REAL ESTATE LAW - txti



REAL ESTATE law

CONTENTS

INTRODUCTION

[§1.01] INTRODUCTION 1

[§1.02] Land Title Act 1

[§1.03] Strata Property Act 2

[§1.04] Property Law Act 3

[§1.05] Family Relations Act 3

[§1.06] Fraudulent Conveyance Act and Fraudulent Preference Act 4

[§1.07] Aboriginal Title 4

[§1.08] Further Reading 5

1. Practice Manuals 5

2. CLE Course Publications 6

3. Texts and Reports 6

4. Law Reports 6

Purchase Agreements

[§2.01] INTRODUCTION 7

[§2.02] Is the Document a Binding Agreement? 8

1. Minimum Requirements: Law and Equity Act, s. 59 8

2. Amendments 8

3. Subject Removal 8

[§2.03] The Main Elements of the Purchase and Sale Agreement 10

1. Description of Parties 10

2. Description of Property 11

3. Price 11

4. Deposit 11

5. Completion Date 12

6. Possession Date 12

7. Adjustment Date 13

8. The Fine Print 13

9. Information on the Back of the Form 15

10. Real Estate Commission 15

11. Completion 16

12. Agency Disclosure 18

[§2.04] Property Condition Disclosure Statement 18

appendices

APPENDIX 1 – CONTRACT OF PURCHASE AND SALE 19

Appendix 2 – Deleted

Appendix 3 – Deleted

Appendix 4 – Property Condition Disclosure Statement 22

Client Instructions

[§3.01] RECEIVING INSTRUCTIONS FROM THE BUYER 28

[§3.02] Conflict of Interest 29

appendices

APPENDIX 5 – SAMPLE CONFLICT LETTER (BUYER) 30

Appendix 6 – Sample Conflict Letter (Lender) 31

Appendix 7 – Deleted

Searches

[§4.01] SEARCHING A TITLE AT THE VANCOUVER/NEW WESTMINSTER LAND TITLE OFFICE 32

1. Obtaining the Legal Description 32

2. Searching the Title 32

3. Obtaining Particulars of Charges (If Requested) 32

4. Obtaining Plans 33

5. Land Title Office Search Checklist 33

[§4.02] Index Searches 34

[§4.03] Strata Title Searches 34

[§4.04] Real Property Taxes 35

[§4.05] Corporate Searches 35

[§4.06] Encumbrances 35

1. Easements 35

2. Statutory Rights of Way 35

3. Certificate of Pending Litigation 36

4. Caveat 36

[§4.07] Investigating Title 36

1. Land Title Act 36

2. Aboriginal Title 37

3. Aeronautics Act 37

4. Agricultural Land Reserve Act 38

5. Bankruptcy and Insolvency Act 38

6. Builders Lien Act 38

7. Consumer Protection Act 38

8. Corporation Capital Tax Act 38

9. Employment Standards Act 39

10. Family Relations Act 39

11. Fish Protection Act 39

12. Forest Act 39

13. Heritage Conservation Act 40

14. Highway Act 40

15. Home Conversion and Leasehold Loan Act 41

16. Homeowner Protection Act 41

17. Home Purchase Assistance Act 41

18. Homeowner Interest Assistance Act 41

19. Islands Trust Act 41

20. Land Act 42

21. Land (Spouse Protection) Act 42

22. Land Tax Deferment Act 42

23. Land Transfer Form Act 42

24. Manufactured Home Act 42

25. Local Government Act 42

26. Patients Property Act 43

27. Personal Property Security Act 43

28. Power of Attorney Act 43

29. Property Law Act 43

30. Securities Act 44

31. Trespass Act 44

32. Waste Management Act 44

33. Water Act 45

34. Workers Compensation Act 45

[§4.08] Contaminated Sites Registry 45

[§4.09] Land Transactions on First Nations’ Lands 46

Appendices

APPENDIX 8  – SKETCH PLAN 48

Appendix 9  – Computer Search 49

Appendix 10 – Easement 51

Appendix 11 – Statutory Right of Way 52

Appendix 12 – Restrictive Covenants 54

Appendix 13 – Deleted

Appendix 14 – Deleted

Steps and Documents in a Conveyance

[§5.01] INTRODUCTION 55

[§5.02] Steps in a Residential Conveyance 55

1. Initial Contact 55

2. Client Interview 55

3. Search Title 56

4. Follow-Up from Interview and Title Search 56

5. Prepare Documents 57

6. Matters Before Closing 58

7. Registration 58

8. Closing Procedures 58

9. Post – Closing Procedures 59

[§5.03] Form A Freehold Transfer 59

[§5.04] Property Transfer Tax Return 60

[§5.05] Other Documents 60

[§5.06] Survey Certificate 60

[§5.07] Land Title Fees 61

[§5.08] Goods and Services Tax 61

1. What is Taxable 61

2. Representations and Warranties 62

3. Who Collects the Tax 62

4. GST Certificates 63

5. Rebates 63

[§5.09] In/Out Analysis 64

[§5.10] Holdbacks for Non-Resident Sellers 64

[§5.11] Effect of Proceeds of Crime Legislation 65

1. Legislation Provisions 65

2. Impact on the Land Title System 65

3. Inability to Honour Undertakings 66

4. Impact of Proceeds of Crime Legislation 66

[§5.12] Environmental Liability 66

[§5.13] Loss Prevention Summary 66

1. Client Instructions 67

2. Implementation 67

3. Completion 68

4. Specific Deficiencies 68

Statements of Adjustments

[§5.14] INTRODUCTION 69

[§5.15] Purpose of Statements of Adjustments 69

[§5.16] The Number of Statements 70

[§5.17] Methodology 70

1. General 70

2. Calculation 70

3. Payout Statements 70

4. Specific Adjustments 71

[§5.18] Notes to Statements of Adjustments 75

Interim Report Letters

[§5.19] INITIAL/INTERIM REPORT TO CLIENT 76

1. Receiving Instructions 77

2. Title Opinion 77

3. Parameters of Instructions 77

4. Conflicts 78

5. Fees 78

6. Conclusion 78

[§5.20] Interim Report Letter Checklist 78

[§5.21] Insurance 79

[§5.22] Types of Insurance Coverage Related to Real Property 80

[§5.23] Extent of Indemnity 80

[§5.24] Co-Insurance Clauses 81

[§5.25] Severability of Interest and Cross-Liability Clauses 81

[§5.26] Non-Occupancy and Vacancy Clauses 81

[§5.27] Insuring Strata Property 81

[§5.28] Insurance and the Lender 81

[§5.29] Insuring Strata Lots – Acting for the Lender 82

[§5.30] Undertakings 83

1. Introduction 83

2. What is an Undertaking? 83

3. Deemed Undertakings 85

4. Basic Practical Rules for Undertakings 85

5. Undertakings in Real Estate Transactions 86

appendices

APPENDIX 15  – DELETED

Appendix 16  – Deleted

Appendix 17  – Deleted

Appendix 18  – Sample Survey Certificate 87

Appendix 19  – Deleted

Appendix 20  – Deleted

Appendix 21  – Deleted

Appendix 22  – Deleted

Appendix 23A – Deleted

Appendix 23B – Deleted

Appendix 23C – Deleted

Appendix 24  – Deleted

Appendix 25  – Deleted

Appendix 26  – Deleted

Appendix 27A – Property Transfer Tax Return – General 88

Appendix 27B – Deleted

Appendix 28  – Property Transfer Tax Return – Instruction Guide 90

Appendix 28A – Deleted

Appendix 28B – Deleted

Appendix 29  – Computerized Certificate of Title 94

Appendix 30 – Buyer's Sample Statement of Adjustments 95

– Seller's Sample Statement of Adjustments 97

Appendix 31 – Buyer's Statement of Adjustments 100

– Seller's Statement of Adjustments 102

Appendix 32A – 1986 Canadian Bar Real Property Section Resolutions 104

Appendix 32B – Adjusting the Home Owner Grant 104

Appendix 33 – Sample Initial Reporting Letter to Buyer 105

Appendix 34 – Sample Interim Reporting Letter to Buyer 110

Appendix 35 – Sample Final Report and Opinion Letter 110

Appendix 36 – Deleted

Appendix 37 – Deleted

Remedies

[§6.01] INTRODUCTION 111

[§6.02] The Solicitor as Witness 111

[§6.03] Relevant Legal Principles 112

1. The Enforceability of the Purchase Agreement 112

2. The Essentiality of Time 112

3. Conditions Precedent (Subject Clauses) 113

4. Anticipatory Breach 114

[§6.04] Remedies of Seller and Buyer 114

1. The First Election: Affirm or Disaffirm 114

2. Seller's Remedies 115

3. Buyer's Remedies 116

4. Damages 117

[§6.05] Tender as an Evidentiary Tool 118

appendices

APPENDIX 38 – SAMPLE LETTER TO BUYER – FAILURE TO CLOSE 118

Appendix 39 – Sample Letters to Buyer – Anticipatory Breach 118

Appendix 40 – Sample Endorsement on Writ Used by Seller 119

Appendix 41 – Sample Statement of Claim Used by Seller 119

Appendix 42 – Sample Letters to Seller 120

Appendix 43 – Sample Endorsement on Writ Used by Buyer 120

Appendix 44 – Sample Statement of Claim Used by Buyer 121

Appendix 45 – Sample Statement of Claim – Recovery of Deposit 121

Appendix 46 – Sample Tender Letter by Sellers' Solicitors 122

Appendix 47 – Sample Tender Letter by Buyers' Solicitors 123

Mortgages and Agreements for Sale

[§7.01] INTRODUCTION 125

1. Contractual Aspect of a Mortgage 125

2. Conveyance and Security Aspect of a Mortgage 125

3. Mortgages Under the Land Title Act 126

[§7.02] Conflicts 126

[§7.03] Capacity of Borrowers 126

1. Infants Act 126

2. Powers of Trustees or Personal Representatives 126

3. Patients Property Act 127

4. Power of Attorney Act 127

5. Adult Guardian Legislation 127

6. Other Considerations 128

[§7.04] Capacity of Corporate Borrowers 128

1. Generally 128

2. British Columbia Companies 128

3. Companies Extraprovincially Registered in British Columbia 128

4. Canada Business Corporations Act 128

[§7.05] Corporate Procedures 129

[§7.06] Restrictions on Lenders 129

1. 75% Loan to Value Ratio 129

2. Loans to Prohibited Individuals 129

3. Effect of Non-Compliance on Security – Doctrine of Illegality 129

[§7.07] Checklists 130

[§7.08] Instructions/Commitment Letter 130

[§7.09] Searches 130

1. Land Title Office 130

2. Company Searches 131

3. Zoning and Bylaw Compliance 131

4. Environmental Enquiries 131

[§7.10] Report to Client 131

[§7.11] Survey 131

[§7.12] Insurance 131

1. Standard Mortgage Clause 131

2. Co-Insurance 132

3. Replacement Cost Endorsement 132

[§7.13] Registration and Advances 133

[§7.14] Clearing Title 133

[§7.15] Final Steps 134

[§7.16] Problems, Pitfalls, New Developments, and Disclosure Requirements 134

1. Interest Act, s. 6 134

2. Interest Act, s. 8 134

3. Interest Act, s. 10 135

4. Assumption and Novation 135

5. Criminal Code 136

6. Mortgage Brokers Act 137

7. Bank Act 137

8. Property Law Act 137

9. Consumer Protection Act 137

10. Priority of Statutory Liens 138

[§7.17] Modifications of Mortgages 138

[§7.18] Builders Liens 138

[§7.19] Acting for a Second Mortgage Lender 139

[§7.20] Mortgage of a Strata Lot 139

1. Land Title Search 139

2. Review Prospectus 140

3. Strata Property Certificates 140

4. Copy of Management Agreement 140

5. Insurance Certificate 140

6. Survey Certificate Not Required 140

[§7.21] Mortgage of a Lease 140

[§7.22] Mortgage of a Mortgage 141

[§7.23] Equitable Mortgages 141

[§7.24] Special Considerations Relating to Agreements for Sale 142

[§7.25] Mortgages of Agreements for Sale 142

1. Buyer's Interest 142

2. Mortgage of Seller's Interest 142

[§7.26] Mortgage Remedies 143

1. Action on the Personal Covenant 143

2. Action for Foreclosure 143

3. Judicial Sale 143

4. Contractual Power of Sale 143

5. Possession 143

6. Distress 144

[§7.27] Title Insurance 144

[§7.28] Residential Mortgage Instructions, Obligations on Solicitors and Opinions 144

1. Introduction 144

2. Instructions and Opinions Generally 144

3. Survey 148

4. Zoning and Use 150

5. Marketability 151

6. Miscellaneous 151

[§7.29] Opinions, or How Far Out on a Limb Can You Go? 152

1. The Law Society's Views 152

2. Validity, Effectiveness, Priority 153

3. Legal Opinions from Borrowers 154

4. Miscellaneous 154

5. Personal Property Security Act 155

6. References 155

[§7.30] Commercial Opinion Letters 155

1. Introduction 155

2. Standards of Care 156

3. Opinion Letters from Borrower's Lawyers 157

4. Aspects of the Opinion 158

5. Sample Opinion Letter from Lender's Lawyer to the Lender 162

6. Opinions in Particular Transactions 164

7. Lender's Standard Form Reports 168

[§7.31] Solicitors' Legal Opinions 169

appendices

APPENDIX 48 – DELETED

Appendix 49 – Deleted

Appendix 50 – Deleted

Appendix 51 – Deleted

Appendix 52 – Deleted

Appendix 53 – Deleted

Appendix 54 – Deleted

Appendix 55 – Deleted

Appendix 56 – Deleted

Appendix 57 – Deleted

Appendix 58 – Deleted

Appendix 59 – Sample Letter Requesting Comfort Letter 172

Appendix 60 – Sample Comfort Letter 173

tax aspects of real estate transactions

[§8.01] INTRODUCTION 174

[§8.02] Principal Residence 174

1. Principal Residence Exemption 174

2. Partial Exemptions 174

3. Change in Use of Property 175

4. Transfers Between Spouses or Common-law Partners 175

[§8.03] Non-Resident Seller 176

[§8.04] Disposition of Real Estate 176

1. Capital Gain or Income 176

2. Allocation of Proceeds of Disposition 177

3. Deferred Payment 178

4. Rollovers 178

5. Capital Gains Exemption 179

[§8.05] Holding Real Estate 179

1. Bare Trust Corporation 179

2. Carrying Costs 179

[§8.06] Foreclosure and Forced Sale 180

1. Foreclosure 180

2. Forgiveness of Debt 180

[§8.07] Leasing 180

1. Introduction 180

2. Capital Cost Allowance Restrictions 180

3. Tenant Inducements 180

4. Lease Cancellation 181

5. Sale-Leaseback 181

6. Lease-Option 182

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