There are essentially two contract processes that enable you to buy a property, whether residential [our main focus in this article] or commercial. These are the Bond Registration process and the Transfer process.
In this article we look at the Registration process. Remember what is happening here is that you have asked the Bank for a bond to help you finance the property. The Bank therefore has the right to register a bond, in most cases a First Mortgage bond, over the property. This bond is lodged in the Deeds Office when the property is transferred [our next blog for the process] into your name. The bond is in place until you settle the Bank in full; then you may request the Bank to cancel the bond and return your Title Deeds to you.
Thanks to attorneys Yammin Hammond Inc. for their easy-to-understand Bond Registration process:
Registering a Mortgage Bond over a property is a complicated and often misunderstood process. It involves a number of parties and institutions, many of whom have conflicting interests. All of them, however, have to coordinate their efforts to ensure that the documents arrive at the Deeds Office on the same day.
There are also numerous other parties, such as the Buyer, Seller, Estate Agent and Bond Originator, who have a financial interest in the transaction and often want it to be completed in the shortest possible time.
Understanding the sequence of events will help you monitor the process accurately and also give you an idea of the time remaining at each stage.
Below are some of the common steps required to register a Mortgage Bond. It has been written in simple language and illustrates the relationships between the various parties.Much of the jargon and key concepts are explained in the notes on the right hand side.
|1.||You buy a house from the Seller||This is normally done through an Estate Agent.|
|2.||You apply to the Bank for a loan or a Bond Originator applies on your behalf||A loan is required so you can pay the Seller the purchase price. The amount of the loan is normally the purchase price less any cash deposit and/or the proceeds from the sale of your existing property.|
|3.||Your Bank instructs their attorney, the Bond Attorney, to register a Mortgage Bond||A Mortgage Bond is a special loan which uses fixed property (e.g. a house) as security and it is registered in the Deeds Office.|
|4.||The Bond Attorney contacts the Seller’s Bank and requests the original Title Deed and the cancellation figures||If the Seller has a bond over the property, his/her Bank will hold the Title Deed in safekeeping. The Bank will also provide cancellation figures (or discharge costs), i.e. how much is required to settle the Seller’s bond.|
|5.||The Seller’s Bank instructs their attorney, the Cancellation Attorney, to cancel the Seller’s bond||The Cancellation Attorney then sends the Title Deed and guarantee requirements (i.e. the cancellation costs) to the Registering Attorney.|
|6.||The Bond Attorney assembles and prepares the documents||This can take up to 3 weeks.|
|7.||You will be called by the Bond Attorney to come in and sign the documents||You will be required to sign the actual bond documents, a loan acceptance form, authorities to issue guarantees and any other papers the bank requires (such as debit order forms). Remember to take your identity documents and FICA documents.|
|8.||You also pay the bond costs at this time||You will be presented with a pro-forma account which is an estimate of the costs. You will get a final account after registration when the actual costs are known. The costs vary because the date of registration is unknown at this stage and some of the costs (such as the interest on the bond being cancelled) are determined by this date.|
|9.||The Bond Attorney instructs the Lodging Attorney to lodge the documents in the Deeds Office||The Lodging Attorney is located near the Deeds Office and acts on behalf of the Registering Attorney (who may be far away from the Deeds Office – even in another town).|
|10.||The Lodging Attorney contacts the Cancellation Attorney to ensure the documents are lodged together on the same day||The documents have to be registered at the same time because the Seller’s Bank has guarantees that ensure it will be paid when their bond is cancelled and they are not prepared to cancel the bond until the new bond is registered.|
|11.||The Deeds Office Examiner carefully checks all the documents||This stage is called “on prep”. It can take between 7 to 10 working days depending on how busy the Deeds Office is.|
|12.||The Deeds Office Examiner contacts the Lodging Attorney and the Cancellation Attorney to inform them the documents are ready||This stage is called “up for prep” or “up for fees”. It means the documents are all in order and they will be registered the next day.|
|13.||The documents are registered||The Buyer becomes the owner of the property. The new bond is registered and the Seller’s bond is cancelled. The guarantees are presented for payment (i.e. the Seller’s Bank is settled).|
|14.||The Bond attorney sends the Title Deed to your Bank||It can take up to 3 months for the Deeds Office to send the Title Deed to the Attorney. Your Bank will keep the new Title Deed a security until the bond is paid off.|
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