An employment contract is a great tool for employers for establishing in writing the expectations with respect to the employment relationship but, more importantly, for also limiting the employer’s liability.  If an employment contract contains enforceable termination provisions, then this can significantly limit an employer’s liability if the employee needs to be terminated in the future.  Without enforceable termination provisions in an employment contract, an employer may be sued for wrongful dismissal as providing notice and/or severance in accordance with the B.C.

A shareholders agreement is signed by the shareholders of the company and it sets out the rights and restrictions relating to the transfer of shares to other shareholders or outside parties.  It may also address management and decision-making regarding the company.  In regards to share transfers, a shareholders agreement can restrict a shareholder from selling shares to an outside party without offering the shares to the existing shareholders to ensure the company does not become controlled by outside parties.  If can also establish what happens to the shares of a shareholder upon death if you want to restrict the beneficiaries of the deceased shareholder’s estate from taking over the shares and asserting control over the company.

Yes. If your spouse becomes incapable due to an accident or illness and you need to sell your home to fund care or downsize, you will not be able to do so without your spouse as you both are registered on title.  If you had an enduring power of attorney or a representation agreement containing financial powers for your spouse, then these documents would allow you to sign the necessary land transfer forms on behalf of your incapable spouse.  Without these documents, you would be forced to make a time-consuming and costly court application for the right to manage your spouse’s financial matters.  It is highly recommended for spouses to have powers of attorneys for each other even if most or all of your assets are joint in order to be able to manage them on behalf of each other.

If you don’t have a Will, it is not for certain that everything you have will pass to your spouse on your passing. In British Columbia, if you pass away and are survived by a spouse and children, then some of your estate may pass to your children pursuant to the B.C. Wills, Estates and Succession Actif you don’t have a Will.  If any child of yours is a minor, then the Public Guardian and Trustee may hold that child’s share of your estate in trust until the child reaches 19 instead of your surviving spouse holding it or receiving it.  Furthermore, the Public Guardian and Trustee will deduct fees from that share for holding it in trust. 

If you are the executor of a Will (and have not declined the role), you will need to determine if an application to obtain a grant of probate must be made to the courts.  A grant of probate may be required to administer certain assets in the deceased’s estate such as real estate, vehicles or accounts with banks or investment firms.  For example, the Land Title Office will not allow the executor to deal with the deceased’s solely-owned real estate unless the executor files a certified copy of the grant of probate issued by the courts with the Land Title Office.  In other cases where a grant of probate may not necessarily be required, the executor may still wish to obtain it to limit personal liability if the estate may have unknown or unidentified creditors or if it is suspected that someone may challenge the Will.

The B.C. Wills, Estates and Succession Act(“WESA”) permits an executor to publish a notice to creditors in the B.C. Gazette which requires any creditors or claimants to present their claims against the estate within at least 30 days from the date of the notice’s publication. When the time period for bringing claims expires, then the executor can distribute the estate’s assets and the executor will not be held personally liable for claims that were not presented with the required time period.

On the completion day, there are a few additional costs in addition to the purchase price that you may need to pay as a purchaser referred to as closing costs which are as follows:

Property Transfer Tax 

Unless you are eligible for a property transfer tax exemption such as the first time home buyers’ exemption or the newly built home exemption, then you will have to pay property transfer tax calculated on the fair market value at the rate of 1% on the first $200,000, 2% on the remaining value up to and including $2,000,000 and 3% on the remaining portion over $2,000,000. For example, if your home is $850,000, then property transfer tax will be $15,000.  If the residential property is greater than $3,000,000 or the purchaser is a foreigner, then there may be additional property tax.

GST 

If you are purchasing a newly built home, then GST will be applicable on the purchase price. However, if the new home that you are purchasing will be your primary place of residence and the fair market value is $350,000 or less, then you may be eligible for a new housing rebate equal to 36% of the GST that you would need to pay.  If the home is above this amount but less than $450,000, then you may be eligible for a partial rebate.

Title Insurance 

If you are getting a mortgage to fund the purchase of your home, your lender will almost always require that you obtain title insurance. Title insurance can protect the lender from title fraud and financial losses that the lender may suffer if their mortgage is later determined invalid or unenforceable.  In the case of a residential property, the cost for the policy is usually in the range of $140 to $185 as a one-time premium.  When your lawyer purchases the lender’s policy of title insurance, some title insurance companies may, on a complimentary basis or a small additional fee, offer a homeowner’s policy which protects you against losses you may suffer for title fraud, municipal work orders, zoning violations and other property defects. An example of title fraud would be if someone fraudulently changed the ownership or title of your property or forged documents to illegally sell or finance your property.  Although title insurance cannot prevent the occurrence of fraud, it can protect you from its financial consequences.  In addition, if you have survey issues such as if you find out after purchasing that your foundation encroaches on your neighbour’s property or certain renovations were done without a permit by the previous owner which the municipality now requires you to remedy or remove, then title insurance can protect you from the costs you incur to remedy the issue.

Insurance Binder Fee 

If you are getting a mortgage to fund the purchase of your home, then your lender will require that they are listed in the property insurance policy as a loss payee for which insurance companies usually charge a fee which is typically no more than $100.

Property Taxes and Utilities 

If the seller has already paid property taxes in full for the year or prepaid any utilities for a certain period, then as the purchaser will you need to credit the seller back for your portion of the period. In the case of property taxes, it is important to note that although property taxes are typically paid in July, they are paid for the then current calendar year.  Therefore, if the completion date is September 1st, the purchaser would credit the seller back for its share of the year being September 1st to December 31st.    

Strata Fees 

If the home you are purchasing is a strata property (i.e. condo), then the property management company will charge for certain strata documents that your lawyer will require on your behalf to complete the purchase.  Typically, the charge for these strata documents is no more than $100 but if they are ordered on a rush basis because the completion date is soon, then the property management company will sometimes include rush fees which can be an extra $100 to $200 in most cases.  If the seller has already paid strata fees for the month in which you are purchasing, then you will be required to credit the seller back for your portion of the strata fees of that month.  In addition, sometimes the property management company will charge a move-in fee (usually no more than $250) and/or require a damage deposit from you in case you cause any damage while you are moving into the building.

The B.C. Real Estate Services Regulation permits a family trust or holding company to hold shares in a personal real estate corporation if certain conditions are satisfied. First, the shares held by the holding company or the family trust must be non-voting shares. Second, in the case of the holding company, all of the shares must be beneficially owned by the realtor or the realtor's spouse or children. In the case of a family trust, all of the beneficiaries of the trust must be the realtor or the realtor's spouse or children. There are a number of reasons why you may a holding company or a family trust as a shareholder in your PREC. If a holding company is a shareholder in your PREC, then the PREC can flow retained earnings to the holding company for investment purposes. If a family trust is a shareholder in a PREC, then the family trust can potentially receive dividends from the PREC and subsequently flow those funds out to the beneficiaries of the trust at potentially lower tax rates. As usual, we recommend you seek tax advice before implementing these structures.