Real Estate Module 6

Front 1

a Caveat is _______, indicating that ______. Anyone dealing with the land must do so subject to the Caveat. One example of a Caveat that is used in the sale and purchase of land is an ________.

Back 1

a document filed at Land Titles Office as an encumbrance against a title

Someone is claiming an interest in the land

Unpaid Vendor’s Lien Caveat

Front 2

A caveat must

Back 2

State the nature of the interest claimed;State the grounds upon which the claim is made; and

Have attached to it an Affidavit of Bona Fides where the deponent swears that the Caveator has a valid claim in the land and is not filing the Caveat for a frivolous purpose.

Front 3

The most common way for purchasers to raise the funds for the purchase price is through mortgage financing. In order for the sale to proceed, the Purchasers need to _______ (which the mortgage lender will require before funding). Only after this has happened will the mortgage funds be advanced and the Vendors paid out.

Back 3

obtain title in their names and then register the mortgage against that title

Front 4

To protect the Vendors, the Vendors’ lawyer will _______ (Appendix 1) before the mortgage is registered. The Caveat will remain _______, and by the Caveat, the Vendors claim _______.

Back 4

register a Vendors’ Lien Caveat on the property

against title when title is transferred to the Purchasers

an interest in the Purchasers’ land as unpaid Vendors

Front 5

Registration of a Vendors’ Lien Caveat protects the Vendors so that if, for whatever reason, the transaction fails (e.g., the Purchasers refuse to complete or the mortgage company refuses to fund the mortgage), _______. The Vendors can then take action on the Caveat to either _______or ______.Fortunately, it is very rare for Vendors to ever have to take action on their Vendors’ Lien Caveat. Normally once the transaction concludes, the Vendors’ lawyer ______ by ______

Back 5

the unpaid Vendors’ Lien Caveat ranks in priority of time to the Purchasers' new mortgage

recover the purchase price

Or convey the property back to the vendor and have the mortgage discharged from the title

recover the purchase price

registration of a Discharge of Caveat.

Front 6

Note that the Affidavit of Bona Fides on the Caveat can be sworn by _______. Often the Vendors’ lawyer will _______. When this is the case, the Discharge of Caveat can be signed only by ______.

Back 6

either the Caveator or an agent of the Caveator. Often the Vendors’ lawyer will swear the Affidavit of Bona Fides as agent for his or her Vendor clients. When this is the case, the Discharge of Caveat can be signed only by the Caveators (the Vendors) themselves, or by the same agent.

swear the Affidavit of Bona Fides as agent for his or her Vendor clients.

the Caveators (the Vendors) themselves, or by the same agent

Front 7

The Caveat is filed by attaching it to a _____and sending it to ______requesting that the _____n.

Back 7

Document Registration Request form (DRR)

the Land Titles Office

Front 8

The Caveat is filed by attaching it to a _______and sending it to ______requesting that the _____ and ______provided as______.

Back 8

Document Registration Request form (DRR) and sending it to the Land Titles Office requesting that the Caveat be filed and a certified copy of title provided as proof of registration.

Front 9

VTB mortgage

A VTB mortgage outlines _____

Back 9

If the Vendor is willing to finance the purchase, the transaction can proceed in the same way (i.e., the 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).

the interest rate, manner of payment, prepayment privileges, and other terms in exactly the same way as a bank mortgage would do.

Front 10

Agreement of Sale, which refers to ________.

An Agreement for Sale (Appendix 1) is a ______

Back 10

the Real Estate Purchase Contract itself

a second method of financing the purchase of land where the Vendor provides the financing

Front 11

For Agreement for Sale, title remains _______. The Purchaser protects his or her position by way of a ____. The Purchaser ________ just like a VTB mortgage. When the last payment is made, ______. Agreements for Sale are not as common now as they were some years ago, but are still fairly popular in relation to _____.

Back 11

in the Vendors’ names until the full purchase price and interest is paid.

Caveat registered against the property (Appendix 2)

takes immediate possession and makes payments of principle and interest to the Vendors

the Vendors transfer title to the Purchasers.

rural transactions

Front 12

An Option to Purchase is a ______.

Back 12

contractual right to purchase land for a fixed price before a certain date

Front 13

First, the developer goes to the owner of Lot 1 and reaches an agreement to buy Lot 1 for

100,000.00 at any point over the next 90 days. In this agreement the developer is not ______. The developer pays the owner of Lot 1 $500.00 as _____and agrees to pay the balance of the purchase price of $100,000.00 within 90 days or the deal is off.

Back 13

obligated to go ahead with the deal

consideration for the option agreement

Front 14

The developer does the same thing for Lot 2. Once the developer makes the deal to purchase Lot 3, they then ______

Back 14

exercise their options on Lot 1 and 2 and purchase all three lots on the terms and conditions negotiated.

Front 15

Once the developer/Purchaser has entered into an option agreement with the owner of Lot 1, he or she will _____ to Lot 1, protecting his or her interest under the option. If the Purchaser does not exercise his or her option, he or she will _____. If the Purchaser does exercise his or her option, then once the deal closes and title is in the Purchasers’ name, the Purchaser will then _____. Once the Caveat is registered, even if the owner of Lot 1 was to sell the property, the new owner would be bound

Back 15

register a Caveat against title

discharge the Caveat

register a discharge of his or her Caveat

Front 16

A Right of First Refusal (Appendix 1) is a __________.

Back 16

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

Front 17

The holder of the Right of First Refusal must ______. In a Right of First Refusal, none of the terms of an eventual sale are __________. All that happens is that _______.

Back 17

match the exact terms of the third party’s offer within the time set out in the Right of First Refusal documentation

determined at the time the agreement granting the Right of First Refusal is entered into

someone has the right to match an offer if, as, and when received

Front 18

In an Option to Purchase, _____________.

In a Right of First Refusal, ______and in fact, the land owner may never receive an acceptable offer.

Back 18

the purchase price and all other essential terms are determined at the beginning. The only thing undetermined is whether the transaction will proceed.

none of the terms are set forth in the documentation

Front 19

Ralph Rancher talks to Farmer Florence and says, “Florence, if you are ever going to sell your land, I’d like first crack at it.” Florence agrees and Ralph and Florence enter into a ______ so that if Florence receives an offer to which she is agreeable, ________. If Ralph does not want to purchase the land on those terms, then Florence can________.

If, however, Ralph does wish to purchase the land on those terms, then _______.

Back 19

Right of First Refusal Agreement

she must give Ralph, as holder of the Right of First Refusal, such notice as is set out in the document.

can sell it to the other party. If, however, Ralph does wish to purchase the land on those terms, then the Right of First Refusal document will outline the details of how the transaction is to close.