EXAM Flashcards
sources of law?
statute law
common law
equity
body of laws made by government
federal - banking, postal service, criminal matters
Provincial - Property rights, education, etc.
Municipal council - Powers is derived from province, can pass local bylaws. Deal with local matters, deal with property. Get their power from the province
common law?
o Originated in England
o Judge-made law
o Based on the principle of stare decisis
“Let the former decision stand”
Based on cases decided by the court
Weakness:
• Overtime, the court system becomes too rigid and is unable to adapt to the current norms and values of society
equity?
o You’re going to have to convince the judge to use their discretion.
o Based on principle of fairness
o Originated as a means to avoid common law courts
Stated as petitions the king
Evolved into the courts of chancery or courts of equity
Merged with common law in 1873.
why is equity important?
Courts can apply both equitable and common law principles
Example of common law remedies:
• Damages
Example of equitable remedies:
• Injunctions
• Specific performance
common law vs. equity
o Overtime, the “common law” system grew unfair and rigid
o This led to the creation of a separate courts system, which decided cases on “equitable” principles and the “law of equity”, instead of “common law” prinicipels (courts of equity or “chancery”)
o Today judges can decide cases based on common law OR equitable principles
the court system?
- Small claims court; lowest trial court
o Hears claims involving claims $35,000 or less.
o An appeal from the small claim courts’ decision, it goes to the next court: - BC Supreme court; highest trial court and appeal court from small claims
- BC court of appeal
- Supreme court of canada
up until what year was the Real estate council of BC the main regulator of BC?
2016
Purpose of RESA
Establish minimum reasonable competency requirements
Set standards of conduct for licenses
Establish the governance structure of licensing
• 1. Real Estate Council
• 2. The Office of the Superintendent of Real Estate
appoint BCFSA to regulate the real estate services profession
Which creation of two other pieces of legislation does RESA authorize that affects licensees?
The real estate services regulation (the “regulation”)
• Exemptions from licensing requiremnets, licensee, disciplinary issues, and others
The real estate services rule (the “Rule”)
• Requirements and duties that apply to real estate licensees
real estate council?
They create the RESA, the regulations, the rules, and all the bylaws within it.
To protect the public by:
• Administer RESA, the regulations, the rules and bylaws subject to oversight and direction of the superintendent.
• Maintain and advance the knowledge, skill and competency of its lincenses; and
• Uphold and protect the pulic interst in relation to the conduct of its liceses
Three main objectives of RESA?
• Ensure min. competency standards for new real estate services professionals
• Ensure that those currently providing real estate services conduct themselves approprtaly
• Appoint BCFSA to reglate the real estate services profession
Activities that require a license
1. Trading services
• Rental property management services
• Strata management services
2. To or on behalf of another
3. For or in expectation of remuneration
exemptions for non-licensees?
o A lawyer who practices real estate law (RESA)
o Employees who provide real estate services to their employer, only (REGS)
Remember, once licensed under RESA, a license cannot take advantage of any of the above exemptions (“once a licensee, always a licensee”) UNLESS they into an exemption in the Rules
• A licensee will only be exempted from the formal requirements in RESA if they fall into one of the emptions contained in the rules
exemptions for licensees?
Licensees are permitted to provide rental property management services for their own real estate, or their familys real estate, if they:
• Do not use their brokerage name
• Disclose that they are not providing the services as ea licensee
• Do not accept any fees for the srvices and
• Certain other requirements
A similar exemption exists for licensees who provide strata management services to a strata corporation in which they own a strata lot
4 levels of licensing
brokerage
managing broker
associate briker
representative
brokerage?
• All real estate services are provided through the brokerage and all licensee remuneration flows through brokerage
• Brokerages must act through the other levels of licensees (managing brokers, associate brokers, representatives)
• Is a licensee on behalf of which other licensees must provide real estate services
• Key obligations:
o Record keeping
o Financial management
managing broker?
• Highest level of respsibility
• Acts for the brokerage in all respects
• Key duties:
o Supervision of brokerage’s employees and licensees
o Deal with misconduct of employees and licesees
o Proper maintenance of brokerage accounts and reocrds
o Notice once a deposit…
• A licensee responsible for exercising the rights and performing the duties imposed on the brokerage by its license and is also responsible for the control and conduct of the brokerage including its representatives and associate brokers.
o Whatever license m.b has, it determines what license wht they can offer
associate broker?
• A licensee who meets the edicational requriements to be a m.b but is providing real estate services under the supervision of a managing broker
representative?
• A licensee who provides real estate services under the supervision of a m.b.
• Provide real estate services under managing brokers supervision
• Key obliagtions:
o Provide all records to manaing broker
o Keep managing broker informe
o Promptly respond to managing broker
o Supervise employees acting for representatives
o Promptly notice managing…
Personal real estate corporation (PREC)?
A license for a licensee to operate as a corporation
teams?
• At least one licensee in combination with other licensees or non-licensees work together and share information regarding individuals to whom they provide real estate services.
purpose of REDMA
• Aims to protect purchasers by requiring developers to:
o 1. Meet any preliminary requirements or approvals
o 2. Ensure cost of utilities & other services are accounted for and to assure purchasers title upon purchase
o 3. Prepare and file a disclosure statement
REDMA?
real estate development marketing act
three things under REDMA
1. Seven say rescission right
• S. 21(2) Purchaser can rescind a purchase agreement within 7 days after the later of:
o A. the date of the purchase agreement was made; or
o B. the date of a written statement acknowledging the purchaser read the disclosure statement.
2. Failure to deliver disclosure statement
• A. purchaser is entitled to an indefinite right of rescission
3. Failure to deliver an amendment
• 1. The amendment was “reasonably relevant” to the purchase in deciding to enter into the purchase agreement; and
• 2. No more than one year has elapsed after the transfer of title
requirements for licensees?
• Applicant must be of “good reputation”
o BCFSA inquire into any criminal records, history of bankruptcy and insolvency, as well as fraud, misappropriation of funds, etc.
• Applicant is a person:
o Must be atleast 19 years of age; and
o Meet the educational and experience requirements under the rules
• Mus not have been
o Refused another license, or disciplined, by another regulatorty body
o Disciplined by a professional body; or
o Convicted of an offence
For a reason that reveals the applicant to be unfit to be a licensee
Licensees must apply to renew their licensee before the end of the 2-year term. If they do so, they can continue practicing until they year back from BCFSA.
RESA organizations?
Real estate errors and omissions insurance corporation (“E&O insurance corporation”) and indemnity plan
Real estate compensation fund corporation
RE foundation
estates?
fee simple
life estate
estates pur autre vie
interests in land than less estates?
easements
restrictive covenants
building schemes
fixtures & chattels
co-ownership of land
joint tenancy
tenancy in common
fee simple?
the greatest estate u can own in Canada
the legal term for the maximum interest in land available to a person
“fee” means the estate can be inherited
“simple” meant there were no qualifications on who can inherit the estate
life estate?
Def: an interest in land to be enjoyed during a person’s life, and which ends on that person’s death.
Example: Mr. Jones’ Will: “To my spouse, Lacey, with remainder to my sibling, Remi.”
• Life tenant (Lacey) is able to enjoy the property until death
• Remainderman (Remi) receives property in fee simple upon Lacey’s life.
o Refer to the estate pur autre vie for a different situation.
how does one terminate their life estate?
• Dictated by the document creating the life estate
• Two possibilities:
o If document provide a remaindermen, the remainderman will inherit the fee simple.
o If there’s no remainderman, than it goes to the “reversioner” (former owner or the former owners heir).
estate pur autre vie
Def: the form of life estate where the measuring life is that of some other person
Ex. Mr. Jones’ Will “To my spouse, Lacey, with remainder to my sibling, Remi.”
• Lacey sells her life estate to Pat – creating an estate per autre vie
• Pats estate will terminate upon Lacey’s death
easements?
o A right to use a neighboring property in a specific way (without possessing it) for the benefit of the holder’s land.
o The land receiving the benefit is called the dominant tenement
o The land granting the benefit is called the servient tenement
conditions to easements?
o 1. There must be both a dominant and servient tenement
o 2. The easement must accommodate the dominate tenement
o 3. The easement must be capable of forming the subject matter of a grant
restrictive covenants?
o A covenant restricting the use of land covenanter (the servient…
o Requirements
It must be negative in nature
It must benefit or enhance the value of the covenantees land in some way
Both the benefitted and burdened land must be precisely identified in the agreement or document
The burden of the restriction must have been intended by the parties to bind the land
Notice must be given to new owner, its original covenanter transfers land
requirements of building schemes?
The parties must receive their title from the same seller
The seller must have laid out and sole the property subject to restrictions
The seller must have intended that the benefit of the restrictions should bind each individual lot
The buyers must have purchased their individuals lots on the understanding that the restrictions were for the benefit of all the other lots
fixtures?
Items that go with the land and become the property of the buyer upon completion
• Things that increase the price of the home when buying one, like a really big rock
chattels?
Items that remain the personal property of the seller upon completion
Ex. a flat screen tv mounted on the wall.
how do courts determine what is a chattel or fixture?
test:
what is the degree of affixation?
what is the purpose of the affixation?
joint tenancy?
o Where two or more persons acquire an equal undivided interest in a property when one person dies, the remainder goes to the other partner.
o Test – “Four Unities”
1. Unity of Time
2. Unity of Title
3. Unity of interest
4. Unity of Possession
how does one terminate joint tenancy?
1. Severance of the joint tenancy by operation of law
2. Partition by mutual agreement of the tenants
3. Partition by a court order under the partition act.
tenancy in common?
o Where two or more persosn acqire interests in a single property. Each may sell or bequeath their interest and in the event of death, their interest becomes part of the estate
o Joint tenancy allows for the other partner to iherit the resposnibile and ervything of the property once the other partners dies, however for tenancy for common, when one partner dies their responsibility goes to who they want it to go to. Point is, the deceased’s 50% ownership does not go to other partner.
o Only has one unity: possession
how does one terminate tenancy in common?
- By agreement to sell interest to each other
- By agreement to sell to a third party
- By a court order under the Partition of property Act.
recording system?
o Existed pre-torrens
o A buyer would check and verify the chain of title when considering to buy a property.
Ex. if a buyer wanted to buy a home, he woud look at who the current owner bought the property from, then they would look at the who the previous owner bought the property from, and again and again, etc.
o This is called the chain of title
• This is done to check if there wasn’t anything done to the property in the past, or if there was any fraud, etc.
o Deed: a document used to transfer an interest in land to another
o Chain of title: buyers had to verify the history of transactions
elements of Torrens system?
indefeasibility
registration
assurance principle
indefeasibility?
Subject to certain 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 in The Register
1. Guaranteed title of the person named in certificate of title
2. Therefore, purchaser can rely on the ownership shown on the certificate of title
3. Over-rules common law doctrine of void deed
Indefeasibility: charges
• Charges are not indefeasible in BC’s Torrens jurisdiction
• Registration of charges on raises a rebuttable presumption that the charge is valid.
registration?
1. Torrens – title passes at registration
2. Registration makes interests valid against 3rd parties
3. Unregistered titles are still effective between parties
negligence?
a. Extremely broad “tory” intended to compensate victims who are harmed by carelessness of others
i. Tort – civil wrong (as opposed to criminal wrongs)
b. Negligence is about compensating a person (plaintiff) or losses they suffer due to the carelessness or mistakes of another (defendant)
c. Requirements
i. Defendant owes plaintiff a duty of care (people who you can reasonably foresee being affected by your actions incl. non-clients)
1. Don’t owe duty of care (DOC) to everyone the world: think railways workers case
ii. Defendant breached the standard of care
iii. Damages suffered as a result of breach were reasonably foreseeable
negligence - imagine that you are hosting an open house.
i. Did the Defendant owe the Plaa duty of care?
- A person owes a duty to take care to all those whom he/she should reasonably foresee as being affected by his/ her actions
negligence - imagine that you are hosting an open house.
ii. Did the D breach the standard of care owed?
- Duty to take the same care as a “reasonable person” would take in all circumstances.
negligence - imagine that you are hosting an open house.
iii. Did the P suffer damages as a result of the D’s breach and were they not too remote?
- Damages must have reasonable been in the contemplation of the D as a possible consequence.
negligent misrepresentation?
Simply put, you said something you shouldn’t have, and someone relies on that and suffers damages
b. Requirements:
i. Untrue statement
ii. Made negligently
iii. Special relationship between the parties (skilled person or expert giving advice in course of business to a person who will reasonably rely on it)
iv. Plaintiff must have relied on the statement and the reliance must have been reasonable
fraudulent misrepresentation?
a. A false statement of fact made by a party who knows, or should know, that it is false, and is made with the intention of deceiving another
b. Similar to negligent misrepresenaation, but also inlcuds an element of moral fraud, not just carelessness
c. Two things you need to know:
i. Person who made the statement either knew it was false, or made the statement recklessly
ii. Does not need to be skilled or an expert
errors in drafting agreements
a. Licenses expected to be able to draft simple legally enforceable contracts in simple, accurate and understandable terms.
Breach of fiduciary duty
a. Acting as an agent on behalf of another rsults in an agency relationship, a types of Fidu. Relationship
statutory relationship
a. Licensees can also face professional discipline from:
i. The real estate council
ii. The local real estate board
PCMLTFA
PCMLTFA aims to help authorities detect, investigate and deter money-laundering/ TF
PCMLTFA obligations?
o Compliance program
o Know your client
o Reporting
o Record keeping
compliance programs?
- AML “blueprint” that a licensees must understand and follow
- Elements:
o Compliance officer
o Policies and procedures (written)
o Risk assessment
o Training program
o Review of compliance program
know your client?
- If an individual = identify them
o 3 methods to do this:
Government-issues photo ID method, credit file method, dual process method - If an entity (corportation, partnerships, trust, etc.) =. Confirm the entity’s existence
reporting?
- Terrorist property report must be filed without delay by a licensee when they know it is owned or correlated to a terrorist or group.
- Large cash transactions
o LCT report must be filed for all LCT’s - Suspicious transactions
o ST report must filed asap when they determine that there are reasonable groups to suspect that a transactions is related to the commission of a money laundering or terrorist financing office.
Difference between commercial and residential tenancies
- Commercial tenancies: governed by terms of lease and common law, and to a similar extent, the commercial tenancy act
o Disputes usually resolved in court - Residential tenancies: governed mostly by residental tenancy act and tenancy agreement
o Disputes usually resolved by residential tenancy act
what must be in a commercial agreement?
o Essential terms
Parties
Rent
Premises rented
Term
o Leases over 3 years must be in writing
what must be in a residential agreement?
o RTA states that tenancy agreements must be I writing, signed and dated by both the L and T, written so that a reasonable person can understand the terms, and delivered to T promptly
o Tenancy agreements must contain…
Types of tenancy
• Fixed term tenancy
• Periodic tenancy
fixed term tenancy?
- Tenancies that continue to a certain period ot time jan 1- dec 31
Commercial FT tenancy?
Ends automatically at the end of the fixed term
On the expiry of the term, the T must vacate and no notice is required from the L
If T remains in possession in the end of the fixed term commercial tenancy, and pays ren that the landlord accepts, a periodic tenancy will form.
residential FT tenancy?
Residential Ieases longer than 20 years are considered commercial leases
When a fixed term residential tenancy expires one of two things happens:
When the term expires, unless the parties agree to a new fixed term, the tenancy automatically continues as a month-to-month (periodic) tenancy under the same terms as the original agreement
Second, the agreement can end on the expiry date. There must be a prior written agreement for this to happen
what is tenants notice?
s. 45
periodic tenancies
- tenant may terminate by giving one months notice
reasons to end for cause?
for cause (s.47)
- Reasons to end for cause examples
o Repeatedly late paying rent
o Significant intereference with others or seruoudly jeoparizied others safety pr rights
can landlord demolish a rental unit?
if landlord wishes to demolish and convert property into another type of property, such as non-residential property, the landlord can provide 4 months’ notice.
can landlord demolish before end of fixted term
no
and tenant is entitled to one month of free rent, or payment in lieu
ways to end tenancy before the end of the term
s. 44 (c)-(g) of RTA
For cause (1 mo. - subject to RTB ending earlier)
For non-payment of rent (10 days)
ways to end tenancy by giving notice
landlord or purchaser use (2 mos.)
demolish or convert (4 mos.)
tenant notice (1 mo.)
method requiring an order from RTB
Renovations or repairs (order effective in 4 most.)
process for renovations or repairs?
if a landlord wishes to Reno a rental uni, they must first apply to the RTB for an order that they be allowed to have possession of the unit (no less than 4 mos.) landlords can no longe simply provide notice to end tenancies to Reno/ repair rental properties.
landlord must also pay on months rent to the tenant (or let the tenant stay one month for free)
after Reno’s are complete, tenant has the right to re-rent the unit at the rent determined by the landlord
when a FT tenancy auto-ends…
tenancy agreement requires tenant to vacate AND
1) landlord intends to occupy; or
2) Lease was a sublease
strata lots
- Some parts of the building/ land are owned by individual owners (“strata lots”)
common property
- Some parts are owned by all of the owners, collectively (“common property”)
unit entitlement
- every strat plan has a schedule of unit entitlement attached(form v)
o Displays each strata lots proportionate ownership share, as a TIC, in the common property
o Displays each strata lots share of common expenses - Each strta lots proprtiomate ownership and responsibility is based on that starta lots unti entitlement
o The UE is based on a strta lots habitable area (the area of a residential strata lot that can be lived in, but does not indluces patios, balconies, garages, etc) - UE of strata lot/ total UE of all strata lots, and then multiply the product by the total contribution
- SPA says that common expenses lke srata fees must be allocated based on UE
- However, SPA allows owner to allocate on a different formula by unanimous resolution, which must be filed on title
limited common property
- There are only a limited number of owners that can use this common property
o Ex. storage space, parking space, etc.
o LCP designation may appear in strta plan (changing the strata plan requires a unanimous vote)
o The LCP designation may be made through a ¾ vote at a general meeting of strata corporation
short term exclusive privileges
o Used to give exclusive use of common property or a common asset to an owner/ tent
o If the permission/ privilege would significantly change the common property’s use/ appearance, then owners must approve with ¾ vote at a general meeting
Otherwise the strat council can approve the privilege my simple majority
strata corp
o An artificial legal “person” who has the same legal abilities as a living person (e.g. the strata corp can enter contracts or sue and can be sued)
o Develop creates the strta corp by filing the strat plan in LTO
o Difference between strat corp. and business corp:
Shareholders of business corp. are not personally liable for any judgements against the business corp.
However the owners of the starta corp are personally liable for payment of any judgement against the strata corp, based on the UE.
o Manage, repair, insure common property, record keeping, and enforce bylaws and rules.
o Formed by filing a strata plan with the land title office
o Exists for as long as the strata plan is still filed with the land title office
o All strata lot owners are members of the strata corp.
strata council
o Executive body elected by the strata members
o Elected annually at AGM
o Eligibility
(a) Owners
(b) Individuals representing a corporate owners
(c) Tenants who have assigned a landlord’s rights to stand for council
Other classes of people set out in strata bylaws
strata lot owners
o Strata lot owners are responsible for adhering to the Strata bylaw and rules, and paying Strata fees and any special levies.
rights of strata lot owners
Rights of a Strata lot owner
• Use their strata lot
• Benefit of common property
• Ensure strata corp. operate in accordance with act, regulations, rules and rules.
Remedies he or she has against the Strata corp. or other owners
• Sue for damages
• Injunction – requiring them to perform their duties
• Order to prevent or remedy unfair action
purchasers - If a person enters into a witten agreement to buy a strata lot, they can access the strata records by:
4 ways…
o Requersting information certificate from strta corp
o Requtesing certifaicate of payment from strta crp
o Indirectly, by requiring the seller to provide the strata records to the buyer under the contrat
rental disclosure
o If the developer intends to rent one more strata lots s 139 of the strata propery act requires the developer to file a rental disclosure form
o Rental disclosure form, a form prepared by the owner developer of the starta property containing information about the rental of strata lots that must be filed with the superintendent of real estate before the first strata lot is offered for sale
Number of strata lots that can be rented
Length of time that strata lots may be rented
Whether there are any bylaw that restricts te renal of starta lots
co-op creation?
o Cooperative ownership: a form of property ownership whereby owners possess shares in a non-profit corporation that holds title to the land, including any buildings, and wherby owners of tehse shares are entitled to lease a unit in the building from the non-profit organization
o Co-op
No individual fee simple title. Co-op acquires fee simple title
Bound the cooperative association act
Co-op can provide can indirect financing to owners
Rights of an owner to sell interest in co-op may be restricted
o Strata
Strata lot owners have individual fee simple title to their strata lot
Bound by strata property act.
operating fund?
- Contributions are made by owners, generally via strata fees
- Can be use to pay expenses that are consistent with the purpose of the fund (common expenses occurring at least once per year and the expense falls into one of the following categories:
o It is authorized in the budget
o It is approved by ¾ vote at a general meeting
o The expense is an authorized (under the SPA) unapproved expense, which may be:
An expense which the council is allowed to pay without approval, up to a spending limit set in bylaws (or the lesser of 5% of total OF contributions for this year or 2,000)
An immediate expense that is required to ensure safety or prevent signficiant loss or damage, in which case only the min. amount necessary can be spent
contingency reserve fund?
- CRF must be seeded by developer when the first strata lot is conveyed to a purchaser
o If the first converyance is within 1 year of depotiing the strata plan, seed is 5% of estimated operating expenses in interim budget
o If first conveyance is more than 1 year after depositing strata plan, seed may be up to 25% of interim expected operating expenses, depending on certain factors - Additionally, apart from seeding the CRF, the inerim bidget must also include…
- At the first annual general meeting, if the amount of money in the CRF is less than 25% of the estimated operating expenses for the 12 month period in the interim budget, the strata corp. must contribute to the CRF
o Required contribution is 10% of the total budgeted contribution to the OF in the current strata corp. budget (meaning the budget that will be used for the coming year) - After the first AGM, the starta corp. must contribute to the CRF if the amount of money in the CRF is less than 25% of the total budgeted contribution to the OF for the last fiscal year
o Required contribution is the lesser of:
10% of the total budgeted contribution to the OF for the current fiscal year or
The amount need to bring CRF up to 25% of the total budgeted contribution to the OF for the current fiscal year
o If the CRF amount does not fall below these thresholds, then the contributions are optional - Used to pay expenses that are consistent with the purpose of the fund (occur less than once per year, or do not usually occur) AND the expenses falls within one of the following categories:
o The expense is approved by a majority (50%+1) vote if the expense is one that was recommened in a depreciation report
depreciation reports?
- An engineer will estimate the repair and reaplcement costs for major items in the strata copr, and the expected life of these items
- First report required within 6 months of the second AGM, and then a new report is needed once every three years afterwards
strata fees and special levies
- Strata fees are usually monthly payments used for operating expenses and CRF contributions, per budget
o Calculated based on UE - Special levies used to rasie money for major repairs and other unanticipated expenses hat cant be covered by CRF/OF
o Also calculated based on UE
o Approved by ¾ resolution of owners (council cannot impose levies) at general meetings if UE is used – if cost will be allocated differently, then unanimous vote is needed - Sometimes, special levies are approved before a starte lot is transferred to a purchaser
o The seller is responsible to pay any portion of the special levy amount that must be paid before the completion date
o The buyer is responsible to pay any portion of the special levy that must be paid after the completion date
o (if the buyer expects a special levy will be approved before the completion date, buyer can seek compensation for the buyer’s portion of the special levy from the seller)
essentials for binding contract
offer
acceptance
consideration
legal intention
capacity
legal object
genuine consent
under what circumstances is a misrepresentation actionable?
false statement
statement induced innocent party to act
reasonable that the innocent party would rely on the statement
innocent misrepresentation
o This is a false statement made unknowingly
o Innocent party can sue for recession prior to execution of contract and the plaintiff cannot sue for damages
defects?
latent defect
patent defect
stigma
latent defect
o Defect that would be discoverable during the course of reasonable inspection.
This needs to be disclosed!
o Material latent defect
Means a material defect that cannot be discerned through a reasonable inspection of the property
patent defect
o Defect which is visible or can be discovered during the course of a reasonable inspection
stigma
o Subjective issues
What one might consider and issue, the other may not.
Ex. smells in an area
Ex. sex offender next door
categories of mistake?
common
- both parties make the same mistake with a contract
• Void
o Mutual
Both parties make a mistake, but a different one in a contract
• Voidable
o Unilateral
One party makes a mistake
• Voidable
termination of a contract?
- Performance
- Agreement to waive performance or substitute another agreement
- Nonfulfillment of condition precedent
- Frustration
- Breach of a condition of the contract which is accepted by the injured party
condition precedent?
o Legal term for a “subject to” clause. In contract law, a condition precedent calls for the happening of some event for the performance of some act before the contract shall be binding upon the parties
performance?
- Ex. In the context of the termination of a contract, “performance” means both parties completed their obligations and the contract is over. If A and B have a contract where A gives B $5 and B gives A a ride to the mall, and they both do that, that is an example of performance which would terminate the contract. A and B no longer have obligations to each other, and the contract is over.
minutes?
- Meeting minutes are the record that is kept of what has been discussed and decided in a meeting, what actions might be taken, who must take them, and when those actions must happen.
conditions?
- Subject conditions that are agreed upon by the buyer before buying the property.
- You cannot use conditions precedent to get out of a contract
two types of assignments?
o Statutory
Complies with the Law and Equity Act
• Original promiser and assignee
o Equitable
Does not comply with all the requirements under the Law and Equity Act
• All three parties named in action
remedies for breach of contract
o Terminate the contract and sue for damages;
o Continue the contract and sue for damages and;
o Continue and contract and sue for specific performance
section 35 of RESA
1. Professional misconduct
• A type of misconduct under RESA (real estate services act) that focses on competency in practice and technical breaches of RESA, regs, and Rules
2. Conduct unbecoming a license
• A type of misconduct that is contrary to the best interests of the public, undermines public confidence in the industry or brings industry into disrepute
Honesty?
- Acting in a manner that is sincere and truthful and free of deceit
o Transparency
o Informing clearly
o Not withholding info
o No deception
o Settling appropriate and realistic expectations
o Following through promises
o Truthful about knowledge and experience
trust?
- Services of the industry will only be used if the public can trust its professionals
o Key points
Long time to build, quickly destroyed
Building and maintaining trust
integrity?
- Acting ethically and doing the “right thing”
o Behave professionally
o Act objectively
o Deal fairly and in good faith
o Maintain competence (know limits)
o Maintain confidentiality
o Act with due care and due diligence
o Have accountability for actions
common law duty to clients?
Contractual (e.g. listing agreement)
Tort laws
• If u act negligently
• If u cost them something
Agency and fiduciary duties
legislative duty to clients
rules (3-3 and 3-4)
rule 3-3 and 3-4?
• 3-3:Duties owed to clients
o Fiduciary duties
Confidentiality
Full disclosure
Avoid conflicts of interest
Act in the best interest of your client
• 3-4: general duties to clients and non-clients
o Acting honestly and with reasonable care and skill
o Reasonably prudent; licensee would in comparable circumtances
duty to report?
- Describe the rationale duty behind the duty to report
- Common obligation of professionals
- Enforcing values of professional = public confidence
- RESA – not explicit (but fundamental component)
- Rules – 3-2
o Professional misconduct
o Conduct unbecoming a licensee
o Improper or negligent conduct - General – ethical decision making
5 elements of ethical decision making
- Consider the situation and identify the potential ethical issues
- Identify the stakeholders
- Specify feasible alternatives for evaluation
- Evaluate each alternative in terms of ethical consequences
- Make and justify your choice
disciplinary procedures?
and penalties?
- Complaints –>Responses –>Investigations –> Disciplinary Hearings (informal and formal)
o Formal hearing is in front of a discipline hearing
penalties:
o Reprimand
o Suspension of membership
o Fine
o Costs
o Expulsion
o Orders to attend courses
o Or usually a combination of the above
why use an agent?
- Possess knowledge, skills and abilities that the principal does not
- Due to geographical or other limitations, the agent is able to perform a certain action that the principal cannot
- The principal does not have the time or desire to perform certain actions.
agency vs dual agency?
- Agency:
o A relationship in which one-person (the agent) is granted the authority to represent and act for another person (the principal) dealings with others - Dual agency:
o An agency relationship where the agent acts for multiple parties in a single…
three major ways a licensee can provide trading services in BC?
- Sole agency relationship
o Licensee represents the consumer as a client and does not represent any other party to the trade - “no agency” relationship
o May provide limited trading services outside of an agency relationship, consumer is unrepresented - Dual agency relationship
o Limited trading services to multiple parties in a trade of real estate
o Represents each party as a “client”
Only permitted in extreme circumstances
Designated agent?
- Under designated agency, while the clident stills signs a services contract with the brokerage, the client agrees that the brokerage will appoint one or more specific licensees (rather than all of its related licensees) to act as a sole agent(s) of the client.
ban on dual agency?
- Some licensees use to engage in limited dual agency = situations that were sometimes not appropriate and the licensee could not meet their fiduciary duty to both clients
concerns regarding dual agency and consumer protection?
o A real estate professional may not be able to be completely loyal and impartial to two clients with competing interests
o A real estate professional may not be able to properly advise those clients without improperly disclosing their confidential information to each other
o A real estate professional acting as a dual agent might prioritize his or her own interest in earning the whole commission, rather than acting in the best interest of his or her clients.
no agency?
what can the licensee do, and not do?
- Unrepresented parties
- Licensee may only:
o Share general information and real estate statistics
o Show property and provide factual information about the property
o Provide standard real estate forms a contract - Licensee cannot:
o Give advice on appropriate price
o Give advice on terms and conditions to include in contract
o Negotiate on behalf of unrepresented party
o Share any client’s confidential information
o Protect confidentiality of unrepresented party
what are mandatory standard disclosure forms (council)?
o Disclosure of interest in trade form
o Disclosure of representation in trading services
o Disclosure of risks to unrepresented parties
what are BCREA non-mandatory standard forms?
o Contract of purchase and sale
o Multiple listing contract
express-contract?
o An agreement under which the agent is given authority to perform actions on behalf of a principal, in return for remuneration
implied-actions?
o An agency relationship that is established by the actions and conduct of the parties
estoppel?
o Where one-person (the principal) acts in such a way as to lead a third party to believe another person (the agent) has authority to act on behalf of the principal
agency termination?
- Express- the principl and agent agree to terminate
- Termination by conduct- act of principl….
agent authority?
- Actual authority- Given to the agent by the principal
o Express
Terms of a contract
o Implied
Authority to carry out anything incidental to express authority
o Usual or customary
Customs of the industry of the trade - Apparent authority
o Through the operation of the doctrine of estoppel
how does an agent become personally liable to a third party?
o No disclosure of agency
Can be held liable as is he/ she was the principal
o No authority or insufficient authority
An agent who makes a conyrct with a third party on behalf of the principal is presumed at law to have warranted or guaranteed that the agent had the appropriate authority to do so
o Torts committed by agent
Ex. negligence, trespass, misrepresentation
conflicts of interest?
- Conflicts respecting remuneration
- Conflicts respecting current client
- Conflicts respecting former clients
- Other
o Purchasing principal’s (clients)property
o Selling own property to principal
o Receiving referral fee from service provider referred to principal (e.g. home inspector)
duties of a principal?
- Duty to comply with agency agreement
- Duty to remunerate agent
- Duty to idemniy agent – common law right
rules?
- Identify the sections in the rules that deal with a licensee’s duty to client and others
o Rule 3-3 (duties to clients)
o Rule 3-4 (duties to act honestly
o Rule 3-5 (duties to act with reasonable care and skill?
agency disclosure?
- Disclosure of representation in trading services
- Disclosure of risks to unrepresented parties
- Disclosure for residential tenancies
- Disclosure when engaging in dual agency
disclosure of remuneration?
- Disclosure of remuneration (5-11)
o Disclosure of receiving remuneration thats not paid directly principal
o Buyers agent. Is splitting the sellers agents remuneration - Disclosure to seller of expected remuneration
o Offer for sale has been received
other mandatory forms?
- Disclosure of intrest in trade
o Licensee buys, sells, or rents real estate for themselves - Disclosure of latent defects
- Notice relating to contract assignments
o Standard term has been amended
can u enforce a verbal contract to buy and sell property in BC?
No
section 59?
o Section 59 of the Law and Equity Act specifies that contract dealing with land must be in writing (does not apply to leases of three years or less) in order to e enforceable
remedies to section 59
Restitution of benefit received
Compensation for money spent relying on the contract
S. 59 remedies
• If a court decides that an alleged gift or contract cannot be enforced, it may order either or both of….
exceptions to contracts/ writing
o Party denying the contract acted in a way indicted its existence (estoppel)
o Party seeking to enforce reasonably relied on the existence of the contract and in doing so changed his/ her position (usually by spending money)
why are plans important?
They prevent errors
• Plan filed backwards. People registered on wrong title.
• Miss portion of land. property goes over more than one legal title
technical requirements of a contract of purchase and sale?
- Names and occupations of parties
- Description of property being sold
- Description of price and related financing
=
certainty
conditions precedent?
- Protecting the seller – conditions precedent
o Prequalification of purchaser
o Time limit on satisfaction of conditions precedent
o Use of time date (not just date)
can conditions precedent be broken up verbally?
No
how to remove conditions precedent?
o Deliver written notice to other party before deadline
Verbal not sufficient
important considerations for a deposit?
o Timing
Acceptance - 24 hours of acceptance is in CPS
Subject removal?
Multiple?
o Method or payment:
Certified cheque, bank draft, cash, or trust cheque
Uncertified cheque
o Stakeholder
Held in trust unless both parties agree
Standard contracts state the following regarding assignments:
o 1. Contracts must not be assignment without the written consent of the seller; and
o 2. The seller is entitled to any profits resulting from an assignment of the contract by the buyer or any subsequent assignee.
what does the competition act do?
Hold business actors accountable for mis-leading, deceptive, or anti-competitive practices
important components of the competition act?
Restraint of trade and misleading advertising
• Restraint of trade (Real Estate exmaples):
o Fixing specific minimum commission
o Allocating territories, markets and customers
o Fix the split
o Restrict public marketing real property
o Prohibit the advertising of commission rates
o Set common fees for specific services
o Control entry of licensee or firms
• False or Misleading representations
o No person shall, for the purpose of promoting, direclt , or indirectly, the supplt or use of a product or for the purpose of promoting, directly, or indirectly, any business interest, by any means whatever, knowlingly or recklessly….
criteria for determining if negotiation was successful?
o Efficiency (quantity of time and effort)
o Satisfaction of parties at the end
o No wasted resources left on the table (divide goods so that value of good is fully realized)
risk management?
risk anticipation
o Avoiding purchaser’s remorse
o Document disclosures and disclaimers
o Avail yourself to others’ experience
o Continuing education
risk shifting
o Insurance
o Referring out scertain work
o Property disclosure statement
o Third party experts
risk control
o Procedures and policies
o Avoiding litigation flashpoint
o Drafting agreements
o Documenting due diligence
o Seeking professional advice
types of equitable mortgages
1. Mortgage of the equity of redemption
2. Deposit of the duplicate certificate title
3. Agreement to give a mortgage
mortgage?
o 1. Contract
o 2. Evidence of a debt between the mortgagor and mortgagee
o 3. A transfer of an interest in security for a loan.
implied terms?
prohibition against clogging
stipulations for a collateral advantage
prohibition against clogging?
o 1. Clauses that prevent borrower from redeeming his/her property free and clear of mortgage
o 2. Such clauses will have no effect
o 3. Ex. Option to purchases property
stipulations for a collateral advantage?
o 1. Terms that give the lender advantages in addition to the security and interest payments.
o 2. Can extend past the mortgage term
Unless it is a penalty, unfair or unconscionable
o 3. Ex. owner of gas station purchases lenders automobile products
express terms?
land title act
personal covenant
security in land
land title act?
o LTA – Two-page form
Part (Form B): parties, legal description, signature…etc.
Part 2: all other mortgage terms
personal covenant?
o That the mortgagor will pay the mortgage money and intertest…
o Contractual promise to pay
o Does not run with the land
security in land?
o That the mortgagor has good title…
o And that he or she has the right to convey the land..
o And that on default the mortgages shall have possession of the land…
o Free from all encumbrances
additional clauses?
o Acceleration clause
Entire principal amount due upon default
o Omnibus clause
Amount not paid is added to the mortgage amount
o Advance clause
Mortgage not bound to advance funds
o Costs clause
If legal costs are incurred it, they will be covered on a solicitor-client basis.
interest act?
o S. 3 – no interest mentioned, no interest payable
o S. 10 – individuals can repay mortgage after 5 years
o S. 6 & 7 – blended payments
business practices and consumers act
Allows courts to intervene where transaction is “so harsh or adverse… as to be inequitable”
mortgage brokers act
o Regulates persons who deal in mortgages within BC
o Defines a mortgage brokers
For a seller to qualify the loan must be either:
To acquire the residence
To make improvements
To the residence
To make expenditures for a household for family purposes; or
To refinance for one of the above three purposes
novation
o Occurs when an original contract between the lender and seller is replaced by a new contract between a lender and the buyer
o Allows the original borrower to be released from liability
o Broader scope than Property Law Act
lenders remedies?
- Demand letter
o First step before formal foreclosure proceedings
o Accelerates loan - Petition and support affidavit & Service documents
o Commences foreclosure proceedings
o Filed in the supreme court
o Lender that initiates foreclosure is the “petitioner”
o Any interests below the petitioner are respondents - Petition hearing & Order Nisi
o Lender can request an order nisi
o May grant remedies
o Defines length of redemption period (typically 6 months)
o Order nisi = final order of the court - Conduct of sale (judicial sale)
o Sale of land carried out under the supervision of the court
o Allows lender exclusive right to list on the MLS
o Borrower is still liable or entitled to the balance - Order of absolute foreclosure
o Order forecloses of any right, title or interest in the mortgage properly for respondents
o Respondents must deliver possession of property
o Once granted petitioner can apply for title in the LTO
equity of redemption
o A borrower may “redeem” the mortgage, or take back ownership of the property, free from the mort., upon payment of the debt
o This right continues even after the due date of the mortgage, usually for approx. 6 months
o It is an implied term in all mortgage agreements and it cannot be contacted out of
legal mortgages?
o The first mortgage grantd by a borrower with respect to their property
o The effect of a legal mortgage is to transfer title of a property to a lender
equitable mortgage?
o Any mortgages registered on a property after the first, legal mortgage (i.e. mortgage of the equity of redemption) – sometimes called “junior mortgages”
o Duplicate certificate of title
o Agreement to a title
priorities in mortgages?
in what three situations will a lender retain priority?
- Lender A will retain full priority in three situations
o No written notice of second mort was given by B
So, lender b must register its mort and give written notice to lender a about its mort it it wants priority over lender a’s further advances
o Lender a was contractually required to advance the money
o Lender a and lender b have agreed that lender a have priority (most common)
statutory priorities?
- Statutes give priority to the following types of claims or charges:
o Builders liens
o Wage liens
o Starta corporation liens
o Unpaid tax
o Others
implied terms of mort.
o Binding tems of the mort that are not written down in the mort documents
Equity of redemption is an implied term
express terms of mort.
o Terms of the mort that are written down
Historically, mort agreements were faily short as each was drafted by hand. By lawyers.
With the improvement of word processing and printing, morts began to grow longer and longer, which created problems for the land title officer when these lengthy morts were filed by banks
In 1990, the land title act was amended to introduce the form B and the concept of standard mort terms to address this issue
o Term of the mort
The dates between which you are required to make monthly payments, usually 5 years or less (because of the interest act)
o Amortization period
Period of time you would require to repay the loan, including interest, at a certain monthly payment amount (usually 25 or 30 years)
At the end of the initial term, need to “renew” the mort with the lender, switch lenders, or pay out the balance owing
o Repayment and renewals
Two common misconceptions:
• Lenders will always allow you to break your mort (i.e. prepay) prior to the end of the term in exchange for 3 months’ interest
o Some mort have no prepayment penalty, some charge 3 mos interest, and some charge the “interest rate differential” which compensates the bank ofr the loss interst it is no longer going to receive ince youre paying the mort off early
• At the end of the term, lendrs will always renew your mort
section 8 of the interest act?
o Section 8: a lender cannot charge a higher rate of interest on money that is in arrears (i.e. in default) than the mort interst rate that would apply to the money that is not in arrears/ default (e.g. interest rate is normally 5%, but if you default, he interst rate increase to 10%)
o Cannot disguise that higher interest rate as a “fee” or “penalty”
o Ex. a mort loan bears interest of 3%. However, the mort loan document states that if a borrower defaults, then in addition to the 3%, the borrower will be charged an “indemnity fee” equal to 3 months interest. This “indemnity fee” would be in breach of section 8
o Ex. a mort that gives a discount which is taken away when the borrower defaults is also a breach of s. 8
levels of govern.
federal
provincial
local
federal govern.
Indirect control
• Encountered in special circumstances
o Ex. airports and fisheries
Ex.
• Arbutus greenway
• CR Rail vs City of Vancouver
provincial govern.
Agricultural land commission act
• Agricultural land reserves established 1970’s to preserve agricultural land
• Powers:
o Pass regulations affecting ALR land
o Exclude land from ALR
o Allow non-farm use (application required)
o Allow subdivision (application required)
Health act
• Established public health departments responsible for maintaining the public health of the province
Local services act
• Provincial govern. Enforces planning regulations
• Rural areas where no other body exists
The islands trust act
• Provincial govern. Assigned planning powers to the islands trust council
• To simplify and standardize the planning process for gulf islands
provincial and local govern.
1. Regional districts
• Province divided into 30 regional districts
• Role varies depending on area
• Some long-term planning powers
• Ex. Garbage disposal
2. Municipal govern.
• Villages
• Towns
• Cities
• Municipal districts
3. Improvement districts
• Construction, operation, and maintenance of utilities
• Established after resident’s petition minister of municipal affairs
• Power to levy taxes, borrow money, and expropriate land.
rationale for the regulatory system
o Public health and safety
Building code regulations to prevent spread of fire
Subdivision regulations to prevent health hazard (i.e. improper water or sewer installations)
o Protection of property values
Maintain existing property values
Zoning controls
o Efficiency, convenience and appearance
Designed to be convenient for residents
Communities are arranged for efficient installing of utility systems
o Conservation of natural resources
Ex. ALRs
zoning?
o The legislation division of a region into separate districts with different regulations for land use
Frequently encountered restrictions
• Restrictions on the number of buildings on a lot
• Set-backs and yards
• Height
• Density
• Home occupations
• Off street parking
• Signs
rezoning?
Usually initiated by property owners
Building regulations are administered in two ways:
building permits
inspectors
three statutes have been passed created local governments:
local government act
community charter
Vancouver charter
types of local governments
regional districts
municipalities
improvement districts
Planning controls for the use of land (including zoning bylaws) have certain purposes:
o Public health and safety
o Protection of property values
o Efficiency, convenience, and appearance
o Conservation of natural resources
official communit plans
- Aka official development plans in van
- Optional for munici. And regional distric
- OCPs encourage local govermenst to plan future growth and financial capacity for the growth
- OCPs, if created, must contain policies on things like:
o Residential developemtn required to meet future housing need
o Location and phasing of public works like highways, sewers, water lines
o Present and future public facilities - Not the same as bylaw, but any bylaws or permits after an OCP is enacted must be consistent with the OCP
what are zoning bylaws?
- Zoning bylaws regulate only current land use, unlike OCPs which deal with current and future use
secondary suites?
- A self-contained dweling located in another dwelling
- Non-complianant secondary suites are “illegal suites” or “unauthorized accommodation” or “non-conforming suites”
- Risk: if an illegal suite is discovered, owner may need to bring it into compliance with current codes/ bylaws…
- Buyers (or listing) agents can easily confirm whether a suite islegal by contracting the local government
o As a buyers agent, don’t simply rely on what the seller puts in the PDS – rules require you to discover relevant facts about the property the buyer may be acquiring
o As a lisiting agent, before you make representations about a suite being legal, you should also takes steps to make sure that it is by contacting the local government
Advertsiign an illegal suite as a possible source of reventue is false and misleading advertising which is prohibited by the rules
two potential problems with secondary suites?
o May not be permitted under zoning bylaws
o May not have been constructed with proper suites
non-conforming uses when rezoning
o Non-conforming uses are where a property previously complied with zoning, but no long dpes do because of a change in the zoning
gst under excise tax
- Subject to this part, every recipient of a taxable supply made in Canada shal pay to her majesty in right of Canada tax in respect of the supply calculated at the rate of 5% on the value of the consideration for the supply.
- Taxable supply is “a supply that is made in the coruse of a commercial activity”.
- Supply means to provide property (including real property like fee simple intrests, or even an option to purchase real property) or services in any manner whatever.
three types of builders
o A developer who builds/ substantially renovates a residential property for sale
o A person buys a residential property after the construction is complete and then resells it before it is occupied as a residence
o A person who is not a developer (Called “one-off” developers in the manual) but who builds/ substantially renovates a residential property and then sells it befoe they occupy It as their residence (or they only occupy it for a short time)
self-supply rule
- A builder may be deemed to have supplied a newly constructed/ renovated residential property to themselves (and would be responsible to pay gst) if:
o They move into the propert (even tho these no actual sale)
o They rent out the home to a long-term tenant before an actual sale
property owners must complete annual declaration by…
March 31st
multiple owners must submit one for each owner
who pays tax?
what is taxed?
community charter
- owner is taxed
assessment act
- registered owner is taxed
taxed at market value
land is taxed
improvements are taxed
• Any buildings, fixture, structure or similar thing constructed or placed on or in land or water over land or on another improvement
assessment appeals?
o Property assessment review panel
Onus is on the complainant
o Property assessment appeal board
- Statements of adjustments?
o Intro
o Sources
o Three dates
o Debit or credit
o Items on a statement
who is responsible for drafting the COPS?
and who verifies title?
The license
the conveyancer will coduct a title search on myLTSA to verify info in Contract
o Errors in terms relating to title can result in:
A potentially voidable contract
Liability for the licensee
Loss of commission
three important dates for the COPS?
o Completion date
The date the title is transferred and seller becomes entitled to the sale proceeds
o Possession date
The date the buyer is entitled to possession of the property
o Adjustment date
The date set for the adjustment of taxes, interests, rents, etc.
Conveyancer?
and what do they do?
o A lawyer or notary who handles the land title officer filling relating to the sale of the property
o Conveyancers will require information for:
Tax, water, rent, and other adjustsments
Loan information for buyer’s new mortgage
Balance payable by seller to discharge existing mortgage
other items related to the closing of the COPS?
survey
title insurance
