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The Lay of the Land DEVELOPMENTS IN CANADIAN REAL PROPERTY LAW

Tag Archives: mortgage

Commercial Condo Purchaser Tips

Posted in Commercial, Residential

With the continued exponential growth in mixed use developments which often take the form of separate components subject to condo declarations and in many cases multiple condo declarations as between the residential and commercial components, buyers and mortgage lenders will consider additional factors during their due diligence and as part of future management of the various components.… Continue Reading

Does a Lease Created From an Option to Lease Enjoy the Same Priority as the Option?

Posted in Land Use

In large infrastructure projects where multiple parcels of land are required to build the project, project developers will often enter into options to lease with land owners rather than entering into leases in order to enjoy flexibility and to permit time to engage in suitability studies. The developers are frequently advised to register the option to lease on title so as to give notice of its right to the land.  However, the period between the registration of the option and the ultimate execution of the lease (if a developer decides to exercise the option) could last years, and it is … Continue Reading

Supreme Court of Canada decides that substance trumps form in the application of the Section 8 Interest Act prohibition on higher default interest to an incentive rate mortgage

Posted in Commercial, Policy, Residential

In Krayzel Corp. v. Equitable Trust Co., 2016 SCC 18 (“Krayzel”), the Supreme Court of Canada held that an interest rate increase that was structured as a lower rate in the absence of default infringed Section 8 of the Interest Act (Canada). In its analysis, the majority decision looked at whether mortgage loan that offered a lower rate of interest where there was no default is in substance the same as imposing a higher interest rate after a default. It ultimately found that framing the higher rate of interest as part of an incentive to avoid a … Continue Reading

Good-Bye nominee share sales in Quebec

Posted in Commercial, Policy, Residential

In its March 17 budget the Quebec government brought in a series of measures reforming legislation governing transfer duties.  Of particular interest is the introduction of the requirement to disclose off title transfers and the imposition of transfer duties on same.  The legislation was drafted so to previously refer to registration as the trigger for taxation.… Continue Reading

Picturing The Lender as Landlord – Key issues for a lender to consider in a lease review

Posted in Commercial, Residential

There is no one-size-fits-all approach to the scope and level of scrutiny a mortgage lender brings to a lease review. Leases are complex commercial arrangements and lenders invariably face trade-offs between the time and expense of a thorough review and understanding the bundle of rights and obligations that make up a key driver of the value of their collateral. A lender’s lease review will look a lot like a purchaser’s, except that instead of stepping into the landlord’s shoes immediately, it must contend with uncertainty about if and when it will ever have to take over the lease and the … Continue Reading

Three Innocent Lenders and a Fraudster: A Priorities Dispute

Posted in Land Use

The recent decision of CIBC Mortgages Inc. (c.o.b. Firstline Mortgages) v. Computershare Trust Co. of Canada, [2015] ONSC 543 provides a fact scenario that sounds like it was dreamt up by a law school professor, but for the three innocent lenders involved, the situation was a nightmare. A homeowner granted a first mortgage to Computershare which was later fraudulently discharged from title. After the Computershare mortgage was discharged from title, the homeowner granted further mortgages to Firstline and Secure Capital. Firstline and Secure Capital had no knowledge of the fraudulently discharged Computershare mortgage, so based on their review of … Continue Reading

Lenders and Execution Creditors Take Note! The Importance of Searching for Writs of Execution on Loan Advances & Providing Actual Notice of Same

Posted in Construction, Policy

Lenders advancing funds in stages or draws to a mortgagor should pay particular attention to searching for execution judgments against the mortgagor prior to advancing such funds. This is particularly common in construction loans whereby lenders will be making a series of advances over time.   Once a lender has registered its mortgage prior to the initial advance to ensure its priority on title, this is not necessarily the end of the matter. On subsequent advances, while it is important to search title to the property to determine if there are any registrations of concern, such as construction liens, it is … Continue Reading

Amendments to registered interests: who comes out on top?

Posted in Land Use, Policy

To what extent can a subsequent lender rely on the explicit terms of prior registered interests? The recent decision by the Alberta Court of Queen’s Bench, CareVest Capital Inc. v 1336868 Alberta Ltd, 2015 ABQB 94, considered that very issue.

The facts in the case were as follows. In 2007, Bowstein Holdings Inc. loaned $18.1 million to 1336868 Alberta Ltd., which loan was secured by a first priority mortgage registered in the Alberta Land Titles Office (the “LTO”). CareVest Capital Inc. subsequently loaned money to 1336868, which loan was secured by two different mortgages, likewise registered in … Continue Reading