New Rules for Advertising Fees for Real Estate Transactions

The Law Society of Ontario (“LSO”) has recently changed the rules regarding how lawyers are allowed to advertise fees for real estate transactions. Previously, many lawyers advertised their “fees” (being the true fee portion going to the law firm) as a set amount and would then include certain disbursements in addition to that advertised fee.

The problem with this system was consistency and transparency; clients could not properly compare fee quotes in many instances as the disbursements that each lawyer or law firm would include in their fee quote would differ from one lawyer(or law firm) to another.

An advertised “flat rate” is to include:

1. For a purchase: the purchase and one mortgage;
2. For a sale: the sale and the discharge of one mortgage;

And, only “permitted disbursements” may be added to the flat fee, namely:

• land transfer tax;
• government document registration fees;
• fees charged by government;
• tenanet fees;
• the cost of a condominium status certificate;
• payment for letters from creditors' lawyers regarding similar name executions; and,
• any title insurance premium.

Furthermore, the advertisement must identify that the “permitted disbursements” (and HST) are in addition to the flat rate.

The all-inclusive price is now required to include overhead costs, courier costs, bank fees, postage costs, photocopy costs, third party conveyancer's title and other search or closing fees and all other costs and disbursements that are not “permitted disbursements”.