CH2
Occupiers Liability Act |
Duty of Care: Children -> Invitee (economic interest) -> Licensee -> Trespasser (can still sue) |
- owes reasonable standard of care |
- more than 1 occupier, less duty to trespasser |
- OLA made changes to common law |
- does not extend to risks willingly assumed by visitors |
- duty of care applies to: condition, activities, 3rd party conduct: on premises |
CH25
promotional mix |
personal selling, advertising, public relations, sales promotion |
Marketing mix |
product, place, price, promotion |
SMART mix |
Specific, Measureable, Agreed upon, Realistic, Timeline attached |
CH21-23
Purchased after taxes |
purchaser include sale date to dec31 |
Taxes to be paid in the future |
purchaser pays entire amount, returns up to before purchase date to vendor |
CH21-23
Comparative Method |
substitution, arms length, recent - stable conditions, similar - factors buyers/sellers |
rating grid |
subject property be the basis and all comparables adjusted to it |
Cost Method |
unusual/unique, last resort |
infrequency of use: |
the assumption that cost equals value is not necessarily correct |
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note: land does not depreciate |
Market Value |
cost of improvement - depreciation + land value |
Improvements based on: |
current cost/modern equivalent |
Curable Physical |
can be fixed |
Curable Functional |
can be replaced cost effectively (ie bathroom fixtures) |
Incurable Physical |
cannot be fixed economically (foundation) |
Incurable Functional |
ie. narrow floor plan |
CH19
Who Pays Property Taxes |
fee simple owner, owner of a life estate, owner of an agreement for sale |
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Charities not exempt, NOT be liable for lease |
Exemptions from taxation: |
crown properties, uni's, cemeteries, some farms, municipal properties, school, indian lands, hospitals |
Home Owner Grant |
only the owner/occupier of the property is eligible |
General Rate |
(small/big)x1000 |
Real Property Tax |
(tax rate x Property Value$)/1000 |
Tax Deferral |
widow/widower, 55 years or older, permanently disabled |
Assessment Apeals |
Property A. Rev. Pan -> PAApp. Board -> Supreme Court of BC -> Court of Appeal |
Mill Rate |
rate of tax per $1000 of net taxable value |
CH18
Federal |
Airports, Oceans, Seaports, Railways, Fisheries, has NO interest in land between individuals |
Provincial |
Agricultural Land Commission: can exclude, subdivide, pass regulations, allow non-farm use BUT can NOT add more land to it |
Local |
Municipal Subdivision of the land, Building regulations, land use zoning, regional, local Improvement |
CH15
Contractual Clauses apply when the borrower defaults |
Acceleration |
maturity date of the loan is pushed forward and lender demands to be paid out in full |
Omnibus |
in default of payment the lender will do the payment and it will be added to the loan |
Lender's Remedies |
this gives lender complete discretion to choose most suitable remedy |
Mortgage in Possession |
foreclosure |
CH12
Types of real estate agency contracts |
Exclusive Listing |
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an exclusive right to sell for a specific period of time |
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if the owner sells himself, must still pay commission |
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If the owner uses 2nd agent to sell his property, two commissions could be payable |
Multiple Listing |
(office/brokerage listing) |
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Exclusive right to sell |
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Listing must be distributed to all members of the real estate board and placed on MLS |
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Not valid unless: signed, in writing and true copy has been delivered to all owners, has provision that it will expire on the certain date |
Open Listing |
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The owner may employ a number of agents to find the purchaser |
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A commission is paid to the agent who is the effective cause of the sale |
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Owner can sell as well and no commission would be payable(usually commercial listings) |
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Brokerage promises to use best efforts to locate a ready, willing and able purchaser |
CH12: Negotiations
Nature of effective negotiation |
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both parties satisfied at conclusion, efficiency of negotiation, creative division for full value, preservation of relationship, minimal wasted resources |
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Preparation principles |
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stay away from zero-sum, find creative solutions, don't go back and forth, make concessions when necessary |
Interest |
focus. ie: find a house before school starts |
Positions |
close the deal by date |
Anchoring Effect |
a psychological phenomenon whereby negotiators make insufficient adjustments away from stated number |
Dirty Tactics |
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recognize dirty tactic and and explicitly raise the issue with the other party |
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question it and argue against it |
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naming out loud |
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remain non emotional and focus on problem with the eye toward mutual resolution |
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do not personally attack the other party |
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take a break until such behaviour stops |
What NOT to do (dirty tactics) |
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respond in kind, put up with it, ignore, make insults regarding a persons nature |
CH2
a person appointed by a partnership/corporation to represent it for all purposes under RESA: Managing broker |
Managing Broker: 2 yrs licensed experience + licensing qualifications |
Licensing qualifications: at least 19 years old, good reputation |
Council: enforces, knowledge, licensing, investigations, 16 members |
Foundation: Law reform, Minister of Finance +4, education/research, interest payable on trusts |
E+OM Corp: assessments on licensees, insurance |
VOLUNTARY |
BC real estate association - PR |
11 real estate boards: MLS, MLS access |
RE Institute: advanced education |
CH8
Balance Sheet: |
Assets/Liabilities/Equity |
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note: purchase of assets by the business does not affect the owners equity |
Income: |
revenue - expenses = net |
Straight line depreciation |
(cost - salvage life) / est. life |
CCA is deductible |
Book value |
original - depreciation |
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CH12: Law of Agency
Agent |
has authority to represent and act on behalf of another person. Any person of sound mind can act as an agent. Not a party to the contract - does NOT need capacity |
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anyone in BC acting as an agent in relation to the provision of real estate services MUST BE LICENSED under the RESA |
Agency Relationship |
Express Contract |
written or oral, most common relationship, mutual agreement by both parties |
Implied Agency |
an agency can be implied by conduct. Past con. is no con. applies |
Ratification |
An agent's authority can be granted retroactively. When the agent informs the principal of his actions and the principal accepts, the principal will be bound by contract. |
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If the seller says no, the agent will be responsible |
Agency by Estoppel |
seller gives all power to act on behalf (power of attorney). Where the principal acts in such a way as to lead a 3rd party to believe that the agent has authority to act on behalf of the principal. Limited right. Agent CANNOT sign for anyone |
CH3: Crown Land
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(based on common law, modified using LTR) |
Fee Simple |
Stated: remainderman, Not Stated: revisioner |
Strata |
Leasehold |
includes city, federal, 1st nations land |
Life Estate (pur autre vie) |
Rights: |
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Obligations: |
Cooperative Ownership |
Joint Tenancy: TTIP unity, survivorship. |
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Tenants in Common: Unequal TTIP, $, will, if not specified its this one |
CH12
Termination of Authority |
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The relationship is based on mutual consent, either party can terminate at will |
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Can be revoked orally/by conduct |
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Principal that is inconsistent with the communication of authority would terminate |
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Frustration |
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Death, insanity, bankruptcy |
CH12
Principal duties to an agent |
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1. To pay commission |
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2. Duty to indemnify the agent |
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Commission is due when the title has been exchanged for money |
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If a seller and buyer conspired to wait for the listing to expire and finish the deal after, the brokerage will be entitled ot the commission |
Agency Disclosure |
Before assisting or representing, agent must disclose |
the nature of the representation the licensee will be providing |
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whether the licensee will be acting on behalf of any other person |
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whether the licensee will be accepting compensation from any other person |
If the agent does NOT disclose that he is an agent |
The 3rd party may sue either the agent or the principal to enforce the contract. Both the agent and principal will be liable if a dishonest act occurs |
CH24 Statement of Adjustments
Price |
debit purchaser, credit vendor |
RE Commission |
n/a purchaser, debit vendor |
Deposit to Brokerage |
credit purchaser, n/a vendor |
Deposit paid directly to vendor |
credit purchaser, n/a vendor |
1st Legal Mortgage |
credit purchaser, n/a vendor |
Equitable mortgage |
credit purchaser, n/a vendor |
Assumed mortgage/Agreement for Sale |
credit purchaser, debit vendor |
Legal Fees/Conveyance |
debit purchaser, n/a vendor |
Discharging existing mortgage |
n/a purchaser, debit vendor |
Security Deposit |
credit purchaser, debit vendor |
Property Transfer Tax |
debit purchaser, n/a vendor |
Purchasers share of taxes already paid by vendor |
debit purchaser, credit vendor |
Vendor's share of taxes not yet due |
credit purchaser, debit vendor |
Penalty due on overdue taxes |
n/a purchaser, debit vendor |
CH15
Process of Foreclosure |
Demand letter |
short time period to pay |
Petition |
BC supreme court registry |
1st Court Order |
Order NISI (redemption period) |
Petitioner may apply for: |
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Judicial Sale: not enough equity. Owner can still be liable, most common in BC |
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Order Absolute of Foreclosure: enough equity in property. Owner is no longer liable. Lender becomes registered owner. No further action can be taken against the owner |
Criminal Code |
offence for a person or corporation to enter into an agreement ot receive interest at a criminal rate (60%) |
Interest Act |
If the document does not mention interest, no interest can be charged. If document requires interest to be paid with no set amount -rate allowed by law is 5% (does not apply to companies) |
Business Practices and Consumer Protection Act |
The court can re-open a mortgage transaction under the consumer protection act if it believes the interest rate is harsh or incosionable |
CH11: Contracts
condition precedent |
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may only be waived by the party who is benefit from the condition |
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to remove- must deliver written notice to each party before deadline |
Protecting the Seller |
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pre-qualification of buyer |
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asking buyer to use his best efforts to satisfy conditions |
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time clause "72 hour clause" (removal of conditions by specified time if better offer is received) |
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specific time on condition precedent (something that MUST occur) |
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Property Disclosure Statement a protection to lender |
CH3:
Interest in Land Less than Estates |
Restrictive Covenants |
negative in nature, runs with the land, binding |
Building Scheme |
Multiple Restrictive Cov., maintains uniformity in development, same vendor for all lots |
Profits a Prendre |
Right to profit from land |
Easement |
must be able to form a subject(makes boundaries), benefits the land, release by express agreement from Dom.Tenement |
CH21
the "subject of appraisal" is.. |
the legal rights of ownership vested in a particular piece of real estate |
Ceiling Price/Subjective Value/to owner |
highest buyer will pay |
Sale Price/Objective Value/in exchange/market |
Negotiated price between buyer and seller |
Floor Price/Subjective Value |
Lowest price the seller will accept |
lending value |
a long term conservative estimate of the value of the interest in land pledged as security |
CH20
Dormer |
mini roof extension that provides extra space |
WATTS = |
VOLTS x AMPS |
Amperage |
measure of the rate of electrical flow |
Voltage |
measure of electrical potential or pressure of current flow |
Wattage |
measure of power consumption |
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CH5: Trespass
Types of Trespass |
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Entry: voluntary without permission |
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Remaining: remains after right ends |
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Placing: object to be wrongfully placed |
Includes: knowledgeable and unknowledgeable trespasser |
Occurs on someone elses property, damage not necessary(actionable "per se"), intentional/direct act/voluntary |
Indirect actions are NOT trespass |
"No soliciting:" trespass if occurs |
Who can sue: |
person in actual possession of property |
Remedies: |
self help, injunction, damages |
CH21-23
Income Method |
appraiser looks at: |
current lease condition at teh time of the sale, registered mortgages, physical characteristics of the building |
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not the expected rent forecast! |
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based on economic factors, no depreciation is used |
Yield= |
net operating income/sale price |
CAPitalization Yield |
an average yield of all buildings being compared |
Sale Price = |
NOI(subject)/Cap Yield |
Gross Potential Revenue |
- Vacancy & Bad debt = G. Realized Revenue |
GRR |
- Expenses = Net Operating Income |
Replacement Reserves |
Provides for a periodic replacement of building components that wear out more rapidly than the building itself |
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replaces the equipment with relatively short lives such as stoves, refrigerators, washing machines, carpeting |
CH21
Margin of Error |
10% |
Factors Affecting Value |
house/lot/location, neighbourhood, local economy, regional economy, prov/nat economy, "special purchaser" (extension of bids), Highest and best use |
LT Trends |
shift in age composition, government programs affecting RE, supply and cost of raw materials |
ST Trends |
consumer pessimism/optimism, change in interest rates (mortgage, bonds, loans) |
CH3: Waste
Common law waste: Voluntary |
exploitation of nat.resources |
CL: Permisisve |
allowing to deteriorate |
CL: Ameliorating |
improvements |
Statute Waste: Equitable |
destruction |
CH18
Planning Process |
long/short term goals |
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testing courses of action |
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forecasting future requirement/trends |
Planning Process |
official community plans, non conforming use and board of variance, zoning bylaw, rezoning, subdivision |
Legal Non-Conforming Use |
Lost after 6 months of discontinued use (90 days in VAN), cannot make alteration, Damage beyond 75% of value cannot be rebuilt |
Zoning bylaw Restrictions |
1. Height 2. Density 3. Set Backs 4.Site Area 5.Home occupations 6.Signage 7.Number of buildings 8.Parking |
Zoning Bylaw has three parts |
map, definition of key terms, schedule of regulations |
Rationale of Regulation |
Public health and safety, Protect Property Values, Convenience and appearance, conserve natural resources |
CH5: Nuisance
Must have proof of physical damage |
Interference with use and enjoyment |
Defense: |
unavoidable as authorized by statute |
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damage is trifling |
CH12
MLS |
a site that pulls together information on real estate related topics with a focus on real estate listings |
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MLS contract must be in writing |
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Managed by real estate boards |
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Distributed to all members of RE board |
DUAL Agency |
listing agent represents also a buyer |
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or agents from the same brokerage |
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Dual agent owes full duties to each client, but keep information confidential in 3 areas: the price, motivation, personal information |
Termination of Agency Contract |
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Death of one of the parties |
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Frustration |
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Letter of termination by the principal |
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Insanity of the agent or the principal |
CH12: Law of Agency
Actual Authority |
when documents are signed, the seller agrees to these authorities |
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Express Authority |
How long/much/commission |
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Is created an limited by the terms of the contract. Promis to pay commission must be supported by consideration (Listing Agreement) |
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Implied Authority/Agency |
Every agent has implied authority to do anything necessary for carrying out teh express authority granted (ie. enter the property with buyer). The goal is to sell |
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Rolls Royce question: buy everything to get the car |
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Usual or Customary Authority |
The agent is governed by what is usual in the trade (collect deposit) |
Apparent Authority |
Similar to agency by estoppel (parenting over someone's listing |
Where the 3rd party would reasonably consider, from the conduct of the principal and the agent, that the agent did in fact possess authority |
CH5: Negligence
duty of care, breach of standard of care, reasonable result - foreseeable damages (in the course of business) |
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not verifying listing agreement |
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not done title search |
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fails to disclose material facts |
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doesn't recommend to insert clauses in offer |
Vicarious Liability |
Fiduciary Duty |
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loyalty to client, full disclosure, duty of utmost good faith, advantageous price |
Negligent Misrepresentation |
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careless (without thought) |
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contractual relationship not necessary |
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reasonably relied on |
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damage must result |
Fraudulent Misrepresentation |
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knowledge of false statement |
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does not need to be expert |
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sued under Tort/Contract law |
Refuse to give advice |
Clear Qualification "do not rely on my opinion" |
Defense |
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not reasonably foreseeable that the person would take the advice |
Errors in drafting agreement: |
licensee must be able to correctly draft documents |
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