LESSON 1 Flashcards
LAND OWNERSHIP
-Ownership may be defined in terms of control, the owner of an object controls its use and decision to transfer ownership to someone else.
-Ownerships involves control of the right to use land.
-To enable private use of land, certain bundles of rights have been granted out of the Crown’s “regal estate” (original expression of “real estate”).
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FEE SIMPLE
-The legal term for the maximum interest in land available to a person, or the maximum of legal ownership. Equivalent in many ways, for practical purposes, to absolute ownership.
-Fee simple owners are subject to:
1) the Crown’s right of expropriation and tax sale;
2) the Crown’s land use and building regulations; and
3) other individuals’ common law rights
-Absolute ownership of the land does not exist in Canada; rather, certain rights with respect to land may be owned by individuals subject to the rights of the Crown.
FIRST NATIONS LAND
BC FN groups have 3 unique property rights:
1) Federal reserve lands under the Indian Act.
-Lands owned by Federal Government for the use and benefit of FN.
-FN don’t own reserve lands but they have the right to use and occupy those lands.
2)Treaty settlement lands.
-Negotiated between BC & FN.
-Process of reconciliation between the Crown and FN.
-Land treaties are owned by the FN groups in fee simple.
3) Aboriginal Title.
-AT is a unique interest in land that the Supreme Court of CA has said cannot be explained using traditional property law concepts.
-Court declarations or contractual agreements.
LAND VALUE
-The value of land is represented by the amount of potential user is writing to pay in exchange for the right to use it.
-Land that is useful has a value to the person controlling the right to its use. This value is the motivation force for the operation of the real estate market.
REAL PROPERTY LAW
-In land disputes, compensation was “real” so the interest in land was referred to as real property.
-Under the general heading of real estate property law, topics include: estates and interest in land, title registration, commercial and residential tenancies, strata titles and cooperatives and the rights under and limitation imposed by contract, common law and statute law.
PARTICIPANTS IN REAL ESTATE MARKET
SEE THE FOLLOWING LIST OF PEOPLE
BUYERS
-Buyers are a party seeking to acquire real estate.
-As a licensee, a key skill when representing buyers is the ability to identify their tastes, motivations and ideal characteristics in a property.
SELLERS
-Sellers are a party seeking to dispose their real estate.
-As a licensee, the key being the ability to appropriately address the seller’s expectations.
REAL ESTATE TRADING SERVICES (WHAT IS A REAL ESTATE LICENSEE?)
-A real estate licensee is a person who is licensed under a provincial statute to provide real estate services, to or on behalf of another, for or in expectation of remuneration.
-Note that real estate licensees do not see interests in land; they sell services to people who want to sell or buy interests in land.
CREA
CANADIAN REAL ESTATE ASSOCIATION
APPRAISERS
-A real estate appraiser determines the market value of a property based on its condition and the selling price of comparable properties that are recently sold in the area.
-Appraisals serve other purposes as well. For example, a lender may, as a condition to providing financing to a borrower, require an appraisal to ensure that the mortgage loan amount is not more than the value of the property being mortgaged.
LAWYERS & NOTARIES PUBLIC
-They do drafting & reviewing the contract of purchase and sell, reviewing title to the property, preparing the closing dos, explaining all of the relevant docs to their clients, obtaining signatures from the parties for closing docs, collecting funds involved in the transactions, registering the transfer of property, and disbursing funds as instructed.
HOME & PROPERTY INSPECTORS
-Conduct visual examination of property’s overall structure, major systems and components & provide a written report.
-Exterior structure, plumbing, electrical, insulation, heating and cooling, roof and foundation.
SURVEYORS
-Surveyor is a professional whose job is to determine the boundaries and other features of land in order to accurately describe what is owned on paper.
-They do surveys of land, water and airspace, rights of ways, strata properties and mining claims.
REAL PROPERTY ASSESSORS
-They establish and maintain uniform real property assessments in accordance to the Assessment Act.
-A real property assessor undertake two key tasks:
1) The determining of actual (or market) value of assessed properties.
2) Assign each property to a property class.
RENTAL PROPERTY MANAGERS
-Many landlords, particularly owners of large scale projects and/or large scale investors, prefer to leave property management and leasing (renting) activities to specialists in this area, who require to be licensed under the Real Estate Services Act.
STRATA MANAGERS
-When strata is created, a strata corporation is formed.
-A strata council will typically hire a strata manager to assist in the management of strata corporation and maintenance of the common areas and facilities, including exteriors of buildings.
BORROWERS
-People who usually takes on a debt to help finance their purchase.
-To provide security of a loan, the borrower, also called the mortgagor, agrees to grant the lender a mortgage of the property that they own or will own.
-A mortgage is defined as the conveyance of title to property that is given as security for the payment of a debt or a performance of duty.
LENDERS
-A lender is someone who is willing to make mortgage funds available to borrowers and can be a single person, a group of people or a financial institution.
-A lender may also be referred to as the mortgage in a mortgage transaction, as the lender receives the mortgage in exchange for a loan.
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MORTGAGE BROKERS
-A mortgage broker acts as an intermediary, bringing borrowers and lenders together; however, the mortgage broker typically works for the borrower, not the specific lender.
OTHER MORTGAGE ORIGINATORS
-These representatives are commissioned or bonus-based.
-Institutions who employ mortgage representatives, because they do not have to pay broker fees to a mortgage broker, may offer discounts for consolidating banking services with them.
MORTGAGE INSURERS
-Financial institutions offer a variety of mortgage life insurance products to borrowers, which provide if the borrower dies, the insurance provides will pay the outstanding mortgage principal amounts, plus other amounts.
RESIDENTIAL & INDUSTRIAL, COMMERCIAL & INVESTMENT (IC&C) REAL ESTATE MARKET
-Residential market consist of properties as single family homes, condominiums and residential land lots.
-IC&I market consist of properties like shopping centers, apartment buildings, hotels and industrial property.
SIZE OF TRANSACTIONS
-Residential: $10,000 mobile home to $20 million waterhouse or more.
-IC&I: $5 million for small development and $100 million or more.
FREQUENCY OF TRANSACTIONS
-Residential sales: continuous basis, involved in a # of sales per year.
-IC&I” few sales per year and may be involved in leasing activities.
MARKET SEGMENTATION
-Broken down by social class, price and location (single fam residences and condominiums).
-IC&I market” figure 1: Broad segments of the IC&I market.
BUYERS AND SELLERS
-Buyers of residential homes are primarily owners who will live in the home. However, some are purchased purely for investment. There are relatively few buyers and sellers in the IC&I market compared to the large number of potential buyers and sellers in the residential market.
THE DECISION PROCESS
IC&I is more logical and analytical then buyers in the residential market, and may carry extensive financial analysis.
FINFING BUYERS AND SELLERS
-Listing and selling IC&I properties is much more difficult than listing residential properties because it is typically harder to find buyers and sellers.
FINANCING
-Financing residential properties is straightforward and a quick process.
-Financing IC&I is lengthy and complicated.
It is influenced by form of ownership, which can include joint ventures, partnerships or corporations.
CONTRACTS OR PURCHASE AND SALE
-Residential contracts contain one or two basic conditions precedent clauses.
-IC&I can be lengthy and complicated.
EARNING POTENTIAL
in the IC&I market, the earning capacity is likely greater than the residential market.
THE SALE OF BUSINESS
-Owners of existing businesses with attendant property rights who whish to sell their businesses are generally in the same position as people who want to sell their interest in land; that is, they are lacking market info, experiences, expertise, methods of marketing and time.
IMMOBILITY
-Immobility is responsible for the local nature of real property markets.
-The forces of demand and supply in real estate markets are determined by the conditions which exist in each local region; transactions in one market area have little impact on transactions in another area.
EXTERNALITIES
-Property and its value are immediately affected by changes that take place beyond its borders.
-Externalities are not only personal (noise, sight, smell) they are also economic, and given rise to particularly difficult choices in the use of the land.
DEVELOPMENT
-The relationship between location, land use and land value is reflected in the history of development of our communities.
-People are typically first attached to a particular location because of the natural qualities and resources of the site.
SUPPLY OF URBAN LAND
-In urban areas, the opposite is the case; there is almost no limit to the supply for land for urban use.
-Urban growth is generally the result of the conversion of land from rural to urban uses through the action of real estate development.
DURABILITY OF IMPROVED LAND
-A second important characteristic of real estate is the indestructibility of space and the durability of structures.
-When considering the durability of structure, it is important to distinguish between the physical life and economic life of the structure.
-Real Estate is a source of shelter. The shelter by real estate; like other services, cannot be stored and must be on continuous production.
INDIVISIBILITY OF SERVICES
-The value of a parcel of real property ultimately depends physically and legally.
-There are horizontal and vertical boundaries in a property can be divided.
-Legal ownership of property may also be divided.
ORGANIZATION OF THE REAL ESTATE BROKERAGE INDUSTRY
-Two aspects:
1) The organizational structure crested by the statutory regulation of the industry; and
2) The voluntary structure created by the variety of professional organization that exists to fulfill objectives not addressed by government regulation.
THE SOURCES OF OUR LAWS
-“Law” can be defined as the enforceable body of rules which governs society.
-On BC there are the common law and stature law.
COMMON LAW
-Common law is the system of law made up of principles and rules of action based upon the ancient customs and usages of the people of a nation which have been recognized, affirmed or enforced by laws.
-An important concept of common law systems the doctrine of stare decisis.
STARE DECISIS
-“Let the former decision stand” - to abide by prior decision and not to disturb the doctrine of the courts that, when the court once laid down a principle of law application to a certain state of facts, it will adhere to that principle, and apply it to all future cases where the facts are substantially the same, regardless of whether the parties and property are the same.
EQUITY
-Equity (in common law) is the concept of justice administered by the courts according to fairness as contrasted with the strictly formulated rules of common law.
-In common law the term “equity” denotes the spirit and habit of fairness, justness, and right dealing which would regulate interaction of person with person.
JOINING OF THE TWO SYSTEMS
-Judicature Acts, “fused” courts of equity with the common law courts.
SPECIFIC PERFORMANCE
-the court, rather than granting damages in lieu of performance, orders that the terms of the contract be carried out by the party in default.
INJUCTION
-A court order which either restraints a party from doing something or require a party to do something.
STATUTE LAW
-Statute law or Legislation is the body of law by which made by our goal representatives in the federal Parliament, provincial legislature or municipal council.
-Involved in banking, bankruptcy, currency, postal services, marriage & divorce, criminal matters, patents, copyrights, shipping, fisheries and national defense. (Federal Govt).
-Civil rights, municipal institutions, administration of justice within the province for property and civil rights, the education and local/ private nature. (Provincial Govt).
CATEGORIES WITHIN OUR LEGAL SYSTEM
-Two major categories which diff. areas of law fall: civil law and public law.
CIVIL LAW
-Also known as Private law regulates disputes between individuals and the public on a whole.
-The term “public” may be i)general applying to all persons with the jurisdiction; ii) local (applying to a geographical area); iii) special (relating to an organization or authority charged with a public interest).
PRIVATE LAW
-The law that deals with disputes between two or more individuals.
PUBLIC LAW
-Includes tax law, constitutional law and criminal law.
-Civil law is more important area of real property law, contracts, agency, and tort law are also civil law matters of daily concern to licensees.
REAL PROPERTY LAW
-Because property and civil rights are matters within the jurisdiction of the provinces, legislation dealing with real property can vary widely from province to province.
THE JUDICIAL SYSTEM IN PRACTICE: THE BC COURT SYSTEM
-Administrative tribunals are not part of the court system.
-To ensure administrative tribunal act fairly and according the law, certain decisions are reviewable by the courts.
CIVIL RESOLUTION TRIBUNAL
-CRT is an online tribunal tasked with resolving almost all strata corporation disputes, including non-payment of strata fees or non-enforcement of strata bylaws; certain small claim disputes; and certain motor vehicle injury disputes.
-CRT has no legal authority to deal with certain matters like libel, slander, claims against the govt. claims constitutional questions and claims involving the Human Rights Code.
-There are 3 potential phases involved in settling a dispute through CRT:
negotiation, facilitation and adjudication.
COURTS OF ORIGINAL JURISDICTION
-There are two civil courts of original jurisdiction in BC: the Small Claims Court and the Supreme Court.
SMALL CLAIMS COURT
-Jurisdiction to deal with most claims of $35,000 or less.
-A person must be able to establish:
1) That the cause of action (i.e circumstances that give rise to the claim) arose within the territorial jurisdiction of the court; or
2) That the person being and lives or carries on business there.
SUPREME COURT OF BC
-BC Supreme Court is the top trial court in the province; there is no monetary limitation on claims which it will hear, nor is there territorial limitations within the province.
APPELLATE COURTS
-After a trial judge has made their decision, either party may appeal that decision to a higher court.
-The higher court is called an appellate and the person bringing the appeal is called appellant.
APPEAL FROM SAMLL CLAIMS COURT
-To the BC Supreme Court, but it does nor automatically lead to a new trial.
-All evidence is reheard and the new trial judge gives their own decision on the matter.
APPEAL FROM BC SUPREME COURT
-To the provincial appellate court, the majority view decides the matter.
-A panel of judges hears the appeal in the Court of Appeal.
APPEAL FROM THE BC COURT OF APPEAL
-The Supreme Court of CA can decide not to hear the appeal.
-Again, the evidence is not reheard and the majority view decides the matter.
PROCEDURE FOR BRINGING A CLAIM
-Where a civil wrong is committed, the injury party may decide to seek a remedy in the court systems to do so, they commence a lawsuit.
THE PARTIES TO A LAWSUIT
-Our common law system is based on adversarial process.
-This means that each party to a dispute presents their case/point of view as persuasively as possible, and then an impartial trier of fact, either judge or jury, makes findings of fact, applies the law to those facts, and comes to a decision that is binding in both parties.
-Not every claim results in a trial. Most claims are settled out of court. Two major reasons for this are the effect of our pre-trial process, and the rise of paying court costs.
THE PRE-TRIAL PROCESS
SEE THE FOLLOWING
WRITTEN PLEADINGS
-BC Supreme Court civil Rules, a plaintiff beings an action by filing a notice of civil claim, which outlines the details of the plaintiff’s claims.
-Once the notice of civil claim has been filed, the plaintiff must serve it on the defendant.
-This process brings the parties to agreement on the points about which they disagree.
DISCOVERY
-In addition to the written pleadings there are many legal devices from bringing out the relevant evidence in the case before it ever gets to trial.
-These proceedings are referred to as “discovery” proceedings.
-The examination of discovery is like a “mini-trial”, each party can examine the opposite party under-oath, and evidence is recorded by a court reporter.
-Strengths and weaknesses of each party positions are presented.
THE TRIAL
-In order to succeed in court, the plaintiff must prove its case on what is known as the balance of probabilities.
-This obligation of the plaintiff to prove its case is called the burden of proof.
-Both the defendant and the witnesses are cross-examined.
THE JUDGMENT
-The judgment will set out the duties or liabilities, if any, that are owed by each party to the other, and may include an order of a particular remedy or course of action.
COURT COSTS
-Courts refers to the monetary allowance that the court orders the unsuccessful party to pay are successful party as a partial reimbursement of the legal expenses (legal fees and disbursement) of brining or defending the lawsuit.
-Court costs do two things, they partially reimburse the successful party for legal fees, and they discourage people from bringing on defending weak cases, due to the risk of having to pay costs if the other party is successful in court.
MEDITATION
-Mediation is a dispute resolution process whereby a mediator assists the parties to constructively resolve their dispute and avoid proceeding to a court hearing.
-The mediation process is often commented through a voluntary agreement to mediate between all involved parties including the mediator.
-When a party refuses to participate in the mediation process despite delivery of Notice to Mediate, the court has the power to impose sanctions against the offending party.
-Mediation is far less expensive than litigation.
ARBITRATION
-Arbitration is a form of ADR involves the parties authorizing a neutral third party to decide the outcome of their dispute. This third party may be an individual or a panel. The decision is typically binding on the parties.
-Another alternative to litigation is arbitration.
-Arbitration differs from mediation in that the arbitrator, after reviewing the evidence and arguments from the parties, will make a binding decision, similar to a judge, whereas a mediator works to assist the parties to achieve a consensual binding agreement themselves.
ENFORCING A JUDGMENT
-A losing defendant who has not yet paid the judgment is also known as a judgment debtor.
ECAMINATION OF THE JUDGMENT DEBTOR
-The first major consideration is how the plaintiff can collect the amount owed.
-If a judgment debtor has not paid voluntarily, the plaintiff may have to take further steps to collect from the debtor’s income/assets.
-Any real estate owned, any major personal assets owned such as cars, boats or major machinery.
EXECUTION
-Execution is the process of commencing proceedings to collect an amount owing by reason of a judgment.
-If the judgment debtor has assets that are known to the judgement creditor (for example, a car) these can be seized and sold.
-Nulla bona or “no goods”.
REMEDIES AGAINST LAND
-This judgment must be satisfied before any purchased, can obtain an estate or interest in the land free from the judgment.
-If the judgment debtor owns an estate or interest in land, the judgment can be registered in the appropriate land title office as a charge against the judgment of debtor’s estate or interest.
-After paying out any prior financial charges registered against the land, the balance of the proceeds from this sale will then be paid to the judgment creditor.
GARNISHING ORDER
-Where any third person owes money to one judgment debtor, the plaintiff can obtain money by means of a garnishing order.
-A garnishing order is served on the third party and orders them to pay the money into the court instead of the debtor.
