QUESTION ONE RUE OR FALSE?

• ________ Undertakings regarding the discharge of mortgages are usually prepared by the purchaseràlawyer.
• ________ An undertaking that is given and signed by the vendoràlawyer is binding on the vendor (or client) only.
• ________ We are acting for the buyer. If the seller is registering a mortgage discharge on closing, it should be registered before you register anything else.
• ________ An Agreement of Purchase and Sale for a resale condominium may require the purchaser to occupy the unit even before the purchaser gets formal title to the property.
• ________ When a buyer agrees to assume a selleràexisting mortgage, the assumed debt is deducted from the amount the buyer has to pay on closing.
• ________ A vendor is required to change the locks on a sale property on the day of closing.
• ________ Selwyn Seller pays his utilities bills on a flat-rate basis, evenly divided over twelve months of the year. There will likely be an adjustment for this on the Statement of Adjustments.
• ________ Selwyn Seller has agreed to take back a second mortgage on 252 College Circle. On closing day, Blanche Buyeràlawyer should register Selwynàsmall mortgage before he registers the large first mortgage Blanche has obtained from her bank.
• ________ Every new home agreement of purchase and sale must contain an addendum prescribed by the regulations under the Act. If there is any conflict between provisions in the addendum and the agreement of purchase and sale, the provisions in the agreement of purchase and sale will prevail.
• ________ The document that identifies the exact amount the purchaser has to pay to the vendor for the property is prepared by the vendoràlawyer.
• ________ Your employer has gone away on a holiday for a couple of weeks and left you instructions to work on several real estate files. You notice that Mr. and Mrs. Weasleyàpurchase file from three weeks ago still has one undertaking that doesn seem to have been completed by the vendoràlawyer. You must not do anything with the file until your employer returns because a law clerk should never contact another law firm about an unfulfilled undertaking.
• ________ If a property is not connected to a municipal sewer system, you must write to the Building Department of the relevant municipality to ensure that the septic tank has been approved by that office.
• ________ Institutional mortgagees may require proof of adequate insurance on a property before they lend money to a borrower.
• ________ If a client has purchased title insurance, we will not need to perform execution searches against prior owners.
• ________ The reporting letter sent to the seller by his or her lawyer will not contain a legal opinion certifying title.
• ________ If the house being purchased is heated by oil, the seller is responsible for having the tank refilled the day before closing.
• ________ The vendoràinsurance policy is assumed by the purchaser as of the date of closing, but you have to change the name on the policy.
• ________ The purchaser must always make the entire balance due on closing payable to the person named as the vendor in the agreement of purchase and sale.
• ________ The title search for 135 College Circle has revealed that Sammy Selleràoriginal deed contains a statement that he is not a spouse. However, there is a more recent mortgage on the property registered to Sammy and Sandy Seller as co-owners of the property in joint tenancy. Our client, Betty Buyer, has a right to ask for evidence that explains the contradiction.
• ________ Sammyàsolicitor reveals that Sandy died a couple of years ago. If Sammy deposits Sandyàdeath certificate on title as evidence to explain the contradiction, that would be all he needs to do to remove the impediment on title in the Land Titles system.

QUESTION TWO ONVEYANCING TERMINOLOGY

DEFINITION

LEGAL TERM or PHRASE

1. When a builder of a new home is fairly sure of completing the house by a specific date, he will provide the purchaser with a firm closing date in the Statement of Critical Dates and a/an ___________________________, which is 365 days after the firm closing date.

2. A mortgage given for more than 80% of the value of the property is known as this type of mortgage.

3. When the building of a new home is complete, the purchaser must arrange for one of these to be conducted before he or she moves in.

4. Our client Penny is purchasing a property from an estate. It will close on June 15, 2023. Against whom will you search executions just before the transfer?

5. What type of tax is paid on the value of chattels in a real estate sale?

6. What type of provincial tax is payable on the sale of vacant land in a rural setting?

7. Give an example of an encumbrance that might remain on a good and marketable title after closing.

8. Our clients are purchasing a new home. If the completion of the building is delayed, at some point the builder will have to pay them a daily living allowance. At what point will that allowance be mandated?

9. If a purchase is being completed electronically, what should you subsearch on closing day?

10. If the seller is a non-resident, you must make arrangements for the payment of this tax.

11. What is the name of the document given to the purchaser of a resale condominium unit that gives details about the directors and officers and the financial aspects of the condominium corporation?

12. A real estate closing should never take place unless this has been verified under the FLA.

13. After all the adjustments and fees have been paid, the sum of money remaining for the vendor from a house sale is known as this:

14. Our client has defaulted on his mortgage and has already received a Notice of Sale. What is the minimum length of time our client will have to redeem the property after receipt of this Notice?

15. A lawyer breaches his undertaking to use the proceeds from closing to pay off and discharge an existing mortgage. Instead, he disappears with the money and his scuba diving equipment. What specific form of bad behaviour has he committed in relation to real estate law?

QUESTION THREE HORT ANSWER 

• What is an undertaking to readjust, and why is one necessary? 
• If a mortgage is being discharged on or after closing day, why is it important for the vendoràlawyer to deliver funds to the mortgagee as soon as possible? 
• We are acting for the seller in a real estate transaction, and the buyer is assuming the mortgage our client already has on title. What steps do we need to take to ensure this happens? 
• The buyers in a real estate transaction have paid a $35,000 deposit, but the deposit is not enough to pay the total real estate commission owing. Explain how the real estate commission will be paid in terms of who pays it and how it gets paid. 
• How are the realty (property) taxes dealt with regarding a new home purchase when taxes must later be assessed against a property that was formerly vacant land? 

QUESTION FOUR LIENT FILES 

• Sammy Selleràrealty (property) taxes on 123 College Circle are $3,650 and he has paid for all of 2023 in advance. The sale of his house to Betty Buyer is due to close on June 10th. Explain to Betty how we would calculate the amount she will need to pay for the 2023 property taxes. Do the calculation for Betty. 
• Harry and Ginny Potter are buying their very first home. It is located in Kingston, and the purchase price is $450,000.00. Explain to Harry and Ginny what the current rates are for land transfer tax, and what they will be expected to pay for this tax. Note: Harry and Ginny are both Canadian citizens. Do the calculation for Harry and Ginny. 
• (a) Our firm represents Beatrice and Boris Buyer in a prospective real estate transaction. An up-to-date survey discloses that the property is smaller than the description in the agreement of purchase and sale and that there are buildings on the subject property that encroach on an adjoining property. The survey also discloses the existence of a right of way over the subject property that is not provided for in the agreement of purchase and sale. What should the lawyer in our firm requisition from the seller, and why? Briefly explain your answer, but you do not need to draft the requisitions. 
• Our client, Ryan Reynolds, is purchasing a new home in eastern Ontario. The builder is registered with Tarion, and the home has been enrolled in the program. The builderàform of agreement of purchase and sale provides for a deposit of $70,000. The agreement also provides that the builder can substitute materials if necessary.

(b) If the requisitions in (a) above cannot be answered to the satisfaction of Beatrice and Boris, what options would they have regarding their intended purchase? Briefly explain your answer. 

• Ryan is nervous about giving so much money as a deposit. What should we tell Ryan about the deposit? 
• Despite owning a mansion elsewhere, Ryan is very excited about being able to choose some of the items in his more modest new home in Ontario (lighting and plumbing fixtures, kitchen cabinets, tiles, and paint in the colours of his favourite hockey team) and is particularly excited about the fireplace finished with red and black marble from Tuscany. He is worried about the builder being able to make changes after he has so carefully made his very artistic choices. He is particularly worried that he will not like the quality or appearance of substitutions that may be made by the builder. What should we tell Ryan about possible substitutions? 

BONUS QUESTIONS (1 mark each):

• Name one chattel or fixture commonly included in an Agreement of Purchase and Sale that may be the cause of friction between the Buyer and the Seller. 
• Name one major effect that the COVID-19 pandemic has had on new construction of residential real estate.