midterm review

Question 1

different types of real estate

Answer 1

real property estates
- all property within canada belongs to the crown (government)
- crown can expropriate the real property without compensation
- crown retains rights on real property
- if there is no next of kin for an individual that passes away, property owned at the time of death reverts to the crown

freehold estate
- a person owns or holds land, free from interference by others

leasehold estate
- a lease gives a person the right to the possession of the real property for specific number of years, in return for rent

fee simple estate
- main type of real property
- person has freedom to dispose of it at will, sell it, rent it out, leave it to someone at will

life estate
- a person has the right to possess, occupy, use and deal with the real property during their lifetime
- cannot sell
- if the fee simple owner has passed away, the real property would go to a beneficiary of the owner (remainderman)

Question 2

examples of real property

Answer 2

one individual
homestead rights
joint tenants
right of survivorship
tenants-in-common

Question 3

differentiate sole ownership, joint tenants, tenants-in-common

Answer 3

sole ownership (one individual)
- only this specific individual or corporation owns the real property
- if the individual is married or is in a common law relationship, the other person has legal right to that of the registered owner

joint tenants
- two or more people hold title entirely together
- each tenant has equal and undivided ownership
- one joint tenant cannot deal in any way with the real property without the agreement of the other joint tenant

tenants-in-common
- people hold separate interest in real property, but are not equal
- title must indicate the percentages that each owner owns
- each may deal with their interest without the agreement of the other tenant-in-common but all must agree to sell the real property

Question 4

be familiar with what an easement is, what are the two most common easements, and how an easement would be registered against property

Answer 4

an easement is the right of a real property owner to temporarily use part of the real property belonging to another owner for a specific purpose

the two most common easements:
right-of-way
- gives the person the right to cross another person’s real property
- need another persons permission in writing

encroachments
- exists when someones real property rests or overhangs anothers real property
- owner who is doing the encroaching needs permission from the owner of the real property in writing, if it is not granted owner with the encroachment on their property can demand the encroachment be removed (demand letter), remove the encroachment themselves, or ask for

an easement would be registered as caveats on the other persons title

Question 5

how are mines and minerals and water located on property dealt with?

Answer 5

mines and minerals:
- owner of the real property that contains mines and minerals can deal with them separately if they choose to
- owners may sell mines and or minerals, as long as the crowns has not reserved rights for these mines and minerals ( a description noted on title would contain “excepting all mines and minerals”)

water rights
sitting water:
- owner of real property may use the water but does not own the water (ex. ponds)

flowing water:
- owner of real property may not take or use all of the water
- water may be used for own needs but may not damn, block, or divert it from its natural course
- owner may not pollute or foul it to deprive a downstream neighbour from using it

Question 6

be familiar with what the land titles offices does and where the LTO locations are within Manitoba

Answer 6

land titles office deals with registration of documents that affect interest in land

six land titles offices in Manitoba
- manitoba
- brandon
- dauphin
- morden
- neepawa
- portage la prairie

Question 7

be familiar with the type of land descriptions that were discussed

Answer 7

civic description
- street address
- physical location

legal description
- geographical description

metes and bounds legal description
- used to describe an irregularly shaped parcel resulting from a subdivision or expropriation

townships
- south to north

ranges
- east to west

sections
- within each square are 36 sections of land
- numbered starting in the SE corner and going left to right and from bottom up

urban property in manitoba is divided and legally described as
lot
block
plan
parish
river lot

Question 8

what is a title search, how do you obtain one, and what information would be in it

Answer 8

a title search allows searches, orders, views, prints and downloads of titles, plans and or instruments noted on a title

to obtain a title search (status of title) you must do a service request from the LTO

information that would be on a title search (status of title) is the:
- title number, the date it was created, and the originating instrument
- the names of the registered owners and how they hold title
- the legal description of the property
- all active instruments and encumbrances
- the address for service ( civic address)

Question 9

when you would obtain a tax search and what information it would retain

Answer 9

a civic address can be used to obtain a tax search and for information on a statement of adjustments

information it would contain it the:
- legal description of the property
- net amount of current taxes
- amount of any arrears
-amount of any TIPP

Question 10

requirements of filing paper copies of documents with an LTO

Answer 10

paper copies of documents that are submitted to land titles must be double sided

Question 11

what would a status of instrument be obtained for

Answer 11

it would be obtained if specific of an instrument are needed in a record of title, provides information of who registered the instrument and when

Question 12

types of mortgages

Answer 12

down payment
- amount of money someone has put down to a purchase of a home

conventional mortgages
- when a buyer has 20% for a down payment
- lender loans 80% of the mortgage
- does not need mortgage loan insurance

insured mortgages
- buyers down payment is less than 20%
- down payment of 5% minimum is required
- mortgage loan insurance is required
- buyer must pay a premium to obtain mortgage loan insurance

assumed mortgage
- allows someone to assume someone else’s mortgage and their property
- mortgagor must be approved by mortgagee
- terms of original mortgage stay the same

Question 13

mortgage term

Answer 13

length of time the mortgage is willing to lend the principal amount for the established interest rate
(ex. 5 year term)

Question 14

maturity date (end of term)

Answer 14

if mortgage is not paid, the mortgagor must renew the mortgage
- negotiates a new term and new interest rate for the balance of the outstanding principal

Question 15

amortization period

Answer 15

length of time it would take the mortgagor to repay the entire mortgage including interest

Question 16

periodic payments

Answer 16

blended payments of both principal and interest

Question 17

interest rate

Answer 17

• percentage charged for the use of borrowed money
• can be fixed rate or variable rate

Question 18

fixed rate

Answer 18

interest does not change throughout the mortgage term

Question 19

variable rate

Answer 19

interest rate varies throughput the mortgage term

Question 20

maturity date (balance due date)

Answer 20

final day of term mortgage
( this date and last payment date may be the same)

Question 21

default

Answer 21

the failure to fulfill a duty or a promise or to discharge an obligation

when someone fails to make a payment

Question 22

equity

Answer 22

amount that the person has paid off of their mortgage

different between the value of property and the total amount of charges charged against it

Question 23

what is an offer to purchase

Answer 23

it is a written contract setting out the terms under which the purchaser agrees to buy a home
- contains information required by a legal assistant to open a file

Question 24

what is the homesteads act

Answer 24

applies to married couples or common law partners cohabiting as a couple in a residence as a family home
- if one person is the sole-registrant on title, the other person has rights to give or withhold consent to any dealings with the family home by the registered owner

Question 25

statement of adjustments

Answer 25

• adjustments reflect prepaid or yet to be paid property taxes
• statement of adjustments determines the balance due and payable from the purchaser to the vendor on closing and possession
• adjustments can be made regarding whether the vendor is on TIPP and whether the closing and possession date is before or after june 30

Question 26

cash required to close

Answer 26

determines the amount of funds the purchaser must bring in on or before the Closing and Possession date

important notes:
- IAD, always do a month prior from first payment date
- funds adv. if funds adv date is before IAD, a calculation is required - if funds adv date is after IAD, calculation is not required
(calculation = gross mortgage proceeds x interest rate / 365 x difference between adv date and IAD DO NOT INCLUDE THE FIRST DATE)

• land transfer tax -> do the online calculator + 119 for the registration

Question 27

differentiate between BLC, Zoning Memorandum and Title Insurance

Answer 27

BLC - indicates whether the house or other formations are contained exclusively within the property lines above ground, indicates encroachments, a new BLC should be obtained each time a purchaser is buying a home

Zoning Memorandum - the amount that is charged to certify the properties compliance with applicable yards and alignment bylaws

Title Insurance - an insurance policy that protects the purchaser from financial loss due to defects in a title to a property

Question 28

declaration as to possession

Answer 28

it is sworn or affirmed statement given as evidence in a sale or mortgage transaction

purchasers declaration:
- contains information and statement that relates to the purchaser, it is addressed to the new mortgagee

vendors declaration:
- contains information and statements that relates to the vendor, it is addressed to the purchaser

Question 29

order to pay

Answer 29

gives direction on how funds (in trust) are to be disbursed

purchasers OTP:
- directs the new mortgagee to pay the net mortgage proceeds to the purchasers lawyer, it also directs the purchasers lawyer to pay the balance of the purchase price with interest to the vendors lawyers

vendors OTP:
- direct the vendors lawyer to use the net proceeds of sal to pay outstanding encumbrances and accounts, the balance goes to the vendor

Question 30

proof of home insurance requirements

Answer 30

mortgagee will not release any funds unless proof of home insurance is provided and it lists the financial institution on the policy

an insurance binder can be obtained as a temporary document that serves as proof of insurance until the full insurance policy is complete

Question 31

what documents are purchasers lawyers and vendors lawyers responsible for

Answer 31

purchasers lawyers are responsible for:
- insurance binders
- registration of instruments
- transfer of title
-mortgage
- status of instrument
- updated status of title
- preliminary report of title
- builders liens list
- statement of account
- land transfer tax
- statements of funds received and disbursed
- reporting letter to purchaser
- final report to mortgage

vendors lawyers are responsible for:
- real estate agent commission
- discharge of vendors mortgage
- transfer
- discharge of vendors mortgage
- discharge of mortgage
- statement of account
- statement of funds received and disbursed
- reporting letter to vendor

Question 32

what is a preliminary report on title for

Answer 32

a report prepared to show ownership of specific parcels of land, as well as liens and encumbrances that are not covered under a title insurance policy

• it is completed after the new mortgage has been registered on title
• purchasers mortgagee send to the purchasers lawyer for completion

Question 33

what is a final report on title for

Answer 33

its to show that the vendors mortgage has been discharged and only the purchasers mortgage is registered on title

Question 34

what is the purpose of an “After 3 PM Search” is for

Answer 34

it ensures no other registration have taken place against the title between the registration of new mortgage and the advancement of net mortgage proceeds

Question 35

which disbursements are a purchaser and a vendor responsible for

Answer 35

purchaser:
- title search costs
- mail and/or courier charges
- photocopying
- tax search costs
- building location certificate
- zoning memorandum
- title insurance

vendor:
- title search costs
- mail and/or courier charges
- photocopying
- tax search costs
- discharge of mortgage

Question 36

what is a statement of funds received and disbursed for

Answer 36

it advises all funds received and disbursed out of the purchaser/vendors trust account throughout the real estate transaction