. That's a good point. I didn't really know that that might be a thing.
Mark:I I remember on a real estate transaction with a friend of mine, he had a hold back about something, but I didn't know that you could actually say, hold it back and say, okay. We're gonna take possession, but we're gonna keep this money back because we have to do the thing that was
Asa:Totally. And it can be done pre possession or post possession, depending on what it is. You know, if
Mark:it's Right.
Asa:Gonna take a long time, if it's, you know, fixing a leak in a roof and the roofers can't come out until post closing, we'd say in the holdback, two weeks from from the closing date is when you have to have this roofer come in, and we've held back $7,000 or whatever the case is Right. To have a certified professional roofer come and fix the leak. If it's not done, this holdback is immediately releasable to the buyer, and then they will go and have a roofer do it on their own.
Mark:Yep. So that's a that's a good point for realtors.
Asa:Like to work with.
Mark:Yeah. That's a good point for realtors. Is is there any advice that you would give to realtors to help protect their clients from legal issues? Like and maybe it's something that, you know, as a as a client, you should bring this up with your lawyer, that kind of thing.
Asa:Totally. Yeah. I I like to work with, So we don't open our files until the conditions are removed in case the condition ends up having the deal fall through. But that's not to say that I'm not accessible. Like, I am happy to chat with clients before they waive their conditions, realtors before even a deal is put in place because I like to help draft that contract to make sure that everybody's happy at the end of the day.
Asa:And so realtors calling your lawyers to say, hey. Listen. There's this weird thing, or maybe it's a change in zoning, or there's a tenant dispute, or something, have your realtor on or your lawyer on speed dial so that you can work through it because it's better to to have that five minute phone call than to deal with five hours of problem solving after the fact.
Mark:Right. So that's early communication. Would think that that's Early.
Asa:Yeah. Early and often is is what I like.
Mark:Okay. If there's one thing you had to pinpoint for every buyer and every seller that they would that they should understand before they enter a transaction. And maybe they're all maybe there's more than one thing, but let's let's see if we can maybe even have a top three.
Asa:I wish that buyers and sellers understood that they didn't have to rush the process and that they're allowed to ask questions. A lot of people think that, you know, it's it is what it is, and it's pretty straightforward, but it's it it doesn't it can still be overwhelming even if the process is generally straightforward. Leaning on your team. Like, lean on your realtor. Lean on your if you have one mortgage worker, lean on your lawyer, and it's we're all here to support the client.
Asa:Really, that's that's how the business works. So making sure that you you are leaning on your team because they're they're gonna get you through whether you're buying or selling. You wanna make sure that you have people around you that you can trust that are making decisions based on your best interests.
Mark:Yeah. There are no dumb questions. Oh, I wish
Asa:Right? I had a Yeah. Every once in a while, I go to a coworker, and I'm like, this is a dumb question, and they're like, nope. There's no such thing, and I am firmly a little bit of a hypocrite because I say, this is gonna be a dumb question, but, yeah. No.
Asa:I think that questions from clients are are always always welcome.
Mark:Now I I think this is something that you also deal with, so I think it'd be interesting to dig into this. What role do you play when it comes to foreclosure properties, and what should people know when they're thinking of making an offer on a foreclosure?
Asa:Well, that's an interesting question. So my involvement in the foreclosure process is typically when we're acting for banks because there aren't a lot of defenses to foreclosure. If you are being foreclosed on, there's not a whole lot left, for you to do other than ask for more time. I I do like to joke that it's easier to get out of a marriage than a mortgage. And so once the foreclosure process has started, you're you're you're in it.
Asa:But I will say, being a foreclosure lawyer, when people are thinking about buying a foreclosure property, people think that they're gonna get a great deal. That's not always the case because when I'm on the other end of it, we're getting appraisals done, and we are setting that list price at the appraised value. And sometimes those appraisers can't get into the house, so it's an external appraisal only. And so they're saying, yeah. Based on the outside, it's worth $500,000.
Asa:And then you go inside, and it's horrific, and there's no interior walls or it's disgusting or whatever the case is. A lot of people are like, oh, but it's a foreclosure. I'm gonna get a deal. Foreclosure properties come with no representations and warranties, so your foundation could be cracked. The furnace might not be working.
Asa:You never know. And so when you're buying a foreclosure property, even if it isn't a condition, make sure that you are getting that inspection done because then you know that you are you know what you're getting yourself into is is that inspector if they can only get to the outside, we'll do their best, but if they can get inside is is best. Just so that you know what you're getting because oftentimes it's not a it's not a deal, and it doesn't come with any remedies against the seller because the seller is the court. So there's there's no representations and warranties with foreclosure properties, so I always say it's it's at your own risk. It's buyer beware.
Asa:It it might be a good deal, but that's probably because there is a reason for it to be a great deal.
Mark:Mhmm. No, that's that's some really good points. Never I would've known that. Now, what are some other services that are within the scope of a real estate lawyer's role? You know, where else might people need legal help when it comes to their property, things that you've dealt with?
Asa:Before I was in real estate, in the practice of real estate, was in civil litigation, so that has given me some background into what happens when deals go sideways. Usually, they don't go sideways on a daily basis, but but they sometimes can. You know? After the fact, you've got people who are claiming you knew about this and you didn't disclose it, and it turns into a whole big thing. But having having a lawyer in your back pocket is is really helpful, and even if it's not the real estate lawyer who can handle it, if it's turned into a huge big thing, it's likely that your real estate lawyer knows someone else who can help you, whether that's a civil litigator, whether it's, like, I don't think a criminal lawyer, but you never know.
Asa:Yeah. And so to to have that person who can be, a, a wealth of knowledge and be a great resource for other lawyers if if you need other types of lawyers, but for the real estate piece of it, your lawyer is handling the conveyancing, which is the legal process of transferring the title over, the mortgage documents, as well as the title transfer itself with land titles.
Mark:And all those sort of things are, I mean, obviously backed up by a lawyer's fiduciary duties and all that sort of thing. That that's where having a lawyer on these transactions is important because they have they have all these this responsibility, and from a legal aspect, that's why they're there. Right?
Asa:Totally.
Mark:Yeah. Absolutely. Now, Ace, I wanna ask you one more question. Just is there anything that I didn't ask you that you think is important to say, or do you think we covered everything?
Asa:Oh, I would say when people are looking for advice about real estate, I think that a good question would be where where are some reliable resources for legal information? I think this is something that is important to hammer home because a lot of people are using AI lately. AI is good for a few things, but it is not good for legal advice. I've had a few people come to me saying that they didn't use a realtor for a transaction, and so they drafted their own contract. And by they drafting their own contract, they mean ChatGPT.
Asa:And they often say, you know what? Yeah. Chat GPT is great. I'm just gonna have them draft a contract and we'll sign it, and then I get to it. And I'm like, this did anybody read this before they signed it?
Asa:Because now it's binding, and it's not great. It's not great for anybody because it wasn't drafted by a normal or a human. The Internet is not a good substitute for legal advice. Please call an actual lawyer if you have questions. A quick call or an email can save you time, money, and stress down the road, so please do not lean on the bots for legal advice.
Asa:I would much rather answer a question over email or by phone or in person if you want. I would rather do that than have to fix something later on down the road.
Mark:Well, we always like to finish off with this question, and we haven't prepared you for it, so you can think about it if you like.
Asa:Okay.
Mark:What do you think makes a house a home?
Asa:That is a really good question. I would say making it your own. I think that a lot of people and I do live this also, so I've been I just kind of I've been renovating my own home in almost three years that I've had it. And, like, I painted the inside of a closet pink and white stripes and kinda looks like a circus tent, but and, like, that's not everybody's cup of tea, but it's my cup of tea, and I live there. Right.
Asa:And so not worrying about decorating for future owners or painting for future owners or renovating for future owners because it's paint is a quick fix. You know, you paint a wall, and then you realize, oh, I hate it. Then you paint it again, and it's not a big deal, but it makes your house feel more like you. So not waiting, not waiting to paint the walls. Paint is relatively inexpensive.
Asa:I think it's $50 a can, and just putting your personal touches on there so that someone walks into the house and says, yeah, this this house feels like you. It's it's got a little bit of your personality in here, whether that's bright colors or not bright colors depending on your style or or the decor pieces that are they you walk in and you're like, that's that's funky. I wouldn't have chosen that for my house, but I love that for you. It's it's really important to make a space feel like your own, and, you know, if you've got access to YouTube, you're probably set for most things. I will say though, probably find a professional when it comes to things like HVAC, electrical, plumbing, that kind of stuff, but you don't have to go to school to become a painter.
Asa:You can just throw some paint on a wall and buy some kitschy decor or whatever feels like you and and make that house yours.
Mark:That's a great answer, Asa. Thanks so much for joining us to talk about this. We really appreciate it.
Asa:Of course. Thank you for having me. This was a pleasure.