Mortgages

BC Home Sales Trending Toward Normal Activity

For the complete news release, including detailed statistics, click here. Vancouver, BC – May 12, 2022. The British Columbia Real Estate Association (BCREA) reports that a total of 8,939 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in  April 2022, a decrease of 34.9 per cent from a record April 2021. The average

Too Tight? The Impact of Bank of Canada Tightening on BC Housing Markets

Vancouver, BC – January 18, 2022. The number of home sales in British Columbia is expected to fall and home price growth will moderate because of rising interest rates according to a new report from the British Real Estate Association (BCREA) examining the potential impacts of the Bank of Canada’s rate tightening widely expected this

Changes to Stress Test Mean Good News for British Columbians

Canada's Parliament Hill and Parliament Buildings, the seat of the federal government of Canada, taken from the back side of the building

The advocacy of BCREA and other stakeholders has resulted in the Federal Minister of Finance Bill Morneau announcing changes to the mortgage stress test. The stress test is used to determine the minimum qualifying rate for mortgages. The new benchmark rate will be the weekly median five-year fixed insured mortgage rate from mortgage insured applications,

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

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

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

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

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

Commission Cases #191

Legally Speaking

By Gerry Neely B.A. LL.B The importance of the exact wording of the terms of a listing contract from which an agent expects to obtain a commission are illustrated in recent decisions of the B.C. Court of Appeal and the Manitoba case which follows. An agreement between a broker retained to obtain financing for land

Norfolk v. Aikens #155

Legally Speaking

By Gerry Neely B.A. LL.B This decision of the British Columbia Court of Appeal led to the distribution among the boards of a two-clause addendum to the Standard Contract of Purchase and Sale. This was done because the reasons for judgment highlighted the distinction between the conveyancing practice through which almost 100% of all real

Soil Contaminated Sites #138

Legally Speaking

By Gerry NeelyB.A. LL.B. What do gas stations with underground tanks, sawmills, pulp mills, paint manufacturing shops, dry-cleaners, shipyards, truck parking yards for moving or fuel companies, junkyards, farms and 63 McClure Crescent, Scarborough, Ontario have in common? With the exception of 63 McClure Crescent, each is a potential site for soils contaminated by the

Satisfactory Financing #121

Legally Speaking

By Gerry Neely B.A. LL.B Relief is in sight. This column is about a B.C. Court of Appeal decision which will make the addition of a conditional financing clause less of a hazard to the enforceability of an offer to purchase. Column 110 reported a B.C. Supreme Court decision which held that an offer to

Property Purchase Tax Act, Bill 60 #115

Legally Speaking

By Gerry Neely B.A. LL.B The Property Purchase Tax Act became law in March of 1987, and amendments to it were made in December, 1987, by Bill 60, mainly to close loopholes or to remove ambiguities in the Act. One loophole was found by developers in the definition of an Agreement for Sale. The definition

Bank Foreclosure – Customer Rights; CMHC Guarantee – Negligence #114

Legally Speaking

By Gerry Neely B.A. LL.B Financial institutions often demonstrate a casual if not contemptuous disregard for requests for pay-out statements or delivery of an executed discharge of a mortgage. While they are quick to demand payment where default occurs, or interest if payment is delayed, they are not as quick to provide statements or discharges.

Property Purchase Tax Act and Other Odds and Sods #104

Legally Speaking

By Gerry NeelyB.A. LL.B. The Property Purchase Tax Act, although it has only received first reading, is here to stay. The amendments to the Bill published in the Orders of the Day of May 19, 1987, primarily remove ambiguities from the Bill as originally drafted. They do remove the original perceived inequities that would have

Interest Clauses – Uncertain and Unenforceable #100

Legally Speaking

By Gerry NeelyB.A. LL.B. What do the following three clauses have in common? “Vendors to carry $90,000.00 by way of a first mortgage payable at $950.00 per month, principal and 12% interest included with a three-year interest adjustment clause. This mortgage to be open and purchaser to have privilege to pay out in full or

Mortgagee Entitled to Six Month’s Interest in Lieu of Notice #99

Legally Speaking

By Gerry NeelyB.A. LL.B. Mary borrowed $100,000.00 from Joe in August, 1983, which she agreed to pay with interest at 11% in monthly installments over a period of one year. This amount was secured by a mortgage and, when Mary’s payments fell into arrears, Joe commenced a foreclosure action. The action was settled by Joe’s agreement

Condominium Act, Municipal Act, Social Service Tax Act #98

Legally Speaking

By Gerry NeelyB.A. LL.B. These three Acts proclaimed by the Legislature in Victoria may contain a number of booby traps waiting to explode in the face of the unwary, but each contains at least one. Anyone purchasing a condominium knows that the legal description includes an interest in the common property. And certainly a mortgagee

Marketing – Another Product? #91

Legally Speaking

By Gerry NeelyB.A. LL.B. For some years Victoria has had double the average population of Canadians over the age of 65 years, the result, of course, of its incomparable beauty and moderate climate. Over the next 30 to 40 years, Canada overall is expected to see a doubling of its population over this age. New

Locked-in Mortgage – No right to prepay #84

Legally Speaking

By Gerry NeelyB.A. LL.B. There must still be some high interest mortgages in force because I have received several calls from licensees asking for an update of columns 38 and 39 in which the question of whether or not a locked-in mortgage could be prepaid before maturity was discussed. As you will recall, the opportunity

Double Interims – A “No, No” #77

Legally Speaking

By Gerry NeelyB.A. LL.B. Despite the creative lending practices of a few financial institutions, such as the Crown Trust and the Canadian Commercial Bank, licensees rightly perceive that the majority of mortgage lending institutions insist that the borrower must meet fairly tough financial and market value requirements before a mortgage loan will be approved. Some

Foreclosure – Defence of Vendor/Mortgagor Against Deficiency Claim #72

Legally Speaking

By Gerry NeelyB.A. LL.B. The Real Estate Council has recently advised licensees of the desirability of advising a vendor of the vendor’s continuing liability to a mortgage lender under a mortgage granted by the vendor on property that is then sold to another person who agrees to assume the mortgage payments. The decrease in property

Agreements for Sale #68

Legally Speaking

By Gerry NeelyB.A. LL.B. A recent amendment to the Law and Equity Act may mean that the time-honoured method of selling property by way of an agreement for sale (right to purchase) may cease. Although its use has declined over the past few decades, largely because most sales require mortgage financing, its use has been continued because

“And/or Nominee” and “And/or Assignee” #65

Legally Speaking

By Gerry NeelyB.A. LL.B. A request has been received for an update of the current law relating to the use of the above phrases in the preparation and enforcement of interim agreements. Column No. 3 written March, 1981, referred to a case where an offer to purchase made by “the undersigned, Century 21 Real Estate

Damages for Breach of Contract – Avoided or Reduced #64

Legally Speaking

By Gerry NeelyB.A. LL.B. Usually a judge will not assist a person who is in breach of contract, to avoid the consequences of that person’s default. One would expect this to be particularly true where the contracting parties agreed that the default of one party would result in “pre-estimated” damages becoming payable to the other

Damages in Lieu of Commission #62

Legally Speaking

By Gerry NeelyB.A. LL.B. The advantages of a listing agreement which fully describes the basis upon which a commission is earned and the obligations of the owner toward the listing agent, in order to support a claim for commission or for damages in lieu of commission, are illustrated by the facts of the following case.

Non-Refundable Deposits #52

Legally Speaking

By Gerry NeelyB.A. LL.B. There appears to be an increasing use in interim agreements of phrases such as “non-refundable deposit”, “at which time a firm contract exists” or “upon which this contract shall be binding upon the parties”. The use of these phrases suggests that the licensee hopes that certain legal consequences will flow from

Guarantees #51

Legally Speaking

By Gerry NeelyB.A. LL.B. The fall in real estate values has made the security held by financial institutions of somewhat dubious value with the result that the number of Court actions against guarantors to recover deficits owed by principal borrowers has increased sharply. This is bad news for guarantors since the form of guarantee used

Agent’s Authority to Receive Mortgage Payments #50

Legally Speaking

By Gerry NeelyB.A. LL.B. Usually you would assume that if you are making monthly payments on a mortgage to a mortgage broker, that you could safely pay the principal amount required to pay the mortgage in full to the broker, and obtain a release from the mortgagee. A recent case once again raises the question

Royal Trust Company Mortgage Renewal Agreement #47

Legally Speaking

By Gerry NeelyB.A. LL.B. Another case has decided whether or not a mortgagor with a low interest five year mortgage which was renewed during the period of high interest rates had the right to prepay it in spite of the terms of the renewal agreement. In this case, the mortgagors, on June 13th, 1977, had

Prepayment of a Locked in Mortgage #38

Legally Speaking

By Gerry NeelyB.A. LL.B. The contrast between today’s relatively low rates of interest and the high rates found in mortgages which were renewed in 1982 has led the mortgagor with a closed renewal mortgage to try to find ways in which the mortgage can be paid off before maturity. These ways have included protests to

Prepayment of a Locked in Mortgage #38

Legally Speaking

By Gerry NeelyB.A. LL.B. The contrast between today’s relatively low rates of interest and the high rates found in mortgages which were renewed in 1982 has led the mortgagor with a closed renewal mortgage to try to find ways in which the mortgage can be paid off before maturity. These ways have included protests to

Prepayment of a Locked in Mortgage (#2 – A B.C. Decision) #39

Legally Speaking

By Gerry NeelyB.A. LL.B. Column No. 38 reviewed the impact of a 1980 Ontario decision interpreting the provisions of the Ontario Mortgage Act in a way which gave a mortgagor who appeared to be locked into a high interest renewed mortgage the right to pay off the mortgage upon payment of three months’ penalty. As that column

Solicitors Conflict of Interest Rules Affecting Vendors #33

Legally Speaking

By Gerry NeelyB.A. LL.B. Column No. 26 discussed the increasing number of successful damage actions brought against lawyers by vendors in transactions where the lawyers in question considered that they were acting for the purchasers only. These actions were successful because the Courts held that in the particular circumstances, the lawyers owed a duty of

Damages, Deposits; Separate Legal Representation for Vendors #26

Legally Speaking

By Gerry NeelyB.A. LL.B. In an Ontario case which arose because of a purchaser’s refusal to close a real estate transaction, the vendors were awarded S5,000.00 general damages for the “vexation, frustration, distress and anxiety, caused solely by the failure of the Defendants (Purchasers) to complete this transaction upon the date agreed upon.” This was

Commission #24

Legally Speaking

By Gerry NeelyB.A. LL.B. “A 1980 decision in which licensees who did not have a listing were successful in obtaining payment for services rendered by them,”. . . illustrates that even in a slumping market for real estate, there are opportunities for a licensee to be of service and to be paid for doing so.

Special Circumstances for Listing Agents’ Commission #22

Legally Speaking

By Gerry NeelyB.A. LL.B. Since the subject of this column, which was requested by the Legislative Committee of BCREA, is one which raises more questions than it answers, it would be appropriate to start it by saying, “HELP WANTED – a reference to the report of a decision of a British Columbia Court which might

Concessionary Financing, the Salvation of the Housing Markets #20

Legally Speaking

By Gerry NeelyB.A. LL.B. An article in the Financial Times of Canada of April 12, 1982 reviews the extent to which “concessionary financing” by vendors has been the salvation of the housing markets in the past few months. The article in question suggests that in Canada and the United States, 70% and 500710 respectively of house sales