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real estate part 2 Cheat Sheet (DRAFT) by

This is a draft cheat sheet. It is a work in progress and is not finished yet.

Council Rules

Disclosure of Agency Repres­ent­ation and Relati­onship in Trading Services: Cannot provide services unless they disclose:
 
The nature of repres­ent­ation the licensee will provide.
 
are they providing re services to/behalf of any other person involved in the trade
 
remune­ration (in trade) from other party
 
nature of relati­onship (in trade) with other party
Substa­ntive Change in Disclosure terms: agent must disclose again
Advert­ising
 
owners must consent to ads
 
names of brokerage must be promin­ently displayed
 
prohib­ited: signage of personal office
 
prohib­ited: personal addres­s/phone number to affiliate with brokerage
Tort of Deceit
 
similar to fraudulent misrep­res­ent­ation, applies to law of contract
 
Pasley v. Freeman. lying about clients situation
Code of Ethics and Standards of Business Practice
 
MINIMUM as set out by real estate BOARDS (under BCRE Associ­ation)

Chapter 7: strata and coop

Unit Entitl­ement
 
schedule of entitl­ement displays each strata lot's propor­tionate rights and liabil­ities for the common property. Accessible through LTO
 
(unit entitl­ement of strata lot/total unit entitl­ement of all lots) x Total Contri­bution
 
Unit entitl­ement is also calculated through the total habitable area of strata lot
Limited Common Property
 
common property designated for the exclusive use of the owners of one or more strata lots. Requires 3/4 votes, must file resolution at the LTO
Short Term Exclusive Use
 
the strata may give permission to exclus­ively use common property that is not designated LCP
Parking Lots/S­talls
 
strata corp will have allocated the use of space by license of lease. Corpor­ation will have licens­ed/­leased space to developer, who will partially assign­/sell rights to indivi­duals
Strata Corpor­ation
 
a legal entity created by the deposit of a strata plan in the land title office. The corpor­ation's respon­sib­ilities are set out in the Strata Property Act and include the duty to manage, repair and maintain and insure common property and common assets
 
The owners of the strata lots in the plan are members of the corpor­ation.
 
All members are shareh­olders. NOT personally liable when someone obtains a judgement against corpor­ation
Suing a strata Corpor­ation
 
if the case is won each owner pays their share by unit entitl­ement
Principal Duties of Strata
 
manage, repair, maintain and insure common property and strata assets.
 
duty to keep records (renters 3+ years, owners, purcha­sers, have access)
licensees should check 2 preceding years of: council minutes, annual extrao­rdinary or special minutes, budget and financial statem­ents, bylaws and rules

Balance Sheet

ASSETS + LIABIL­ITIES
= OWNERS EQUITY
Current Assets
 
marketable securi­ties, accounts receiv­able, invent­ories, prepaid expenses
Current Liabil­ities
 
accounts payable, property taxes payable, wages payable, income taxes payable (NA for partne­rsh­ips), interest payable

Chapter 10

Binding Contract
offer, accept­ance, consid­era­tion, legal intention, capacity, legal object, genuine consent
Latent Defect
concealed defect, cannot be discovered upon reasonable inspection
Patent Defect
discov­erable upon reasonable inspection
Breach of Contract
failure to perform without legal excuse any promise which forms part or all of the contract
Breach of Condition
allows the injured party to terminate the contract and/or sue for damages or specific perfor­mance
Remedies
Damages:
COMMON LAW. anyone who can prove they suffered loss as a result of breach. Damage intended to put the parties in the position they would have been if the contract had been performed. Liquidated damages are pre-agreed upon when signing the contract and is enforc­eable if it amounts to a reasonable estimate of forese­eable damages (otherwise other amt is set)
Specific Perfor­mance:
EQUITABLE LAW. court will order the terms of the contract to be carried out instead of awarding damages. Granted in a contract for the sale of property where the property is unique (ie. rare)
Injunction
EQUITABLE LAW. sopts a party from doing something, or requires a party to do something (mandatory injunc­tion)
Quantum Meruit
requests the services of another in circum­stances in which it is reasonable to conclude that the services would be paid for
A voidable contract is a contract which has an option to be cancelled, at which point it becomes void
 

Disclosure Statements (in develo­pment)

Document prepared by the developer of a subdiv­iison to ensure that investors or purchasers have adequate inform­ation upon which to base a purchasing decision.
Failure to Deliver Disclosure
 
agreement becomes unenfo­rceable and the purchaser does not have to complete the transa­ction
Disclo­sures should be amended when:
 
there is a misrep­res­ent­ation
 
does not comply with REDMA regulation
 
amendment must clearly identify and correct any misrep­res­ent­ati­on/­deceits
NEW Disclo­sures should be filed when: there are MATERIAL CHANGES
 
identity of developer, court appoints a receiver, liquid­ato­r/t­rustee in bankruptcy over the develo­pment property, superi­nte­ndent gives notice to file new disclosure
 
purchaser receives a new disclo­sure, they have 7 days to rescind
 
Rescis­sion: unmaking or undoing the contract from the beginning

Chapter 7: Strata Council

made up of strata members
general meetings decided by majority vote unless bylaws­/le­gis­lation require different voting
 
if two or more persons share one vote to a strata lot, only one of them may vote on a given matter, if they cant agree their vote doesn't count
 
votes which lack legal capacity to make a decision are made by someone who is acting on behalf of them (power of attorney)
 
bylaws are not enforc­eable if they contravene the Strata Property Act, regula­tions or any other code.
 
Amendments are not enforc­eable if they restrict a persons right to sell, lease or mortgage their lot
 
if a rule conflicts with bylaws, bylaws prevail
 
where a building is being converted into a coop, any reside­ntial tenants who are required to move will be entitled to the protec­tions of the reside­ntial tenancy act
finances
 
reserve funds, budget process, special levies - refer to notes

Chapter 7: Cooper­ative Properties

created by incorp­oration of a company or cooper­ative associ­ation
company or coop has fee simple estate in building and lands, owner owns share in the coop or company, and is tenant of the associ­ation or company, on a long term lease
Governed by the Cooper­ative Associ­ations Act, possibly also a shareh­olders agreement
To sell, the owner transfers shares and assigns the rights under his or her long term lease. Buyer may have trouble obtaining financing

Chapter 8: Principles

Cost Principle
 
when a business acquires an asset, the asset's historical cost (purchase price) is what should be recorded in the books, NOT the market value/fair price
Revenue Recogn­ition Principle
 
when it is earned, not necess­arily when cash is received
 
revenue from the sale of goods is considered to be earned over the period benefited by the cost. Recorded when INCURRED, not when paid
Matching Principle
 
expenses associated with revenue should be recognized in the same period in which the revenue is recogn­ized.
 
Other expenses should be recognized in the period which the goods/­ser­vices are consumed.
 
Costs which benefit more than one period should be recognized over the period benefitted by the cost.
 
recorded when INCURRED not when paid
Object­ivity Principle
 
accounting inform­ation should be reported on object­ively determined and verifiable data
Consis­tency Principle
 
accounting inform­ation should be reported on object­ively determined and verifiable data
Consis­tency Principe
 
once a business enterprise adopts one generally accepted accounting principle, the enterprise should follow that same principle in subsequent years. They can change principles if necessary

Chapter 10: condition precedent

"­subject to" clause
Calls for the happening of some event/­per­for­mance of an act - binding on both parties
(for example: inspection and mortgage approval before completion of contract).
Waiver of s54 Law and Equity Act: benefits only that party: they may waive
Waiver of s54: benefits both parties - both parties must consent to waiver.
Subject clause is too subjec­tive? court will declare the contract to be regarded as offer until the clause is removed.
Time Clause: period in which a condition precedent must be removed, or the contract will be cancelled
Lesson offer, callback about lesson­/re­sponse, callback accepting: Callback = request for inform­ation. Response = counter offer
Doctrine of Privity: only the parties to a contract have the right to be sued.
Doctrine of Privity Exception: right to sue runs with the land (owners)
 

Chapter 10

Assign­ment: transfer over to another. Law and Equity Act states it must be: in Writing, Absolute amount, given to the original promisor
Vicarious Perfor­mance: it is legal to have obliga­tions performed by someone else. It is not an assign­ment, but requires the substi­tution of one of the original contra­cting parties for another. The Subcon­tra­cting party can only be sued by the person they are in a contract with.
refer to notes for contract termin­ations, remedies

Chapter 5: Nuisance, OLA

private nuisance remedy:
prove damage, get injunction and replac­ement cost
defences to private nuisance:
 
statutory authority (unavo­ida­ble), damage is trifling
Occupiers Liability Act
 
does not extend to willing risks, lesser standard of care to trespa­ssers
Common Law Distin­ction
Children --> Invitee --> Licensee --> Trespasser
Licensee:
no contra­ctual relation (social guest)
Invitee:
contra­ctual relation (contr­actor)
Occupiers Liability Act:
 
replaced the common law rules: statute defines occupier as a person who has physical possession of the premises, or has respon­sib­ility for or control over the condition of the premises
 
OLA statute: occupier owes duty of care (condi­tion, activi­ties, third party conduct)
 
the differ­ence: there may be more than one occupier
Statute law aka:
legisl­ation

Chapter 7: Fee Simple Strata Properties

created by strata plan which is filed in the LTO
owner owns a fee simple interest in strata lot plus share of common property as tenant in common with other owners
governed by the Strata Property Act, regula­tions, bylaws and rules
To sell, owner transfers a fee simple state to buyer, who can grant a mortgage secured by the fee simple estate

Chapter 7: Fee Simple Strata Properties

created by strata plan which is filed in the LTO
owner owns a fee simple interest in strata lot plus share of common property as tenant in common with other owners
governed by the Strata Property Act, regula­tions, bylaws and rules
To sell, owner transfers a fee simple state to buyer, who can grant a mortgage secured by the fee simple estate

Chapter 8: Financial Statements

Financial Statements
 
provide useful to present and potential stakeh­olders, in assessing the perfor­mance of those engaged to manage the assets and activities of the entity, provide inform­ation about economic resources of an enterprise
Comprised of
income statement:
revenu­e/e­xpenses over period
Balance sheet:
assets­/li­abi­lities specific time
Income Tax Return
Statement containing list of all fixtures, goods, chattels, rights and other assets relating with the business

Income Statement

Deprec­iation is an expense
 
annual deprec­iation expense = (cost - salvage value)/ estimated life (years)
Capital Cost Allowance:
 
the amount that the income tax act permits a taxpayer to deduct from income in determ­ining taxable income.
 
Class 1 assets include most buildings acquired in 1988 and subsequent years, the rate of CCA allowed is 4% (at end of fiscal year)
Income Tax Act prohibits the deduction of deprec­iation expense but allows for CCA, adjust­ments must be made:
 
Net Income + Deprec­iation expense = subtotal - CCA = taxable income
Retained Earnings
 
Net Income + (-losses) - dividends
Compar­ati­vely:
 
assets - liabil­ities = owners equity
note: purchase of assets does not affect the amount of owners equity