This is the first part of a multi part series of posts to help clients understand the types of documents that they will generally be asked to sign in the course of a real estate transaction (for the purposes of these articles, we will initially be focusing on purchase transactions).  When acting on behalf of a buyer, there are many pieces that go in to compiling the set of documents required to complete a purchase transaction. Over the course of a series of articles, we will cover some of these pieces to help provide clarity on what documents should be expected and what they mean to our clients as purchasers.

One of the most important documents that most purchasers will need to sign is a consent form – we will refer to this as the Lender/Buyer Consent.  In almost all cases with conventional real estate transactions, the lawyer or notary assisting on the purchase will be acting both on behalf of the purchaser of the real estate as well as the lender providing mortgage financing.  This is, in part, to simplify the transaction and avoid the need to involve a separate lawyer to act on behalf of the lender (as well as the additional cost of multiple lawyers).  For the standard real estate deal, this is almost always the case and is permitted by the Law Society of British Columbia on some specific conditions.

While there are various forms of these documents, a sample of the language found in a buyer/lender consent is set out below:

The undersigned do consent, authorize and instruct you to act for us with respect to the above noted transaction, as well as our financial institution as Lender. In so doing we acknowledge that you have advised and informed us as follows:

1.       You are obligated to and will disclose to each of us all information relevant to this transaction obtained by you from any of us or from any other source.
2.       If a conflict of our interest and that of our financial institution arises at any time before or after completion of the transaction that cannot be resolved by our mutual agreement, you may not be able to act for one or any of us and reserve the right to refuse to continue to act for any of us.

We acknowledge and agree that we shall be liable for and shall pay the amount of your legal fees and disbursements incurred by you concerning our interest in this transaction.

As indicated, the lawyer or notary public acting in this capacity must share information between the parties that is relevant to the other (i.e. from buyer to lender as well as from lender to buyer). If there are pieces of the transaction that have not been disclosed or new information pertinent to the transaction, the lawyer or notary is required to resolve any issue by the agreement of both the lender or borrower or refer both parties elsewhere for legal advice.

In the event of a dispute surrounding the mortgage post-closing (for example, if the property went

into foreclosure proceedings), the lawyer that assisted under the joint engagement provided for above would generally be unable to provide assistance to the borrower or the lender on the foreclosure matter.

Author: Una Gabie