As always, Hendrix Law is working to protect our lenders from claims made by government authorities, namely, Revenue Canada, when exercising their super priority, now even over a discharged mortgage. This coverage will be added to all residential and commercial lending policies by our office.
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An excellent article from Mortgage Professionals Canada and summary
Please note the disclaimer in the report.
Priorities under the Seniors’ Property Tax Deferral Act and the Seniors’ Home Adaptation and Repair Act
Seniors Home Adaptation & Repair ActSeniors’ Property Tax Deferral ActSeniors’ Property Tax Deferral Act Seniors Home Adaptation & Repair ActBoth of these pieces of legislation provide assistance for Seniors who either can not pay their property taxes as they become due and payable or require assistance to cover the costs of repairs, renovations or adaptations that are reasonably necessary for the maintenance, structural integrity or energy efficiency of the residence or for the health, safety or mobility of the occupants.
Each piece of legislation provides that the Minister can file a caveat, in the land titles office, against the certificate of title for the eligible residence for the loan. Each piece of legislation also provides that upon “the registration of a caveat,.. the charge has the same priority as a mortgage under the Land Titles Act and may be enforced in the same manner as a mortgage”.
Each piece of legislation provides that the debt is payable in full on the “date of the transfer or sale of the residence in respect of which the loan was made”.
So what does this mean when you seen a Caveat under the Seniors’ Property Tax Deferral program or the Seniors’ Home Adaptation and Repair program registered on title to a property you are lending on?
If it is registered on title prior to your advancing funds on your mortgage, you must require the charges to be paid out in full from your mortgage funds as these charges will form a financial property to your mortgage.
If it is registered on title after you have advanced funds, it technically does not form a priority to your mortgage as it is registered with the same priority as if it was a subsequent encumbrance. The difference is that it must be paid off in full with the sale of the property.
Accordingly, if you are foreclosing, you must consider the balance owing on those Caveats, like you would regular property taxes, as forming a priority to your registered mortgage on payout. If the Borrower is selling, they have to sell for sufficient funds to clear all registered financial encumbrances from title. If they don’t have sufficient funds to clear title, but are still selling at what you consider to be market value, you are going to have to treat these Caveats as a priority for payout purposes and decide if you are going to potentially accept less on your charge or foreclose if they can’t complete the sale.
Please note you should be pulling updated titles when you are offering renewals to borrowers that are seniors. These charges affect your loan to value on the property and should be strongly considered on renewal.
As always, we are here for you with any questions, at any time. Please feel free to contact Denise Hendrix at firstname.lastname@example.org
Copies of the legislation are attached for your reference.
Whether you are being foreclosed or are a new Lender wondering what the process is in Alberta, click on the attached link and you will see a description, summary and timeline (in general) for each step taken in a foreclosure action. As always, if you have any questions, please don’t hesitate to contact email@example.com
Guidance for Video Conference Witnessing and Commissioning of Documents Submitted to Land Titles for Registration
From the Law Society of Alberta
Updated April 8, 2020 @ 1 p.m.
Physical personal attendance with clients while they sign documents or swear affidavits may not always be feasible during the COVID-19 pandemic. Effective April 3, 2020, the Government of Alberta is temporarily permitting land titles documents to be witnessed remotely. Read the official letter. In addition, lawyers are permitted to take a deponent’s oath over two-way videoconferencing. The Ministerial Order is limited to situations in which a lawyer is the witness or is acting as a commissioner or notary in administering an oath while a deponent is signing an affidavit. The lawyer must be an active, practicing and indemnified member of the Law Society of Alberta. The Minister’s notice also states that lawyers are subject to the Law Society’s client verification rules and oversight.
The following is a summary of Law Society requirements and recommended best practices, followed by comments on the amended forms prescribed by the Ministerial Order. This guidance has been vetted and approved by the Registrar of Land Titles.
The Ministerial Order also permits the Registrar to authorize the registration of forms that may not be compliant with existing legislation. The Order did not address Form A and Form C, the Consent of Spouse and Certificate of Acknowledgement, contemplated in the regulations under the Dower Act. The Registrar of Land Titles has confirmed that the Certificate of Acknowledgement may be modified to make it consistent with the modified forms in the Ministerial Order. Please refer to additional guidance below.
Please note that Land Titles still requires originally executed documents and affidavits. The Ministerial Order permits remote execution, witnessing and administering an oath, but lawyers will still be required to obtain the originally executed documents from the client before submitting to Land Titles.
Of particular importance, the Registrar of Land Titles has also confirmed that the process may be used where the client is present outside Alberta, and only the lawyer must be present in Alberta.
Law Society Requirements
Lawyers must maintain high standards when identifying the client, and maintain the integrity of the process and the authenticity of the document. The purpose of this guidance is to ensure that parties signing or swearing any official land titles document are properly identified and cannot later deny understanding or signing the relevant documents. This guidance contemplates situations in which the lawyer witnesses the execution of documents by video, and thereafter completes an affidavit of execution, as well as those situations where the lawyer is commissioning the affidavit of execution sworn by a third party witness.
The Ministerial Order makes reference to requirements established by the Law Society. The Rules of the Law Society of Alberta require lawyers to identify and verify clients’ identity in the course of a legal retainer. Those rules have been modified during the COVID-19 pandemic.
The Law Society is also directing lawyers to manage risks by taking the following steps:
- Before the meeting:
- Secure a written consent from the client PRIOR TO THE MEETING to proceed with video conference signing. Notify clients that you will be taking screen shots of them and their identification.
- The client must send clear and legible copies of their identification (front and back) prior to the meeting. Identification should be current, government-issued photo ID. This may also be required by a lender in the event the client is obtaining a mortgage, but lawyers should also check with lenders to confirm their instructions.
- Follow the modified client verification rules set forth in the Law Society’s FAQ.
- Select a secure app or platform for the meeting and ensure both the lawyer and the client have the appropriate technology in place.
- Both the lawyer and the client must ensure that they have an adequate connection to permit the entire meeting to be conducted IN ONE SESSION without interruption. The client and lawyer must be able to see and hear one another throughout the video conference. This does not mean that there may not be interruptions; the lawyer should ensure, however, that the video and audio is continuously streaming while the client is signing or swearing a document.
- Prior to the meeting, deliver original documents to the client (hard copy or electronic for the client to print). The lawyer should retain one identical duplicate copy of each document for use during the meeting; there is no need for the lawyer to retain multiple copies.
- During the meeting:
- At the commencement of the meeting, the client must produce the same identification that was emailed to the lawyer. The lawyer must take “screen shots” and compare the photos on the identification with the individual on the call. Lawyers should also consider taking screen shots of the client, either separately or in the same screen alongside their identification.
- The lawyer must review the entire package with the client, page by page, and have the client initial all the pages.
- The lawyer should make best efforts to have a sufficient view of the client location to identify who is present and to ensure that confidentiality of the meeting is preserved. If the client needs assistance from a third party to act as a witness or to deal with technological issues, for example, the attendance of those third parties is appropriate.
- The lawyer must witness the client’s or deponent’s signature by video.
- Immediately after signing, the client must send a PDF version or photograph of the signed documents to the lawyer (preferably during the recorded video conferencing session). If the client does not have the ability to scan the entire document, it will be sufficient for the client to provide images of the signature pages to the lawyer.
- After the meeting:
- The original “wet ink” documents must be returned to the lawyer (preferably by courier).
- Upon receipt of the original signed documents, the lawyer must compare the documents and signatures to the ones in his or her possession to ensure that there are no missing or substituted pages, and that the signature received matches what was witnessed.
- The lawyer must complete the relevant documents that require further signatures, whether as a witness or as a notary or commissioner. The documents must reflect the manner in which they were executed. It is never permissible, for example, to complete an affidavit that suggests it was sworn at an in-person meeting between the deponent and the commissioner or notary when it was in fact taken by video.
- The lawyer should maintain minutes of the meeting, including the date, start time, end time, method of communication, identity of all people present.
- The lawyer should provide the client with a scanned copy or photocopy of the final versions of the executed and sworn documents. This may be done as part of the final reporting to the client.
Recommendations and Best Practices
Lawyers should always be aware of the risks associated with remote signing of documents and affidavits, including but not limited to:
- Identity theft;
- Undue influence;
- Lack of capacity;
- Leaving the client without copies of the executed documents;
- Failing to provide the client with an adequate opportunity to ask questions or request clarifying information about the documents they are executing.
Some recommended practices and safeguards include:
- Consider whether there are any indicia of fraud. If necessary, take additional steps to confirm identity or ask more detailed questions about the transaction;
- Be alert to the fact that some people may attempt to use the current circumstances and resulting confusion as an opportunity to commit fraud or other illegal acts;
- Assess whether there is a risk that the client may be subject to undue influence or duress. Lawyers should determine who is present at the remote location and their relationship to the client. If there is a risk of undue influence or duress, consider whether it is possible to assist the client at this time without meeting in-person;
- Confirm your client’s understanding about the documents they are executing and provide adequate opportunity for them to ask questions during the video conference;
- Observe others who may be physically in the room with the client during the execution and ensure that the client is alone for particularly sensitive documents where duress may be a relevant concern;
Land Titles Forms and Affidavits
When a lawyer receives documents from the client, the lawyer may sign as witness or may act as a commissioner for oaths or notary to complete an affidavit of execution sworn by a witness. The documents must disclose when the client or deponent signed remotely and the documents submitted to Land Titles should include an explanation of the circumstances surrounding their execution, and the manner in which the affidavit of execution was taken. The Ministerial Order outlines the required wording to be adopted in affidavits and sworn declarations to be filed with Land Titles.
The jurat on the affidavits required by Land Titles permits taking an oath via two-way video-conferencing with the deponent. The jurat and body of the affidavits also contemplates that the deponent will have provided evidence to the lawyer to permit the lawyer, acting as a commissioner or notary, to verify the deponent’s identity and to confirm the contents of the document being executed.
When acting as a witness, the lawyer will be required to swear an Affidavit of Execution swearing to the fact that the entire process was completed by two-way video conferencing and that the lawyer, as witness, was all times able to see and hear the person signing the instrument.
When acting as a commissioner or notary, the lawyer and client should refer to the process adopted by the Alberta Court of Queen’s Bench for the completion of affidavits, effective March 25, 2020
When commissioning an affidavit taken by video conference, both the lawyer and the deponent need to have a full copy of the affidavit and all exhibits in front of them. Pages should be compared to ensure they are identical, and initialed. The lawyer must administer the appropriate oath or affirmation and watch the deponent sign the affidavit, after which the deponent will send the originally signed affidavit to the lawyer. The lawyer must again compare each page of the signed affidavit with what the lawyer reviewed during the video conference, and may commission or notarize the document only if satisfied the two copies are identical.
While most of the Dower Act forms were captured in the Ministerial Order, Form C, the Certificate of Acknowledgement by Spouse, was not included. In the case of those Dower Act forms, Land Titles has confirmed that it will accept documents completed by video conference. Lawyers may use modified language in the Certificate of Acknowledgement, such as “This document was acknowledged before me by ______________, by two way video conferencing on the basis of evidence provided to me that enabled me to verify their identity, and apart from her husband (or his wife).”
Lawyers should not submit a document that suggests it was executed or sworn at an in-person meeting when it was in fact taken by video.
The Law Society of Alberta, together with the Government of Alberta is allowing for the registration of Land Titles documents that have been witnessed, sworn or affirmed by Alberta lawyers using two-way visual teleconferencing.
This is a temporary measure invoked by the Government that can end at any time and will expire, in any event, by August 14, 2010.
Original signatures are still required on all documents to register but they can be signed via video conference and then the originals sent to the law firm, to meet their requirements under this interim legislation, and to register at Land Titles.
Your safety and concern remains a priority to us. We are ready and able to do remote real estate signings with you and have implemented this process for court documents previously.
If you have any questions, please do not hesitate to contact our office at 403-269-9400.
We wish all our clients, colleagues, business partners and referral partners, health, grace and peace during this time.
Unfortunately we have postponed the Coloring Contest until further notice – please look back for further updates in the future.
Welcome to Raising Awareness For Autism Colouring Contest. Our goal is to raise awareness for Autism by spending 20 minutes to colour. Today 1 in 57 children are diagnosed with Autism and it is the fastest growing disease in the world. The spectrum is vast and the life long journey requires significant support and understanding from our community. Autistic children and their families become overwhelmed with finding and accessing the required therapeutic and educational services they need. You can help get the word out by sharing and getting your friends, family, colleagues and community colouring! So let’s colour, upload to your Facebook and remember to #colouringconetestyyc to enter. Do not forget to share!!! We are excited to see your creativity.
WHAT CAN I DO?
– Facebook – Like Our Page Here and Share
– Post and Share your artwork all over Social Media!
– Share the contest with your friends, family, business colleagues
– Place copies of the colouring contest in your offices, schools, community centre for clients to colour
– attend your local Autism Awareness day
– take just a moment to think about ways you can show acceptance, love and inspiration with or towards someone who is autistic
If you would like to donate all Funds go to Austism Calgary – Donate Here.
BE A SPONSOR
Be apart of making a bigger difference in raising awareness for Autism. We would love to have apart of the team! Click Here to Learn More.
Click on the link to download the picture to Color!
We are very excited to host with our partner Mortgage Tree, the movie Mulan, by Disney. (unfortunately due to the Covid 19 outbreak, this event has been cancelled). We look forward to rescheduling in the Fall.
We are pleased to advise that First Canadian Title Insurance has, at our request, made available the Attached Mortgage Priority Endorsement for Second Mortgagees. The cost is $75.00 but the value is priceless.
You can either add this endorsement directly through FCT’s website after you select the second mortgage priority in ordering your title insurance or you can create a note requesting the endorsement.
The requirements of the endorsement are as follows:
- The law firm obtains an information statement from the prior mortgagee that is within 30 days of the date of the FCT policy;
- The borrowers sign an irrevocable direction not to re-advance to the prior mortgagee and in that form request a partial discharge of the mortgage from the prior mortgagee;
- The law firm sends the prior mortgage the notice, by registered mail, of the borrowers irrevocable direction not to re-advance and also requests a partial discharge of the unadvanced portion of the mortgage. The law firm must keep a record of the delivery by registered mail.
The endorsement will then provide protection to the second mortgagee for the prior mortgagee asserting a claim for priority over the second mortgage for amounts of principal in excess of the amount shown on the information statement. I understand this endorsement has been available in BC and Ontario for some time. Please note this is only available for second mortgages and not 3rds, 4ths, etc.
We will be ordering these as a matter of course for all our second mortgagee clients. If you require any assistance with a format of irrevocable direction or the request for a partial discharge, please advise and we would be happy to help you.
For our First mortgagees, please ensure that all products secured by the registered mortgages are shown on your information statements as to the balance owing and secured by the registered mortgage.
If you have any questions, please don’t hesitate to ask.copy of second mortgage endorsement