Selling a home is one of the largest financial transactions most people will ever undertake. The price involved is significant, the documents are dense, and the legal obligations on a seller are more substantial than most people realize. Many sellers focus on choosing a real estate agent, staging the home, and pricing the listing, and treat the legal side as a formality. It is not. The legal side is where mistakes are most expensive and where good advice has the highest return.
In Ontario, only a licensed lawyer can transfer title from a seller to a buyer through the provincial land registration system. Real estate agents handle the marketing, the showings, and the negotiation, but the legal work behind the closing is the lawyer’s responsibility, not the agent’s. This guide explains what your real estate lawyer actually does, the legal obligations on a seller in Ontario, the closing costs you should expect, the tax implications of selling, and the timeline of the whole process.
This guide is the companion to our guide on buying a home in Ontario. Together they cover both sides of a residential real estate transaction. For most people who sell a home, the proceeds are being used to buy another one, and understanding both sides of the same transaction is valuable. Nothing in this guide is a substitute for legal advice about your specific sale; please consult a qualified real estate lawyer for advice tailored to your situation.
Before You List: Understanding What Selling a Home Involves
The Listing Agreement
Selling a home typically begins with a listing agreement between you and a real estate agent. This is a binding legal contract that sets the listing price, the commission, the duration of the listing, and the agent’s marketing obligations. Most listing agreements in Ontario use the standard Toronto Regional Real Estate Board form, but the specific terms are negotiable. Commission rates are not fixed by regulation. Total commission (which typically pays both the listing agent and the buyer’s agent) usually falls between 3.5 and 5 percent of the sale price, plus HST. On a $1 million home in the GTA, that is between $40,000 and $56,000.
A lawyer is not usually involved in the listing agreement itself, but if your situation is unusual (you are selling under power of attorney, you are a non-resident of Canada, you are selling under court order, or the property has unusual features) it can be worth having a lawyer review the listing terms before signing. The listing agreement is a binding contract; you cannot simply cancel it because you change your mind.
Selling Privately Without an Agent
Selling privately, sometimes called ‘For Sale By Owner’ (FSBO), is legal in Ontario and saves you the listing commission. It also shifts marketing, showing, and negotiation responsibilities to you. From a legal perspective, the most important thing to understand is that whether or not you use an agent, the legal closing process is identical. You still need a real estate lawyer to handle the transaction. The lawyer’s role does not change because you sold privately.
Your Real Estate Lawyer’s Role in a Sale
A real estate lawyer is required for every residential real estate sale in Ontario. The transfer of title cannot happen without one. The lawyer’s work is concentrated in the period between when you accept an offer and the closing date, but engaging a lawyer earlier (ideally before you list, or at least before you sign an offer) is generally a good idea, particularly for any sale with unusual features.
What the Lawyer Actually Does
Your real estate lawyer’s responsibilities in a typical sale include the following. Reviewing the agreement of purchase and sale and advising you on the legal implications of its terms. Replying to the buyer’s lawyer’s requisitions (formal legal questions about title and other matters). Preparing the closing documents, including the transfer deed, the statement of adjustments (the document that reconciles all of the financial credits and debits at closing), and various statutory declarations. Discharging your existing mortgage and any other charges registered against the property. Coordinating the closing with the buyer’s lawyer, ensuring that the buyer’s funds arrive, that title transfers, and that you receive your sale proceeds. Reporting to you in writing after closing with a final accounting and the documents you need to keep.
Choosing a Real Estate Lawyer
Many people choose a real estate lawyer based on a recommendation from their real estate agent, but you are not required to do so. You have the right to choose any lawyer you want. The relationship matters: you should feel comfortable asking questions and receiving honest answers. For a guide on what to consider when choosing a lawyer, see our guide on questions to ask before hiring a lawyer. For information on what to expect at your first meeting, see our guide on the first legal consultation. Most real estate lawyers charge a flat fee plus disbursements; see our guide on how much a lawyer costs in Ontario for a full discussion of legal fee structures.
The Agreement of Purchase and Sale: What You Are Signing
When you accept an offer to purchase your home, you sign an Agreement of Purchase and Sale (APS). This is a binding legal contract. Once signed and any conditions are removed, you cannot back out without significant legal and financial consequences. The APS sets out everything that has been agreed to, and the deal will close on the basis of what is written in it.
Conditions in the APS
Most APS documents include conditions that protect the buyer in the early days after acceptance. The most common are a financing condition (the deal is conditional on the buyer obtaining mortgage approval), a home inspection condition (the deal is conditional on a satisfactory inspection), and sometimes a status certificate condition (for condos). Conditions usually expire within 5 to 10 business days, at which point the buyer must either waive them (committing to the deal) or terminate the agreement (walking away with their deposit returned).
From the seller’s perspective, the period before conditions are waived is the most uncertain. The deal can still fall through. Once conditions are waived, the agreement becomes firm and binding. From that point until closing, the seller is required to complete the transaction on the agreed terms.
Chattels and Fixtures
One of the most common sources of dispute in residential sales is what is included with the property. The APS lists specific items being included (chattels) and specific items being excluded (fixtures the seller is taking with them). Anything that is permanently attached to the property is generally considered a fixture and stays unless specifically excluded. Anything that is not permanently attached is generally a chattel and goes unless specifically included. The line between the two is not always obvious, and disputes are common over items such as window coverings, light fixtures, appliances, and built-in shelving. Be specific in your APS to avoid disputes at closing.
Seller Disclosure Obligations
Ontario is a ‘buyer beware’ jurisdiction in real estate, which means that the buyer is generally responsible for satisfying themselves about the condition of the property. However, this principle has important exceptions, and sellers do have legal obligations that go beyond simply saying nothing.
Latent Defects
A latent defect is a problem with the property that is not visible on inspection and that the seller knew about but did not disclose. Examples include hidden water damage, structural issues that have been concealed, environmental contamination, or known issues with the roof, foundation, or systems that have been deliberately hidden. Failing to disclose a latent defect that you knew about can expose you to a lawsuit by the buyer after closing, with damages potentially well into six figures depending on the severity of the defect.
The duty does not extend to defects you did not know about (a defect is not a latent defect unless you knew). It also does not extend to patent defects, which are visible on reasonable inspection and which the buyer is responsible for identifying. The line between latent and patent is often contested, and sellers who want to be safe disclose more rather than less. Your real estate lawyer can help you think through what to disclose in your specific situation.
The Seller Property Information Statement
Some sellers provide a Seller Property Information Statement (SPIS), a standard form on which the seller affirms various facts about the property and acknowledges any known defects. The SPIS is not legally required and is not part of the APS unless specifically incorporated. Some lawyers and agents recommend against filling one out, on the theory that it creates additional opportunities for liability if any answer turns out to be wrong. Others view it as helpful for transparency. This is a decision to make with your lawyer in light of your specific property and circumstances.
Required Statutory Disclosures
Some disclosures are required by statute regardless of what the buyer asks. If the property has been used as a marijuana grow operation, this must be disclosed. Properties with known issues such as having been a methamphetamine lab, properties where a violent death has occurred (in some circumstances), and properties subject to certain environmental orders all have disclosure requirements. Your lawyer can advise on whether any statutory disclosure requirements apply to your specific property.
Closing Costs for Sellers in Ontario
Buyers usually focus on closing costs because they directly affect what they can afford. Sellers also have closing costs, and they can add up to a significant percentage of the sale price. Budgeting for these in advance avoids unwelcome surprises at closing.
Typical Costs
| Cost | Typical Range |
| Real estate commission (listing + buyer’s agent, plus HST) | 3.5 to 5% of sale price, plus 13% HST on the commission |
| Real estate lawyer’s flat fee | $1,200 to $2,500 plus disbursements and HST |
| Disbursements (title search, registration fees, courier, etc.) | $300 to $800 |
| Discharge fees on existing mortgage (if applicable) | $200 to $400 per mortgage, plus any prepayment penalties |
| Mortgage prepayment penalty (if applicable) | Varies; can be substantial. Confirm with your lender before listing |
| Status certificate (for condos, if buyer requests) | $100 to $200 (paid by seller in most cases) |
| Adjustments at closing (property tax, utilities, etc.) | Varies; reconciles what you have paid in advance with what the buyer assumes |
Mortgage Prepayment Penalties
If your mortgage is not yet at the end of its term, paying it off early when you sell can trigger a prepayment penalty. For fixed-rate closed mortgages, this penalty is usually the greater of three months’ interest or an ‘interest rate differential’ (IRD) calculation that can be substantial. On a $700,000 mortgage at a high fixed rate, an IRD penalty can easily exceed $20,000. Always confirm the prepayment penalty with your lender before listing your home. If the penalty is large, you may have options such as porting the mortgage to a new property (if you are buying again), or timing the sale to coincide with the end of the term.
Tax Implications of Selling a Home in Ontario
The Principal Residence Exemption
In most cases, when Canadian residents sell their primary home, the capital gain is exempt from tax under the Principal Residence Exemption (PRE). This exemption is one of the most valuable provisions in the Canadian tax system, and it is the reason most home sellers do not owe tax on the appreciation of their home. To claim the PRE, the property must have been ordinarily inhabited by you, your spouse, or your child during each year you are claiming the exemption.
Since 2016, you are required to report the sale of your principal residence on your tax return for the year of sale, even when no tax is owed because of the PRE. Failing to report a principal residence sale can result in penalties and the loss of the exemption. Your lawyer is not your tax advisor, but should remind you that this reporting obligation exists.
Selling a Property That Is Not Your Principal Residence
If the property you are selling is an investment property, a rental property, a cottage, or a second home that was not your principal residence, the capital gain is taxable. You will pay capital gains tax on 50 percent of the gain (the inclusion rate, subject to current federal tax rules) at your marginal tax rate. For sales of investment or rental properties of significant value, the tax liability can be substantial, and tax planning before the sale is important. Consult an accountant or tax lawyer if your sale is anything other than a clear principal residence.
Non-Resident Sellers
If you are a non-resident of Canada for tax purposes when you sell, special rules apply. The buyer’s lawyer is required to withhold a portion of the sale proceeds (typically 25 percent of the gross sale price for residential property, 50 percent for some other property types) and remit it to the Canada Revenue Agency unless you provide a Certificate of Compliance under Section 116 of the Income Tax Act. Obtaining the certificate is a process that takes several weeks and requires that the CRA calculate your tax owing. If you are or may be a non-resident, you need to start this process well before closing. A real estate lawyer experienced with non-resident sales is essential.
The Sale Process Timeline
From Listing to Closing
The full timeline of a sale varies significantly with market conditions and the specific transaction, but a typical sequence looks like this.
| Stage | Typical Timing |
| Choose an agent and sign listing agreement | Day 0 |
| Prepare property and list | 1 to 4 weeks before going live |
| Property on market | Days to months depending on market |
| Offer received and accepted | Variable |
| Conditional period (financing, inspection) | 5 to 10 business days |
| Conditions waived; deal becomes firm | End of conditional period |
| Lawyer prepares closing documents | 30 to 90 days before closing |
| Signing of closing documents | 1 to 5 days before closing |
| Closing day: title transfers, funds change hands, keys delivered | Closing date in APS |
The Closing Day Itself
On closing day, your lawyer coordinates the transfer of title and the exchange of funds with the buyer’s lawyer. Title is registered electronically through Ontario’s Teraview system. Once title has transferred and the buyer’s funds have been received and your existing mortgage has been paid off, the remaining proceeds are deposited to your account or held in your lawyer’s trust account until you provide instructions. You hand over the keys to the buyer’s agent or directly to the buyer, depending on what has been arranged. It is also possible for closing to be delayed, sometimes by a few hours, sometimes by a day or two, because of issues such as the buyer’s financing not arriving in time, missing documents, or registration delays. Delays are inconvenient but usually resolvable. Outright failure of a closing is uncommon once conditions have been waived, but it can happen.
Selling Under Special Circumstances
Selling Under a Power of Attorney
If you are selling a property on behalf of a parent or other family member under a power of attorney, the lawyer will require a copy of the POA and will verify that it has not been revoked. The lawyer will also confirm that the sale is in the grantor’s best interest, since a property attorney is acting in a fiduciary capacity. For an explanation of how powers of attorney work, see our guide on power of attorney in Ontario.
Selling an Estate Property
Selling a property that belonged to a deceased person requires that an estate has been opened and that an estate trustee has been formally appointed (usually through a Certificate of Appointment of Estate Trustee, formerly known as ‘probate’). The estate trustee, not the heirs, has authority to sell. The sale proceeds flow through the estate, not directly to the heirs. The estate must also clear any debts of the deceased before distributing the remaining proceeds. For an introduction to estate matters, see our guide on how to make a will in Ontario.
Selling After Separation or Divorce
If you are selling the matrimonial home as part of a separation or divorce, both spouses generally have to consent to the sale (and to sign the closing documents), even if title is registered only in one name. This is because of the special legal status the matrimonial home receives under Ontario’s Family Law Act. If your separation is contested, selling the matrimonial home becomes legally complex, and a family lawyer should be involved alongside your real estate lawyer. For an introduction to how separation affects property in Ontario, see our guide on separation and divorce in Ontario.
Selling a Tenanted Property
If you are selling a property that has a tenant in it, the tenant’s rights under Ontario’s Residential Tenancies Act do not automatically end on closing. The tenant generally has the right to remain in the property under their existing lease, and the new owner steps into the landlord’s position. There are limited grounds on which a landlord can terminate a tenancy for the buyer’s own use, and these are tightly regulated. For an introduction to landlord-tenant law in Ontario, see our guide on tenant rights in Ontario.
Why a Real Estate Lawyer Who Speaks Your Language Matters
The legal documents in a residential sale, particularly the Agreement of Purchase and Sale, the closing documents, and any addenda, are dense and technical. Even people fluent in English find them challenging. For sellers whose first language is not English, the gap between what is written and what is genuinely understood can become significant, and decisions that involve hundreds of thousands of dollars are made on the basis of partial comprehension.
A real estate lawyer who speaks your language can review the documents with you in the language in which your understanding is most complete. They can explain implications you might miss in English, confirm that you are agreeing to what you think you are agreeing to, and ensure that questions and concerns are surfaced before signing rather than after closing. For a transaction of this size, this level of clarity is worth meaningfully more than the legal fee.
Our Language Guides explain the legal landscape for specific communities across the GTA, including Mandarin, Cantonese, Hindi, Punjabi, Tamil, Korean, Italian, Portuguese, Farsi, Arabic, Spanish, and French. For a more general guide on finding a multilingual lawyer, see our guide on how to find a multilingual lawyer in Toronto.
How to Find a Real Estate Lawyer in the GTA
Real estate is one of the most active practice areas at Lawyers Who Speak. To find a lawyer, visit the main lawyers directory, filter by Real Estate and your language, and narrow by location. For advice on choosing and engaging a lawyer, see our guides on questions to ask before hiring a lawyer, the first legal consultation, and what to expect in a retainer agreement. Always confirm the lawyer is currently licensed by checking our verification process or the Law Society of Ontario’s public register.
Real estate transactions in Ontario must be completed by a lawyer, not a notary public. This sometimes confuses newcomers from jurisdictions where notaries handle property transfers. For a fuller explanation, see our guide on do I need a lawyer or a notary in Canada. For a complete overview of free and reduced-cost legal advice options, see our guide on how to get legal advice in Ontario.
Frequently Asked Questions
Do I need a real estate lawyer to sell a home in Ontario?
Yes. In Ontario, only a licensed lawyer can complete the transfer of title from a seller to a buyer through the provincial land registration system. Real estate agents handle marketing, showings, and negotiation, but the legal work of preparing closing documents, discharging your mortgage, coordinating with the buyer’s lawyer, and transferring title is the lawyer’s responsibility. This is the case for every residential sale, including private sales without an agent. For an explanation of why a lawyer is required (and not a notary, as in some other countries), see our guide on do I need a lawyer or a notary in Canada.
How much does it cost to sell a home in Ontario?
Seller closing costs typically add up to between 4 and 7 percent of the sale price. The largest item is the real estate commission, usually 3.5 to 5 percent of the sale price plus HST, which is paid out of the sale proceeds and split between the listing agent and the buyer’s agent. Real estate lawyer fees are typically $1,200 to $2,500 plus disbursements (title searches, registration, courier) of $300 to $800. If your existing mortgage is being paid off, discharge fees of $200 to $400 per mortgage apply, plus any mortgage prepayment penalty (which can be substantial, particularly for fixed-rate mortgages with significant term remaining). See our guide on how much a lawyer costs in Ontario for a fuller discussion of legal fee structures.
Will I have to pay tax on the sale of my home in Ontario?
In most cases, no. The Principal Residence Exemption allows Canadian residents to sell their primary home without paying tax on the capital gain. However, you must report the sale on your tax return for the year of sale, even when no tax is owed, since 2016. If the property is not your principal residence (a rental property, cottage, investment property, or second home), the capital gain is taxable and tax planning before the sale is important. If you are a non-resident of Canada for tax purposes, special withholding rules apply and the process is significantly more complex. Consult an accountant or tax lawyer for your specific tax situation; your real estate lawyer is not your tax advisor.
What do I have to disclose to a buyer when selling my home in Ontario?
Ontario follows a ‘buyer beware’ principle, meaning that the buyer is generally responsible for satisfying themselves about the condition of the property through inspection and due diligence. However, sellers have a legal duty to disclose ‘latent defects’: hidden problems that the seller knew about and that the buyer could not reasonably discover through inspection. Examples include concealed water damage, hidden structural issues, environmental contamination, or known issues with major systems. Failing to disclose a latent defect can expose you to a lawsuit by the buyer after closing. Statutory disclosure also applies to certain properties (former marijuana grow-ops, methamphetamine labs, properties subject to environmental orders). When in doubt, disclose. A real estate lawyer can advise you on what to disclose in your specific situation.
Can I back out of a sale after I have accepted an offer in Ontario?
Once you have signed an Agreement of Purchase and Sale and any conditions in the agreement have been waived, the deal is binding on both parties. The seller does not have an automatic right to back out. If the seller refuses to close, the buyer can sue for damages and in some cases for ‘specific performance’ (a court order requiring the seller to complete the sale). The damages can be substantial: the difference between the contract price and the lower price the buyer eventually pays for an equivalent property, plus the buyer’s costs. During the conditional period (typically the first 5 to 10 business days after acceptance), the buyer can usually walk away if a condition is not met, but the seller generally cannot. If you have second thoughts about a sale you have agreed to, contact a real estate lawyer immediately rather than waiting.
Find a Real Estate Lawyer in the GTA Who Speaks Your Language
Selling a home is one of the largest financial transactions you will undertake. Having a real estate lawyer who can communicate with you clearly in your first language ensures that every document is understood completely and every decision is fully informed. Lawyers Who Speak connects GTA residents with verified, Law Society of Ontario-licensed real estate lawyers across many languages. Search by language and practice area to find the right lawyer for your sale.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Real estate transactions are fact-specific and tax rules can change. Please consult a qualified real estate lawyer and, where appropriate, a tax professional, for advice about your specific sale.
