This guide is to help you understand the fees charged by a lawyer in the course of a residential real estate purchase file.  There are four components which will form part of the lawyer’s bill, plus several other costs which will be paid through your lawyer’s account.  The lawyer’s bill will include:

• Hourly fees for advising prior to signing a contract

• Processing fee for the purchase

• Processing fee for the mortgage, and;

• Disbursements

Besides these, several other expenses will be paid out by your lawyer from his trust account, such as title insurance and registration fees.  Each of these elements will now be explained.

Hourly fees are those charged by your lawyer at an hourly rate for doing work which is not purely transactional.  Usually lawyers charge for their time on matters where the amount of time is not predictable, but this could also include fees for things like reviews of condominium status certificates, which while done at an hourly rate, would depend on how many status certificates were reviewed, and further hourly charges could apply to follow up questions asked in light of the results of a review.  This would also include any time the lawyer spent directly communicating with the Seller’s representatives on your behalf.  Bryan Rowe charges $350/hr, though a free half hour of time is offered to all clients who retain Robin Hood Realty through the Zero Value Realty platform, provided the client closes on a transaction.  Condo status certificate reviews are flat fee charged at $350.  All fees are subject to HST.

The processing fee is the flat fee charged for completing a purchase, and covers all aspects of document preparation, the signing appointment and moving money necessary to complete a purchase.  Bryan charges $1800+HST for this.  It is important to understand how this works relative to how other lawyers sometimes price real estate services.  As will be discussed later, Bryan charges few other disbursements, and those are directly related to your file (rather than estimates) while other solicitors will often charge a lot for disbursements in order to advertise a lower ‘fee’ to entice clients to retain them.  This can include things like photocopying charges or document processing charges to external clerks, all of which are billed as disbursements, meaning costs incurred by the lawyer in carrying out the file, but are not officially part of the lawyer’s fee.  Since Bryan does all of the file processing personally, the entire cost is billed as his fee.  The fee is higher than is average, but that is because an experienced lawyer is doing 100% of the work on your file.

The mortgage fees are added if you are purchasing with a mortgage, because preparation of mortgage documents and registration of the mortgage on the property are assigned by the lender to the lawyer.  Bryan has four tiers of mortgage pricing, based on the complexity of the documents.  A fee will be assigned to a file once the mortgage documents are received, but in general the tiers are arranged like this: Tier 1 ($250+HST) is when the mortgage documents are very simple, usually reserved for mortgages where you visited a bank branch, and they only send a single document to the lawyer to instruct on the preparation of the charge document for registration, and the mortgage disclosure documents for review with the client.  Tier 2 ($400+HST) is when in addition to the charge instructions and disclosure the bank also sends a series of other documents to be signed, such as a mortgage loan agreement.  Tier 3 ($700+HST) is when the lender in addition to the previously mentioned documents has a series of forms the lawyer is required to fill out, such as ID verification forms, and usually involves the lender simply pointing the lawyer to some kind of document portal to download those forms, and then fill them out based on the information provided.  This sort of document requirements are typically reserved for mortgages obtained through a brokerage, as they often offload administrative tasks to the lawyer.  Finally, Tier 4 ($950+HST) is reserved for mortgages which have all the documentary requirements, but which also have particularly onerous documentary requirements and convoluted instructions.  Sometimes instructions have the information required to register the charge split amongst several places, they have multiple forms which must be signed and initialed on every page, and have administrators who will demand that very minor changes be made, such as changing date formats, before accepting the documents.  Mortgages with these requirements usually come from non-deposit taking bank lenders through a broker, such as Strive, MCAN or XCEED.

Finally, disbursements are part of the lawyer’s bill.  These are expenses the lawyer incurred directly as a result of the file, and which are included for reimbursement.  These include things like the charges for doing the title search on the property (usually $50-$100), bank fees (usually $50) and the LawPRO transaction levy ($65), which lawyers must pay every time they complete a real estate transaction.

The other category of things which are paid through the lawyer, and so must form part of the money you send to your lawyer before completing the transaction, are those things he pays out on your behalf, as opposed to disbursements which are costs incurred by the lawyer to carry out his obligations.  These include things like your title insurance, registration fees ($84.23 each) and land transfer tax.  The cost for title insurance and land transfer tax varies with the cost and type of the property, see the article on title insurance for an explanation of those fees, and calculators for land transfer tax are available online.

Your lawyer will request you send an amount of money to complete the transaction, and it will be based on these amounts.  On the one side will be the costs: the completion amount requested by the Seller’s lawyer, and all the fees and charges described above, and on the other will be the amount of your mortgage, and you will need to provide whatever amount is necessary beyond the mortgage amount to meet the total of all the costs.