Category Archives: Legal Information

Does the Basement Apartment comply with retrofit requirements or not?

Posted on April 24, 2011 | 1 Comment

By Martin K. I. Rumack

A recent case concerning the issue of the lack of warranty of retrofit status of a basement apartment has recently been brought to my attention.  This case is of significant interest as there are numerous instances of Agreements of Purchase and Sale involving properties containing basement apartments.  Very often the Listings and the resultant Agreements contain a provision essentially stating that neither the Listing Agent nor the Seller “warrant the retrofit status of the basement apartment”.

In the particular case a property was listed for sale by a real estate agent (Agent).  The listing information described the property as:

“Magnificent house in Prestigious Court, elegant design with apartment in the basement ($1,150.00 income), all window coverings, all existing light fixtures, CAC, CVAC,security systems, garage opener, three fridges, three stoves, a washer and a dryer.  Seller and Agent do not warrant retrofit status of basement apartment.

An individual Buyer engaged the Agent to prepare an Agreement of Purchase and Sale to purchase the property in question.  The Agent advised the Buyer that the property would be an excellent purchase for investment purposes as there was a separate entrance to the basement apartment.  As a result the Agent advised that the property could be rented to two different Tenants because of the separate entrance.

The Agent did not insert any provision either in the Agreement of Purchase and Sale, or in any other ancillary documentation, to ensure that the Buyer was protected nor to ensure that the Buyer was fully informed of the possible illegality, and the suitability or the lack of suitability of the basement apartment for the Buyer’s stated purpose of renting out the basement apartment to provide rental income from the basement apartment.  Following the closing of the transaction, as a result of the Agent’s failure to protect the Buyer commencing to rent the basement apartment for income purposes, the Buyer incurred a number of legal and financial issues and setback.  Amongst other matters the issues included:

1.The Municipality advising the Complainant that the basement entrance was not built in compliance with the Building Code Act 1992;
2.An order being issued by the Municipality for the violation of the Building Code Act 1992 because the basement apartment was not in Compliance with the Building Code Act;
3.Water damage to the basement apartment of about $50,000.00 due to the improper Building of the basement door;
4.The Buyer being taken to the Ontario Rental Housing Tribunal by the Tenants due to the problems the Tenants had with the door;
5.The Buyer having to file for bankruptcy as he could not carry the mortgage when the Tenants stopped paying rent due to the damage to their living space.

Accordingly the Agent acted unprofessionally when he/she;

1.Failed to verify the retrofit status and/or intended use of the basement apartment on behalf of his client, the Complainant.

2.Failed to insert a clause in the offer to ensure that the Complainant received assurances and/or information from the Municipality regarding the legality of the retrofit of the basement apartment before the offer became binding.

The Agent breached the following Provisions of the REBBA 2002 Code of Ethics:

Section 3 – Fairness and honesty
A registrant shall treat every person the registrant deals with in the course of a
trade in real estate fairly, honestly and with integrity.

Section 4 – Best interests
A registrant shall promote and protect the best interests of the
registrant’s clients.

Section 5 – Conscientious and competent service, etc.
A registrant shall provide conscientious service to the registrant’s clients and
customers and shall demonstrate reasonable knowledge, skill, judgment and
competence in providing those services.

Section 6(1) – Providing opinions, etc.
A registrant shall demonstrate reasonable knowledge, skill, judgment and
competence in providing opinions, advice or information to any person in
respect of a trade in real estate.

Section 21(1) – Material facts
A broker or salesperson who has a client in respect of the acquisition or
disposition of a particular interest in real estate shall take reasonable steps to
determine the material facts relating to the acquisition or disposition and, at the
earliest practicable opportunity, shall disclose the material facts to the client.

Section 38 – Error, misrepresentation, fraud
A registrant shall use the registrant’s best efforts to prevent error,
misrepresentation, fraud or any unethical practice in respect of a trade in real
estate.

This was a case decided by the Discipline Committee (REBBA 2002) in March 2010.

Martin K. I. Rumack is a Toronto based Barrister and Solicitor and is a regular contributor to the Muddy York Blog. Contact Information:  202 – 2 St. Clair Avenue East, Toronto, Ontario, M4T 2T5, Tel:  (416) 961-3441 (Ext. 26). Mr. Rumack can be mailed directly at martin@martinrumack.com.

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Removing Abandoned Underground Fuel Tanks In Ontario

Posted on January 7, 2011 | Leave a comment

If you are buying an older home or rural property (such as a cottage) it is important to ensure that there is not an underground oil tank on the property or that it has been removed by having a thorough home inspection conducted. You can mention the possibility of a fuel tank on the property to the inspector, or hire a fuel tank inspector.

If propane or natural gas are not or were not available for heating the home at the time it was built, it is likely that it initially used oil heating. If a fuel tank is not visible on the property, the fuel tank may be buried underground.

The latest deadline for removal or upgrade of an underground tank system was October 1, 2009. This deadline was for underground fuel tanks that were installed less than nine years ago, and underground fuel tanks installed earlier were supposed to be removed between 2006 and 2008, depending on the age of the tank or date of original installation.

It is going to be quite costly to have one of these tanks removed from the property as required by law, so inspecting before you buy is key. In that case, the seller can deal with the fuel tank themselves or knock down the asking price accordingly. The underground fuel tank must first be removed, disposed of properly, and then the surrounding soil tested for contamination. Contaminated soil is akin to a miniature oil spill on your property, and also must be dealt with by professionals. This total cost can run up to a couple thousand dollars and is even more problematic than some realize: The Insurance Bureau of Canada will not insure a home that has an exterior oil tank older than 15 years or an interior tank older than 20.

If the fuel tank is not abandoned and is still functional, it will need to be inspected and registered with the Technical Standards and Safety Authority (TSSA) if not already. Registration is free, but inspections can run at about $150 per hour. Fuel suppliers are supposed to inspect every tank they bring fuel to, but if the tank is no longer used, no one is inspecting it. All abandoned fuel tanks are at risk of leaking and should be removed by a professional who is TSSA-certified.

For more information from Home Inspection experts and Consulting Engineers CarsonDunlop, read their post on fuel tanks on the Muddy York Blog here.

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First-Time Home Buyer’s Credit a.k.a. Disability Home Purchase Credit

Posted on March 26, 2010 | Leave a comment

By Martin K. I. Rumack

This is a credit for taxpayers which was introduced in the January, 2009 budget and which is still in existence today, as opposed to the Home Renovation Tax Credit which expired on January 31, 2010.

This particular credit is worth $750.00.  This credit did not receive the same amount of media attention as the Home Renovation Tax Credit did, nor is it as well known as the Home Renovation Tax Credit.  To be eligible for this credit, the following conditions must be met:

  • Buy a home, alone or as a joint tenant – Note:  only one person is eligible for the credit;  If more than one person qualifies, two (2) people can share the credit;
  • The party or parties claiming the credit must be shown as the registered owner in the Land Titles registration system;
  • The home can be brand new or previously owned;
  • The home can be a single-family, semi-detached, townhouse, mobile home, condominium unit, or a share in a co-operative housing corporation which provides the party claiming the tax credit with both possession and an equity interest in the co-op unit;
  • The closing date must have occurred after January 27, 2009;
  • The home must be your principal place of residence, and you must live in the home within one year after closing;
  • Either:   The home is intended to be used for a disabled family member and yourself, and the home would provide a more suitable environment for the disabled party who will inhabit the home in terms of their personal needs and care;  or is more accessible for the disabled family member, who qualifies for the Disability Tax Credit;
  • Or:        You or your spouse must never have owned a home which you occupied, including jointly, during the previous five years.

Finally, this credit is non-refundable and can be used to reduce income tax only for the applicable year and only if you have income tax payable;  in other words you cannot qualify for a refund if you do not have tax payable in that year.

Martin K. I. Rumack is a Toronto based Barrister and Solicitor and is a regular contributor to the Muddy York Blog. Contact Information:  202 – 2 St. Clair Avenue East, Toronto, Ontario, M4T 2T5, Tel:  (416) 961-3441 (Ext. 26). Mr. Rumack can be mailed directly at martin@martinrumack.com.

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Dying Without a Will

Posted on November 21, 2009 | Leave a comment

By Martin K. I. Rumack

Studies and surveys indicate approximately 40% of Canadian adults do not have a will.  I believe that number would drop significantly if people understood the significant consequences of dying without one.

Consider what would happen if you died without a will (“intestate”).  Initially, your estate assets will be frozen until the courts appoint an administrator, which could cause financial hardship for your family.

Eventually the estate will be distributed according to provincial intestacy laws.  These laws vary by province, but typically provide a set dollar amount to a surviving spouse, with the balance divided equally among the spouse and each child.  This is in the situation of a married spouse and biological or legally adopted children.  A common law spouse or step-children may not be recognized under intestacy laws.  If you have no surviving spouse or children, the assets would go to your next-of-kin in the order provided for by the legislation.

The administrator would have very little discretion in distributing your assets.  Many opportunities to reduce tax – both before and after death – would be reduced or eliminated without a will and related estate planning.

In the case of minor children or dependants, your preference, if any, concerning their guardian may not be recognized.  Payments to minor children would be held in trust by the courts, but only until they reached the age of majority.  At this point, they would have a legal right to the money to spend as they wish – a thought many parents find disconcerting.

It is easy to see that without a will, your family and next of kin could be subject to delays, additional expenses, angst and even potential conflict among themselves at an already stressful time.

I would be happy to meet with you to prepare a will and powers of attorney making life simpler and less costly for those you leave behind.

If you do not have a will, or your will and powers of attorney need to be reviewed and updated, I invite you to give our office a call.

Martin K. I. Rumack is a Toronto based Barrister and Solicitor and is a regular contributor to the Muddy York Blog. Contact Information:  202 – 2 St. Clair Avenue East, Toronto, Ontario, M4T 2T5, Tel:  (416) 961-3441 (Ext. 26). Mr. Rumack can be mailed directly at martin@martinrumack.com.

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NEW HST TAX WILL HURT CONDOS, CO-OWNERSHIPS, CO-OPERATIVES AND HOUSE OWNERS

Posted on November 18, 2009 | 1 Comment

By Martin K. I. Rumack

New taxes are never a good thing.  The new harmonized sales tax (HST) which is effective July 1, 2010, will be tough on the housing industry and particularly on owners of condominiums, co-ownerships, co-operatives and houses.

In the past, the 8 per cent provincial sales tax has not applied to services, but that will change on July 1st.  The new HST will combine the sales tax with the 5 per cent GST for a combined 13 per cent sales tax.  For owners of condominiums, co-ownerships and co-operatives, it means many services that make up maintenance fees, such as hydro and natural gas, repairs and maintenance, landscaping, and contracted services will be taxed at the new rate.  It’s estimated that maintenance fees will rise by 6 or 7 per cent.

Property managers also warn that if major work is planned for an older building, such as replacing a roof, owners may have to pay a special levy to top up their building’s reserve fund to cover the new charges.

It is not just owners who will feel the impact of the harmonized sales tax.  Renters will have to pay the tax on repair and maintenance changes to their rental property.  For anyone who buys a property after July 1, closing costs such as legal fees, real estate commissions, home inspections and the costs of movers will also increase because of the HST.

If you are thinking of buying, if you buy now, you can avoid that increase.

Martin K. I. Rumack is a Toronto based Barrister and Solicitor and is a regular contributor to the Muddy York Blog. Contact Information:  202 – 2 St. Clair Avenue East, Toronto, Ontario, M4T 2T5, Tel:  (416) 961-3441 (Ext. 26). Mr. Rumack can be mailed directly at martin@martinrumack.com.

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Do I Need a Lawyer for my Real Estate Transaction?

Posted on July 10, 2009 | Leave a comment

By Julian Merry

When buying or selling it is a far more complicated procedure than you think. By the time you realize this, it may already be too late and you could have just lost thousands or even tens of thousands of dollars.

business-peopleSince buying or selling a home is a significant financial transaction you should not be considering saving money when it comes to legal fees. Hiring a lawyer for legal advice will definitely be expensive but in the long run you will realize that your interests are protected and it was worth every penny.

The procedure involved when buying or selling a home contains reading and drafting of legal documents; it does require some familiarity with the standard in real estate transactions.

For a seller, it is recommended that you consult with a lawyer immediately early in the process; normally before you sign the listing agreement with a real estate agent. As a seller, you should understand exactly what is in the listing agreement. Some things you should keep in mind would be the real estate agent’ commission and what could happen if you want to cancel your listing or the real estate agent wants to cancel the listing.

When you do sign the listing agreement after you have had a lawyer look through it, you will know what you have signed and exactly what are the terms and conditions within the agreement.

As a buyer it is not necessary to consult with a lawyer until you enter the process to being making an offer on a home and of course before the purchase contract are finalized. You have to be aware of the terms of the offer you are accepting.

Hidden costs are always a possibility and it can come to a shock for those who have exacted a budget. You do not want to be kept in the dark until the last moment of you signing away your home or buying a home. A lawyer will help make sure you do not get any surprises and will let you know what you are getting into before you sign anything.

A lawyer will be able to give you advice and help you in your negotiations; they always will ensure that your interests are protected. In any event that occurs where the deal goes wrong; your investment will be secure knowing that you have not done anything without having your lawyer go through it. You will have peace of mind knowing that you have done everything you can in order to secure your home in any transaction.

Julian Merry is a Broker with Royal LePage/Johnston & Daniel Division.  Julian is a regular contributor to the Muddy York Toronto Real Estate Blog.  Julian’s website is located at www.julianmerry.com.

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CO-OWNERSHIP VERSUS CONDOMINUMS

Posted on April 13, 2009 | 1 Comment

By Martin K. I. Rumack

Condominiums and Co-ownerships are legal structures that define both the exclusive rights and the shared rights of individuals who purchase a unit/percentage interest in buildings created as one of these types of legal entity.

IMPORTANT FEATURES OF CONDOMINIUMS AND CO-OWNERSHIPS FOR THE PURCHASER

CO-OWNERSHIP

  • Purchaser acquires ownership of a percentage interest in the Co-ownership Corporation by a Deed.
  • Purchaser acquires exclusive right to occupy a specific unit through a registered Co-Ownership Agreement and the provisions of the Co-ownership Agreement.
  • Purchaser acquires ownership of a percentage interest in the common areas of the building.
  • Purchaser becomes a member of the Co-ownership Corporation which:
  • (a)    manages the affairs of the building according to the Co-ownership Agreement, the Corporation’s By-laws and/or private Contracts, and the Rules and Regulations; and,
  • (b)    represents the interest of the Percentage Interest Ow.    cte.
  • Purchaser can individually finance her/his own unit, using their shares and interest in the unit. A limited number of lending institutions finance these types of purchases of shares and/or grant mortgages on these types of properties.
  • Purchaser pays for their percentage share of property taxes as a part of their monthly common expenses. The Co-ownership Building is assessed and taxed as one structure.
  • Purchaser is assessed for percentage share (based on the size of unit in comparison to the whole building) of the common expenses.
  • No legislation requiring a Capital Reserve Fund, but Co-ownership Agreement may require a Capital Reserve Fund to be established for maintenance of building. No legislation exists requiring or outlining requirements for a Reserve Fund Study. No legislation exists requiring compliance with the recommendations of a Reserve Fund Study.
  • Purchaser can participate in management decisions by sitting on the Board of Directors and voting as a member at Annual General Meetings.
  • Purchaser is subject to the Co-ownership Agreement, Rules and Regulations, and By-laws and other contractual documentation of the Co-ownership Corporation.
  • Purchaser does not need consent of the other co-owners or Co-ownership Corporation to sell, rent or mortgage his/her unit. There is the odd exception.
  • Purchase of unit should be subject to receipt of an Estoppel Certificate which identifies any outstanding or pending payments, special assessments, or legal actions, re: the unit or corporation, amongst other items together with all other documents included.
  • Co-ownerships may have yearly audited Financial Reports issued to all owners and are managed by a professional Management Company Or self-managed.

CONDOMINIUMS

  • Purchaser acquires ownership of an individual unit by a Deed.
  • Purchaser acquires ow rei.    hip to individual unit by a Deed pursuant
  • to provisions of The Condominium Act.
  • Purchaser acquires a percentage interest in the common areas of the building.
  • Purchaser becomes a member of the Condominium Corporation which:
  • (a)    manages the affairs of the building according to the Condominium Act, and more particularly the Declaration, the By-laws, and the Rules and Regulations; and,
  • (b)    represents the interests of the Owners.
  • Purchaser can individually finance her/his own unit. Large number of lending institutions finance purchases of condominiums and/or grant loans on these types oft.    one ties.
  • Purchaser receives an individual property tax bill.
  • Purchaser is assessed for percentage share (based on the size of unit in comparison to the whole building) of common expenses.
  • Condominium Act requires a reserve monetary fund to be established for maintenance of building. Most comply with the provisions of the Act and generally with the Reserve Fund Study. Study must be updated every 3 years.
  • Purchaser can participate in management decisions by sitting on the Board of Directors and voting as a member of the Condominium Corporation at Annual General Meetings.
  • Purchaser is subject to the Declaration, Rules and Regulations, and By-laws of the Condominium Corporation.
  • Purchaser does not need consent of the other owners or the Condominium Corporation to sell, rent or mortgage his/her unit.
  • Purchase of a unit should be subject to receipt of a Status Certificate which identifies any outstanding or pending payments, special assessments, or legal actions, re: the unit or corporation, amongst other items together with all other documents required to be included.
  • Condominium Corporations must have yearly audited Financial Reports issued to all owners and are almost always managed by a professional Management Company.

Martin K. I. Rumack is a Toronto based Barrister and Solicitor and is a regular contributor to the Muddy York Blog. Contact Information:  202 – 2 St. Clair Avenue East, Toronto, Ontario, M4T 2T5, Tel:  (416) 961-3441 (Ext. 26)

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CONDOMINIUMS VERSUS CO-OPERATIVES (No Shared Liability)

Posted on April 8, 2009 | 3 Comments

By Martin K. I. Rumack

Condominiums and Co-operatives are legal structures that define both the exclusive rights and the shared rights of individuals who purchase a unit/percentage interest in buildings created as one of these types of legal entity.

IMPORTANT FEATURES OF CONDOMINIUMS AND CO-OPERATIVES FOR THE PURCHASER

CO-OPERATIVE (No Shared Liability)

  • Co-operative Corporation is the only registered owner of property (registered on title); purchaser does not own unit
  • Purchaser has long term, exclusive use of individual unit through a I A-ase, or Occupancy Agreement, not a Deed.
  • Purchaser acquires shares in the Co-operative Corporation and is a shareholder in the Corporation.
  • Purchaser becomes a member of the Co-operative Corporation which:
  • (a)owns and manages the affairs of the building on behalf of the Shareholders according to the Co-operative/ Shareholder/ Occupancy Agreement, the Corporation’s By-laws, and/or private contracts, and the Rules and Regulations;
  • (b)grants exclusive occupation right; to shareholders of a specific unit; and,
  • (c)represents the interests of the Shareholders.
  • Purchaser can finance the unit, using their shares and leasehold interest in the unit, only if there is no prohibition on pledging shares as security. Only a few lending institutions finance these types of purchases of shares and/or grant loans on these types of properties.
  • Purchaser is assessed for a percentage share (based on the size of unit in comparison to the whole building) of common expenses.
  • Purchaser pays for their percentage share of property taxes as a part of their monthly common expenses. The Co-operative Building is assessed and taxed as one structure.
  • No legislation requiring a Capital Reserve Fund to be established for maintenance of building. Most Co-operative Corporations do have a Capital Reserve Fund for maintenance of building. No legislation exists requiring or outlining requirements for a Reserve Fund Study. No legislation exists requiring compliance with the recommendations of a Reserve Fund Study.
  • Purchaser can participate in management decisions by sitting on the Board of Directors and voting as a Shareholder of the Co-operative Corporation at the General Annual Meetings.
  • Purchaser is subject to the Co-operative/Shareholder/ Occupancy Agreements, Rules and Regulations, and By-laws of the Co-operative Corporation and other contractual documentation.
  • Purchaser needs consent of the Board of Directors of the Co¬operative Coition/ton to sell shares, assign Lease for unit and to rent unit, which is not unreasonably withheld. There is the odd exception. Additionally, consent is required to pledge shares as security.
  • Purchase of a unit should be subject to receipt of an Estoppel Certificate which identifies any outstanding or pending payments, assessments, or legal actions, re-. the unit or Corporation together with all other documents which are included.
  • Co-operative Corporations may have yearly audited Financial Reports issued to all shareholders and are self-managed or managed by a professional Management Company or self-managed.

CONDOMINIUMS

  • Purchaser acquires ownership of an individual unit by a Deed.
  • Purchaser acquires ow rei.    hip to individual unit by a Deed pursuant
  • to provisions of The Condominium Act.
  • Purchaser acquires a percentage interest in the common areas of the building.
  • Purchaser becomes a member of the Condominium Corporation which:
  • (a)manages the affairs of the building according to the Condominium Act, and more particularly the Declaration, the By-laws, and the Rules and Regulations; and,
  • (b)represents the interests of the Owners.
  • Purchaser can individually finance her/his own unit. Large number of lending institutions finance purchases of condominiums and/or grant loans on these types oft.    one ties.
  • Purchaser receives an individual property tax bill.
  • Purchaser is assessed for percentage share (based on the size of unit in comparison to the whole building) of common expenses.
  • Condominium Act requires a reserve monetary fund to be established for maintenance of building. Most comply with the provisions of the Act and generally with the Reserve Fund Study. Study must be updated every 3 years.
  • Purchaser can participate in management decisions by sitting on the Board of Directors and voting as a member of the Condominium Corporation at Annual General Meetings.
  • Purchaser is subject to the Declaration, Rules and Regulations, and By-laws of the Condominium Corporation.
  • Purchaser does not need consent of the other owners or the Condominium Corporation to sell, rent or mortgage his/her unit.
  • Purchase of a unit should be subject to receipt of a Status Certificate which identifies any outstanding or pending payments, special assessments, or legal actions, re: the unit or corporation, amongst other items together with all other documents required to be included.
  • Condominium Corporations must have yearly audited Financial Reports issued to all owners and are almost always managed by a professional Management Company.

Martin K. I. Rumack is a Toronto based Barrister and Solicitor and is a regular contributor to the Muddy York Blog. Contact Information:  202 – 2 St. Clair Avenue East, Toronto, Ontario, M4T 2T5, Tel:  (416) 961-3441 (Ext. 26)

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Mortgage Fraud – A Hot Topic

Posted on February 18, 2009 | 2 Comments

By: Valerie Logaridis

Few people are aware of the possibility of fraud against their home. But people with substantial equity in their homes or who spend more time out of their home become easy prey for sophisticated fraudsters who have the means to perpetrate this kind of crime.

Susan Lawrence is a Toronto victim of real estate fraud. Her home was mortgaged for almost $300,000 by fraudsters who forged her signature and walked away with the money early in 2005. She says, “Until I was defrauded, I was not aware that if I had title insurance, I would have been protected.”

The Ontario government plans to introduce legislation this fall to enhance existing protection from real estate fraud. If passed, the proposed legislation would ensure that ownership of a property couldn’t be lost as a result of the registration of a falsified mortgage, fraudulent sale or a counterfeit power of attorney. Instead, innocent homeowners will have their titles restored to them and the fraudulent document will be nullified, the government says.

Minister of Government Services Gerry Phillips said, “While individual cases are of concern to me and are upsetting, I can reassure homeowners that real estate fraud is limited in comparison to the more than two million real estate transactions that occur each year in this province. However, we will continue to build on today’s proposals because even one case of fraud is too many.”

Title insurance is one inexpensive way that homeowners can protect themselves from mortgage fraud.

Fraud protection

For many buyers, the fraud coverage provided by title insurance is particularly reassuring. Title insurance can protect homeowners if they are the victim of fraud, and may also pay the costs involved in defending their ownership in the property and restoring their title to the home.

Title insurance provides protection against title-related problems; it is not home warranty insurance, and will not protect homebuyers if the fridge breaks down or the furnace gets old. As with any insurance purchase, the homebuyer should consult the policy for full details of the actual terms and conditions and seek advice from a real estate lawyer. A real estate lawyer can help a buyer or a homeowner sort out the various protections offered by different title insurance companies in order to get an idea of which risks are covered and which are excluded.

One company that sells title insurance, commissioned a survey that found nearly half of homeowners over the age of 45 said they do not have title insurance or are unaware if they do. The survey also found that 63 per cent of Canadian homeowners without title protection had “absolutely no understanding of title insurance – a number that rose to 66 per cent for those over the age of 60,” says the company.

Court of Appeal Decision Protects the Homeowner-victim

In February, the Ontario Court of Appeal reversed a decision that held defrauded home owners on the hook for a fraudulent sale. In a unanimous 5-0 ruling, the court’s decision said that banks and lending institutions had “to be vigilant when making mortgages, and places the burden of fraud on the party that has the opportunity to avoid it – rather than on the innocent homeowner who played no role in the perpetration of the fraud.”

In this Court of Appeal decision, Lawrence v. Maple Trust Company, the homeowner won, was able to keep her home, and was not required to repay the illegally-obtained mortgage.

The Court of Appeal decision is a reversal of a lower court decision made in the fall of 2005, which held that fraudulent mortgages are binding once registered.

Valerie Logaridis is a Sales Representative with Royal LePage R.E.S./JOHNSTON & DANIEL DIVISION. Val is a regular blogger with Muddy York.

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