Humber/Ontario Real Estate Course 1 Exam Practice

What role does the buyer's lawyer play in a transaction involving a non-resident seller without a tax certificate?

1. Notify the taxation office of the sale

2. Request payment extension from the taxation authority

3. Hold back funds until the tax clearance is received

4. Ensure tax payment from the buyer's funds

5. Arrange for early closure despite missing certificates

6. Advise the buyer to secure additional funds for taxes

The correct answer is: Hold back funds until the tax clearance is received

In a real estate transaction involving a non-resident seller without a tax certificate, the buyer's lawyer plays a crucial role in ensuring that the transaction is completed smoothly while also protecting the buyer from potential taxation issues. One of the key responsibilities of the buyer's lawyer in this scenario is to hold back funds until the tax clearance is received. This is important to safeguard the buyer from any potential tax liabilities that may arise from the transaction. Options A, B, D, E, and F are not the primary roles of the buyer's lawyer in this situation. Notifying the taxation office of the sale (Option A), requesting a payment extension from the taxation authority (Option B), ensuring tax payment from the buyer's funds (Option D), arranging for early closure despite missing certificates (Option E), or advising the buyer to secure additional funds for taxes (Option F) are not as directly related to the specific concern of ensuring tax clearance in a transaction involving a non-resident seller without a tax certificate. Holding back funds until the tax clearance is received is a critical step to protect the buyer's interests and ensure compliance with tax regulations.