Where a credit card creditor obligates its account holder to pay interest at a rate which is higher after default than the rate applicable prior to default, and, the credit card debt is real estate secured (typically by way of an “all obligations” mortgage on the cardholder’s home), it may be unlawful for the creditor [...]
Author Archives: Ned Brown
An “All Obligations” mortgage is one which, by its terms, secures all of the mortgagor’s present and future obligations of all types, from time to time owed to the mortgagee, limited at any one time to the maximum principal or face amount stated in the mortgage. This type of mortgage has become increasingly popular with [...]
A purchaser of residential real estate closes the transaction, moves in and then subsequently discovers that there is a convicted pedophile living across the street. The new purchaser has a young family living with him. Is the existence of the neighbouring pedophile a “latent defect” under real estate contract law sufficient to enable the purchaser [...]
When taking security from a general (as opposed to a limited) partnership, the creditor must list as debtors in its financing statement both the partnership name plus the names of each of the partners of the partnership. This can cause difficulties when the partnership in question comprises many partners. For an expansion on these problems, [...]
Did you know that if you acquire title to a parcel of real estate which is subject to a mortgage, you will, without signing any document, be “automatically” obligated to both the mortgagee (the creditor) and to the party transferring to you (the original mortgagor/debtor), that you will be responsible for performance of all of the obligations owed to the mortgagee/creditor under the mortgage? To find out what the ramifications of this rule may be, please refer to my more detailed memorandum on this matter by going to same on “Implied Covenants”
Where an owner of lands and premises undertakes to provide you with some rights pertaining to his/her/its realty, you would, in most cases, wish to be able to enforce those rights against property owners who acquire title subsequent to the current owner’s title holding. In other words, you wish to bind all “successors in title” [...]
DANGER FOR A LENDER WHO GETS TOO CLOSE TO ITS BORROWER’S THIRD PARTY CONTRACTORS
Where a lender is making credit available to a borrower operating/carrying on a business or using the lender’s money to build something, the lender has an obvious concern and interest in how the borrower carries on its business and how it goes about building/developing a project. This often results in a lender extracting a number of covenants/promises from the borrower relating to what the borrower may – and may not – do in its business activities. Where a borrower gets into financial difficulty, the lender may take an even greater role in “controlling” or monitoring the borrower’s activities. This may range from the extraction of further undertakings/covenants from the borrower (further restricting its activities) to appointing a “monitor” to review the borrower’s activities on a day-to-day basis, to appointing a receiver for the borrower. The danger for a lender in doing this is that a lender may – note perhaps inadvertently – insert itself into the borrower’s affairs to such a degree that a Court later holds the lender was responsible to third parties for certain failures or shortcomings on the part of the borrower.
If a secured lender takes a security interest in the debtor’s goods which are or in the future become affixed to real property (whether belonging to the debtor or some third party, such as a lessor), it is generally accepted practice for the creditor to file a financing statement in the Personal Property Registry and additionally file a PPSA (Fixtures) Notice against the title or titles to the underlying land. But what about the situation where a creditor takes a real property mortgage but not a security agreement charging goods which are or may become fixtures? Is it enough to register the mortgage in the usual manner as a mortgage at the Land Titles Office? Or does something else have to be done by the creditor to protect its position vis-à-vis the fixtures? Does the registration of the mortgage alone protect the lender’s interest in fixtures?
You are a financial institution financing the operations of a business which owns and leases goods to third parties. Naturally, you take a security interest in your borrower’s inventory of goods, those waiting to be leased and those which are or become leased. What happens to your security interest in any particular item when your [...]
You take a general security agreement from a debtor which is broad enough to include all present and after-acquired serial numbered goods acquired by the debtor. The problem is that, at the outset, the debtor does not own any serial numbered goods (so you can’t register against same) and only acquires some later. At that [...]