Property

Question 1

Purpose of Security

Answer 1

To ensure a debt will be repaid:

a) by providing security of equal or greater value; and
b) if borrower defaults, creditors gets first claim on security.

Question 2

Personal Property Security Act

Answer 2

Legislation that controls all secured transactions involving personal property. Allows any form of personal property to be used as security.

Question 3

Default

Answer 3

Creditor has right to obtain and resell property used as security.

Question 4

Builders’ Lien Act

Answer 4

Gives suppliers and subcontractors a claim against property if they are not paid.

Question 5

Transferring Land

Answer 5

Agreement of purchase and sale followed by deed. Agreements may contain various conditions precedent:

• buyer must be approved for mortgage.
• property must be insurable.
• buyer must be permitted to inspect the property.
• buyer must sell his/her own property.

Question 6

Adverse Possession (Squatter Rights)

Answer 6

Claimant must establish five elements:
- actual possession
- open, visible and notorious
- continuous for at least 20 years
- exclusive
- adverse in interest

Question 7

Prescriptive Easement

Answer 7

Claimant can gain right to use a portion of property for a certain purpose. Must prove same elements as for adverse possession except exclusivity.

Question 8

Equity of Redemption

Answer 8

Right to redeem title by payment of debt.

Example: if land is worth $200k and balance of mortgage is $150k then equity is $50k

Question 8

Mortgages

Answer 8

Method of financing a purchase of property.

Mortgagor: borrower.
Mortgagee: lender.

Question 9

Obligations of mortgagor (borrower)

Answer 9

• pay the principal debt and accrued interest.
• keep property insured in name of mortgagee.
• pay taxes on land/buildings
• keep premises in reasonable state of repair.

Question 10

Obligations of mortgagee (lender)

Answer 10

• discharge mortgage upon payment in full.
• cannot interfere with mortgagor’s possession so long as contract is being obeyed.

Question 11

Foreclosure

Answer 11

If there is a default, lender foreclosures and there is a three stage process.

Question 12

Three stage process of foreclosure

Answer 12

1) lender gets a foreclosure order (sets amount of $ owed by borrower)
2) Public Auction Held (borrower has right of redemption until property sold).
3) Lender gets order confirming sale (if deficit, can register judgement against borrower).

Question 13

Leasehold Estates

Answer 13

Tenant has right to exclusive possession and use for specified time.

Question 14

Periodic Leases

Answer 14

Lease for specified period and automatically renews for same period.

Question 15

What if commercial tenant fails to pay rent?

Answer 15

Landlord has two choices:
1) Forfeiture: landlord can terminate tenancy.
2) Distraint: landlord can seize tenant’s goods for rent owed.