Assignment 2 Flashcards
1
Q
- Mike, Dave, John and Kevin are joint tenants of a very large condominium that they all occupy. Kevin suddenly dies in an unfortunate accident. In his will, Kevin leaves his interest in the property to his sisters, Sarah and Jennifer. Upon learning of Sarah’s and Jennifer’s intention to move into the condominium, Dave sells his interest in the condo to Fred, without the knowledge or consent of anyone else. When John and Mike learn of these events they decide not to let Fred, Sarah or Jennifer onto the property, arguing that the entire tenancy now remains in their hands.
Which of the following statements is/are TRUE?
A. Fred, Sarah and Jennifer have each acquired a legal interest in the condominium.
B. For the transfer to Fred to be valid, he required the consent of John and Mike.
C. John and Mike are tenants in common with each other in the condominium.
D. Because neither Fred, Sarah nor Jennifer occupies the condominium, they have not acquired an interest in the condominium.
(1) A only
(2) B and C only
(3) D only
(4) None of the above
A
- Answer: 4
When one joint tenant dies, his or her interest transfers to the surviving joint tenants through the right of survivorship; a joint tenant cannot leave his or her interest to someone in a will. As a result, Kevin’s gift to Sarah and Jennifer is invalid. However, Dave’s transfer to Fred, is valid. A joint tenant can sever his or her share of the property by sale, which will destroy the unity of title of the relevant joint tenant. Moreover, a joint tenant can freely sell his or her own interest without the knowledge or consent of the remaining co-owners. John and Mike remain joint tenants of a two-thirds share in the property as between themselves, but are tenants in common with Fred, who owns a one-third share in the property.
2
Q
- Hiroj dies leaving a will which states: “I leave my property to my brother Hafiz for life without impeachment for waste, with remainder to my son Rafi.” Which of the following statements is TRUE?
(1) If Hafiz tears down the garage to make way for a basketball court, he will be liable to Rafi for voluntary waste.
(2) If Hafiz plants an apple orchard in the back yard, he will be liable to Rafi for permissive waste.
(3) Hafiz can destroy the buildings on the property so Rafi has nothing of value to inherit because he is not liable for any category of waste.
(4) If Hafiz decided to destroy the buildings in order to spite Rafi, Hafiz would be liable to Rafi for equitable waste.
A
- Answer: 4
If a life estate is granted without impeachment for waste, a life tenant will not be liable for any of the three common law categories of waste. Voluntary waste consists of direct, positive acts that result in damage to the property beyond the wear and tear “damage” a life tenant is entitled to allow. Permissive waste consists of allowing a property to deteriorate without any positive acts of the life tenant. A life tenant who is granted a life estate without impeachment for waste is not liable for the three categories of common law waste but can still be liable for equitable waste.
3
Q
- When Andy gave up surfing, he decided to sell his beachfront bungalow to Bertrand. Shortly afterwards, he was struck with remorse and wanted his bungalow back. Checking the state of title at the land title office, Andy learned that Bertrand had not registered the transfer; he immediately mailed the purchase monies to Bertrand and demanded that he return the premises to Andy. Which of the following statements is/are TRUE?
A. Under the Land Title Act, a conveyance must be registered in order to be enforceable between the parties to the contract.
B. If before Bertrand registers the transfer, Andy sells the property to Clara for valuable consideration (and she is unaware of the earlier sale to Bertrand), and she registers the transfer, she would take title subject to Bertrand’s superior right to the property.
C. If Andy completed a second sale with an unsuspecting third party who registered the transfer before Bertrand, Bertrand could lose his interest in the property.
D. Bertrand will be able to enforce the contract against Andy.
(1) A and B only
(2) C and D only
(3) A and C only
(4) D only
A
- Answer: 2
Under the Land Title Act, registration is not required for a conveyance of land to be enforceable between the parties to the contract; therefore, Bertrand will be able to enforce the contract against Andy. However, once the property is sold to a good faith purchaser for valuable consideration, an individual may lose his or her interest in the land if he or she has not registered.
4
Q
- Heinrich is developing a 20 lot subdivision in the Fraser Valley in British Columbia. The area is heavily wooded and Heinrich wants to ensure that it will stay that way. He has included a building scheme in the development plan that is registered in the land title office. The building scheme limits the circumstances in which the existing trees on any of the lots can be cut down. Which of the following statements is TRUE?
(1) This type of provision will not be enforceable unless the original owner reserves the right to waive it as against individual lots.
(2) This type of provision must apply to at least half of the lots in the development unless certain lots are specified as exempt at the time of registration of the plan.
(3) For a provision like this one to be valid, all the original purchasers must purchase their lots from the same seller.
(4) All of the above
A
- Answer: 3
A building scheme is a group of restrictive covenants attaching to two or more lots within a particular development plan. To be valid, the restrictions in the building scheme must apply to all of the lots equally. Furthermore, all the initial buyers of the development must receive their title from the same seller.
5
Q
- Alana owns an old marble statue that has been firmly affixed to the floor of the largest room in her house for nearly 50 years. She is planning on selling her house, but she wants to make sure that she can take the statue with her when she leaves. How should Alana proceed?
(1) The statue is a fixture, so Alana can be certain that it will remain her property following the sale of her house.
(2) The statue is a chattel, so when Alana sells the house, the statute will become the property of the new owners.
(3) Alana should ensure that the contract of purchase and sale makes it clear that the statue will remain Alana’s property following the sale of the house.
(4) Alana should wait until after the contract of purchase and sale is completed, and then mention that she wants to keep the statue.
A
- Answer: 3
As the seller, Alana will only be able to take with her those items that are determined to be chattels, whereas fixtures will become the property of the buyer. Items that are affixed to the land are presumptively fixtures. However, it is unclear whether a court would decide whether the statue is a fixture or a chattel, and it could be an expensive process to find out. For this reason, Alana should make sure that the statue is listed in the contract as a piece of property that she will continue to own following the sale.
6
Q
- When William subdivided his property and sold three lake front lots, he retained a large lot back from the water, with a panoramic view. To protect the value of the lot he retained, he sold each lot subject to a restrictive covenant prohibiting any commercial use. These were properly registered. Over the next 10 years, the various owners of lots 1 and 2 had operated a campground and a motel on their lots, with no objection from William. However, when the new owner of lot 3 opened a marina, which meant too many boats around for William’s liking, he brought an action for an injunction against the owner of lot 3 to prevent the operation of the marina because it contravened the restrictive covenant. Which of the following is TRUE?
(1) William would easily succeed in an injunction against the owners of all 3 lots for the various commercial enterprises being operated.
(2) William’s failure to take action against the owners of lots 1 and 2 for 10 years may give a court grounds to cancel or modify the restrictive covenant.
(3) A restrictive covenant cannot limit a person’s ability to make a livelihood.
(4) None of the above
A
- Answer: 2
Where land has been operated in a manner inconsistent with a restrictive covenant over a period of years, the covenantee may not be able to enforce it. Restrictive covenants frequently limit certain activities related to livelihood. For example, in a shopping centre, tenants are frequently restricted from operating certain types of businesses.
7
Q
- Which of the following statements about the subdivision of land is TRUE?
(1) Land can only be subdivided in compliance with section 73 of the Land Title Act, and regulatory approval is required.
(2) The common law rules for subdividing land continue to govern. Fee simple owners can subdivide their land as they please, without any requirement to seek government or regulatory approval.
(3) While fee simple owners can subdivide their land without regulatory approval, persons with life estate interests may not do so.
(4) Land can no longer be subdivided.
A
- Answer: 1
The Land Title Act provisions on the subdivision of land, including section 73, replace the common law right to subdivide at will. Subdivision of land requires regulatory approval, which takes into account several considerations, including whether the subdivision is in the public interest.
8
Q
- Which of the following is an example of a restrictive covenant that is positive in nature and, as such, will NOT run with the land and bind subsequent owners?
(1) No trees shall be planted on the northern 10 feet of the property.
(2) Every subsequent owner must paint the fence once per year.
(3) No pesticides shall be used on the property.
(4) If a shed is built on the property, it shall not be taller than 10 feet.
A
- Answer: 2
Valid restrictive covenants must be negative in nature. This means that one must be able to comply with the covenant by doing nothing. Only Option (2) cannot be complied with by doing nothing, as it requires a certain action on a yearly basis.
9
Q
- Grandma has entered a contract with Wolf Renovations Inc. to have some improvements made on her cottage before she sells it. Wolf Renovations Inc. hires the Three Little Pigs Electrical Co. to assist in the renovations. 10 days after the job is completed, Three Little Pigs Electrical Co. files a builder’s lien on the property, claiming that Wolf Renovations Inc. has not paid them even a penny for their labour. In response to this lien, when she pays Wolf Renovations Inc., Grandma holds back 5% of the total contract price for the work done. When Little Red Riding Hood, a prospective purchaser, looks at the cottage a week later, she expresses a concern over the lien registered on title. Grandma assures Red that if she buys the house, she will not have to worry about the lien because adequate money has been held back.
Which of the following statements is TRUE?
(1) Three Little Pigs Electrical Co. could properly file a caveat, thus preventing the transfer of the property to Red.
(2) If Red buys the property and Wolf Renovations Inc. goes bankrupt, Red may be liable to Three Little Pigs Electrical Co. for the money owed to them.
(3) If Red decides to buy the property, she has an automatic right to withhold 10% of the purchase monies since there is a builder’s lien registered on title.
(4) None of the above statements are true.
A
- Answer: 2
Option (1) is false because a caveat cannot prevent the transfer of a property, although it is very possible that, where a caveat has been lodged, the proposed sale will never complete. Option (2) is the correct answer because 10% of the original contract price was not held back after the builder’s lien was filed; in such a case, a landowner or subsequent purchaser will be liable to all subcontractors if the head contractor goes bankrupt. Option (3) is incorrect because a purchaser is not authorized under the Builder’s Lien Act to hold back under the contract of purchase and sale unless the contract itself creates that right.
10
Q
- Which of the following properties could be converted into a strata development pursuant to the Strata Property Act?
(1) An existing apartment building with no strata plan currently filed
(2) 10 acres of bare land with several buildings constructed upon the land
(3) A newly created duplex with two separate entrances and separated living spaces
(4) All of the above can be converted into strata developments
A
- Answer: 4
An existing apartment building can be converted into a strata building, subject to approval from the local municipal council. Bare land can be turned into a strata development by deposit of a bare land strata plan. Similarly, a duplex will typically be converted into a strata unit by the creation and deposit of a strata plan.
11
Q
- Sharon, the registered fee simple owner of Whiteacre, sold her interest to Anne. Anne did not register the transfer she received from Sharon. Some months later Sharon discovered that she was still the registered owner, so she “sold” the property again to Myron, who registered his transfer. Myron did not know about Anne’s purchase and paid market value for the property. Anne has now discovered what has happened. Which of the following statements is TRUE?
(1) Anne is the rightful owner of the property and she can have Myron removed from the title.
(2) Although Anne cannot remove Myron from the title, she has a valid claim against the assurance fund.
(3) Myron’s title is indefeasible because he purchased bona fide for value from the registered owner.
(4) Both (2) and (3) are true.
A
- Answer: 3
Myron cannot be removed from the title because he bought in good faith for valuable consideration from the registered owner. Anne cannot claim against the assurance fund because she negligently failed to register her interest. Pursuant to section 294.6(f) of the Land Title Act, the assurance fund is not liable to compensate a claimant for the proportion of the loss caused by his or her own neglect.
12
Q
- Three years ago, Bernard leased a warehouse from Harold for a 5-year term. Although Bernard was given a properly executed lease agreement, he failed to register it in the land title office. Which of the following statements is FALSE?
(1) Bernard’s interest is protected in any event because there are only two years left on the lease. Therefore, it is a lease for less than 3 years and does not have to be registered.
(2) Harold is prohibited under section 20(1) of the Land Title Act from denying Bernard’s leasehold interest on the grounds that the agreement was not registered.
(3) Bernard’s interest is still valid as against Harold.
(4) Unregistered leases require actual occupation by the tenant is order to be protected from third parties.
A
- Answer: 1
Section 20 of the Land Title Act clearly says that any document dealing with or affecting real estate will be enforceable between the parties whether or not the document is registered. Bernard can enforce the agreement against Harold whether or not it is registered. A lease for five years remains a lease for five years although there may be less than five years left in the term. The exception to the indefeasibility principle relating to leases is for leases for terms of three years or less.
13
Q
- Which of the following statements about a caveat is TRUE?
(1) A caveat may be used for 3 months without removal to protect a claimed interest in land.
(2) A caveat is not of itself a cause of action or an interest in land.
(3) It is usual to register a certificate of pending litigation before a caveat.
(4) The use of a caveat is a good way to tie up any further dealing in land regardless of the validity of the underlying claim.
A
- Answer: 2
A caveat only continues in effect for two months, not three. A caveat is frequently registered BEFORE the certificate of pending litigation, to protect a disputed interest prior to bringing a lawsuit, because a certificate of pending litigation cannot be registered until a lawsuit is commenced and registered in the court registry. The Land Title Act imposes liability for damages where a person wrongfully registers a caveat.
14
Q
- Under the Land Title Act, registration:
(1) is NOT required by the Act for a conveyance of land to be enforceable between the parties to the transfer.
(2) is NOT necessary for leases for terms of greater than five years, as they are effective against all parties even if they are unregistered.
(3) renders a charge indefeasible.
(4) does NOT permit any indication of a trust on a registered title to land.
A
- Answer: 1
Only fee simple interests are indefeasible under the Act, not charges. Trusts are noted on the certificate of title. Although registration is required if one wants protection against claims of third parties, it is not required to validate a conveyance. Registration of a lease is not necessary for leases of terms not exceeding three years as long as there is actual occupation.
15
Q
- Alvin, Boris, Claus and Daria are the joint tenants of a property. Daria sells her interest to Xander. Which of the following statements is TRUE?
(1) The sale destroys the joint tenancy and Alvin, Boris, Claus and Xander now hold the property as tenants in common with each other.
(2) Daria cannot legally dispose of her interest without the permission of the other joint tenants, as it would affect the interests of the others.
(3) Alvin, Boris and Claus remain joint tenants with each other, but become tenants in common with Xander.
(4) None of the above
A
- Answer: 3
Daria is free to dispose of her interest, but in doing so, she severs the joint tenancy only as far as her share is concerned. Alvin, Boris and Claus continue as joint tenants amongst themselves and as tenants in common with Xander.
