Question 1

Jared engaged Mackenzie as his lawyer to handle a real estate purchase on his behalf. Mackenzie examined the title to the property, and discovered that the land was subject to a registered outstanding mortgage in favour of Steven. The mortgage would be extinguished if the vendor gave Jared a deed to the land, as the mortgage is an agreement between Steven and the present owner.

Accepted Answer

The mortgage being a registered interest against the property means it remains attached to the property until it is discharged or paid off, regardless of any change in ownership. The transfer of the property to Jared does not automatically extinguish the mortgage.

Question 2

Following closing, should a third party show a legal right to ownership over the purchaser, the purchaser's first recourse is to the vendor in damages.

Accepted Answer

The answer of Following closing, should a third party show...

Question 3

Where a purchaser has viewed the property to his satisfaction before offering, but a survey reveals significantly less land than what was alleged by the vendor, the purchaser may accept it with abatement, or walk away from the sale.

Accepted Answer

If there is a significant difference in the amount of land being offered by the vendor as compared to what is revealed in the survey, the purchaser has the option of accepting the property with an abatement in price or withdrawing from the sale altogether.

Question 4

On closing, a purchaser obtains from the vendor a certificate as to writs of execution.

Accepted Answer

On closing, a purchaser typically obtains a title to the property, not a certificate as to writs of execution. A writ of execution is a court order granting the enforcement of judgments against a debtor's property, which is different from the transfer of property title during a sale.

Question 5

In most cases a vendor must pay an agent his commission based on the sale price in the offer even if the prospective sale falls through.

Accepted Answer

This is because the agent has already put in the effort in finding a potential buyer and negotiating a deal. Even if the sale falls through due to reasons outside the control of the agent, they still performed services and are entitled to their commission as per their contract with the vendor.

Question 6

A real estate agent is bound by a duty of utmost good faith as he acts as agent for both parties as negotiations go back and forth.

Accepted Answer

The answer of A real estate agent is bound by...

Question 7

Jared engaged Mackenzie as his lawyer to handle a real estate purchase on his behalf. Mackenzie examined the title to the property, and discovered that the land was subject to a registered outstanding mortgage in favour of Steven. If Jared proceeded with the purchase without obtaining a discharge of the mortgage from Steven, Steven would be entitled to claim payment from Jared for the mortgage amount.

Accepted Answer

Mackenzie's examination of the title revealed that the property was subject to a registered outstanding mortgage in favour of Steven. Therefore, if Jared proceeded with the purchase without obtaining a discharge of the mortgage from Steven, Steven would be entitled to claim payment from Jared for the mortgage amount.

Question 8

A lawyer obtains on closing a Sheriff's Certificate with respect to Writs of Execution against a vendor. Explain why he or she might (or must) also obtain one as against his or her own clients, particularly if there is to be mortgage financing.

Accepted Answer

The answer of A lawyer obtains on closing a Sheriff's...

Question 9

Leo engaged Raveen, a real estate agent, to sell his house and lot for him. Without disclosing the fact to Leo, Raveen arranged for his brother-in-law to offer to purchase the house at a relatively low price, because he knew Leo was anxious to sell the property. After the transaction closed, Leo discovered the true facts. The transaction is valid.

Accepted Answer

Raveen's actions constitute fraud and breach of fiduciary duty to Leo. The transaction may be deemed voidable at Leo's discretion, and he may choose to seek legal remedies such as rescission of the contract or damages.

Question 10

A "letter of requisition" is the purchaser's formal demand on closing that the vendor deliver the property up in return for payment.

Accepted Answer

A "letter of requisition" is not typically used in real estate transactions. A demand on closing for the vendor to deliver the property is usually made through a lawyer using a "closing letter" or "demand letter."

Question 11

A lawsuit for monetary damages is the traditional remedy open to a purchaser should the vendor improperly attempt to rescind the Agreement of Purchase and Sale.

Accepted Answer

The answer of A lawsuit for monetary damages is the...

Question 12

Jared engaged Mackenzie as his lawyer to handle a real estate purchase on his behalf. Mackenzie examined the title to the property, and discovered that the land was subject to a registered outstanding mortgage in favour of Steven. If the purchase agreement did not provide for the assumption of the mortgage by Jared, the vendor of the property would be obliged to obtain a discharge of the mortgage before Jared would be required to complete the transaction.

Accepted Answer

If the purchase agreement does not provide for the assumption of the mortgage by Jared, then the vendor would need to obtain a discharge of the mortgage before completing the transaction. This is because the mortgage would remain on the property and Jared would then be responsible for paying it off if it is not discharged.

Question 13

An offer contains a statement that: "the agent, for procuring this offer, will be paid by the vendor on the date fixed for completion of this sale, a commission of 6% of an amount equal to the above-mentioned sale price." This places the vendor in a materially better position than an offer which contains a statement that: "the agent, for procuring this offer, will be paid by the vendor on completion of this sale, a commission of 6% of the sale price."

Accepted Answer

Both statements essentially convey the same outcome: the agent will be paid a 6% commission on the sale price upon completion of the sale, not altering the vendor's position materially between the two.

Question 14

A solicitor's fee for handling a sale would exceed his fee for a purchase.

Accepted Answer

Typically, a solicitor's fee for handling a property sale is not necessarily higher than the fee for handling a purchase. The fees depend on various factors such as the property's location, complexity of the transaction, and the solicitor's pricing structure, rather than the nature of the transaction (sale vs. purchase) alone.

Question 15

Describe the role, duties (and to whom they are owed) of a real estate agent in the course of listing a property for sale and conducting negotiations. A complete answer will contain the pitfalls an agent faces in light of general Common Law principles of agency.

Accepted Answer

The answer of Describe the role, duties (and to whom...

Question 16

Livery of seisin has been replaced by delivery of keys.

Accepted Answer

Livery of seisin, which was a symbolic transfer of possession of land through the use of a ceremony involving the handing over of a twig or clod of earth, has been replaced by delivery of keys as a more practical and efficient means of transferring possession of property.

Question 17

The appraisal and survey must be handed over to the purchaser as part of the document package on closing of the real estate transaction.

Accepted Answer

The answer of The appraisal and survey must be handed...

Question 18

Jared engaged Mackenzie as his lawyer to handle a real estate purchase on his behalf. Mackenzie examined the title to the property, and discovered that the land was subject to a registered outstanding mortgage in favour of Steven. If Jared wishes to purchase the property subject to Steven's mortgage, he would only pay the vendor the difference between the mortgage value and the purchase price.

Accepted Answer

If Jared wishes to purchase the property subject to Steven's mortgage, he would need to pay the vendor the full purchase price and also assume responsibility for the outstanding mortgage. This is known as assuming the mortgage.

Question 19

One would not normally expect to find a Bill of Sale as part of the closing documents on the sale of ten hectares of pasture lands.

Accepted Answer

A Bill of Sale is typically used to document the transfer of ownership of personal property, not real estate like pasture lands. Real estate transactions usually involve deeds and other property-specific documents.

Question 20

Describe the major steps a solicitor undertakes and completes in the course of handling a residential real estate purchase.

Accepted Answer

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Quiz 25: Insurance Law