Chapter 4 Title Registration / Strata Flashcards
What is a builders lien?
A builders lien is a claim registered against the title to land by a contractor, supplier of materials, or workman with respect to work done or materials supplied to improve that land.
What is the Assurance fund?
The Assurance fund was established by BC government:
- to compensate any person who is deprived of land because of the operation of the Land Title Act
- in certain cases fraud has been committed
- a mistake has been made
- or an improper act has been performed by the Registrar of Titles or his employees
What is caveat?
Someone is making a claim of an interest in land. A caveat is lodged at LTO. The current owner is informed of the caveat.
A caveat automatically expires in 60 days. But can be revived.
A caveat is a notice registered against the title to land warning those looking at the title that a claim with respect to an estate or interest in that land has been made.
Define the TORRENS LAND REGISTRATION SYSTEM?
The TORRENS land system is a system for registration of actual title to land in order to provide security to those holding interests in land and to remove the need for retrospective investigation of titles to land.
Which of the following is is true regarding a deed?
1) a deed is the legal term for the granting of lease.
2) a deed is a document used to transfer land from one party to another
3) a deed is the part of a corporations after tax income that is distributed to shareholders
4) a deed is a limited right of use of another’s land by a landowner for the benefit of his land.
a deed is a document used to transfer land from one party to another
Define the legal principle of indefeasibility.
In BC, subject to certain statutory exceptions, the Title Register is conclusive evidence that the person named as holding an estate in land is in fact entitled to that interest, and his holding is not subject to any condition or encumbrance other than those shown on the Title Register.
The Contaminated Sites Registry is totally separate from the TORRENS system of title registration.
True
In order to complete a discharge of a mortgage, the discharge must be registered at the LAND TITLE OFFICE
What is certificate of pending litigation and what is its purpose.
A certificate of pending litigation:
- is a Notice of a pending court action registered against the title to property. It’s purpose is to warn all persons that the title to the property is in litigation and to prevent dealings with respect to the property.
A TRUSTEE is an individual or business entity in whose name the property subject to the trust is held.
Trustees are listed in Title as the registered owner, with the notation “IN TRUST” to indicate they are not registered owner.
Strata Common Area
Common area Is considered Tenancy in common. The space within the apartment excluding the balcony could be Joint Tenants.
Void Deed. (FIN)
From Common Law System.
F
Deed that looks Valid, but has no legal effect
Cannot Transfer any Title
F. 1/ Forged
I 2/ Paid illegal Considerations or action
N. 3/ Non Est Factum. Did not know what I signed.
Under Common Law responsibility of purchaser to discover all interests which affect property.
You had 20 years to prove the deed was fraudulent. If you can prove it you get the property back. Under Void Deed Rightful could recover his title back
Land Title Act abolished this CL Doctrine in BC.
CL conflicts with TORRENS principles.
Common law Doctrine Abolished by LAND TITLE ACT.
The land was NOT secure for 20 years
Under Void Deed the rightful owner can get property back if they prove they are legal owner
Land Title Act has abolished this Common Law Doctrine in BC
Conflicts with the TORRENS system
Purchaser was responsible to discover all interests which affect the property.
Forgers title is considered Void Deed. Original owner can get property back. If sold to good Faith buyer, then original cannot get title.
If buyer does not register title. Original owner sold to someone else and they registered then second buyer cannot get property back.
BC TORRENS system of Land Registration
Provides security of interests in real property and removes the need for going back through all of the OLD TITLE DOCUMENTS
BC TORRENTS system of Land Registration
3 Requirements
1/ must be a good faith purchaser (not fraud)
2/ must have paid Fair Market Value (FMV)
3/ must have registered the Title in the Land Title office
If you do all 3 - you will be protected under TORRENS System in BC
BC TORRENTS system of Land Registration
4 Principles
1/ Indefeasibility Principle
2/ Effect of Registration
3/ Abolition of Notice
4/ Assurance Principle
1/ Indefeasibility Principle. ( means Protection). Cannot lose title but there are exceptions.
Guarantees a fee simple purchaser, in GOOD FAITH, is not required to investigate how the owner got his title and is protected by our TORRENS land title system
A purchaser can rely on the Title as proof
Of Ownership; and if they deal with the registered owner of Fee Simple if a piece of property, and acquires this property for Valuable Consideration, the Land Title Act will protect you.
Indefeasibility does not extend to charges like Mortgages. There are Exceptions.
Indefeasibility Principle Exceptions. ( Your interest in land (fee simple)maybe overturned by these exceptions.
Exceptions: these are things that will not protect you.
Reservations in Crown Grants
Taxes (unpaid taxes). Govt can take your property if you do not pay property taxes)
Leases where Tenant has lived for 3 years or less. Applies to Commercial Leases. Lease greater that 3 years becomes an interest in land so it protects you.
Fee simple obtained by fraud
Public right of way in favour of BC Hydro or Power Authority
Municipal charges
Highways, Easement
Expropriation, Escheat (property reverts back to government if no heir.
Caveats, builders lien
Incorrect boundaries
TORRENS system protects
Owners for their title.
If fraudulent Mortgage placed on property they are not protected
Effect of Registration
Must register under your name
Title does not pass until it’s registered
Delivery of DEED only transfers a right to apply for registration.
Abolition of Notice
— subject to fraud
Means you can trust everything that is on Title Search report because all charges on title. Before some these were not registered
A purchaser only needs to be concerned with those interests contained in the register
Does NOT protect purchaser who participated in fraud.
Old Common law system did not have easements or liens or rights of way registered. You did not know what is registered to the property. TORRENS system abolished this and only things registered in title apply.
Now whatever you find on title search that’s all you are responsible
Assurance Principle
Intended to compensate parties who have:
1/ lost interest in land
2/ cannot recover loss by court action
3/ as a result of the principle of indefeasibility (if Land Title Act had not been passed- (the TORRENS System is in effect). Because under CL you good get title back by going to court. Now you can’t.
The Fund is not liable to compensate for the loss, neglect or default of a complaint- if the claimant has somehow caused the situation, they will not be covered by the fund
- banks
Items Appearing on Title
Caveat — I am alleging an interest in this land.
- Formal Notice to anyone searching title that a Notice placed on the title to freeze it.
Lapses in 2 months but can be extended
Certificate of Pending Litigation (CPL)
Formerly known as” lis pendens”
- a notice of pending court action registered against the title, preventing dealings with respect to property. Can’t sell property
Builders Lien
The claimant has 45 days to file lien ( lasts for 1 year)
Protection from Builders Lien
1/ hold backs 10 % of price
2/ strata lots - owner developer must hold 7%
Notation of Trusts
- an infant cannot be placed on Title. The title is in the name of an adult as a TRUSTEE and child is the BENEFICIAL OWNER.
The Form of Documents
The freehold transfer document ( the document given by the vendor to purchaser must be in a prescribed form. known as “Form A”
To transfer legal title from Seller to Buyer the required documents are:
1/ freehold transfer “form A”
Property Transfer Tax Form
Title Insurance what is it
Indefeasibility Principle only Protects Interest in land but not the exceptions.
1/ lender wants Title Insurance because “charges” i.e. mortgage as a charge not protected under principle of indefeasibility
2/ Title Insurance can provide coverage for many items that are not part of the TORRENS system, such as access, zoning, and property boundaries.
3/ Title insurance cheaper than survey costs
4/ Required by the lender for the benefit of the Lender
5/ Owner can pay additional premiums to get coverage
Manufactured Homes (2 Qs on Exam) Are mobile homes registered in the land title office? What do you think Mobile home might be?
Mobile Homes have no Title and not registered at LTO?
it is moveable so is considered a chattel. Can be placed on PAD. Does not have an interest in land.
Indefeasibility principle or Assurance fund does not apply
Manufactured Homes - Transport Permit
In order to move you need :
1/ Registered at MH registry
2/ Get Transport Permit from Government MH Registrar.
3/ The registrar must be satisfied all taxes on the home have been paid.
Will authorize move to specific location and valid for 30 days.
If in arrears in taxes Government can place a lien on the home. Takes priority.
If Registrar satisfied then you get transport permit to specific location identified ahead of time. Valid for 30 days only.
Contaminated Site Registry (CSR) like Oil Tanks. What must be done?
1/ information about potentially contaminated sites can be obtained through BC Ministry of Environment Site Registry.
2/ CSR does not deal with any title matters
3/ it is far more likely that site profile will exist for a commercial rather than residential property.
Manufactured Homes
Don’t have to register at MH Registry if not moving or selling
But if you register, you get 2 Decals much like the VIN. Code on cars. J no it equivalent to certificate of title but proof of registration under MH act.
Are considered Chattels. It is moveable.
What is a Strata Plan
Filed in the Land Title Office and designates which parts of a strata project are strata lots and which are Common Areas. It looks like a building plan done by Architects showing the Strata lots (Suites) on each Floor.
Strata Corporations - how it is formed
Collectively the group of owners as one Entity, once the strata plan has been deposited at LTO. Initially the developer owns all the shares of Strata Corp, once he sells the units then the Unit holders become Strata Corp shareholder
Once the Developer submits the Strata Plan to LTO ( Land Title Office) a Strata Corporation is formed.
Is a separate Entity
It is determined by unit Entitlement. The Developer owns all of them initially. Once he sells a Unit
Duty of Strata Corporations
To manage, maintain, insure, and repair common areas.
Common Property in Strata Corporation
Common property is owned collectively by the strata lot owners, as tenants in common.
Individual ownership is proportional to the strata lot’s unit entitlement as set out in the “Form V: Schedule of Unit Entitlement.”
The strata corporation exclusively controls the common property
.
Limited Common Property
Common property designated for the exclusive use of the owner of one or more strata lots known as “limited common property“
Balconies and Parking space are considered “limited common property“
Unit Entitlement
Each strata lot owner owns a proportionate share of the common area property based on his unit entitlement
The figure used to calculate a strata lot owners contribution to common expenses. This is the STRATA FEE.
Purchasers Interest in Strata
Inside Unit is Fee Simple
Outside - Common Area is Tenants in Common
Strata Council Meetings
20 days notice for meetings and in writing
Approves Budget
Sets Strata Fees
20 days notice must be given to owners for AGM meetings of strata council.
Notice Has to be in writing
Strata Council
If you own 20 % share in the Strata, you can demand a meeting
The Power to manage is with Strata Council not Corporation
Duties of Strata Corporations
- Duty to manage ( control, manage and administer the common property)
- Repair and maintain
- Insure common Assets
- To keep records (minutes, records, budget, financial statement)
- Duty to establish contingency fund and operating fund.
Strata Funds
Operating Fund
- common expenses
- interim budget
Contingency Fund
- less than once a year
- it is key to good management
Special Levies
- each owner must pay a portion
Strata Council can:
- Enforce its By-laws & Rules
- Register a lien for unpaid strata fees.
BUT NOT FOR UNPAID FINES - NO LIEN - Removes owners right to use some common property.
Strata Owners Remedies
- May Sue strata corporation
- Court May order the appointment of an administrator
Owner cannot withhold payment of strata fees
Cannot place a lien against Strata Corp
Strata - Change Bylaws
Votes per unit is 1 Vote
3/4 or 75% of votes to change bylaw
New Bylaw has to be filed in the LTO
GRANDFATHER Rule for pets if bylaw changed
Form B - bylaws of strata at LTO
Strata Corporation vs CO-OP (COOPERATIVE)
Strata
- Fee simple interest
- easier to sell
- filed in LTO
- disclosure statement
- Residential Tenancy Act
CO-OP
- NO Fee Simple
- Cannot sell their interest
- hard to obtain Financing.
- disclosure statement
- Residential Tenancy Act
-
Disclosure Statement from Developer
Strata Property Management Contract
- can hire someone for day to day responsibilities
- Needs 2 months notice to cancel
- can hire property management company, but it may take instructions from the strata council.
Property Taxes
Each Unit owner pays their own property taxes including the amount of common area.
Conversion of Rental Apartment to Strata Condos
- developers must get approval from City Hall
Should be considered:
- priority of rental over private ownership
- relocation of tenants
- life expectancy of building
- NOT
THE POTENTIAL INCREASE IN REAL PROPERTY TAXES
On Exam. Developer wants to Convert building to condos. What city will be not looking to consider in decking whether to give approval.
Not a shopping centre nearby.
Permission to Exclusive Use of Common Property
A Tenant or Strata Owner can Exclusive Use of Common Property for a period less than 1 year. If permission granted doesn’t involve significant changes. If significant change need 3/4 approved
Indefeasibility Principle
— conclusive proof of ownership
— Assurance Fund
— TORRENS system facilitates land commerce (buy and sell)
Risk Allocation
— risk on purchaser
— In BC risk for losing on owner, but it is mitigated assurance fund
— US: risk on purchaser, but will obtain title insurance
Title Insurance
— for BC mortgages, as a replacement for a survey, for the benefit of the lender.
Indefeasibility Principle— what you see is what you get. If you see at the LTO that Arvind Reddy is on Title — this is conclusive proof Arvind is the Owner
10 Exceptions to Indefeasibility — reservations in the original grants — Federal/Provincial Taxes — Lease for a term of 3 years or less — Highways or public right of ways — Caution, Caveat, charge, builders lien, etc. noted/endorsement on title — right to show a wrong description of boundaries — Fraud by the registered owner
Fraud by Registered Owner
A — Registered Owner
B — Forges Title into his name
If A finds out about it. The Title is transferred back to A. This is true under CL and TORRENS.
If B sells property to C who is a Bonafide person who paid valuable consideration, a certificate of title issued (means registered at LTO, THAN A cannot get title back but can make a claim to the Assurance fund.
The Assurance Principle
— Claimant lost interest/estate in land
— if Land Title Act had not passed, claimant would have recovered the interest/title/estate
— Claimant cannot otherwise recover the interest/estate.
Charges on the Title are Indefeasibility. In other word you are not protected
If there is a forged Mortgage on the Title. Not protected.
The Owner (mortgagor)
Strata Plan
— shows strat lot number
— schedule of unit entitlement - must appear on strata plan.
— interest on destruction- if building destroyed. What is your share of insurance proceeds. Assessed value of your unit divided by total assessed value for every unit.
Types of strata lots
— fee simple
— leasehold
Ok
