Assignment 2, Real Estate Trading Services, UBC Sauder

Question 1

Question 1

Mike, Dave, John and Kevin are joint tenants of a very large condominium which 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

Answer 1

Correct Answer: 4

When one joint tenant dies, their interest transfers to the surviving joint tenants through the right of survivorship; a joint tenant cannot leave their 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 their 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 their 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.

Question 2

Question 2

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.

Answer 2

Correct 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.

Question 3

Question 3

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

Answer 3

Correct 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 their interest in the land if they have not registered.

Question 4

Question 4

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

Answer 4

Correct 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.

Question 5

Question 5

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 statue 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.

Answer 5

Correct 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.

Question 6

Question 6

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

Answer 6

Correct 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.

Question 7

Question 7

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.

Answer 7

Correct 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

Question 8

Question 8

Which of the following would be considered trespassing?

A. Charles sells magazines from door to door. When he approaches the Jones’ house, he sees a “No Soliciting” sign on the gate but goes up to the door anyway.

B. In order to avoid a mud puddle, Julie leaves the sidewalk and briefly walks onto Marilyn’s property.

C. When he was hiking in the park, Williams lost his bearings and wandered around for hours. Without realizing it, he wandered onto Graham’s land.

D. Joyce walked across Yun’s property using a registered easement that is registered on Yun’s property in favour of Joyce’s property. The day before this, Yun said that she would prefer if Joyce no longer used the easement.

1. All of the above
2. A, B, and C only
3. A and B only
4. C only

Answer 8

Correct Answer: 2

Option (2) is correct because A, B, and C would constitute trespass, while D would not. Trespass requires an intentional or deliberate act of entering the land of another without express or implied permission.

Scenario A is trespassing because Charles
does NOT have permission to enter the Jones’ property. The Jones’ have expressly prohibited all “soliciting” and Charles is selling magazines, which is considered soliciting.

Scenario B is also trespassing, even though Julie’s entry is slight and causes no damage. Trespass is actionable “per se”; no damage needs to be proved to succeed in a legal action. Further, Julie’s entry was intentional.

Scenario C is also trespassing. William is a trespasser because his action is considered intentional since he deliberately walked on Graham’s land, and ignorance is no excuse.

Scenario D is not trespassing. Joyce is entitled to use the registered easement, even if Yun would prefer that Joyce stopped using it

Question 9

Question 9

Alex owns real property in Vancouver, British Columbia. Wishing to improve his property, Alex hired Bill as a contractor to complete some renovations. Bill, in turn, hired Catherine as a subcontractor to help with some of the renovations. The renovations are done and Catherine is upset because Bill refuses to pay her for her work. Catherine registers a lien against Alex’s property through the Land Title Office.

Which of the following is TRUE regarding the lien that Catherine registered?

1. The registration of the lien will impact Alex’s ability to sell the property, but will not impact Alex’s ability to mortgage the property.
2. To enforce the lien, Catherine must begin a lawsuit and separately file a certificate of pending litigation.
3. The lien will be valid for a period of six months.
4. The lien is not legally binding, as subcontractors do not have lien rights in British Columbia.

Answer 9

Correct Answer: 2

Option (2) is correct because it is a true statement. To enforce the lien, Catherine must begin a lawsuit and separately file a certificate of pending litigation against Alex’s property.

Option (1) is incorrect because once registered, a builders lien will impact the owner’s ability to sell or mortgage the property.

Option (3) is incorrect because a lien is valid for a period of one year.

Option (4) is incorrect because it is a false statement. Subcontractors do have lien rights in British Columbia, and Catherine’s lien is
legally binding.

Question 10

Question 10

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.

Answer 10

Correct 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

Question 11

Question 11

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 re¬moved 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.

Answer 11

Correct 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 their own neglect.

Question 12

Question 12

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 greater than 3 years in length are not protected from third party buyers.

Answer 12

Correct Answer: 1

Option (1) is false because the length of Bernard’s lease is measured at the beginning of the lease. A lease for five years remains a lease for five years although there may be less than five years left in the term. An unregistered lease greater than 3 years in length can only be enforced against the person making it (i.e. Harold) due to section 20 of the Land Title Act.

Option (2) and (3) are true because 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.

Option (4) is true because an unregistered lease greater than 3 years in length does not form a charge on the title of the property and is therefore not protected from third party buyers claiming the property free of the unregistered lease.

Question 13

Question 13

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.

Answer 13

Correct 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

Question 14

Question 14

Under the Land Title Act, registration:

1. is NOT required by the LTA 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.

Answer 14

Correct 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

Question 15

Question 15

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

Answer 15

Correct 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

Question 16

Question 16

In which of the following situations would someone have a successful claim against the assurance fund?

1. Black owns Whiteacre. Mary forges a transfer to herself, registers it and then obtains a bank loan for $50,000 giving a mortgage of Whiteacre as security.
2. Bob owns Blackacre which is worth $1 million. Martin forges a transfer to himself, registers it and then sells the property for $1.2 million to Jim who registers the property and is unaware of the fraud. Upon completion of the sale to Jim, Martin
   disappears and cannot be found.
3. Gerald, the owner of Greenacres, gives a life estate in his property to his companion Jasmine. Subsequently, Jasmine sells her life estate to John. All necessary documents are registered in the land title office. In a fit of rage Gerald kills
   Jasmine to get his property back.
4. In all of the above situations a successful claim against the assurance fund might be brought.

Answer 16

Correct Answer: 2

Option (1) is incorrect because the bank did not deal with the true registered owner. According to the Gill v. Bucholtz case, Black would have his title restored, and the mortgage would be struck from title.

Option (3), John’s life estate expired with Jasmine.
While criminal charges would presumably be brought against Gerald, John has not lost an interest because of the provisions of the Land Title Act; therefore, no claim against the assurance fund may be made

Question 17

Question 17

A strata plan MUST show all of the following EXCEPT:

1. a unique registration number.
2. the names of all of the registered owners of the strata lots.
3. the boundaries of the land.
4. the area of each strata lot in square meters.

Answer 17

Correct Answer: 2

A strata plan must contain the items described in Options (1), (3) and (4).

Question 18

Question 18

In which of the following examples could a joint tenancy exist between all of the parties?

A. Laura transferred her summer cottage to her 3 children. The eldest received a ½ undivided interest and the two younger children each received a ¼ undivided interest.

B. Leopold and Nan purchased property as equal owners of an undivided interest. Later, Leopold transferred his share in the property to Wolfgang who then shared the property equally with Nan.

C. Robert owned a house. When he married Lina, he transferred the property to himself and Lina as equal owners of an undivided interest.

D. Jen and Dawn owned a house together as equal owners entitled to an undivided interest. Dawn became increasingly jealous of Jen and secretly sold her interest to her mother who registered the transfer.

1. C only
2. B, C, and D only
3. All of the above
4. None of the above

Answer 18

Correct Answer: 1

All joint tenants must have the same kind of interest in the land: the extent, nature and duration must be identical and their interest must be equal. All joint tenants must have received their interests at the same time and from the same document.

Question 19

Question 19

Which of the following individuals holds an interest in land that is less than an estate?

1. Meredith has the right to live in Greyacre until the death of her mother.
2. Avram has a licence to sell popcorn from a street vendor’s stall on the Stanley Park seawall.
3. Under his uncle’s will, Ian inherited a remainder fee simple interest in a farm after the death of his aunt, who was left a life interest in the farm.
4. Hiram has a registered easement over the property of his neighbour granting him access to a fishing lake.

Answer 19

Correct Answer: 4

Option (4) is correct because an easement is an interest in land less than an estate. An estate pur autre vie

(Option (1) and a fee simple subject to a life estate (Option (3) are incorrect because both of these interests in land amount to estates as they grant
absolute possession to the holder.

Option (2) is incorrect because a licence is a contractual right rather than an interest in land

Question 20

Question 20

Kevin is the registered fee simple owner of Orangeacre. David forged a transfer of the fee simple from Kevin to himself and registered the transfer. David then approached ABC Trust Company and arranged a mortgage of Orangeacre. ABC advanced $100,000 to David and registered its mortgage against Orangeacre. Kevin has just discovered what has occurred.

Which of the following is TRUE?

1. Because David forged the transfer of the fee simple to himself, Kevin can have David removed from the title.
2. ABC is entitled to its mortgage because it dealt with the registered fee simple owner of Orangeacre.
3. ABC can successfully claim against the assurance fund for money to satisfy the mortgage.
4. All of the above

Answer 20

Correct Answer: 1

Because David obtained title to Orangeacre through fraud, ABC did not receive a valid interest. ABC is not entitled to claim against the assurance fund because it never held a valid interest. Kevin can remove David from title according to Gill v. Bucholtz.