On top of the legal fees, GST and PST that are paid when you complete a real estate purchase or sale, there are also “disbursements” that are charged.
Disbursements are costs that are paid out-of-pocket by your notary public or lawyer on your behalf in connection with your real estate transaction. Disbursements usually include the cost of land title and tax searches, land title registration fees, digital execution fees, agent’s fees, courier, postage, copies and other miscellaneous office expenses.
What are Disbursement Fees in Real Estate?
In the context of a real estate transaction in British Columbia, Canada, “disbursements” refer to the various out-of-pocket expenses incurred by a lawyer or notary public in the process of completing and closing the transaction.
These costs are separate from the legal fees charged for professional services and typically include a range of necessary expenditures to ensure the transaction proceeds smoothly and complies with legal requirements.
Common disbursements in a real estate transaction in BC may include:
Land Title Search Fees: Costs associated with searching the title of the property through the Land Title and Survey Authority of British Columbia (LTSA) to confirm ownership and identify any encumbrances or liens.
Land Title Registration Fees: Fees for registering the transfer of property ownership with the Land Title and Survey Authority of British Columbia.
Property Tax Search Fees: Costs to obtain a property tax certificate to ensure that all property taxes have been paid up to date and make the financial adjustments required between the two parties.
Execution and Judgment Searches: To ensure there are no outstanding judgments or legal claims against the property or the seller.
Courier and Postage Fees: Costs for sending documents to the relevant parties or institutions involved in the transaction.
Survey or Building Location Certificate: Fees for obtaining a current survey of the property if required by the lender or the buyer.
Title Insurance: If required, the cost for a title insurance policy to protect the buyer and the lender against potential title defects or issues arising after closing.
Insurance Binder Fees: Costs for securing a property insurance binder to demonstrate to a lender that the property is insured at the time of closing.
Zoning Search Fees: Costs associated with verifying the zoning and permitted uses of the property.
These disbursement fees are necessary to cover the various aspects of due diligence, documentation, and compliance in a real estate transaction. They help ensure that the property is transferred with clear title and that all legal and financial obligations are met.
The exact amount of disbursements can vary depending on the specifics of the transaction, such as the type of property, its location, and the terms of the sale.
Our team is located in Nanaimo, BC, and has decades of experience with real estate transfers.
Give us a call at (250) 756-7720 or email us to set up an appointment.