Legally Speaking

Life Lease Housing and Seniors (continued) #352

Legally Speaking

By Gerry Neely B.A. LL.B There are several models for life lease housing other than the one referred to in Legally Speaking 351. That model requires the landlord to refund the purchase price to a life tenant whose lease is terminated. Other models include the following: The tenant receives the refund of the purchase price

Life Lease Housing and Seniors #351

Legally Speaking

By Gerry Neely B.A. LL.B Life lease is a term for an alternative residence and ownership arrangement for seniors. The term has been growing in BC over the past ten years because of its appeal to seniors with shared interests and values. The typical arrangement involves a non-profit service club or church sponsoring the construction

Fire Damage Before Closing – Rights and Responsibilities of Buyer and Seller; Easement With or Without Motor Vehicles – No Parking on Easement Area #350

Legally Speaking

By Gerry Neely B.A. LL.B When a fire destroyed or damaged a house before the completion date for its sale, at common law the buyer had to complete the purchase and pay the contract price, unless the contract otherwise provided. For this reason, the Contract of Purchase and Sale includes Clause 16 which allocates risk

Duty of Good Faith to Complete Contracts #349

Legally Speaking

By Gerry Neely B.A. LL.B Lawyers used to feel they could confidently advise clients that, if the buyers failed to pay on the closing dates or sellers failed to deliver executed conveyancing documents by those dates, the contract could be terminated by the innocent party because of the “time is of the essence” clause. However,

Shopping Centre Lease – Injunction to Prevent Landlord from Demolishing Mall; Appraiser’s Failure to Red Flag Inexact Comparables was Negligent #345

Legally Speaking

By Gerry Neely B.A. LL.B The arrival of the “big box power centres” should lead owners or property managers of existing, enclosed mall shopping centres to reexamine their standard leases. Landlords may find the wording of typical clauses dealing with alterations and relocations of tenants’ premises limiting if they decide to change the physical structure

Contract of Purchase and Sale – Clause 18 #344

Legally Speaking

By Gerry Neely B.A. LL.B I understand it is the standard practice of a licensee to explain the significance of the Contract of Purchase and Sale terms to the parties to it, before it is signed. This is particularly desirable for Clause 18, in which the parties agree there are no representations, warranties, etc. other

Commission Claim Lost, Restrictive Contract Wording #339

Legally Speaking

By Gerry NeelyB.A. LL.B. Earning a commission is very much an all or nothing venture. It is made riskier by the court’s strict interpretation of a listing contract to determine whether the acts of an agent who claims a commission, fall within the precise wording of the contract. It is important that an agent not

Streamside Protection Regulation, Continued #338

Legally Speaking

By Gerry NeelyB.A. LL.B. Column 337 ended with formula descriptions for establishing streamside protection areas (also referred to as “leave strips”). The formulas apply to both sides of the stream, so that it is possible to have setbacks as wide as 60 metres. The Streamside Protection Regulation does, however, introduce some flexibility.   Local governments have the authority to

Streamside Protection Regulation – Law on January 19, 2001 (BC Reg. 10/2001) #337

Legally Speaking

By Gerry NeelyB.A. LL.B. Streamside Protection RegulationThe Regulation establishes streamside setbacks that are designed to prevent the deterioration or destruction of the water flow and habitat upon which a healthy fish population depends, or where possible, to restore them. Local governments affected by this Regulation must enact standards before January 2006, in their zoning and

Damages, Licensees’ Purchase of Property Customer Wanted, No Explicit Agency Relationship, Fiduciary Duty; Leaky Condo, Buyer Acted Unreasonably in Relying Upon Property Disclosure Statement #336

Legally Speaking

By Gerry NeelyB.A. LL.B. It should be obvious that licensees cannot purchase property they know their clients want. If licensees are uncertain whether an agency relationship has been created by conduct, they must take all necessary steps to satisfy themselves that the buyers have abandoned their interests in the property, before offering to purchase it.

Finder’s Fee; Unlicensed Person Entitled to Enforce Payment #334

Legally Speaking

By Gerry NeelyB.A. LL.B. A Supreme Court of British Columbia judge decided an individual who was not licensed as an agent or salesperson under the Real Estate Act was entitled to payment of $50,000 for introducing a buyer to property sellers. Since Section 47 of the Act bars a claim for commission or other remuneration for an

A Judge’s Guide to Whim and Fancy, or Best Efforts Clauses; Seller Had to Have Actual Knowledge of Default, Not Deemed Knowledge of Agent, to Be Liable Under Contract; Note Re: Legally Speaking 332 #333

Legally Speaking

By Gerry NeelyB.A. LL.B. In one case, the conditional clause in a Contract of Purchase and Sale required the buyer to satisfy himself as to the tax implications of Canadian/USA/international law upon his purchase of Canadian property. The buyer lived and worked in California, and the purchase monies from an inheritance were to be transferred

Aboriginal Land Development and Sale (Continued) #330

Legally Speaking

By Gerry NeelyB.A. LL.B. The importance of a homeowner’s association was alluded to in Legally Speaking column 329. The association’s role in a development is equivalent to that of a strata corporation. It provides the mechanism through which the owners of leasehold interests in a development, or a phase of a development, govern the administration of their

Aboriginal Land Development and Sale (Continued) #329

Legally Speaking

By Gerry NeelyB.A. LL.B. Column 328 referred to the landlord/tenant relationship resulting from the development of reserve lands. Once all levels of approval have been given, for example, to a residential project, a headlease is created between the federal Minister of Indian and Northern Affairs and a developer, as the tenant. This document provides the

Commission, Receiver/Manager Can’t Be Sued Personally for Sale of Unionized Business, Seller Discharged Employees, Not Liable for Payment Made by Buyer to Settle Grievance #327

Legally Speaking

By Gerry NeelyB.A. LL.B. An agent who is given a listing of real property by a receiver/manager licensed under the Bankruptcy and Insolvency Act can confidently expect to be paid if a buyer contracts during the term of the listing to purchase the property in question and completes the purchase. Unfortunately, the agent with a listing from

Indian Land Development and Sale, Introduction To #328

Legally Speaking

By Gerry NeelyB.A. LL.B. Anyone involved for the first time in the sale of an interest in reserve land will find little that resembles the more usual sale of fee simple land with which we are familiar.  The outright sale of reserve land is a rarity, occurring usually as part of a trade of land, because

Co-Lenders’ Personal Liability for Agent’s Misrepresentation #326

Legally Speaking

By Gerry NeelyB.A. LL.B. Raising financing for a specific project occasionally involves pooling the funds of a number of investors in a mortgage in favour of a limited company which is incorporated and managed by the persons who brought the project to the attention of the investors. An arrangement of this kind is often structured

Strata Property Act, Continued #325

Legally Speaking

By Gerry NeelyB.A. LL.B. An owner-developer now has the opportunity until the first annual general meeting to amend the strata plan to designate parking stalls as limited common property for the use of strata lot owners and, in addition, to designate up to two extra stalls for their use. “Extra” means those stalls set aside

Strata Property Act Regulations #324

Legally Speaking

By Gerry NeelyB.A. LL.B. BCREA published in 1999, a very useful cpe seminar manual, called Strata Property Law for REALTORS, on strata property law and in particular, the Strata Property Act which becomes law on July 1, 2000. This year, regulations to the Act were published which will affect developers, owners and strata councils. The Act requires an owner/developer to

Title Insurance – Part 3 of 3 #323

Legally Speaking

By Gerry Neely B.A. LL.B Some banks and credit unions are now requiring title insurance for the refinancing of consumer mortgages. This, according to a bank spokesperson, provides for a more efficient system at less cost. From the lender’s prospective, the benefits of title insurance coverage include: removing concerns over negligence; making the insurance no-fault;

Title Insurance – Part 2 of 3 #322

Legally Speaking

By Gerry Neely B.A. LL.B A lender’s policy, whether residential or commercial, contains the basic risks plus a broader coverage than is provided in the buyer’s policies, referred to in Column 321. Those risks include, interesting enough, the invalidity of the mortgage due to usury laws, encroachments on to or from the insured lands. These

Title Insurance – Part 1 of 3 #321

Legally Speaking

By Gerry Neely B.A. LL.B We in British Columbia take pride in our Land Title registration system because we can satisfy ourselves as to the state of title with a 60 second online search, instead of waiting a week or so for a title search, as in the State of Washington. However, our system does

Representation Agreements and Powers of Attorney – Part 1 of 3 #318

Legally Speaking

By Gerry NeelyB.A. LL.B. If a licensee is asked by a third party to list a property, the first response would be to ask to see that person’s authority to act on behalf of the owner. Before the proclamation of the Representation Agreement Act on February 28, 2000, the licensee could have received proof of that person’s

Representation Agreements and Powers of Attorney – Part 2 of 3 #319

Legally Speaking

By Gerry NeelyB.A. LL.B. A representation agreement (RA) will be the principal document used to appoint someone you trust to make your medical, personal care, financial and legal decisions. There are two types of RAs. The first is a simple representation agreement (SRA) which gives the representative the authority to make routine legal and financial

Representation Agreements and Powers of Attorney – Part 3 of 3 #320

Legally Speaking

By Gerry NeelyB.A. LL.B. The contents of the representation agreement are yours to decide. With respect to personal, medical and health care decisions, speak to your family, friends and medical professionals. It is particularly important that you speak with your doctor if you have a chronic medical problem. State whether and under what circumstances you

Warranty By Numbered Company – Bankruptcy – Licensee’s Liability for Failure to Advise Seller to Take Security for the Warranty; Private, Not Public Rights of Way and Paragraph 9 of the Contract Of Purchase and Sale #317

Legally Speaking

By Gerry Neely B.A. LL.B What is a licensee’s duty of care to a client who is negotiating the purchase of a commercial property from a numbered company that agreed to give an unsecured warranty? This was the issue in an Ontario case where the licensee drafted the warranty clause in the contract he prepared

Condominiums – Leaky – Court Disallowed Fines for Breach of Rental Bylaw; Owners Entitled to a Hearing #316

Legally Speaking

By Gerry NeelyB.A. LL.B. Two strata owners, who were faced with a rental bylaw limitation, rented their condominium to their adult children without seeking permission from the strata corporation. At various times over several years, permission to rent was denied, then given, and then denied. The owners tried unsuccessfully, in a poor market, to sell

Negligence – on the Base Path – Play Ball (Carefully) #315

Legally Speaking

By Gerry NeelyB.A. LL.B. With so many licensees involved in recreational team sports, such as softball, hockey or basketball, the question of the liability of a person who injures another during the course of a game may be of some interest. This was discussed in a BC Court of Appeal decision of a softball game.

Commission – Licensees Sign the Effective Cause of Sale #314

Legally Speaking

By Gerry NeelyB.A., LL.B A Port Alberni agent successfully collected a commission because of his prominently displayed sign on his principal’s property. It, and the dog run that could be seen from the road, resulted in drive-by buyers turning in and speaking to the owner’s son. When the owner advised the agent of this interest, the

Leaky Condo Syndrome – Statute of Limitations #313

Legally Speaking

By Gerry NeelyB.A., LL.B. That leaky condos are disasters is a given but what is even more depressing are the results of the decision of the cases now being heard concerning the attempts by condominium owners to obtain damages from developers, architects, engineers and others involved in the planning and construction of the condominium. Strata owners,

Assignment of Commission to Listing Agent #311

Legally Speaking

By Gerry NeelyB.A., LL.B. A licensee with a deposit that is less than the commissions has always run the risk of either losing the remainder of the commission, or being forced to sue for it, because an unhappy seller instructs his lawyer or notary public (the conveyancer) to pay all of the proceeds of sale to

Leaky Condo, Special Assessment, Approval by Ordinary Resolution Sufficient – but No Authority to Collect Lump-Sum Payment #310

Legally Speaking

By Gerry NeelyB.A., LL.B. Following upon the leaky condo case discussed in Column 304 of an owner’s refusal to pay a special assessment, is another case in which the developer, as the holder of 24 units in a 194 unit condominium development, challenged the validity of an ordinary resolution approving an assessment of $2,467,000 to be

Cooperating Agent’s Claim for Commission from Listing Agent #307

Legally Speaking

By Gerry NeelyB.A., LL.B. The agent for a prospective buyer, whose offer for a seller’s property was rejected, sued the listing agent for the share of commission offered by the listing agent to cooperating agents. The offer, which was for the exact price and the same terms as those contained in the MLS® contract, was rejected

Fictitious Mortgages – A Mortgage Broker’s Nightmare #306

Legally Speaking

By Gerry NeelyB.A., LL.B. The diligence of an employee of a mortgage broker, and the suspicions of a bank customer service representative, helped to stop the activities of a criminal who created fraudulent mortgages which were then assigned to innocent customers looking for a reasonable return. The method of operation of the fraudsman, as the judge

Retail Strata #305

Legally Speaking

By Gerry NeelyB.A., LL.B. The businesses in a retail shopping centre in Richmond were carried on by owners or tenants of strata lots in a strata corporation. Its bylaws required an owner or occupier of a strata lot to obtain written approval from the strata council to make any change in the nature of the business

Condominiums – Special Assessment, Owners Refusal to Pay #304

Legally Speaking

A strata owner who refused to pay the second half of a special assessment for the cost of substantial repairs to a condominium complex applied to the court for an order for the cancellation of a certificate of default filed against the strata owner’s property by the strata corporation. The owner claimed that a cost overrun

Home Less than Advertised #303

Legally Speaking

By Gerry NeelyB.A., LL.B. Another favourable decision has been given in support of commission trusts for salespersons and cooperating agents, and their priority over the claims of a secured creditor. The secured creditor had registered a general security agreement under the Personal Property Security Act against all assets of the insolvent agency. The creditor was the former principal

Subdivision Plan Not Registered By Completion Date #301

Legally Speaking

By Gerry NeelyB.A., LL.B. A decision made January 29, 1999 now gives us three decisions since 1983, each of which involved the sale of a lot to be created upon the registration of a plan of subdivision of a larger parcel. The issue in each case was whether a seller could force the completion of sale

Three Hundred and Counting #300

Legally Speaking

By Gerry NeelyB.A., LL.B. The first Legally Speaking column was published in January 1981 and each succeeding one, issued at intervals of three weeks more or less for eighteen years, has led, somewhat to my amazement, to this column: Number 300. This is a milestone sufficient to look back and answer a question which has been asked

The Millennium Bug – Will It Y2K-O Us? #299

Legally Speaking

By Gerry NeelyB.A., LL.B. Between those whose Y2K predictions are of nuclear bombs accidentally detonating, others who say Y2K is nothing but hype by the media and the Y2K specialist consultants who benefit from compliance work, there are a number of conservative computer system analysts who believe that North America will face disruptions in 2000

Encroachments on Adjoining Property – Property Law Act #291

Legally Speaking

By Gerry NeelyB.A., LL.B. Occasionally a property owner builds a wall, fence, walkway or structure partly on adjoining property. This is usually the result of a misunderstanding of the location of the common boundary line between the two properties. Decades ago an encroached-upon owner would have had the right to have the encroachment removed. The law

Area – BC Assessment Authority Information Inaccurate #289

Legally Speaking

By Gerry NeelyB.A., LL.B. We can draw two conclusions from the facts described in a recent decision in which a buyer sued for damages because the area of the land purchased by the buyer was only 258.5 acres instead of 309 acres. The first conclusion is that one cannot rely upon the British Columbia Assessment Authority

Heritage Conservation Act (continued) #288

Legally Speaking

By Gerry NeelyB.A., LL.B. As discussed in the previous column, early planning may reduce the overall costs. For example, with early advice, an owner may be able to change his or her plans before an excavation disturbs the artifacts within the site, to avoid the higher remedial cost of screening and salvaging the artifacts from disturbed

Heritage Conservation Act #287

Legally Speaking

By Gerry NeelyB.A., LL.B. Although legislation to protect and conserve heritage property in British Columbia has been in existence since 1925, its impact upon residential homeowners and small property owners has seemed remote. That changed in the Victoria area with newspaper reports of the problems experienced by a beachfront owner of property whose excavations for a

Builders Lien Act #282

Legally Speaking

By Gerry NeelyB.A., LL.B. February 1st, 1998 is the date when the new Builders Lien Act became law, with the exception of a few sections which will only come into force if and when they are proclaimed by regulation at a later date. The sections are those against which the British Columbia Real Estate Association protested, because

Property Transfer Tax – Multiple Buyers and Exemptions #277

Legally Speaking

By Gerry Neely B.A. LL.B A decision involving the Property Transfer Tax Act points to a way, when the facts are right, to reduce the amount of the total tax payable when there are multiple buyers. Three individuals bought one parcel of land in 1994 valued at $760,000, taking the fee simple title in their

Lease – Renewal, No Renewal Agreement, Initial Lease Terms Binding Upon Tenant; Operating Expenses Not Defined and Therefore Uncertain; UFFI – Damages for Breach of Warranty #278

Legally Speaking

By Gerry Neely B.A. LL.B The omission of wording in a lease renewal clause that the renewal would be void if the parties were unable to agree upon the renewal terms, led to some surprising results, at least for the tenant. The right to renew the initial term for a further period of three years,

Condominium Act: Unresolved Issues #276

Legally Speaking

By Gerry Neely B.A. LL.B Completion of the revisions to the Condominium Act will be delayed, according to the Ministry of Finance and Corporate Relations, to allow for a further discussion of the major five following issues. The major issue is one raised by the owners of larger strata lots who argue that expenses should

Commission Claims Made in Small Claims Court #275

Legally Speaking

By Gerry Neely B.A. LL.B The increase several years ago of Small Claims Court monetary jurisdiction to $10,000, opened the door for a number of licensees to sue for payment of a commission which they might otherwise have chosen to forget about. The advantage is that there are no costs, other than minor court costs,

Commission Trust and the Personal Property Security Act ; Condominium Act – Assessments, Defaulting Owner, Strata Corporation Priority Over a Mortgagee #272

Legally Speaking

By Gerry Neely B.A. LL.B Column No. 266 described a B.C. Court of Appeal decision that a valid trust can be created by a properly worded independent contractor contract, despite the illegality of that form of contract under the current Real Estate Act. The significance of this decision is that the trust protects the licensee’s

Substantial Instead of Minor Changes to the Condominium Plan; Disclosure Statement – Failure to File Amendment, Material False Statement in the Budget #269

Legally Speaking

By Gerry Neely B.A. LL.B Since many developers are now pre-selling before there is a hole in the ground, their presentations to prospective buyers can only be based upon models, plans and sales brochures portraying the merits of the condominium a prospective buyer may occupy. Inevitably some alterations to the plans are required as construction

Personal Property Security Act – Commission Trust; Contract of Purchase and Sale (Paragraph One) Restrictive Covenant; Third Party Approval of Plans Not a Minor Defect of Title #267

Legally Speaking

By Gerry Neely B.A. LL.B The last column No. 266 ended with the suggestion that licensees with independent contractor contracts containing commission trusts, might wish to file a Financing Statement in the Personal Property Security Registry in Victoria, against the possibility that the Supreme Court of British Columbia may conclude that the commission trust creates

Condominium Act – Loss of Owner’s Right to Vote; Contract of Purchase and Sale – Paragraph 9 Exclusions of Representations, Etc. #268

Legally Speaking

By Gerry Neely B.A. LL.B Section 125(6) of the Condominium Act states that except where a unanimous resolution is required, an owner is not entitled to vote at a general meeting, unless all contributions payable for the owner’s strata lot have been paid. An owner/developer of a newly-created strata corporation, who follows the not uncommon

Contract with Unincorporated Company a Nullity; Unlicensed Person Posing as Licensed; Residential Assessment – Market Value Included Not GST; Cheque Yore Spilling #265

Legally Speaking

By Gerry Neely B.A. LL.B Two decisions illustrate the risk of not using the full name of a company purchasing property, or the failure of a company to be incorporated at the date it received the benefit of an assignment of a contract. In the first case, which involved an agent’s claim for commission, the

Condominium Jacuzzi’s Excessive Noise and Chlorine Odour #264

Legally Speaking

By Gerry NeelyB.A., LL.B. The Condominium Act, as out-of-date as it is in many respects, may provide a remedy to a strata lot owner, who finds that a decision of the strata council to manage part of the common facilities for the benefit of all owners, interferes with the owner’s enjoyment of her suite. Section 40

Condominium Retroactive By-Law Unenforceable #263

Legally Speaking

By Gerry NeelyB.A., LL.B. A ground level strata unit had a patio on common property, which was reserved for the exclusive use of the owners of the unit. Buyers who purchased it installed a hot tub about June of 1995. The patio was entirely surrounded by the wall of the building, a fence and gateway.

Sellers Take Back Part II of Mortgage #262

Legally Speaking

By Gerry NeelyB.A., LL.B. As anyone who has recently signed a mortgage will know, computerization of the Land Title Office has resulted in a mortgage consisting of two parts. Part I contains the particulars of the parties, legal description, principal amount of the mortgage, the interest rate and how and when the principal and interest

Sellers Right to Recover Tax Paid on Behalf of a Buyer #261

Legally Speaking

By Gerry NeelyB.A., LL.B. Generally, the GST legislation makes a buyer of property, upon which GST is payable, responsible for its payment. The seller has the responsibility, as agent for the Crown, of collecting and remitting it. The question of the seller’s rights when the buyer fails to pay the GST, was the subject matter

Chattels or Fixtures New Test Applied #260

Legally Speaking

By Gerry NeelyB.A., LL.B. Column #247 referred to a case in which the judge laid down six rules for deciding whether or not an article is a chattel or a fixture. Since that case, another judge who said that the rules were of material assistance, has applied them to decide which of the following items are fixtures

Condominium Age Restriction Upheld #259

Legally Speaking

By Gerry NeelyB.A., LL.B. Another decision concerning the right of a strata corporation to pass by-laws limiting occupancy to those of advancing years and to prohibit the rental of any strata units. This case arose out of the occupancy of a unit by parents in their seventies, and a son who was forty-eight, in 1990,

Real Estate Council Lack of Jurisdiction #258

Legally Speaking

By Gerry NeelyB.A., LL.B. Section 20 of the Real Estate Act gives the Real Estate Council the power to conduct an inquiry into a complaint, under regulation 9.12, that a licensee has been negligent or incompetent in the performance of any act, for which he is required to hold a license. While the committee reviewing the evidence

Obtaining Credit By False Representation #257

Legally Speaking

By Gerry NeelyB.A., LL.B. Column #77 discussed an attempt to obtain financing through the use of the Contract of Purchase and Sale, one between the parties and one for the mortgage company, the latter agreement for a higher price and larger down payment than the parties agreed upon. It is a criminal offense to attempt

Negligence by Licensee #256

Legally Speaking

By Gerry NeelyB.A., LL.B. Small mistakes lead to big problems, which proves yet again that eternal vigilance is the price to be paid to avoid having to check your E. & 0. insurance to see what the deductible is. Buyers under a conditional Contract of Purchase and Sale, asked the agent to obtain extensions for

A breach of Section 73 of the Land Title Act #255

Legally Speaking

By Gerry NeelyB.A., LL.B. A recent Court of Appeal decision concerning the validity of a lease, while affecting only a few landlord/tenant relationships, may have serious consequences for those few. The property in the lease in question was part of an unsubdivided larger parcel of the landlord’s land. A building was erected on the part.