Land Titles and Registration Systems

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Questions and Answers

What is the main characteristic of the registry system for documenting land interests?

Provides indefinite protection against competing claims.

Issues certificates of title to property owners.

Allows inspection of documents affecting real property. (correct)

Guarantees the accuracy of ownership documents.

What does the chain of title represent?

A method to invalidate prior claims against property.

A series of transactions where ownership is exchanged. (correct)

A record of all past landowners with no time limit.

A legal document that guarantees ownership.

Which principle states that only interests listed in the certificate of title are deemed valid?

Mirror Principle

Curtain Principle (correct)

Indefeasibility Principle

Insurance Principle

What does the doctrine of indefeasibility ensure in the land title system?

Certificate holders are protected from most competing claims. Signup and view all the answers

What role does title insurance serve in the registry system?

It provides compensation for unfulfilled transactions. Signup and view all the answers

In the context of mortgage fraud, what is a potential consequence of the indefeasibility principle?

Innocent parties may face hardship when improperly excluded. Signup and view all the answers

What is the function of the mirror principle in a land title system?

To reflect that all interests in the certificate are valid. Signup and view all the answers

What risk do users of the registry system bear?

The risk that documents may not reflect true ownership. Signup and view all the answers

What is the general rule regarding the purchase of land?

Caveat emptor, let the buyer beware. Signup and view all the answers

Which of the following is an exception to the general rule for land purchases?

The vendor must disclose latent defects that affect the safety or habitability of the property. Signup and view all the answers

What is required for a contract for the sale of land to be valid?

It must be evidenced in writing. Signup and view all the answers

What is a condition precedent in the context of a purchase agreement?

A requirement that must be fulfilled before the transaction is completed. Signup and view all the answers

What happens if a condition precedent is not satisfied?

The primary obligations of the contract are suspended. Signup and view all the answers

What does the term 'closing' refer to in real estate transactions?

The completion of the transaction where payment is made. Signup and view all the answers

What is the role of professionals like real estate agents and appraisers in land transactions?

They can help manage risks associated with the sale. Signup and view all the answers

What describes a subsidiary obligation in a land purchase agreement?

A commitment to expend maximum effort to fulfill a condition precedent. Signup and view all the answers

What is the role of the deferred owner in the principle of differed indefeasibility?

A person who did NOT transact with the fraudster Signup and view all the answers

Which of the following may defeat a certificate of title despite not being registered?

Short term leases Signup and view all the answers

What condition must be met for a writ of execution to allow seizure of property after it has been sold?

It must be filed while the seller was the owner Signup and view all the answers

What should a lawyer do to check for unpaid taxes on a property?

Search municipal and provincial records Signup and view all the answers

What is implied by the principle of indefeasibility regarding the interests of those who deal with a fraudster?

Their interests may be defeated Signup and view all the answers

Which factor is NOT a reason for a lawyer to inspect a property?

Historical ownership records Signup and view all the answers

What is TRUE regarding the principle of prescription and adverse possession?

It involves a long period of use or occupation Signup and view all the answers

What action should a lawyer take concerning public easements?

Look for signs of activity on the land Signup and view all the answers

What happens to the certificate of title if a fraudulent instrument is involved?

It may be defeated by interests of those who transacted with the fraudster Signup and view all the answers

What does a purchaser's lien allow the purchaser to do?

Have the land sold to satisfy outstanding debts Signup and view all the answers

Who is referred to as the mortgagor in a mortgage agreement?

The person who borrows the money Signup and view all the answers

What is a deed of conveyance used for in a title transfer?

To transfer property in the registry system Signup and view all the answers

In the Land Title system, what happens if the mortgagor does not repay the loan?

The mortgagee can enforce rights against the property Signup and view all the answers

What remedy allows a purchaser to require the actual transfer of land?

Specific performance Signup and view all the answers

What is a vendor lien?

An agreement that allows the vendor to recover payment Signup and view all the answers

What is the relationship between a mortgage and a charge in the context of property?

A mortgage creates a charge over the property Signup and view all the answers

Which scenario involves using one asset to acquire another through a mortgage?

Using an owned property to secure a loan for a new purchase Signup and view all the answers

What interest does a mortgagee receive in the property?

A charge on the property Signup and view all the answers

What can Morgagor do to exercise its equity of redemption?

Repay the outstanding debt Signup and view all the answers

What happens to the charge once the debt is paid?

It is removed Signup and view all the answers

What can a mortgagor do even after the loan's due date?

Recover legal title by repaying the loan Signup and view all the answers

What is the primary purpose of foreclosure?

To extinguish the mortgagor's equity of redemption Signup and view all the answers

Under what condition can a borrower have foreclosure set aside?

If they repay the loan amount in full Signup and view all the answers

What must occur for a mortgagee to properly reconvey title to the mortgagor?

The agreement must be properly performed and the loan repaid Signup and view all the answers

What is the role of the assignee in a mortgage transfer?

To assume the same rights and responsibilities as the mortgagee Signup and view all the answers

What does a judicial sale require before it can occur?

Approval from a court or government official Signup and view all the answers

What does the power of sale allow the mortgagee to do?

Sell the land to recover loan payments Signup and view all the answers

What could happen if a borrower fails to repay either of two outstanding loans secured by mortgages?

They will automatically lose the property for both loans Signup and view all the answers

What does foreclosure allow the first mortgagee to do?

Keep the land for themselves by extinguishing the mortgagor's equity Signup and view all the answers

What obstacle do First Nations face in obtaining financing related to reserve land?

Inability to transfer title to the land Signup and view all the answers

What must be done before purchasing a property with an existing mortgage?

Conduct a title search to discover mortgage interests Signup and view all the answers

Which workaround can facilitate financing for First Nations?

Designating reserve land for a long-term lease Signup and view all the answers

What is unclear regarding leasing under aboriginal title?

Whether leases can be mortgaged Signup and view all the answers

Study Notes

Land Titles

A registration system documents interests in land.
Two systems exist: Registry and Land Title.

Register System

Provides a way to inspect and evaluate documents affecting property.
Allows for a chain of title search, which tracks ownership transfers.
Records are usually kept for 40 years.
Documents are available but accuracy isn't guaranteed.
Title insurance is often purchased to address potential mistakes or inaccuracies.
Competing claims are resolved by registration timing and valuable consideration.

Land Title System (Torrens)

Creates certificates of title that heavily guarantee interest validity.
Relies on the doctrine of indefeasibility (interests are generally unchallengeable).
Based on 3 principles:
- Mirror Principle: All interests are listed.
- Curtain Principle: Only registered interests are considered valid.
- Insurance Principle: Compensation for errors.

Mortgage Fraud

Despite benefits, indefeasibility can create hardship for innocent parties.
Relief might be limited to the assurance fund after exhausting other remedies. This can be a lengthy and costly process.
Victim of fraud may face delays in claiming damages against an assurance fund

Unregistered Interests

Some unregistered interests may defeat a certificate of title (exceptions to indefeasibility).
Examples include short-term leases, prescription/adverse possession, public easements, unpaid taxes, and unpaid creditors claims

Land Sales

Sales involve a transfer of ownership for consideration.
A general rule in land purchase is "caveat emptor" (buyer beware).
Vendors are generally not obligated to reveal all facts affecting the sale but should disclose known defects.
Risk management includes engaging professional help (e.g., real estate agents, lawyers, appraisers).

Agreement of Purchase and Sale

Created by an agreement to buy and sell land.
Must be evidenced in writing.
Can have conditions precedent, which must be met before the transaction completes (e.g., property inspections or financing).

Remedies for Default

Purchasers can recover property value or seek specific performance.
Purchasers liens or vendor liens can be used to satisfy outstanding debt.
A lender may exercise a power of sale if the loan isn't repaid.

Mortgages

A security interest in land that guarantees debt repayment.
Mortgagor borrows money, mortgagee lends.
Common situations include purchasing existing properties and securing additional funds using existing property as collateral,

Transfer of Interest by Mortgagee

Mortgagees can assign their rights to others.
Assignee takes on the same responsibilities and rights as the original mortgagee.

Vulnerability of Mortgages

Multiple mortgages create potential vulnerabilities if loans aren't repaid.

Priority of Mortgages

Mortgages generally take priority based on registration order.

Terms of the Contract

Repayment terms are specified in the agreement.
Acceleration clauses allow for immediate payment if conditions aren't met.
Prepayment clauses are common.
Taxes are usually the responsibility of the buyer.

Closing

Involves the completion of the transaction.
Payment of the purchase price and property transfer.
Review by participating parties' lawyers to ensure the transaction's validity and address potential issues,

Possession of Property

Mortgagee can obtain possession under certain circumstances.

Waste

Actions that negatively affect a property's value.

Insurance

Mortgages typically require property insurance with the lender as beneficiary in case of loss or damage

Foreclosure

Legal process used to extinguish a mortgagor's right to redeem the property if they are in default of the loan.

Mortgages on First Nations

First Nations land may have limitations affecting transfer and creditor rights when considering financing.

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Description

Explore the concepts of land titles and registration systems with this quiz. Learn about the differences between the Registry and Land Title systems, their functions, and principles such as indefeasibility. Understand the implications of mortgage fraud and the importance of title insurance.