Calgary, Alberta Sait: Real Estate 2

Front 1

What is a condominium?

Back 1

a form of ownership NOT A style of building. You share fees for common areas.

Front 2

List 7 buildings that could possibly be a condominium:

Back 2

Apartment

Single Family Residence (gated community)

Warehouse

Store in a Strip Mall

Bare Land

Townhouse

Duplex

Front 3

Who is the lender v. borrower in a mortgagee/mortgagor relationship?

Back 3

Mortgagee - Lender

Mortgagor - Borrower

Front 4

List the three characteristics of Condominium Ownership:

Back 4

1. Fee Simple Ownership of the individual unit

2. Common property owned with all other unit holders as tenants-in-common

3. Say in how the condominium is run through the payment of condo fees

Front 5

Explain what common property means in regards to condominium ownership:

Back 5

Each owner owns a proportionate amount of the common property and has the right to use and enjoy the common property together with all other owners

Front 6

Explain what Fee Simple Ownership is in regards to Condominium Ownership:

Back 6

the right to exclusive possession (a separate title exists for each unit) and the right to sell or mortgage your unit (each unit is separately assessed for property taxes)

Front 7

Explain why and what you have a say in; in regards to condominium ownership:

Back 7

Through the payment of condo fees to the Condominium Board you have the right to control, maintain, manage and insure the condominium project

Front 8

The rights and responsibilities of the Condominium Owner are governed by whom?

Back 8

1. The Condominium Property Act;

2. The Condominium Property Regulation; and

3. The bylaws of the Condominium Corporation

Front 9

Explain the Condominium Plan:
Include minimum, what it shows and how it is created.

Back 9

a condominium is created by registering a Condominium Plan prepared by a surveyor at the Land Titles Office

Among other things the Condominium plan displays
1. boundaries of the condo plan, boundaries of each individual unit;
2. the area of each unit, the common property, areas of common property;
3. where an owner is permitted to exercise exclusive possession (parking stalls, balcony, storage unit, etc.)
4. and amendments to by laws.

There must be a minimum of two units in the plan; however, there is no maximum

Front 10

What happens once a Condominium Plan has been submitted?

Back 10

The old title to the land is cancelled and a new certificate of title is issued for each unit

Front 11

Why obtain a Copy of the Plan?

Back 11

1. Confirm with client that you are dealing with the correct unit

2. Check if parking, storage or any other area belonging to the unit has a separate title

3. Check what areas are common property

4. Exactly what the by laws are (pets?)

Front 12

What happens if there is no provision in the Plan dealing with boundaries of a specified unit?

Back 12

Refer to Section 9 of Condominium Property Act

Front 13

What does Section 9 of the Condominium Property Act state?

Back 13

Boundaries are the interior finished wall, floor and ceiling. Doors and windows on interior walls are party of the unit.

Doors and windows on exterior walls are party of the common property (unless stated otherwise in by-laws)

Front 14

What does it mean when all unit owners own the common property as tenants-in-common?

Back 14

They each own a percent. There is no right to survivourship as their percent forms part of their estate

Front 15

Why is a balcony, storage area or parking stall considered common property?

Back 15

It is on the exterior walls of the building meaning an individual owner must have exclusive use of the area

Front 16

If parking stalls and storage areas are titled separately, what does that mean?

Back 16

You will be charged separately, thus making the value of your property more expensive

Front 17

What is a downside to Condominiums?

Back 17

Common ownership means you share in the maintenance, insurance, control of the use of the common area, and liability for anyone injured on common property.

Ex. Someone slips on ice on the common property, then sues. Wins case. ALL unit owners must split costs in condo fees to pay out the Plaintiff

Front 18

In terms of Condominium, what does the legal land description include?

Back 18

Condominium Plan Number

The Unit Number

The unit Factor (percentage)

Front 19

What is something important to remember in terms of unit number with a condominium?

Back 19

The unit number of the condo shows in the legal description may differ from the municipal address. (i.e. Unit 40 may be #1020)

Front 20

Unit factors must always total what?

Back 20

10, 000

Front 21

Unit factors differ due to...

Back 21

Size of unit and sometimes value (i.e., scenery, penthouse) also if there's a mixed-used commercial and residential building (spa)

Front 22

What does the unit factor represent?

Back 22

the share of the common property belonging to the condo unit - this will also determine your condo fees

Front 23

What are the three types of estates you can have in a condominium?

Back 23

Fee simple

Life Estate

Leasehold

Front 24

Why is it important to have the address of the registered owner on title?

Back 24

Documents relating to the property will be served here

Front 25

What is Section 22 of the Condominium Property Act?

Back 25

Certain encumbrances may affect the title without being registered:

creates an implied easement of every unit for the support, shelter and passage of utility lines

arrears of condo fees may also be an unregistered charge on the unit

Front 26

What is the difference between CAD and CP?

Back 26

CAD aka master file or condominium additional plan sheet displays:

1. Changes in board members, bylaws (must be registered at LTO to be effective),

2. Address for service of the Condominium Corporation;

3. Dispositions of common property;

4. Notice of termination of condominium status revisions to individual units

Front 27

What is the purpose of a Condominium Corporation?

Back 27

The corporation is responsible for the

property

bylaws

control

management; and

administration of the condominium

Front 28

Section 25 of the Alberta Condominium Property act states what?

Back 28

The same moment a Condominium Plan is registered at the LTO, a corporation is created

Front 29

What is something the Condominium Corporation shares with the Condominium plan?

Back 29

registration number

Front 30

The Condominium has the right to...

Back 30

sue and be sued in regards to the common property - owners may be jointly liable

Front 31

How does one become a member of the Condominium Corporation?

Back 31

When one becomes an owner of a unit in the condominium

Front 32

What is the difference with shares in a Condominium Corporation v. Corporation?

Back 32

You do NOT enjoy limited liability

Front 33

What does liability mean to owners?

Back 33

liable for any judgments against corporation

liable for liens against corporation whether registered on title or plan

once liability based on unit factor is paid out owner may discharge interest

Front 34

A bigger unit factor not only means higher condo fees but also

Back 34

a higher risk in liability

Front 35

Section 26 of the Condominium Property Act deals with...

Back 35

voting rights in the corporation and bylaws

Front 36

Voting rights are based on two things...

Back 36

unit factor and the payment of condo fees

Front 37

Who is able to vote when there is more than one owner in a unit?

Back 37

the bylaws address if voting rights are shared based on the proportion of ownership

Front 38

If voting on something, what must an owner be aware of?

Back 38

Mortgagee (lender) may choose to exercise voting rights in priority to owner either by proxy or personally

Front 39

If you have multiple mortgages against your property who has the right to vote and is there an exception to this rule?

Back 39

1. First mortgagee

2. Owner

3. Other mortgagees in order of priority

If there are special resolutions ONLY the mortgagee may vote

Front 40

Define special resolution

Back 40

to amend or repeal a bylaw

Front 41

What is the responsibility of the mortgagee and of the corporation?

Back 41

A mortgagee must notify the corporation of mortgage against condo unit while the corporation must have the name and address of the mortgagee so they can receive notices of any meetings

Front 42

When are voting privileges suspended?

Back 42

When unit exceeds 30 days in arrears in condominium fees

Front 43

What occurs annually in regards to condominiums?

Back 43

a general meeting of all owners must be held once a year

Front 44

What does the Board of Directors do?

Back 44

carry out powers of the Condominium Corporation

Front 45

Board of Directors are subject to...

Back 45

restrictions in the bylaws

Front 46

How does one become a Board of Director

Back 46

through election

Front 47

Who is usually responsible for day-to-day tasks of running a Condominium Corporation?

Back 47

a management company hired by the Board

Front 48

If there is a change in Board of Directors, what happens?

Back 48

It is filed on the CAD file for LTO

Front 49

Section 47(7) of the Condominium Property Act requires the corporation to provide...

Back 49

directors' insurance for the members of the Board

Front 50

What can be found in sections 36-48 of the Condominium Property Act?

Back 50

Powers and Duties of the Board

Front 51

What are some powers and duties of the board?

Back 51

to maintain the common property of the corporation

to enforce the condominium bylaws

to prepare a budget to cover ongoing expenses and to build a reserve to cover major capital expenses

to levy contribution on the owners (condo fees)

to place and maintain insurance on the units and common property and for directors' liability

on request of an owner, to provide an Estoppel Certificate as to the status of the condominium fee account and the fee payable for a unit

right to provide owners of minutes of meeting

notification of annual meetings

Front 52

What does Section 32 deal with?

Back 52

bylaws of the condominium corporation

Front 53

Bylaws of the condominium corporation provide for:

Back 53

the control, management, and administration of the units

management of the common property

management of any other property (real or personal) owned by the corporation

binding on all owners and tenants of the unit no matter the time the title became theirs

Front 54

Bylaws are automatically attached to Corporation once Plan is registered in order to repeal or amend them you must..

Back 54

file changes on both condominium Plan and the CAD file at Land Titles Office

Front 55

What are some possible restrictions the condo board may place on units?

Back 55

prohibiting smoking

prohibiting pets

quiet times

prohibiting revenue (renting)

prohibiting home business

condo fees to be based on things other than unit fact (mixed-use, value)

Front 56

How do you enforce bylaws?

Back 56

through provincial court civil division right to fine for contravening a bylaw Court of QB will intervene if relief is not in jurisdiction of PC

Front 57

List six rights of Condominium OWNERS (9):

Back 57

right to exclusive use

right to undivided interest

right to vote at any general meeting

right to be nominated and elected

right to be provided with financial and other information

right to apply to the Court to terminate the condominium status of a building

right to apply to Court to settle a scheme for use of insurance funds received because of damage to building

right to apply to Court for appointment of administrator to exercise the powers and duties of Board of Directors

Front 58

Explain the right of exclusive use as a condominium owner.

Back 58

You have the right to exclusive use and ownership of the unit subject to the restrictions set out in the Act or the bylaws of the corporation and over certain portions of the common property such as parking stall, balcony, storage unit, etc. according to plan or lease with condominium corporation

Front 59

Explain the right of voting as a condominium owner

Back 59

allowed to vote in any general meeting subject to the rights of the first mortgagee

Front 60

Explain the rights in "common property" as a condominium owner

Back 60

right to an undivided interest in the common property and assets of the corporation as a tenant in common with the other unit owners in proportion to their unit factor

Front 61

List the six obligations of Condominium OWNER

Back 61

bylaws

access

condominium fees

liability

exclusive use area

rental

Front 62

Explain what the obligation of bylaws means as a condominium owner:

Back 62

you must adhere to bylaws of the corporation

Front 63

Explain what the obligation of condominium fees means as a condominium owner:

Back 63

you must pay fees in order to run condo

Front 64

Explain what the obligation of access means as a condominium owner:

Back 64

must allow access to unit for emergencies and general maintenance of common property

Front 65

Explain what the obligation of exclusive use area means to a condominium owner:

Back 65

if required by corporation, must care and maintain exclusive use areas leased

Front 66

Explain what the obligation of liability means to a condominium owner:

Back 66

must pay proportionate share of any judgement or lien against corporation

Front 67

Explain what the obligation of rental means to a condominium owner:

Back 67

must give corporation notice of intention to rent, name of the tenant, and notice if not renting

Front 68

The developer is under this duty with respect to entering, performing, or enforcing a purchase agreement. What does it mean?

Back 68

"fair dealing" meaning full disclosure

Front 69

The Purchaser must be provided with copies of these four things before they sign the purchase agreement

Back 69

bylaws

management agreement

condominium plan

details of any mortgage on the property

Front 70

What must a Purchaser be provided with if units or common property are still being developed?

Back 70

complete description with drawings or photographs of projects

reasonable estimate of monthly

condominium fee, unit factor and basis of which it is determined (size, value, mixed-use)

Front 71

A Purchaser has the Ability to Rescind an agreement if....

Back 71

within 10 days of signing if he or she has not received all the documents the Condominium Property Act requires be provided

Front 72

How is a Purchaser made aware of their Ability to Rescind?

Back 72

There must be a notice displayed on the front page of the agreement in BOLD UPPERCASE stating so

Front 73

List 10 reasons why a lawyer should look over a Condominium Purchase Agreement:

Back 73

1. What will the developer do with your deposit?

2. Is there a title to parking stalls?

3. Provisions to add conditions

4. Entitlement to GST Rebate

5. What are exclusive use areas and common use areas?

6. Payment of condo fees until all units sold

7. Return of all deposits (mitigate if you lost $$)

8. Use developer can make with purchase price

9. What payments are required before title is issued?

10. What are the adjustments to purchase price?

Front 74

What happens to a Real Estate Contract when a condominium purchase is involved?

Back 74

A special schedule is involved.

Front 75

What documents must the Seller to a Purchaser in a condominium transaction? (8)

Back 75

Must provide copies of:
Condominium Plan
Bylaws
Current financial statement and budget
Insurance certificate
Any lease or exclusive use agreement regarding the common property
Details of Storage
Management and recreational agreement
Estoppel Certificate

Front 76

What form is a Seller required to produce on closing day?

Back 76

Estoppel Certificate

Front 77

What is an Estoppel Certificate?

Back 77

document prepared on behalf of the Condominium Corporation (usually by its management company) which confirms the status of the condominium fee account and provides the information set out in section 44

Front 78

To ensure condo fees are paid when should you get your Estoppel Certificate

Back 78

No earlier than first month prior to closing; however, it is good practice to obtain it ON closing day to ensure nothing has changed.

Front 79

What are warranties?

Back 79

limited value - not unconditional but instead are limited to only those problems that are in the Seller's knowledge

Front 80

Section 44 states that an Estoppel Certificate should have these 6 things:

Back 80

1. Monthly condo fees and arrears

2. Any actions or judgments against the Condo Corp.

3. Copies of financial statements, budget, bylaws, lease agreement, and exclusive use agreements

4. Copies of any management or recreation

5. Statement of capital reserve fund

6. Statement of any structural deficiences

Front 81

What is the purpose of the Estoppel Certificate?

Back 81

to stop the Condominium Corporation from claiming a different position than that set out in the certificate, to the detriment of the person ordering the certificate

Front 82

What do mortgage companies require in a lawyer's final report before a new mortgage is obtained in terms of condominium resale?

Back 82

Estoppel Certificate

Front 83

List 6 things bylaws may restrict:

Back 83

age

parking

rental

overnight guests

home occupations

pet ownership

Front 84

In terms of insurance, what does the Condominium Property Act require?

Back 84

condominium corporations must carry "replacement cost" fire insurance as well as liability insurance

**each owner may be responsible for any incidents that occur due to tenants-in-common relationship

Front 85

What is the reserve fund?

Back 85

a provision made in the bylaws to ensure that sufficient monies are set aside for repair or replacement of major cost items, such as repainting or installing new shingles

Front 86

To calculate the seller's portion of the fees, set up an equation:

Back 86

Monthly Condo Fees / number of days in a month * number of days from the first of the month (up to and including adjustment date)

Front 87

To calculate the buyer's portion of the fees, set up an equation:

Back 87

Monthly Condo Fees / number of days in month * number of days from adjustment date to end of the month

Front 88

Define personal property

Back 88

chattels

Front 89

List and explain two types of personal property

Back 89

Tangible - things you can touch and move

Intangible - things you cannot touch such as, intellectual property, bonds, security, rights, etc.

Front 90

Define real property

Back 90

fixtures - come with the land (cannot be moved)

Front 91

What's a Personal Property Security Agreement?

Back 91

type of contract where personal property is given as security for an obligation meaning a lender can take "security" over a chattel for payment of a loan

Front 92

What is "security"?

Back 92

created when the borrower signs a contract with a lender and, in consideration of the loan, the borrower grants security over property that he or she owns or is purchasing

Front 93

Security gives the lender priority in three circumstances, list them:

Back 93

the property is sold

the borrower goes bankrupt

the borrower defaults on the loan agreement

Front 94

Security gives the lender the right:

Back 94

to seize the property that is secured and sell it

Front 95

The minimum requirements for security agreement are:

Back 95

collateral being taken on as security

must be described and

must be signed by the Debtor

Front 96

Collateral can be described as either of two terms, list and explain them

Back 96

General OR Specific

Specific - grants security on a specific item or items

General - grants security over all of the Debtor's present and after - acquired property (exceptions can apply)

Front 97

List some examples of Specific Security Agreements:

Back 97

Chattel mortgage

Conditional sales agreement

assignment of book debts

Fixed-Charge debenture

Front 98

A car mortgage would be what type of security agreement:

Back 98

A specific security agreement > chattel mortgage

Front 99

What is a chattel mortgage and why?

Back 99

Car mortgage because it moves

Front 100

Give an example of a conditional sales agreement

Back 100

Lender keeps the title to land until mortgage is paid out

Front 101

A company's future income can be held as specific security. This would be an example of what?

Back 101

Assignment of book debts

Front 102

Define fixed charge debenture

Back 102

the company has to sign over specific assets to act as security over the loan.

They can't sell anything that has been signed over because if the company defaults the assets can be sold by the debenture holders

Front 103

Define float charge debenture

Back 103

charge is over all of the company's assets meaning they can sell things as long as they are replaced by other assets

If the company defaults the debenture holders apply to the courts to make the floating charge become a fixed charge over specific assets which can be nominated by the company, then the assets can be liquidated

Front 104

Give an example of general security example?

Back 104

Floating Charge Debentures

Front 105

How do you protect your interest as a Lender?

Back 105

Register a financing statement at Personal Property Registry

Front 106

What is the goal of registering a security interest?

Back 106

to ensure that you have priority over subsequent claims against the security by a third party

Front 107

How may a third party become involved in a security interest?

Back 107

if the property being secured is sold or the borrower obtains a subsequent loan

Front 108

Registering the financing statement at Personal Property Registry or obtaining possession of item(s) means you have:

Back 108

PERFECTED your security which means you have priority over subsequent claims against security by a third party

Front 109

What does PERFECTED mean?
EXAM QUESTION

Back 109

you have registered a financing statement at PPR or obtained possession of security interest in order to have priority over subsequent claims against the security by third parties

Front 110

What is the legislation dealing with personal property in Alberta?

Back 110

Personal Property Security Act

Front 111

Who regulates the PPR?

Back 111

The PPSA

Front 112

What is the PPR?

Back 112

Personal Property Registry

Computerized registry providing one system for registering provincial security interests

Front 113

In order to determine priority to security of personal property you must:

Back 113

Look at the registration date at PPR

the date of loan or contract to make something a security is uselss

Front 114

How do you know if someone has registered security against an item?

Back 114

PERPIS - Personal Property Information System

Front 115

PERPIS search can be conducted using

Back 115

Debtor name or serial number

Front 116

What is a financing statement?

Back 116

a form that is completed on behalf of a lender who has entered into a personal property agreement with a borrower form can be completed and then provided

to a registry agent, who registers it in the PPR

Front 117

What makes a financing statement invalid?

EXAM QUESTION

Back 117

And error in completing a financing statement that is seriously misleading

i.e., debtor name, no serial number

Front 118

What must be included in a financing statement?

Back 118

Type of registration;

Debtor name;

Secured party information; and

Collateral (information about the property to which the security interest applies).

Front 119

On a financing statement what must you keep in mind when filling out collateral?

Back 119

MUST include serial number in order to be valid.

Front 120

List the four serial number goods as defined by PPSA and exceptions:

Back 120

Motor Vehicles

Trailers

Mobile Homes

Aircraft

either consumer goods or equipment

Exceptions: Inventory

Front 121

What is the difference between consumer goods and equipment?

Back 121

items that are used by the individuals and not for business purposes are Consumer Goods

Equipment is personal property of a BUSINESS that is not held for resale or lease and is not raw materials or other materials being used by the business

Front 122

T/F Inventory is Serial Number Goods

Back 122

False

Front 123

What must you remember when registering security against inventory?

Back 123

It will not include serial number goods

i.e. dealership with cars - you ain't getting the cars

Front 124

A general description of collateral is used when...

Back 124

goods are not serial number

Front 125

When registering a serial number good what are three things to keep in mind?
EXAM QUESTION

Back 125

-do not add any marks, hyphens, symbols, or words that are not in serial number

-entire serial number must be entered

-MUST include make and model of item

Front 126

What form do you use if you wish to change, correct, renew, or discharge a financing statement?

Back 126

FINANCING CHANGE STATEMENT ON PERPIS

Front 127

Once your financing statement has been registered you will receive a verification statement, is this important?

Back 127

No, as you can make several mistakes thus making statement invalid and it will not matter if you have a verification statement or not

BUT

Yes, as you can use this statement to verify you have correct information - if not make amends ASAP

Front 128

Would you use a financing change statement if you received a rejection notice?

Back 128

No, because the initial finance statement is not registered.

Front 129

Define mortgage.

Back 129

charge upon the land given as security for a loan, which includes a promise to repay the loan and a charge upon the law

Loan in which home is security

Front 130

Define principal.

Back 130

the amount the mortgagee is lending at the beginning of the term of the mortgage or the amount owning on the mortgage from time to time

how much is left owing

Front 131

Define amortzation

Back 131

length of time required to payout the mortgage at the given interest rate and payment schedule

Front 132

Define term

Back 132

length of time of the mortgage before it must be renewed or paid out

Front 133

What is the difference between amortization period and term?

Back 133

Amortization is paying out mortgage

Term is interest rate

Front 134

Define maturity date

Back 134

date when the mortgage must be paid out or renewed - the end of the term not the amortization period!

Front 135

Define open mortgage

Back 135

mortgage which can be paid out at any time by the mortgagor without notice or penalty

Front 136

Define closed mortgage

Back 136

mortgage which cannot be paid out until the maturity date, or where the Mortgagee charges a penalty if paid out before maturity

(interest/term)

Front 137

Define CMHC Mortgage

Back 137

high ratio mortgage , greater than 80% of the appraised value of the property, insured by CMHC

Canada Managing Housing Corp.
20% must be the down payment

Front 138

Define conventional mortgage

Back 138

mortgage for less than 80% of the appraised value of the property and which does NOT require mortgage insurance

Front 139

Define blanket mortgage

Back 139

mortgage on a number of properties usually part of a development

Front 140

Define interest adjustment date

Back 140

the date from which the mortgagee starts to charge interest on the funds advanced

Front 141

Define net mortgage proceeds

Back 141

the amount of money a lawyer receives and which is available to his or her client after the Mortgagee's deduction

legal fees must be paid out first! :)

Front 142

Define security

Back 142

all documentation and registrations required by the Mortgagee(bank) to protect the loan

Front 143

Law firm's involvement in preparing and registering a mortgage usually begin with instructions from the Mortgagee. The instructions should outline the details of the...

Back 143

loan

security documents to be prepared

what will be required by the mortgagor in order to advance the funds

Front 144

What is a trust account?

Back 144

Money that does not belong to the firm

Front 145

What searches must a legal assistant complete?

Back 145

(Spin II) LTO Encumbrance Search

(CITYOnline) Tax Search

Corporate Search CORES

Front 146

After searches, what happens?

Back 146

Buyer will attend office of lawyer to sign mortgage documents. Once they are execute, the mortgage will be forwarded with transfer documentation from Vendor's solicitor to the LTO for registration against title

Front 147

What happens after registration?

Back 147

Buyer's lawyer will forward to the Mortgagee the Interim Report and Requisition for Funds - this includes the Mortgagee's form of Report on Title

Front 148

Once title has been cleared by the Vendor's lawyer (all their mortgages and encumbrances are discharged) the Buyer's lawyer will send...

Back 148

a final report to the Mortgagee

under trust conditions*

Front 149

List the 10 documents usually required in a mortgage transaction:

Back 149

1. Mortgage

2. Mortgage Commitment or Approval of Mortgage

3. Statement of Disclosure

4. Insurance Binder Letter

5. Real Property Report

6. Conflict of Interest Letter

7. Acknowledgement of Receipt

8.Waiver of Time Disclosure Statement to be delivered

9. Direction to Pay

10. CMHC Acknowledgement Letters

Front 150

Explain the Mortgage Document

Back 150

Mortgagee's instructions to the lawyer will be accompanied by Mortgagee's commitment letter to the Mortgagors (binding lender)

Instructions will provide details of the principal interest rate, interest adjustment date, term, etc

Front 151

Define Mortgage Commitment or Approval or Mortgage

Back 151

outlines the term upon which the Mortgagee is prepared to advance the funds of the Mortgagors

Front 152

Define Statement of Disclosure and what it will include

Back 152

statement outlining what it is costing the Mortgagors to borrow the money

it will detail:

-total amount of payments being made over the term of the mortgage

-how much of these payments go to pay interest

-how much of the payments go to pay principal

-what the principal balance will be at maturity

Front 153

Define the Insurance Binder Letter

Back 153

all mortgagees require that mortgagors place insurance on property

will require lawyer to arrange for and receive a binder letter from insurance company indicating that sufficient insurance is placed on the property AND that the first loss is payable to Mortgagee

Front 154

Define Real Property Report

Back 154

required by the mortgagee in case there are problems if they become the owner due to foreclosure

report will include encroachments, relaxations required and a Certificate of Compliance

Front 155

No Certificate of Compliance means...

Back 155

Relaxation Orders and Encroachment Agreements are necessary

Front 156

What is Title Insurance?

Back 156

common with jurisdictions that do not have Torrens System of Land Titles - some mortgagees will not accept this

you may purchase insurance against defects in title and against problems with the location of improvements

Front 157

What is Conflict Of Interest Letter?

Back 157

lawyer acts for both buyer and mortgagee will mean they must obtain consent of both parties to act for both of them

Front 158

What does Conflict of Interest letter disclose?

Back 158

in any even of a dispute between parties the lawyer will refuse to act for or against the other party

there is also no solicitor-client confidentiality

Front 159

What is an Acknowledgement of Receipt?

EXAM QUESTION

Back 159

Mortgagee's lawyers will have the Mortgagors acknowledgement receipt to prove the received both the mortgage itself and the statement of disclosure

Confirming you are aware of price

Front 160

What is a Waiver of Time Disclosure Statement to be Delivered?

Back 160

Statement of Disclosure must be signed in the Bank and that the mortgage be signed in the lawyer's office two days later.

Front 161

What happens if you sign the Statement of Disclosure and mortgage on the same day?

Back 161

You must also sign a document waiving that two-day period.

Front 162

What is Direction to Pay

Back 162

also known as Irrevocable Order for Payment - document in which mortgagors instruct the mortgagee to forward the funds to their lawyer's office to be placed in the trust account

Front 163

How does Direction to Pay work?

Back 163

Mortgagors instruct their lawyer to use those funds for the completion of the purchase

no cheque is directly deposited to mortgagors

Front 164

Define CMHC Acknowledgement Letters

Back 164

insurance due to high-risk

they cannot sue you ONLY take the land

original mortgagor is still responsible for loan

Front 165

Why should you get a mortgage broker or agent?

Back 165

-lots of products and options

-professionally trained and usually licensed

-bring together borrower and lender

-rates

Front 166

Mortgage broker can access these possible lenders:

Back 166

trust companies

chartered banks

credit unions

private lenders

Front 167

mortgage brokers have the ability to...

Back 167

assess the possible lenders and find the best rate and product to fit the consumer's needs

Front 168

Mortgage Broker represents...

Back 168

the consumer/borrower

Front 169

When must you pay for a mortgage broker?

Back 169

when you as the consumer only qualify for financing through a private lender

percentage

Front 170

When do you need bridge financing?

Back 170

When you buy a property that does not match the closing date of the sale of your currently owned property

Front 171

This gap between closing dates will create a _____ of funds for the buyer.

Back 171

shortfall

Front 172

Bridge financing involves...

Back 172

the Lender temporarily paying ALL the funds of the mortgage on closing day of the purchase

Front 173

Lenders will not advance more than ___ percent of the value of the property being sold

Back 173

90%

Front 174

What is the formula for cost of financing to the buyer?

Back 174

Bridge loan = bridge amount required x interest = ? / 365 * # of gap days = your answer

Front 175

What is commercial property?

Back 175

property intended to be used for-profit businesses that are often bought and sold by companies

Front 176

List some examples of commercial property

Back 176

shopping malls

office centres

service stations

restaraunts

Front 177

How is commercial property owned?

Back 177

leased or fee simple

Front 178

Is commercial property industrial property? Why or Why not?

Back 178

No. Industrial property are powerhouses and factories (must be outside the city due to noise and smell emitting from them) Commercial property are office buildings that are inside the city

Front 179

List for key differences when purchasing or selling commercial property:

Back 179

-more complex transaction than residential

-increased diligence due to large considerations

-expensive chattels with contracts are also transferred

-more time consuming than residential

Front 180

Residential transactions often include chattels such as a stove and/or fridge. What do commercial property chattels look like?

Back 180

-inventory (bar stools, office chairs, cutlery)

commercial property maintenance - lawnmower

-contracts - cleaning staff

Front 181

What are some unique searches involved in commercial transactions?

Back 181

Corporate Registry

Worker's Compensation

Court Searches

Municipal Authority

Environmental Audit

Boiler Safety

Occupational Health and Safety

Front 182

List 7 additional security documents sometimes required for commercial transactions:

Back 182

-General Security Agreement

-Assignment of Rentals

-Guarantee

-Mortgage Collateral to Promissory Note

-Postponement of Shareholder's Loans

-Corporate Resolutions

-Certificate of Independent Legal Advice

Front 183

What is a General Security Agreement?

Back 183

protects the bank (interest in personal property and all your may acquire in the future)

you may need to sign and register this agreement at the PPR

Front 184

What document is used to register a security agreement?

Back 184

Financing Statement

Front 185

What is Assignment of Rentals?

Back 185

If there is a tenant in the property that is mortgaged, the Lender will most likely require this document signed by the borrowers

Front 186

The Assignment of Rentals is registered as a...

Back 186

CAVEAT on title

Front 187

In the event the Borrowers can't pay their mortgage the Lender has a right to have the tenant...

Back 187

direct their rental payments to the Lender.

Front 188

If the property is owned by a corporation the mortgage must be signed by a registered owner - the corporation. What is a Guarantee?

Back 188

Lender requires a personal guarantee of one or more of the directors or shareholders of the corporation

Front 189

The Guarantee makes the person(s) personally responsible for the mortgage which means...

Back 189

if the loan defaults Lender can require payments from Guarentee

Front 190

A personal guarantee will not be valid and effective until...

EXAM QUESTION

Back 190

it has a Certificate of Notary Public attached.

Front 191

What is a Mortgage Collateral to Promissory Note?

Back 191

Note is another form of security for items such as Line of Credit.

If payments default for the line of credit (operating expenses for company) a mortgage on another paid out building can be collateral

Front 192

What is Postponement of Shareholder's Loans?

*Dragon's Den

Back 192

If the Borrower is a corporation and a shareholder loans money the Lender may require postponement of payments to shareholder until mortgage is paid out

Front 193

What is Corporate Resolutions?

Name the documents.

Back 193

If the borrower is a corporation it binds all directors and owners to borrow the money and sign the documents required.

Lawyer will prepare a Resolution of Directors and sometimes a Resolution of Shareholders

Front 194

What is Certificates of Independent Legal Advice?

Back 194

If Lender is not comfortable with lawyer acting for both them and commercial they will hire their own lawyers.

Shareholders who are not key players will be required to attend independent lawyers to be aware of what's going on.

Front 195

What will the Independent lawyer tell the shareholders?

Back 195

their rights and obligations and what a personal guarantee means

Front 196

A Certificate of Independent Legal Advice must be attached to...

Back 196

the Personal Guarantee