Buying property in PEI

 

Buying a home or land is one of the biggest financial decisions any person makes therefore it is important to learn as much as possible about the process of buying property before you make decisions…(The information in this section is shortened for web posting and please contact New Home PEI Real Estate Services for a full version) 

What do Real Estate Agents do?
Most people who sell property use the services of a Real Estate Agent to do so. Real estate agents in PEI are governed by the Real Estate Trading Act and must be licensed in order to sell property. Licensing ensures that they follow certain standards of ethical practice or they risk losing their license.…

What happens first?
Before you begin a search for a suitable home or piece of land, you should look at your financial situation to decide what you can afford. Often this can be done together with a mortgage company or bank. The bank will tell you about their lending range and conditions you must meet to qualify for a mortgage. The bank may give pre-approval for a mortgage up to a certain value even before you have found a place to buy….

What happens once I’ve found a property I want to buy?
Once you find a property, you make an “Offer to Purchase,” listing the offered purchase price and any conditions you want included. ..

Do I need a lawyer?
Both Buyer and Seller need the services of separate lawyers to complete a sale. The lawyers’ job is to protect their clients and to ensure that their client, either the Buyer or the Seller, is treated fairly. Using lawyers from the same law firm raises concerns about a conflict of interest.…

Do I need a title search?
It is in your best interests to have the title to the property searched. A standard clause in Agreements of Purchase and Sale gives time limits for your lawyer to perform the title search. In a title search, the ownership of the land is traced back at least 40 years and a chain of ownership is completed to be sure that the Seller actually owns the land he or she is trying to sell, and that no one else has a claim to that land…

What if I am a non-resident ?
If you are a non-resident of PEI or a corporation, and your total land holdings exceed the limits of the Lands Protection Act, then you must apply to the Island Regulatory and Appeal Commission (IRAC) for consent to purchase the land. …

What happens after I have reached a deal with the Seller?
The signed accepted offer is referred to as the “Agreement of Purchase and Sale”. This is often on a real estate company’s standard form. It is a binding contract, so both sides should have it reviewed by a lawyer before signing it. ….

How do I get a mortgage?
When you have a signed Agreement of Purchase and Sale, you will need to approach a mortgage company unless you are paying in cash. If you are approved for the mortgage, the mortgage instructions will be sent to your lawyer and the lawyer will prepare the documents required for the mortgage and the closing of the sale.…

Do I need a survey done? Why?
If the purchase is financed with a mortgage, the mortgage company will usually require a survey plot plan or a Title Insurance policy to protect their investment. The mortgage company wants to be sure that any buildings are actually located within the property lines and that you are actually receiving what has been sold. …

What happens if I find problems with the property?
Any defect known to the Seller and not apparent to the purchaser on a visual inspection must be disclosed before purchase. If you find yourself in a situation where full disclosure was not made, you should speak with a lawyer. …

What happens at closing?
On the closing date, each party meets with their lawyer to sign all documentation.
You, the Buyer, will be required to pay all fees connected to the transfer, such as deed registration costs, mortgage registration fees, title search fees, lawyer fees, Title Insurance premiums, and so on…

How can I get more information?
To get more information about the laws that govern buying and selling property in PEI, you can view the Acts and their accompanying Regulations at the provincial government website (www.gov.pe.ca) or you can get paper copies at Island Information Service at 11 Kent Street in Charlottetown. Acts you might want to review are:

1. Environmental Protection Act - laws about wells, sewer systems, waterways and
other environmental issues;
2. Investigation of Titles Act - law concerning claims to land;
3. Mechanics Lien Act - law concerning judgments or liens on property;
4. Planning Act - law about how land can be used, community plans, restrictions on
development, etc;
5. Quieting Titles Act - law about obtaining clear title to property that does not
presently have clear title;
6. Roads Act - law that regulates roads, lanes and driveways;
7. Real Estate Trading Act - law concerning licensing and standards for real estate
companies and salespeople;

Contact for more detail information.
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