What Are Disbursements?
31 January 2021
What are disbursements and other charges, and why am I being charged them on my real estate transaction?
Disbursements are the third-party costs that are incurred by your lawyer to complete your real estate transaction and can vary depending on the complexity of the transaction.
For example, when purchasing a home, a buyer is responsible for paying for the registration fee to transfer the title into their name(s). The Alberta Land Titles Office charges this registration fee, and the amount depends on the declared value of the property being purchased. Similarly, if a buyer is obtaining a mortgage to assist with their purchase, their lending institution requires the mortgage also to be registered on title to the land. The registration fee charged by the Alberta Land Titles Office depends on the value of the mortgage being registered.
The following chart illustrates a few examples of the registration fees charged on a purchase where the buyer pays a deposit of less than 20% of the value the home they are buying:
Purchase with High Ratio Mortgage
Other disbursements your lawyer may pay to the Alberta Land Titles Office include:
Title Searches: Your lawyer will complete a title search to confirm who the owners of the property being sold are and to also determine what registrations on title may need to be discharged. The Alberta Land Titles fee for completing a title search is $10.00 per search; and
Discharges: In the case of a sale, the seller is required to register a discharge of their mortgage. The Alberta Land Titles fee for removing a mortgage from title is $10.00 per discharge.
Other non-Alberta Land Titles Office examples of disbursements you may incur include:
Real Property Report (RPR) and Statement Respecting: If you are selling your home and the Purchase Contract confirms an updated RPR is required, your lawyer orders one and submits it for compliance to the municipality where the house is located. The seller is responsible for both the costs of the RPR and any municipality charges for obtaining a statement respecting compliance. The price of an RPR can vary depending on which survey company completes the RPR; however, the costs generally range between $550.00 to $700.00. The price for obtaining statement respecting compliance from your municipality varies depending on whether there are any compliance issue with your RPR;
Tax Search: Your lawyer will complete a tax search to make sure that all outstanding property taxes have been paid up to the date of closing; and
Estoppel Certificate: If you are selling a resale condominium, you will be required to provide the buyer with an Estoppel Certificate. This is a statement signed by your condominium corporation and confirms things like your condominium fees are up to date, whether any unpaid special assessments are owing, and if there are any outstanding court-ordered judgments against your condo corporation. Usually, your lawyer orders the Estoppel Certificate on your behalf. The date of the Estoppel Certificate is essential, so it is prudent to speak to your lawyer before ordering one. The price of an Estoppel Certificate can vary between different condominium corporations; however, the costs generally range between $200.00 to $400.00.
It’s always a good idea to speak to your lawyer about the cost of disbursements related to your real estate transaction before finalizing the deal. The more informed you are, the less stressful your transaction will be.