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Questions and Answers
All provinces and territories in Canada operate solely under the land titles system.
All provinces and territories in Canada operate solely under the land titles system.
False
The registry system allows for public access to records for evaluating property ownership.
The registry system allows for public access to records for evaluating property ownership.
True
Once a property is transferred, no further investigation into the title is required.
Once a property is transferred, no further investigation into the title is required.
False
If title issues are found, a buyer cannot proceed with the purchase at any adjusted price.
If title issues are found, a buyer cannot proceed with the purchase at any adjusted price.
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The administrators of a registry system guarantee the validity of all filed documents.
The administrators of a registry system guarantee the validity of all filed documents.
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In a registry system, the burden of title search liability falls solely on the seller.
In a registry system, the burden of title search liability falls solely on the seller.
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Historical documents must be examined to confirm a property's ownership and location.
Historical documents must be examined to confirm a property's ownership and location.
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A fundamental defect in a property's title can lead to the collapse of a deal.
A fundamental defect in a property's title can lead to the collapse of a deal.
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Environmental regulations may require property owners to clean up contamination caused by previous owners.
Environmental regulations may require property owners to clean up contamination caused by previous owners.
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In most jurisdictions, squatters gain rights after occupying a property for five years.
In most jurisdictions, squatters gain rights after occupying a property for five years.
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Bankruptcy legislation can potentially result in claims against personal property or fixtures.
Bankruptcy legislation can potentially result in claims against personal property or fixtures.
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Hiring an environmental auditor is an unnecessary step when purchasing a property.
Hiring an environmental auditor is an unnecessary step when purchasing a property.
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Incorporating assurances about property features into the contract means the seller must provide truthful information.
Incorporating assurances about property features into the contract means the seller must provide truthful information.
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It is advisable to examine the property for the presence of tenants before finalizing a purchase.
It is advisable to examine the property for the presence of tenants before finalizing a purchase.
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It is not necessary to determine compliance with local setback requirements when hiring a surveyor.
It is not necessary to determine compliance with local setback requirements when hiring a surveyor.
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Making an offer to purchase conditional on a satisfactory environmental audit is an unnecessary precaution.
Making an offer to purchase conditional on a satisfactory environmental audit is an unnecessary precaution.
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Sellers are not held accountable for clean-up expenses if contamination is discovered prior to the sale.
Sellers are not held accountable for clean-up expenses if contamination is discovered prior to the sale.
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A mortgage represents a loan specifically secured by the property being purchased.
A mortgage represents a loan specifically secured by the property being purchased.
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A mortgagee is the borrower in a mortgage agreement.
A mortgagee is the borrower in a mortgage agreement.
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If a purchaser is unable to secure financing, they must proceed with the purchase regardless.
If a purchaser is unable to secure financing, they must proceed with the purchase regardless.
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Personal guarantees can be required by lenders when the borrower is a corporate entity.
Personal guarantees can be required by lenders when the borrower is a corporate entity.
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Registration of the mortgage document is unnecessary for the lender to secure their interest in the property.
Registration of the mortgage document is unnecessary for the lender to secure their interest in the property.
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Claims registered against the land prior to a new mortgage will not affect the bank's decision to grant a loan.
Claims registered against the land prior to a new mortgage will not affect the bank's decision to grant a loan.
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The contract established between a purchaser and a lender will detail the interest rate and repayment schedule.
The contract established between a purchaser and a lender will detail the interest rate and repayment schedule.
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In a commercial lease, tenants can withhold rent if the landlord fails to meet a requirement in the lease.
In a commercial lease, tenants can withhold rent if the landlord fails to meet a requirement in the lease.
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The rights and obligations in a commercial lease are generally referred to as covenants.
The rights and obligations in a commercial lease are generally referred to as covenants.
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A tenant is typically entitled to make alterations to the leased space without restrictions.
A tenant is typically entitled to make alterations to the leased space without restrictions.
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The duration of a typical commercial lease is often between five to seven years.
The duration of a typical commercial lease is often between five to seven years.
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A tenant's usual remedy for a landlord's breach is to terminate the lease and vacate the premises.
A tenant's usual remedy for a landlord's breach is to terminate the lease and vacate the premises.
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Dispute resolution processes are a common component included in commercial leases.
Dispute resolution processes are a common component included in commercial leases.
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Commercial leases can prohibit landlords from leasing to the tenant’s competitors.
Commercial leases can prohibit landlords from leasing to the tenant’s competitors.
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Security deposits in commercial leases are usually optional and are not commonly required.
Security deposits in commercial leases are usually optional and are not commonly required.
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The doctrine of frustration was frequently invoked in commercial leases before the COVID-19 pandemic.
The doctrine of frustration was frequently invoked in commercial leases before the COVID-19 pandemic.
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Gap was required to pay full rent for the months of April and May 2020, despite the store being closed due to government restrictions.
Gap was required to pay full rent for the months of April and May 2020, despite the store being closed due to government restrictions.
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The landlord argued that the pandemic situation fell outside of the force majeure clause's scope.
The landlord argued that the pandemic situation fell outside of the force majeure clause's scope.
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Gap vacated the leased premises in September after partially paying rent from June to September 2020.
Gap vacated the leased premises in September after partially paying rent from June to September 2020.
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The trial judge determined that the lease should be interpreted as a whole when looking at the force majeure clause.
The trial judge determined that the lease should be interpreted as a whole when looking at the force majeure clause.
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The force majeure clause in the lease was triggered by public health measures during the pandemic.
The force majeure clause in the lease was triggered by public health measures during the pandemic.
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According to the court, the purpose of entering the lease was fundamentally altered due to the pandemic.
According to the court, the purpose of entering the lease was fundamentally altered due to the pandemic.
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Gap was relieved of its obligation to pay rent due to the force majeure clause.
Gap was relieved of its obligation to pay rent due to the force majeure clause.
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The doctrine of frustration requires a contract to be more burdensome, rather than radically altered, to apply.
The doctrine of frustration requires a contract to be more burdensome, rather than radically altered, to apply.
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The force majeure clause includes references to riots and insurrection.
The force majeure clause includes references to riots and insurrection.
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The court determined that restrictive laws during the pandemic did not constitute a force majeure event.
The court determined that restrictive laws during the pandemic did not constitute a force majeure event.
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The lease explicitly stated that the tenant was required to operate a retail store.
The lease explicitly stated that the tenant was required to operate a retail store.
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The force majeure clause allows for the extension of performance periods equivalent to the delay caused.
The force majeure clause allows for the extension of performance periods equivalent to the delay caused.
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Study Notes
Chapter 19: Real Property
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Real property refers to land and interests like mineral rights and leases, having constitutional, statutory, and common law features
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Real property law in Canada is governed by provincial statutes, which determine registration systems, use, and development.
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Private property ownership encompasses the surface, airspace, and subsurface (e.g., minerals).
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Ownership types include fee simple (maximum ownership), life estate (ownership for a lifetime), and condominium (shared ownership of a unit and common areas).
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Key interests in land include mineral rights, leases, and easements.
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There are two main systems for registering land interests in Canada: registry and land titles. Land titles systems offer more certainty and less potential for competing claims.
Business Law in Practice
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Ashley Bishop, a furniture store owner, is expanding to a new strip mall.
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Ashley wants to know the legal aspects of purchasing the mall, the financing implications, and duties to tenants.
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The listing price is 2million,andAshleyandherbusinesspartner,AndrewDoncasterplantoraise2 million, and Ashley and her business partner, Andrew Doncaster plan to raise 2million,andAshleyandherbusinesspartner,AndrewDoncasterplantoraise800,000 and borrow the rest.
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Legal issues for Ashley in the mall purchase include ensuring clear title, identifying existing interests (e.g., leases), and assessing environmental hazards.
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Risks of borrowing 60% include potential financial issues during adverse market conditions, and possible loss of the mall if the loan cannot be repaid.
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Ashley needs to understand her current lease agreement, and the rights and obligations of other tenant leases in the mall.
Quiz Questions
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Question 19.1: Fee simple confers most comprehensive ownership.
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Question 19.2: The distinction between tenancy in common and joint tenancy is that in a tenancy in common, the interest of a deceased tenant passes to their heirs, whereas in a joint tenancy, the interest passes to the surviving joint tenant.
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Question 19.3: A registry system does not inherently provide the same level of certainty as a land titles system. It requires investigation of the "chain of title".
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Question 19.4: The sequence of registration is a critical aspect in a registry system, but not in a land titles system.
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Question 19.8: Caveat emptor is the "buyer beware" principle.
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Question 19.9: The Jardins have a positive duty to disclose the hidden sewer-line defect to the potential buyer.
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Question 19.10: A sale of a property previously used as a gas station requires an environmental audit.
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Question 19.11: In a registry system, a mortgage usually transfers legal ownership to the lender during the borrowing period.
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Question 19.12: Financing conditions create a contractual obligation on the seller or land.
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Question 19.13: Preserving land value is the primary concern for lenders when considering mortgages.
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Question 19.14: Prime can likely sue Dally for the shortfall related to the outstanding mortgage.
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Question 19.15: The three common stages involved in a real estate transaction are: agreement of purchase and sale, investigations, and closing.
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Question 19.16: Confirms the boundary of the land is done when closing is complete.
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Question 19.17: The seller (Martina) will receive an adjustment in taxes from the purchaser. ($1200)
Obligations of Sellers
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Sellers have a duty to disclose known material defects, especially latent defects.
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Misrepresentations, whether spoken or written, can potentially lead to legal repercussions.
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Accurate disclosures of property conditions are important in transactions, including legal descriptions and disclosures of potential issues.
Managing Risk
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The risks in real estate transactions are complex. This includes assessing potential tax implications, environmental issues, and legal conflicts when interacting with relevant parties.
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Thorough investigation by the buyer, including legal and financial due diligence, is critical for mitigating risks.
Financing the Purchase of Real Estate
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Mortgage transactions involve a contract for credit extension (loan).
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A mortgage creates a security interest in the property for the lender (bank).
Termination of the Lease
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Leases often have clauses to address events like defaults which lead to termination of the lease.
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A landlord might terminate the lease for major breaches, or a tenant may claim the premises are uninhabitable (frustration principle.)
Retail Leases in a Changing Marketplace
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The retail industry is subject to significant changes in trends and consumer behaviours.
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Retailers are making use of online sales and other digital means to bolster sales.
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The changing marketplace is making terms and negotiations in lease contracts complex.
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Description
This quiz covers essential concepts of property law as it pertains to the land titles and registry systems in Canada. Test your knowledge on property ownership, title validity, and the responsibilities of buyers and sellers in property transactions. Explore key issues such as title defects and squatters' rights that can impact real estate dealings.
