3. Do I need a lawyer to buy a property in PEI?

Answer:

Yes, you need a PEI lawyer to search out a property for you to make sure there are no liens or mortgages
outstanding.

4. What is the procedure to buy a property in PEI?

Answer:

The Purchaser (with the help of a PEI Real Estate agent) fills out 3 forms:
1.An Agreement of Purchase & Sale
2. An Agency Disclosure form
3. A Schedule"A" form.
These forms are submitted to the Vendor of the property for his or her acceptance. The Vendor can accept the offer
or give a Counteroffer back to the Purchaser. Eventually an agreement is reached and when the offer conditions are
met, the offer goes to the closing date and the Purchaser takes title to the property.

5. What is a Perk Test?

Answer:

Before any citizen of Prince Edward Island can get a Buiilding Permit, there must be a successful
Perk Test completed. This Perk Test is solely concerned with the type of soil a PEI property has in
regards to a Septic System. A good Perk Test measures the ability of the soil to absorb liquid.
Unfortunately, not all soils can absorb wastewater or purify it. Sewage disposal systems that are installed
in unsuitable soils usually malfunction by leaking raw, untreated sewage to the soil surface or a roadside
ditch, or by contaminating the groundwater.

To do a Perk Test, a hole of about 4 feet is dug by a backhoe in the area of the property where the septic tank
and septic field will be located. Then a Prince Edward Island government official will get into the hole and analyse
the profile of the soil at different depths in the profile. The PEI government official knows by training what a good
soil profile should look like. He or she then will make a decision as to whether the Perk Test is Category 1 soil
(The best soil test), or Category 2 soil, or Category 3 soil, etc. Most properties in Prince Edward Island will be either
Category 1 or Category 2 soil.

In conclusion, it is mandatory that a Perk Test be done in Prince Edward Island before a Building Permit will be
issued by the PEI government. When buying Raw Land on PEI, it is imperative that a Perk Test be done on it by
the Vendor or Purchaser before the closing date of the offer agreement to protect the Purchaser. In very rare cases, it
may be that the Purchaser bought land that he or she cannot build on.

6. Do I need a Home Inspection done when I buy a PEI Home?

Answer:

It is advisable to have some kind of house inspection done. It is the choice of the Purchaser as to whether it is a Commercial Home Inspector, or a friend, etc. who is knowledgable in assessing a home property.

7. What taxes do I pay when purchasing a PEI property?

Answer:

1. There may be a 5% GST (Goods & Services Tax) on the selling price of some PEI properties.
2. Provincial Real Property Transfer tax of 1% may be applicable.
3. NOTE: Yearly property taxes are higher for non-residents than for PEI residents.

8. What is a closing inspection?

Answer:

It is a final inspection done by the purchaser and his PEI Real Estate Agent on the closing date of the Offer agreement. This is to insure that the house is in the same shape and condition as it was when the purchaser had his or her first showing on the home, and house inspection. The Vendor is completely responsible for the home until the Purchaser takes title to it at the closing date.The Closing Inspecton is done on the closing date just prior to the Purchaser going to his lawyer's office to take title to the property. If their is a problem during the Closing Inspection, both sides will have to negotiate to work it out.