Canadian Lawyer InHouse

Feb/Mar 2010

Legal news and trends for Canadian in-house counsel and c-suite executives

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Page 7 of 39

By Andrea L. Centa Under the act, a person or entity Licensed to lend Rules around vendor take-back mortgages actions when traditional methods are unavailable due to loan-to-value ratios. A current trend being commonly used T is for the purchaser/borrower to approach the vendor to provide a portion or all of the balance of the sale proceeds by way of a loan from the vendor to the purchaser/ borrower. In return, a mortgage is given he credit crunch has meant borrowers looking to pur- chase commercial real estate have to be creative to obtain financing to complete trans- by the purchaser or borrower in favour of the vendor or lender and registered on title to the subject property. This is a viable alternative financing arrangement; however, the Mortgage Brokerages, Lenders, and Administrators Act, in force since July 1, 2008, broadened the scope of the regulatory regime and set out new licensing requirements for those entities engaged in regulated activities, including in certain circumstances, lend- ers who lend by taking a vendor take- back mortgage as security. is required to be licensed or must be exempt from the requirement to have such a licence if it "carries on business" in Ontario as a mortgage lender or car- ries on business in Ontario of dealing in mortgages, of trading in mortgages, or of administering mortgages. However, financial institutions are excluded from the licensing requirements. Under the act, a "mortgage lender" includes a per- son or entity engaged in lending money in Ontario on the security of real prop- erty. This broad definition will cover vendors acting as lenders by granting VTBs. The act provides no definition on what it means to carry on business as a mortgage lender. Courts have generally accepted a single or isolated act does not constitute carrying on the business of an activity. Instead, carrying on business requires a succession, repetition, a series of acts, or a pattern of conduct normal for [Across the street, down the block or Canada wide — our commercial team is ready for you. ] For over 100 years, legal professionals have trusted Stewart Title to provide title insurance for their commercial real estate transactions. Some of the world's best hotels, golf courses, resorts, office towers and business centres are insured by Stewart Title. Our global reach and financial strength, combined with the expertise of our Commercial Team, enable us to handle the most complex transactions. We can facilitate specialized commercial endorse- ments for almost any situation. Our title insurance services provide efficient closings and fast turnaround times. With Stewart Title you can close real estate transactions with security and peace of mind. Visit to view some of our recent transactions, or call us for a quotation on your next transaction to see us in action. 1.888.667.5151 8 • FEBRUARY 2010 Untitled-2 1 INHOUSE 1/4/10 10:33:44 AM

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