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171 Cards in this Set
- Front
- Back
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What are the three requirements of a caveat?
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1. State the NATURE of the interest claimed
2. State the GROUNDS which the claim is made 3. Have attached to it an AFFIDAVIT OF BONA FIDES where the deponent swears that the Caveator has a valid claim in the land |
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When is a Corporate Registry Search needed (aside from the fact that the buyer/seller is a corporation)?
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When you need a Certificate of Status that states the corporation are in good standing.
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What caveat is to be registered on title to protect the Vendor's claim?
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Vendors' Lien Caveat (Unpaid)
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True or False: The time of registration at Land Titles Office is important.
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True.
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An Unpaid Vendor's Lien Caveat will remain on title until...
What document is filed to remove the Caveat? |
The Vendors have been paid. They will then register a Discharge of Caveat.
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What is the purpose of the Unpaid Vendor's Lien Caveat?
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Once title is transferred into the Purchaser's name the caveat protects the Vendor's by stating they have yet to be paid.
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Who can swear an Affidavit of Bona Fides?
Who signs the Discharge of Caveat?* |
Caveator or Caveator's Agent
Caveator or the SAME agent. |
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A Document Registration Request (DRR) is attached with what document and filed?
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A Caveat.
*Certified Copy of Title is sent back as proof of registration. |
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What is a Vendor's Take-Back Mortgage?
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Purchaser registers a transfer from the Vendor, which puts title into the name of the Purchaser, and then the Vendor grants the Purchaser a mortgage for the balance of the purchase price.
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What does a Vendor's Take-Back Mortgage contain? (4)
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(1) Outlines interest rate;
(2) Manner of payment; (3) Prepayment privileges; and (4) Other terms like a bank mortgage. |
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Name the two methods a Vendor can finance the the purchase of land for a Purchaser:
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(1) Vendor Take-Back Mortgage
(2) Agreement FOR Sale |
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In a Agreement for Sale, who's name is transferred on title?
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No one. The Vendor's name remains on title until the full purchase price and interest is paid.
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In an Agreement for Sale, what happens?
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Vendor agrees to pay full purchase price.
Purchaser gets IMMEDIATE possession and makes payments of principle and interest to the Vendors. Title is transferred to Purchaser's name once last payment is made. |
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Agreement for Sale is popular among _______ transactions.
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Rural transactions
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What is an Option to Purchase?
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A contractual right to purchase land for a fixed price before a certain date.
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In an Option to Purchase if the developer decides against the ideal of purchase what happens?
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The owners keep their consideration. (Developer is not obligated to complete the purchase)
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If an Option to Purchase is agreed between Owner and Developer, what happens?
*Sold? |
Developer registers it on title, if house were to be sold by owner the caveat runs with the land and the new Owner would be obligated to sell.
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What is the Right of First Refusal?
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right to match the terms and conditions of any acceptable offer made to purchase a particular piece of land for a given period of time.
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How is an Option to Purchase different from the Right of First Refusal?
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No terms are set forth in documentation.
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What are the main goals for conducting searches? (2)
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1. Ensure the Buyer obtains a clear title
2. Ensure that Sellers do not have to wait to receive their funds |
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List four common searches used in real estate transactions.
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(1) Municipal TAX
(2) Land TITLES (3) CORPORATE Registry (4) Personal Property |
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Where do you search taxes on property?
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CITYonline
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What does a Municipal Tax Search tell the buyer and seller? (3)
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(1) IF taxes are paid (arrears);
(2) HOW taxes are paid (TIP); and (3) Any local IMPROVEMENT (levies)? |
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What's the difference between a tax search v. certificate?
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Tax search is cheaper but you will be held liable if anything is inaccurate.
Certificates are double the price but are guaranteed by the city and can be relied upon in law. |
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Who accepts any tax obligations to the MUNICIPALITY?
*Think about Statement of Adjustments |
Purchasers/Buyers.
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Who is responsible for tax arrears and penalties?
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Purchaser!!!!!!!!!!!!
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Aside from taxes what does the City Tax Search also provide?
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The legal description of the property.
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Why is the legal description of the property important?
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It is used to search the title of the property.
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*Where do you find the legal description of the property?*
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Title or City Tax Search.
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Where do you search for the title of a property and what information do you need first?
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SPINii, you need legal description of property.
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What do you look for on a title? (6)
HINT: ENCUMBRANCES |
ENCUMBRANCES
-easement -utility/pipeline right-of-way -mortgage -caveat + lien RESTRICTIVE COVENANTS |
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What encumbrance is a VENDOR'S lawyer concerned with?
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Discharging their mortgage.
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What encumbrances is a PURCHASER'S lawyer concerned with?
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Encumbrances their buyer will assume.
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Where do you obtain a search for real estate transactions involving corporations?
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Corporate Registry at Alberta Online
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What three things does the Corporate Search disclose?
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(1) Exact Corporate Name
(2) Names of Directors and Shareholders (3) Their ''good standing'' status with Corporate Registry |
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Define a mortgator and a mortgagee.
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Mortgator: the person in debt
Mortgagee: the person lending the cash |
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When dealing with corporations, Mortgagees often need this document to grant them the money. Why?
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Certificate of Status.
To ensure they are in good standing with Corporate Registry. |
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This search is used with large commercial transactions.
Why? |
Personal Property Search.
Chattels such as a bar stools and a cash register in a lounge may be vital characteristics of the land. |
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When do you usually perform Personal Property Searches?
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When dealing with commercial transactions.
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What are three examples of commercial transactions?
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(1) purchasing/selling business
(2) purchasing/selling apartment building (3) purchasing land for development |
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Aside from chattels what do you specifically search for when doing a Personal Property Search at the Registry?
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Any Security Agreements registered on chattel or relevant party.
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If a house is being purchased for occupation, what is the exception to the Personal Property Search at the Registry?
What does this exception mean? |
Personal Property Security Act
Exempts consumer goods worth less than $1000.00 |
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The buyer is allowed to take a fridge, stove, washer, and dryer clear of any security interest under two conditions, what are they?
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(1) Worth less than $1000.00
(2) Buyer was unaware of security interest |
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What is the Garage Sale Exception?
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It allows the buyer to be exempt from security on consumer goods if they are worth less than $1000.00 and buyer is unaware of security interest.
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Who is obligated to obtain a Real Property Report?
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Seller.
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Who prepares Real Property Report?
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Alberta Land Surveyor and forwarded to the Planning and Building Department of the municipality for Compliance Certificate
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Why is the Real Property Report important?
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You need a compliance certificate
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If you are not in compliance what are the two options you have?
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(1) Relaxation Order if location of building does not follow bylaws
(2) Encroachment Agreement if a building is encroaching on a neighbors property |
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Condominium require special searches so a separate schedule is attached which includes four things.
HINT: Fire, Estoppel, Finance, Bylaws |
Budget and financial statements
Copy of current condo bylaws Copy of the Condominium Corporation's fire insurance policy Copy of Estoppel Certificate to ensure that condo fees are up-to-date |
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Who's responsibility is it to get a copy of the Condominium Plan?
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The Purchaser's Lawyer
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The Purchaser's lawyer is responsible for this document in the purchase of a condo.
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Copy of the Condominium Plan
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Three things are inevitable, what are they?
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Death, taxes and condo fees
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What does CAD stand for?
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Condominium Additional Plan Sheet
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CAD also means...
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Master File
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Where can the Master File be located?
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Alberta Online
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What three things does the Master File/CAD sheet provide?
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-any legal action against condominium corporation
-any changes in by laws -any changes in the Board of Directors of the Condominium Corporation |
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List the two basic documents that are used in every real estate contraction.
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Transfer of Land and Statement of Adjustments
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Who's responsibility is it to prepare transfer documentation?
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Vendor's lawyer.
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What is the Transfer of Land document?
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registered owners transfer their interest in that property to someone else
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Would you fill out the Consent of Spouse if there was only one owner registered on title?
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Only if the sole owner was married.
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What is the purpose of the Statement of Adjustments?
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To reflect the amounts paid by each party and find out the amount the Purchaser needs by Closing Day
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Items can only be included in the Statement of Adjustments if they are....
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affecting BOTH the Vendor and the Purchaser.
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There are two columns in a Statement of Adjustment, list them:
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1. Credit to the Purchaser
2. Credit to the Vendor |
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What provinces does this Protocol apply to?
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The Western Law Societies’ Conveyancing Protocol is an initiative of the law societies of Alberta, British Columbia, Saskatchewan and Manitoba.
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What are the four fundamental purposes of the Protocol?
HINT: Due diligence, release of Mortgage proceeds, solicitor-opinion letter, security requirements |
(1) To allow for the release of Mortgage proceeds and other purchase funds on Closing, for
the mutual benefit of Buyers, Sellers and Lenders (2) To encourage the continued exercise by Buyers in matters of survey and zoning; (3) To enable lawyers to satisfy the unique security requirements of Lenders without the expense of obtaining a Real Property Report unless there is a known defect; and (4) To provide a Solicitor’s Opinion to Lenders. |
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What types of real estate transactions does the Protocol apply to? (2)
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transactions existing condominiums
and transactions involving existing single family residential property having 4 or fewer units |
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Are there any trust conditions in a protocol real estate transaction?
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No. Only in conventional ones.
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What is the difference between a conventional real estate transaction and a protocol transaction?
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Before Transfer of Land occurs (title names switched) the mortgage proceeds are released
No trust conditions in a protocol verses a conventional one |
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The protocol transaction cannot be used for two types of properties, list them:
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brand new condominiums
commercial areas |
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Can you use a Protocol Closing even if no mortgage financing is required?
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Yes you can, just ignore any provisions relating to the mortgage or the Lender’s requirements
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What is the definition of “Land” for purposes of the Protocol?
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means all of the land and premises agreed to be sold by the Seller to the Buyer
pursuant to the Agreement; |
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What is the difference between a Permitted Registration and a Non-Permitted Registration?
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Buyer assumes all permitted registrations on title such as a utility/pipeline right-of-way
Seller discharges all non-permitted registrations on title such as their mortgage |
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True or False: You need trust conditions but not a Statement of Adjustments in a Protocol transaction?
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False. You ALWAYS need a Statement of Adjustments - no matter what. You do not need trust conditions.
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A Solicitor's Opinion Letter is sent to who?
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The Lender (Bank)
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List the 9 duties of the Buyer’s lawyer when conducting a Protocol Closing.
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(1) Conduct a Title Search
(2) Analyze all Registrations against “exceptions form title” provisions of the Agreement a. Solicitor’s Client Opinion Letter 3. Other Investigations 4. Real Property Report 5. Pre-arrange Funding of Purchase Monies 6. Prepare Closing Documents 7. Review all Documents 8. Exchange Documents and Funds 9. Post-Closing and Report to Client |
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What is cash to close? Who receives the credit?
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The amount of money the Purchaser (who is credited) must come up with by closing
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When are Municipal Land taxes due?
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At the end of June every year.
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Who pays the taxes if the transaction is closed before June?
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The Purchaser's.
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When the closing date is before June what does that mean?
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The purchaser will be paying for most items and we will be finding out how many days the Vendor lived there in order adjust.
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What is the Basic Tax Adjustment formula and step?
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Determine who pays taxes.
Calculate number of days other person lived there. Calculate, using formula: # of days * tax levy/365 Whoever pays taxes, gets the credit |
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What are four types of adjustments on the Statement of Adjustments other than the basic tax adjustment?
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(1) Mortgage Assumption
(2) Tax in Arrears (3) Taxes paid through TIPP (4) Community Association Fees |
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List two advantages and one disadvantage of having an assumption of mortgage:
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(1) Do not have to qualify for the mortgage
(2) No expense of placing new mortgage on property (1) must agree to principal amount and interest rate of mortgage, even if inconvenient |
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Who gets the credit for an assumption of mortgage?
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Purchasers
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Who gets credit for the Mortgage Tax Account?
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Vendor
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If taxes are in arrears, how do you go about the tax adjustments and who receives credit for penalties?
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By ignoring the closing date and assuming that the Purchaser is paying and receiving the credit and long with penalties.
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Who receives credit for the purchaser price and the deposit?
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Vendor receives credit for purchase price while Purchaser receives credit for Deposit
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Is a TIPP being assumed or paid out?
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Assumed
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In terms of an TIPP who pays the taxes?
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THE PURCHASER ALWAYS!!!
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T/F: If the possession date is after June 30th, the adjustment will be greater than half the levy when dealing with TIPP
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True
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If property is commercial or being rented out what other adjustments should be considered?
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Rental and security deposits
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Who receives credit from rental Adjustments
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Purchasers
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Who gets credit from security deposit and accrued interest?
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Purchasers
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Since the Vendor usually pays the community association fees, who gets the credit?
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VENDOR
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Who signs the Affidavit re Value of Land or Affidavit of Transferee?
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The Purchasers. Their lawyer's responsibility
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When is a Consent of Spouse, Dower Affidavit and Certificate of Acknowledgement used?
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When there is a single owner on title. (Only Vendor's issue)
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What are the 10 steps a lawyer takes when acting for the Vendor?
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(1)
(1) (1) Open File (2) Check list (3) Review Agreement (4) Contact Client (5) Searches (6) Contact Buyer's Lawyer (7) Mortgage or Financial Encumbrance (8) Real Property Report (9) Tenancies (10) Condominiums |
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When you open a file you should have a...
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New Case Report
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Why is a checklist important?
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helps determine status of file and ensure no steps are missed
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Onece the Real Estate Contract is "firm" (all conditions have been met) the Vendor's lawyer will...
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Review agreement to ensure all essential terms are in there.
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The Vendor's Lawyer is always concerned about this fact in terms of their client.
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Their residency.
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Why is it important to know if the Vendor is a resident of Canada?
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If they aren't then we must hold back 25% of the sale proceeds
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Why is it important to know if the Purchaser is a Canadian Citizen?
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If they are not we must be informed about controlled land.
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A lawyer must obtain these documents and send over to the Buyer's lawyer within a reasonable time.
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Real Property Report and Compliance Certificate
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After doing searches on the property a Vendor's lawyer should contact the other side and ask...
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How their client's wish to be described on title.
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It is the Vendors' lawyer's responsibility to discharge any financial encumbrances on title. How do they go about this?
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Send a request letter asking for a Mortgage Payout Statement or Discharge Statement.
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The Mortgage Payout Statement includes what?
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Balance owning as of closing date, penalty for paying before maturity and per diem (how much they are required to pay per day if not paid back on time)
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The seller will forward sufficient funds (from the buyer's lawyer client's) to the mortgagee of the seller on the condition that...
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they provide a register able Discharge of Mortgage
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What is the difference between Mortgage Payout and Mortgage Assumption Statement?
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Penalty v. No Penalty
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Who is responsible to obtain the Real Property Report and Compliance Certificate?
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Seller's lawyer, 7 days before closing.
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What do you need attached with a Real Property Report?
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Compliance Certificate
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Can tenancies remain when a rental property is being sold?
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Yes, this will be reflected on statement of adjustments and buyer's assume the obligations of landlords
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What is the Seller's obligation when dealing with the sale of a CONDOMINIUM UNIT?
Hint: Similar to Real Property Report |
Estoppel Certificate
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What is an Estoppel Certificate?
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document certifying there are no legal actions against condominium corporation and all condo fees for that particular unit have been paid
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Once a lawyer has prepared the Transfer of Land and Statement of Adjustments he sends them over in a trust letter which also includes...
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Trust Conditions that only allow use of documents if they comply with ALL and the promise to undertake mortgage funds
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Why are documents sent over at least 2 weeks prior to closing date?
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So that buyer's lawyer has time to register transfer and any new mortgage.
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The Seller has to comply with this trust condition and the Buyer's lawyer must comply with these 5 trust conditions list them:
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Undertaking
Fire Insurance Cash Difference Tenancy At Will Transfer Back Irrevocable Assignment |
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What is an undertaking?
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Once Vendor's lawyer receives funds from Buyer they will pay off original mortgage
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What is the purpose of trust conditions?
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The buyers need their name on title to place a new mortgage which means the seller is at risk of giving up their title without being paid
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What is the purpose of undertakings?
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To ensure that the Purchaser's will not have two financial encumbrances to worry about.
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What is the first trust condition and what does it mean?
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Fire insurance, property must be insured in case it is damaged before the Seller gets the balance of their money.
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What is the second trust condition and why is it important?
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Cash Difference
(Cash to Close) - (Mortgage Proceeds) Important because Sellers want to insure they receive the money (coming out of Buyer's pockets) before the Transfer of Land is used |
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What is the Transfer Back?
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A trust condition that is used to get title back into the Seller's name along with Transfer of Land if the balance of purchaser price is not paid within a reasonable time after closing.
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What is Tenancy at Will?
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A trust condition that is used to state that the Purchaser's are only tenants of the property until the balance of the purchase price is paid, they will vacate the property on 48 hours notice if required.
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What is Irrevocable Assignment?
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A trust condition that directs mortgage proceeds to the Purchaser's lawyer and then the Vendor's lawyers to ensure it does not go to clients.
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What is the purpose of both trust conditions and undertakings?
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To allow documents and funds to flow and protect interest of clients.
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It is the buyers lawyer submits the transfer of land and this document to the land titles office for registration.
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Mortgage
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What is the cash to close formula?
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Mortgage Proceeds + Cash Difference
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A Statement of Sale for a Vendor usually indicates what?
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Monies received, paid out and balance left on seller's credit
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A Trust Account Reconciliation can usually be used to ...
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Check the accuracy of Statement of Sale
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True or False: Receiving the Discharge of Mortgage from the Mortgagee can take up to 6-8 weeks
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True
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While the Purchaser's lawyer registers the mortgage and Transfer of Land what does the Vendor's lawyer register at the Land Titles Office?
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The Discharge of Mortgage
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The Statement of Sale for the Vendor's only refers to the total amount paid not how, what should be included?
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Real estate commission + legal fees
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Future Disbursements (registration of discharge) are shown as a _______ on the Statement of Sale
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Holdback
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What is the goal of the Vendor's Lawyer and the goal of the Purchaser's Lawyer?
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VL: to receive money without problems
PL: to receive property without problems |
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What are the four steps a buyer's lawyer is responsible for in a real estate transaction?
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1. Open file/Checklists
2. Review Agreement and Conduct Searches 3. Contact Clients and Vendor's Lawyer 4. Insurance and Tenancies |
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In commercial transactions, mortgage companies tend to hire their own lawyers, who is responsible for the cost?
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Mortgagor
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When the buyer's lawyer conduct searches what are they concerned about?
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The encumbrances their client will be assuming like a utility right of way or easement
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A buyer's lawyer contacts their clients to find out what details?
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How they wish to be described on title. What Joint tenancy/tenants in common means and to confirm citizenship.
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What type of Insurance and Tenancies does the BUYER'S lawyer need to worry about?
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"First Loss" insurance and Assumption of Tenancies
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What is first loss?
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Mortgage company requires binding letter that confirms that the property has insurance for full insurable value and indicates that if property is destroyed by fire the mortgagee will be paid out first.
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What is Assumption of Tenancies?
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If buyers assume tenancies they should review copies of leases, pre-paid rentals, and security deposits
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If trust conditions cannot be met by either side what are the two options each side can take?
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Amendment or Returning the Transfer of Land unused
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A buyer's lawyer should check for accuracy on which document?
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Statement of Adjustments
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Irrevocable Assignment is also known as...
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Direction to Pay
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Who hold's the three trust condition documents?
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Buyer's lawyer
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Why would a mortgage company refuse to fund a purchaser?
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If they are dishonest in their mortgage application
i.e. not actually receiving a steady income |
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Statement of Purchase for the Buyer only includes matters important to the buyer such as?
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How much money the buyer needs to close.
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Who cares about Real Estate commission?
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The Vendor, in a Statement of Sale
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When is the Vendor's Mortgage applicable to a Statement of Purchase?
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When the Buyer is assuming the Vendor's mortgage
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What is Cash Shortfall? Provide examples
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The money a buyer is required to bring over and above the mortgage to pay for everything.
Such as cash to close, legal fees, possible late interest, Realtor fees |
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True or False: Mortgagee is the person receiving the money.
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False. That is the lender (bank)
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Why is a mortgage different from other loans?
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It is backed up by the house if no money can be produced.
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When is a Conflict of Interest letter required? Who needs it?
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When a lawyer decides to work for both client and mortgagee. The Purchaser's lawyer needs this.
WRITTEN CONSENT IS REQUIRED |
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Who signs the Affidavit of Transferee?
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Buyer's clients
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What does the Affidavit of Transferee/ Affidavit re Value of Land contain?
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-how purchaser's are paying
-swear value of property at the date of transaction |
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Cash shortfall is always provided...
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after signing Affidavit of Transferee
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Before sending the cash shortfall over to the Vendor's lawyer what needs to be taken out?
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Legal fees
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Registrations takes 3-5 days t/f
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True
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Who does the Buyer's lawyer report to aside from clients and mortgage company?
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Municipal Tax Authority and also provides final Statement of Purchase, lawyers account and copies of documents
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Why will the final Statement of Purchase differ from the original?
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Because disbursements have incurred or interest due to late closing
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The Buyer's lawyer sends final reports to...
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Buyers, Mortgagee and Municipal Tax Authority
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Files are destructed after....
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10 years
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The Law Society of Alberta expects this code to be adhered to, what is it?
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Code of Professional Conduct
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A lawyer must take reasonable steps to ensure what?
HINT: MODULE 11 |
maintenance of confidentiality of all persons engaged or employed by lawyer
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A lawyer can only accept a certain amount of cash per file from clients, what is the limit?
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$7500.00
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A lawyer must follow client's requests under these limits:
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law and professional ethics
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What does Duty of Good Faith mean?
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must provide the best service possible and must keep the client's interest foremost
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When you provide the best service possible and keep the client's interest foremost you are practicing...
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Duty of Good Faith
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A lawyer cannot represent opposing parties unless...
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Conflict of Interest letter is signed and it would be in the best interest of both parties
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If another legal assistant makes a mistake that benefits your client, what do you do?
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Bring it to the attention of everyone.
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You must treat everyone around you with...
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COURTESY AND RESPECT
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