Inheriting Property Isn’t as Simple as it Seems

Will and Testament

Podcast Episode 117: Estates Are Tricky!

Real estate can cause all kinds of problems when a family member passes away. First, it can take a long time before the will is executed and the inheritor is actually in control of the property. Second, the person who inherits the property also inherits the financial responsibility (mortgage, taxes, etc.), which they end up responsible for even before they own the real estate! This Tale is about what happened when someone inherited a piece of property and almost went into foreclosure with it.

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Creative Investing with Foreclosures: Appearing in Court and Taking Notes.

mortgage default foreclosure

Podcast Episode 109:

“Foreclosures, Creative Deals, and Court.”

This Tale is about taking good notes when you appear in court as the buyer of real estate in foreclosure. My client was a creative kind of guy and he found a property in Alberta where the mortgage payments weren’t being made. The seller was still living in the home but trying to sell and get out from under the foreclosure. After some conversation, my client put together a creative deal that the seller and the seller’s lawyer both liked. Now, in addition to being in foreclosure, the seller was in way more financial trouble and he had actually filed for bankruptcy…

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Is Your RRSP Mortgage Legal?

Podcast Episode 108:

“RRSP Mortgages and the CRA.”

Registered Retirement Savings Plan (RRSP) mortgages, the supposed Holy Grail of private lending. I hear it all the time. Borrowers of all stripes believe there is a vast pot of money held in RRSP accounts just waiting to be lent to them. And, to some extent, that’s true. There are lots of folks with lots of RRSP money tucked away. Maybe you’ve thought about leveraging your RRSP to become a lender yourself.

But, like everything else run by the government, there are rules to follow if you want to lend your RRSP money as a mortgage.

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How to Lose a Deposit: Unmet Conditions Can Sink a Real Estate Deal

Podcast Episode 107:

“Conditions, Lost Deposits,
and Collapsed Deals.”

In other Tales from the Trenches I’ve talked about the importance of accomplishing sufficient diligence on any property purchase to say that you have done ‘Due Diligence.’ It’s worth repeating here because it’s so important. The notion of doing or accomplishing your own Due Diligence is what allows you to make a buying decision. Will you buy or not buy? In this Tale, a deal falls through because of a lack of diligence regarding financing conditions.

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Buyer and Seller Using Same Real Estate Lawyer

legal dispute

Can We Both Use the Same Lawyer in a Real Estate Transaction?

This question comes up all the time in my Alberta real estate legal practice. I’ll get a call from a buyer or seller, we discuss the details of their purchase or sale and then the question comes up: “This is a simple deal and we want to save some money on legal fees. Can we both use you as our lawyer to close this deal?”

The short answer is maybe, but practically speaking, no. Continue reading

Joint Ventures and Land Titles

Who’s on Title?

Two of our clients at RMLO Law LLP formed a typical Joint Venture (JV) to buy a property in Alberta with a brand new mortgage. One client was the “Investor” (the money-man). His JV partner was the “Finder”, (typically a person with real estate expertise and no money). In this case, the Finder had already purchased properties using every cent of his own money. He was out of borrowing capacity.

Part of their JV discussions was, “How should we take title?” Both clients understood that they had a few basic choices. Continue reading

Assuming Mortgages and Transfering Property to a Corporation

house outline with check mark

Podcast Episode 99:
“Happy Assumptions & Corporate Rollovers.

This episode of Tales from the Trenches contains two stories about transfers: one is about transferring mortgages and the other is about transferring property.

In theory, many mortgages are assumable, but in practice lenders in Alberta (and elsewhere) have been tightening up on their regulations. Some lenders just won’t allow it at all, while others require full re-qualification. This Tale explains how a real estate investor got the bank to agree to a mortgage assumption after he held a property for just seven days!

Rollovers are when a property is transferred from your personal name to your corporation or vice-versa. My Edmonton legal firm, RMLO Law LLP (formerly Ritchie Mill Law Office), helps people with rollovers all the time. But we always caution our clients to get additional accounting advice because capital gains might be an issue. In this Tale, the example is an investor who rolled over a property and had to pay the Canada Revenue Agency (CRA) $30,000 dollars in tax…

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For all your Alberta real estate law needs, contact Barry and he’ll sort you out.

“3D Home Inspection Big Check” by http://www.ccpixs.com/ used under CC Attribution 2.0 Generic.

How to Avoid Mortgage Fraud

mortgage fraud

Podcast Episode 97:
“Mortgage Fraud.

The simplest way to avoid committing mortgage fraud is to fully disclose everything about a deal to your lender. If they are satisfied, then you’re probably okay. But what happens if someone else is defrauding you? In Tales from the Trenches, you usually hear second-hand accounts of the trials, tribulations, and successes of Canadian real estate investors. In this Tale, you’ll hear it from the “horse’s mouth.” Special guest Valden Palm tells us how he narrowly avoided getting sucked into a mortgage scam. An unscrupulous guy in Edmonton was buying houses, doing shoddy renovations, and then flipping them between shell companies to get more and more money in refinanced mortgages. Lucky for Valden, due diligence and a gut feeling saved his bacon!

 

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If you’re buying or selling real estate in Alberta, you need a lawyer.
Use the form below to contact Barry now!

“Mortgage Fraud” image courtesy of  www.cafecredit.com used under CC Attribution 2.0 Generic.

Interest Rates on RRSP Mortgages

Podcast Episode 96:
“RRSP Mortgages.

In Canada, it is possible to use money held in a Registered Retirement Savings Plan (RRSP) to fund mortgages. While this strategy can yield a nice steady return on investment, there are rules in place that can make it a bit tricky to get into. One of those rules is that the lender (i.e., the person with the RRSP) must use a third party trustee to administer the mortgage. This Tale is about dealing with a couple of different trustees and their policies on interest rates. RRSP mortgages must legally be “commercially reasonable,” but apparently there is a lot of room for interpretation of what exactly that means…

 

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Need an Alberta real estate lawyer in Edmonton? Contact Barry now!

“Mortgage” image courtesy of NYPhotographic.com used under Creative Commons Attribution-Sharealike 3.0.