Publisher s Note 2019 Release 3 Previous release was

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1 Publisher s Note 2019 Release 3 Previous release was From Your Library: Lamont Real Estate Conveyancing This 2nd edition of Donald Lamont s classic work on real estate practice covers the various legal issues that arise in buying and selling real estate. It examines leading case law and relevant statutes for each stage of the real estate transaction including signing the listing agreement, negotiating the Agreement of Purchase and Sale, submitting Requisitions, closing the transaction and the document registration procedure under electronic registration. This release features updates to the case law and commentary in the following Chapter 3 (Offer to Purchase), Chapter 5 (Practical Description of Common Terms), Chapter 6 (Outline of Some Real Estate Statutes), Chapter 8 (Cottage and Rural Conveyancing), Chapter 22 (Mortgages), Chapter 26 (Condominium), Chapter 27 (Building Restrictions), and Chapter 28 (Legal Surveying). Highlights. Option to Repurchase Mortgage Remaining on Title Payment on Closing Whether Difference between Purchase Price and Outstanding Mortgage Where the purchaser had an option to purchase a property, and the option allowed a mortgage to remain on title after the purchase, the option required the purchaser to tender the full purchase price and not just the difference between the purchase price and the outstanding principal on the mortgage. In this case, the vendors purchased the subject property from the Province s predecessor, a Crown corporation, developed the property, and leased it back to the predecessor for a 20-year term. The predecessor had an option to re-purchase the developed land at end of the lease term for $11 million. A schedule to the option agreement set out encumbrances THOMSON REUTERS CANADA Customer Support (Toronto International) (Toll Free Canada U.S.) Fax (Toronto) Fax (Toll Free Canada Only) CustomerSupport.LegalTaxCanada@TR.com This publisher s note may be scanned electronically and photocopied for the purpose of circulating copies within your organization. 1

2 allowed to remain registered against the property after the exercise of the option, including mortgages up to $11 million. The Province brought an action for a declaration that it had the option of paying the full purchase price in cash (and, presumably, having the mortgage discharged) or assuming responsibility for the undischarged mortgage and paying the difference between $11 million and the principal owing on the mortgage. The trial judge dismissed the Province s action. She found the Province was required to tender the full purchase price of $11 million in cash, and taking the property encumbered by the mortgage. In her comments, the trial judge further determined that the vendors had no obligation to indemnify the Province for any payment it might make to discharge the mortgage, as in her view it was sensible to assume that the mortgage amount would have been credited in determining the purchase price. In her reasons, she declined to incorporate those comments into her formal order. The Province went ahead with the purchase, discharged the mortgage and filed an appeal. The Province s appeal was dismissed. In the Province s appeal, it did not, in its factum, seek a declaration that all it was required to pay to exercise the option was the difference between $11 million and the outstanding principal on the mortgage. Instead, it sought a declaration that the $11 million purchase price did not include any credit for the amount secured by the mortgage. The Province believed that if such a declaration were granted, it would be in a position to seek indemnity for amounts paid to discharge the mortgage. The appeal was not clearly moot. However, the trial judge made no reversible error in her interpretation of the option. The option clearly required the full purchase price to be tendered. The trial judge did not err in her approach when she declined to consider the subjective intentions of the parties or any negotiator s opinion about why the terms were included in the option. Nothing in the factual matrix of the case could serve to cast doubt on the meaning of the option. The trial judge s obiter comments regarding indemnification were erroneous, but were not pertinent to the claim as pleaded, were not incorporated into the order, and did not bind the parties. Moreover, the comments were not properly raised as a basis for the appeal: British Columbia (Technology, Innovation and Citizens Services) v. Columbus Real Estate Inc., 2018 CarswellBC 2369, 2018 BCCA 340, 15 B.C.L.R. (6th) 308, 95 R.P.R. (5th) 179, [2018] B.C.J. No (B.C. C.A.), affirming, 2017 BCSC 940, 2017 CarswellBC 1505, 83 R.P.R. (5th) 79, (B.C. S.C.); additional reasons at CarswellBC 2326, 2017 BCSC 1518, 83 R.P.R. (5th) 140, (B.C. S.C. [In Chambers]).. Mortgages Mortgage Guarantee Guarantor Not Signing Acknowledgement and Direction Where the guarantor did not execute the acknowledgement and direction in relation to a mortgage, he was not bound by the charge, in the absence of any other document containing the terms of the guarantee. In Deutsche Bank v. Mieszko Properties Inc., 2018 CarswellOnt 9800, 2018 ONSC 3815, 95 R.P.R. (5th) 171 (Ont. S.C.J.), the chargee was the transferee of a charge provided by the debtor defendant, and guaranteed by the guarantor defendants. The charge matured and was not renewed, and the demand for repayment was not met. As a result, the chargee brought an action against the defendants for the balance owing on the charge. The chargee obtained default judgment against the charger, and one guarantor. The chargee brought a motion for summary judgment against the defending guarantor; the defending guarantor brought a cross-motion for summary 2

3 dismissal of the claim against him. The chargee s motion was dismissed; the guarantor s cross-motion was granted. The charge named all three defendants, and the evidence established that the parties contemplated that the loan would be secured by the subject land, and the two guarantees. One guarantor executed the acknowledgment and direction, agreeing to be bound by the charge and the standard charge terms to which it referred. However, the defending guarantor did not sign the guarantor s section of the acknowledgement and direction as guarantor. The chargee relied on the document it expected that the guarantor had signed, but he did not. The chargee attempted to rely on other documents, but none contained the terms to constitute a contract of guarantee. The chargee did not allege any oral agreement, and doctrine of past performance did not overcome the fundamental problem with the guarantor not signing the guarantee. There was no genuine issue for trial against the guarantor.. Condominiums Reservation Agreements Whether Enforceable Where the reservation agreements (RAs) did not contain all the essential terms of a contract, including the precise units and their location, the RAs were not binding contracts, and the vendor was free to subsequently propose whatever terms it chose, and purchasers were free to accept or reject those terms. In this case, the vendor was a developer that encouraged prospective purchasers to execute and submit reservation agreements (RAs) in order to reserve condominium units in the complex at specified prices pending the formal agreement of purchase and sale. Six prospective purchasers submitted RAs, and subsequently received draft formal agreements of purchase and sale. The purchasers refused to sign the draft agreements as they contained terms that were inconsistent with the RAs, including an increase in the price. The purchasers brought an application against the vendor for specific performance in accordance with the terms of the RAs, and for damages for breach of contract. Their application was dismissed. The RAs did not contain all essential terms of contract and were not binding contracts, so the vendor was free to subsequently propose whatever terms it chose, and the purchasers were free to accept or reject those terms. While the RAs identified the parties and the price, the RAs did not sufficiently identify the subject property. The precise condominium units and their locations had not been identified, and these were essential terms for the sale of any condominium unit. Even if the precise units and locations had been identified, the absence of particulars regarding the floor plans and trim levels supported the finding that the RAs were not binding. With respect to the parties objective intentions, the parties could not possibly have intended to contract for a specific unit, as none had been built, and the draft plan had not even been approved. In absence of an approved plan, the Planning Act, R.S.O. 1990, c. P.13, had prohibited the vendor from offering any unit for sale. A contract to make a contract was not a contract at all, and the five RAs had been accepted on the basis of only giving the purchasers priority over other prospective purchasers: Rangwani v. Pinewoods Home, 2018 CarswellOnt 16205, 2018 ONSC 5819, 95 R.P.R. (5th) 131 (Ont. S.C.J.).. Water Boundaries Riparian Ownership Accretion and Erosion Artificial Landfill Not Constituting Accretion to Shoreline Property An accretion to property abutting a lake or waterway had to be a naturally occurring phenomenon, and not artificially created landfill. A claim for relief for interference with riparian 3

4 rights was subject to the applicable Real Property Limitations Act. In this case, the provincial government transferred a water lot adjacent to the original shoreline of the subject lake to the federal government in Due to the erroneous belief that there was no parcel between the shoreline and the nearby road, no one had sought any kind of consent from the property owners predecessors in title. The federal government constructed a wharf facility on the water lot, and used gravel landfill to extend the shore. The federal government transferred the water lot to the residents association in The property owners acquired their property in 2012, including a secondary parcel between the road and the original shoreline. Shortly after purchasing the property, the owners retained a surveyor who ultimately deposited his survey on the title to the property. The survey did not include the extended shore. The owners brought an application against the residents association, the federal government, and the provincial government for a declaration that the owners had title to the extended shore. The owners application was dismissed. While the owners did in fact own the parcel between the road and the original shoreline, owners did not own the extended shore. There was a significant difference between a naturally occurring change in the shoreline, and man-made landfill that extended from the shore into the area that previously was fully part of the lake. The term accretion suggested a slow, gradual process of receding waters, and not an engineered process that took place as part of a construction project. Leading authors had opined that an accretion to property abutting a lake or waterway had to be a naturally occurring phenomenon, and not artificially created landfill. The extended shore was once simply water, and was part of the water lot, and it was still part and parcel of the water lot. Moreover, the owners survey did not include extended shore, but rather corresponded with what owners knew they had bought, which was not adjacent to the water. The courts across Canada had held that where owner of property registered a survey, the public was deemed to be on notice of the boundaries of the property. The upshot of this was that the owner was considered to have agreed to the boundaries depicted in the survey and could not later assert boundaries that were other than as shown. Even if riparian rights attached to the owners lot, their claim based on interference with riparian rights was barred by both estoppel and expiration of the limitation period. The limitation period in s. 4 of the Real Property Limitations Act, R.S.O. 1990, c. L.15, was within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to some person through whom the person making or bringing it claims. The right of action in the current case first accrued to the owners predecessors in title more than 10 years ago. The argument that interference with riparian rights was an ongoing trespass that had not triggered the 10-year limitation period was contrary to ss. 4 and 15 of the Act, the latter of which provided for the extinguishment of the right at the end of the limitation period. The owners appealed, and their appeal was dismissed. The application judge s decision in finding that the deposit of landfill on the association s water lot moved the shoreline was well-grounded in the evidence and supported by the existing survey monuments. The owners property could not have abutted the lake due to the presence of landfill. Any riparian rights that the owners had to their property were extinguished by the applicable Real Property Limitations Act: In Mihaylov v. Long Beach Residents Association, 2018 ONSC 14, 4

5 2018 CarswellOnt 3337, 95 R.P.R. (5th) 202 (Ont. S.C.J.), affirmed 2018 CarswellOnt 18563, 2018 ONCA 871, 95 R.P.R. (5th) 220 (Ont. C.A.). 5

Court of Appeals of Ohio

[Cite as Adams v. Glitz & Assoc., Inc., 2012-Ohio-4593.] Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA JOURNAL ENTRY AND OPINION No. 97984 BERNARD ADAMS PLAINTIFF-APPELLANT vs.