Title Fraud Revisited - Reviczky v. Meleknia
The recent case Reviczky v. Meleknia (2008) 88 O.R. (3d) 699 provides an interesting new slant on fraudulent conveyances before October 20, 2006 that I hope won’t adversely affect the certainty provided by the amended Land Titles Act.
Bill 152, the Ministry of Government Services Consumer Protection and Service Moderation Act, 2006, was introduced on October 19, 2006 and became law on December 20, 2006. It substantially amended the provisions of the Land Titles Act relating to title fraud. The key changes were to Section 78 where subsection 4.1 simply makes fraudulent instruments registered on or after October 19, 2006 void. The amended Land Titles Act goes on and provides for a deferred indefeasibility model by saying in subsection 4.2 that instruments registered subsequent to a fraudulent instrument are not invalidated. Accordingly, under the amended Land Titles Act, the doctrine of deferred indefeasibility applies in connection with fraudulent instruments registered after October 19, 2006.
May 5, 2008 in Title Fraud | Permalink | Comments (0)
Adverse Possession: Tasker v. Badgerow
In a world of electronic commerce, 'squatter's rights' seems to be an anachronism. Nevertheless, it still applies in many areas in Canada. The law calls it "adverse possession". Where the law permits adverse possession" anyone one who uses land for 10 years or more openly as if they owned it, will be granted ownership it. The court will order 'paper title' to be transferred to the squatter. A key to adverse possession is that the paper title holder must be excluded from the use to which the paper title holder wishes. Yesterday's Court of Appeal decision in Tasker v. Badgerow, 2008 ONCA 202 emphasizes the importance of the use of the paper title holder. Unless that title owner's use of the land is impaired by the squatter, the court will not consider the possession "adverse" and therefore there is no "adverse possession". In this case the squatter put a fence around the property, and argued that this was strong evidence of its actual open possession for over ten years without objection by the original owners, and therefore it should have title by adverse possession. The squatter lost. The court noted that the land in question is a Mill Reserve, and the claimant’s use was not inconsistent with the title owners’ use. The owners of the Mill Reserve only ever intended keep the land for purposes containing a millpond or head pond resulting from damming the River, and so the squatters use was not adverse to the interest of the owner.
March 26, 2008 in Other | Permalink | Comments (0)
Consents to Lease Assignments - Case Comment, Loblaws v. The General
In a recent unreported decision,
the Supreme Court of Newfoundland and
March 22, 2008 in Leasing | Permalink | Comments (0)
Subrogated Claims by Insurers in Commercial Leases (Part IV)
My blog entries of October 28, 2005, August 29, 2006 and March 6, 2007 discussed the ability of an insurer of a landlord to proceed against a tenant to recover from the tenant amounts paid out by the insurer under a claim by the landlord. That is referred to as a subrogated claim.
In Lincoln Canada Services LP v. First Gulf Design Build Inc. [2007] O.J. No. 4167 the court dealt with a very similar issue, though in this case it was claim by the tenant and there was no insurer involved.
Lincoln Canada Services LP (the “Tenant”) leased certain premises from First Gulf Design Build Inc. (the “Landlord”). A sprinkler leak occurred in the building and the Tenant suffered damages to its inventory and incurred repair costs in cleaning up the water. The amount of the damages were less than the deductible under the Tenant’s insurance policy so initially the Tenant had to absorb these costs. The Tenant then sued the Landlord to recover the costs.
February 26, 2008 in Leasing | Permalink | Comments (0)
Asbestos, Asbestos Everywhere: Complying with Ontario’s New Asbestos Regulations
Just when you think you have complied with your legal obligations respecting asbestos that came into effect two years ago, two new legal requirements under Ontario Regulation 278/05 came into force on November 1, 2007.
As of November 1, 2007, asbestos management programs must now include both friable and non-friable asbestos-containing material (ACM). Prior to November 1, 2007, requirements related to friable asbestos only.
February 1, 2008 in Environmental | Permalink | Comments (5)
City of Toronto Proposes New Environmental Reporting and Disclosure Program
The City of Toronto is considering a new bylaw to introduce an Environmental Reporting and Disclosure Program that will require certain businesses to report the use or release of certain prescribed chemicals to the City, on an annual basis. The information reported to the City will be made publicly available.
Businesses with facilities that use or release any of 25 listed chemicals in amounts above specified thresholds would be affected by the proposed program.
The 25 substances listed in the consultation document are substances that the City has identified as being of concern to human health. These substances include: carbon tetrachloride, lead, nickel, polycyclic aromatic hydrocarbons, tetrachloroethylene, trichloroethylene, vinyl chloride and volatile organic compounds.
January 27, 2008 in Environmental | Permalink | Comments (0)
Toronto's Land Transfer Tax
The new Toronto Land Transfer Tax comes into force on February 1, 2008 and will have a material impact on commercial conveyances.
Below is a table which shows the graduated rates of Ontario and Toronto Land Transfer Tax for commercial transactions (that is, ignoring the 2% LTT on the portion of the purchase price over $400,000 on residential transactions).
Land Transfer Tax in Toronto 2008
Portion of Purchase Price |
Existing Ontario Land Transfer Tax |
New Toronto Land Transfer Tax |
$1 - $55,000 |
.5% |
.5% |
$55,001- $400,000 |
1% to $250,000 1.5% to 400,000 |
1% |
$400,001 - $40,000,000 |
1.5% |
1.5% |
$40,000,001 - |
1.5% |
1% |
A $10 million purchase will attract Ontario Land Transfer Tax of $148,475 and Toronto Land Transfer Tax of $148,475, totaling $296,950. All conveyances up to $40 million in value, will similarly double the Land Transfer Tax payable. For conveyances over $40 million it is slightly less than doubling as Toronto Land Transfer Tax reduces to 1% of the purchase price over that amount.
If the transaction closes by January 31, 2008 the Toronto Land Transfer Tax will not apply. In addition, if a real estate closing takes place on or after February 1, 2008 and the Agreement of Purchase and Sale was executed on or before December 31, 2007 the Purchaser is also entitled to a full rebate.
January 22, 2008 in Purchases and Sales | Permalink | Comments (2)
Environmental Liability in "As Is" Transactions
The recently reported case of Antorisa Investments Ltd. v. 172965 Canada Ltd. 82 O.R. (3d) 437 gives support for something real estate lawyers have been advising clients for some time. If you make no representation or warranty, give people an opportunity to inspect and test on the property and have the Purchaser take the property in an “as is” condition, a Vendor can escape liability to the Purchaser for environmental contamination on the property even if the Vendor caused it.
May 10, 2007 in Environmental | Permalink | Comments (1)
Real Estate Title Fraud - Title Insurance is Still the Answer!
August
Publications
Last summer I wrote a Lang Michener LLP Real Estate Brief and an article in Lawyers Weekly about title fraud entitled “Real Estate Title Fraud – Is Title Insurance The Answer?”. I reviewed the case law to that date and the coverages that were provided and set out when I thought people should title insure their residential dwellings to assist with the risk of fraud. My conclusion was:
“An easy answer (when purchasing a new home) is to title
insure your property, as most title insurance policies cover certain events
that occur after the date of the policy. These include fraud and forgery,
matters that are obviously not protected by the lawyer’s usual title opinion
effective as of closing. In addition, a
title insurance policy, as an indemnity insurance policy, includes a duty to
defend your title – to deal with the litigation related to such fraud.
For an existing owner of a home that was not title insured at its purchase I don’t feel that it is necessary to title insure today so long as the owner is in occupation of the property with a clearly identified ownership and no unusual title dealings. The risk of fraud is minimal because a purchaser or lender would find it almost impossible to be “innocent” and the risk to the ‘con persons’ of being caught is great. However, if you do not occupy your property, unless you are very scrupulous about and extremely comfortable with the persons who are occupying the property, the risk of fraud increases and purchasing title insurance is prudent.”
The case law at that
point was quite clear. As I said in the
Lawyer’s Weekly article:
“There have been 5 lower court and one court of appeal decisions over the past decade and the result of these cases now seems pretty straightforward. In accordance with the language of the Act and the various decisions, the rule seems to be that an “innocent” purchaser or lender’s interest is valid even if obtained pursuant to a fraud, and a “fraudulent” purchaser or lender’s interest (the member of con persons’ group) is invalid. A lender or owner whose interest is lost or encumbered to an “innocent” purchaser or lender by a fraud must first look to the person who committed the fraud and then to the Fund for compensation.”
Since those words were written there have been two significant changes to the law in Ontario in this area. The first was the enactment by the Province of Ontario of Bill 152, the Ministry of Government Services Consumer Protection and Service Moderation Act, 2006, introduced on October 19, 2006 and which became law on December 20, 2006 (“Bill 152”), which amended the sections of the Land Titles Act (the “Act”) considered in those 6 decisions. The second was the decision of the Ontario Court of Appeal in Lawrence v Wright [2007] O.J. No. 381 (“Lawrence”) in which the court reversed the position previously taken by Ontario courts in respect of title fraud.
Not surprisingly, a few weeks ago I got an e-mail from a gentleman who read my August 2006 article on Lang Michener LLP’s web site saying “What is your opinion on title insurance now that the government has passed Bill 152?”. An excellent question and he could also have added “and now that the Ontario Court of Appeal decided differently than you thought it would?” I thought it was important to look at the changes and see whether I should change my advice. Certainly the law is very different than it was in August of 2006.
May 7, 2007 in Title Insurance | Permalink | Comments (3)
Arbitrating Renewal Rent – The Value of Leasehold Improvements, Fire Productions v. Lauro (the appeal)
In my blog entry of January 23, 2006 I reviewed the trial decision in Fire Productions v. Lauro (2005), 38 R.P.R. (4th) 82 (B.C.S.C.). That decision was appealed and the British Columbia Court of Appeal reversed the decision. The appeal is reported at (2007) 49 R.P.R. (4th) 1.
The issue in this case was whether or not a market rent to be settled by an arbitrator for a renewal term should reflect the lease of the premises including the improvements that may have been constructed and installed by the Tenant or rather whether the rent should exclude such improvements. The premises in this case consisted of 3,100 square feet. The market rent including the improvements was held to be $19.00 per square foot. Without the improvements the rent was held to be $13.60 per square foot. The British Columbia Court of Appeal determined that the rent should include the value of the improvements.
March 6, 2007 in Leasing | Permalink | Comments (1)
