Canadian Lawyer

22 A p r i l 2 0 1 4 w w w . C A N A D I A N L a w y e r m a g . c o m rEaL EstatE its records to demonstrate it did its due diligence to ensure no illegal money was used to finance the mortgage. "In light of Nguyen we're going to be talk- ing to [clients] about it, absolutely," says Roberts adding each case will turn on its own facts. Roberts thinks the current trend toward holding lenders accountable could lead to them seeking criminal record checks for anyone seeking a mortgage. "What kind of a society do we live in that you have to get a criminal record check for your bank?" The lessons from Nguyen, says Lindsay Goldberg, a partner in McMillan LLP's Vancouver office, is that past, present, and future use of the property is now relevant to lenders, underlying the importance of due diligence. Lawyers can, to some extent, protect lenders from future threat of forfei- ture. "Lenders must be able to demonstrate that they follow 'prudent' lending practices. What that means will change over time as lending practices evolve with market forc- es," says Goldberg, who represents lenders. But he makes several suggestions about how they can implement that in their lend- ing policy. Get the borrower's intentions of the property in writing and ensure the mort- gage states illegal use of property could result in default. It should also allow the lender to immediately inform police and specify possible foreclosure if the lender learns of any alleged illegal activity on the property. Heavy-handed cautionary measures, such as requesting a criminal record check and lender approval of tenants, are additional options if there are concerns about the borrower. "The absence of any reason for lender suspicion arising from the loan application was an important and relevant fact, though not determina- tive, in R. v. Nguyen. In that case there was nothing on the face of the application to How lenders can protect themselves obtain the borrower's written representations as to the past, existing, and intended future use of the property; Consider criminal records checks; the commitment letter and the mortgage should spell out illegal use of property could result in default and the lender is permitted to inform police if lender learns of alleged illegal activity on the property; If property is to be rented include a provision requiring lender to approve tenant and tenant's intended use. Consider requiring tenant to give statutory declaration as to intended property use; Bottom line for lenders: don't look like you are ignoring the question. — source: Lindsay Goldberg LEXPERT LEGAL EDUCATION SEMINARS SPRING 2014 SCHEDULE FOURTH ANNUAL SOCIAL MEDIA LAW CONFERENCE CUTTING EDGE PRACTICAL ADVICE FROM CANADA'S ADVERTISING LAW EXPERTS 5PSPOUPȕ+VOF STILL OPEN FOR BUSINESS? - GETTING DEALS DONE UNDER CANADA'S EVOLVING FOREIGN INVESTMENT REGIME 5PSPOUPȕ+VOF $BMHBSZȕ+VOF NEW PROCUREMENT: CRITICAL DEVELOPMENTS FROM PROCESS TO PRACTICE 3FHJOBȕ+VOF 5PSPOUPȕ+VOF )BMJGBYȕ+VOF 3&70-65*0/"3:1":.&/540-65*0/4 #&:0/%-&("-3&(6-"503:$0.1-*"/$& PRIMER SPEAKERS 5PSPOUPȕ+VOF $BMHBSZȕ+VOF CANADA'S ANTI-SPAM LEGISLATION 5PSPOUPȕ"QSJM 5)&$0.1-&5&(6*%&50%&'&/4&4&$63*5: 130$63&.&/5#&:0/%/"7*("5*/( CANADA'S FAST CHANGING LANDSCAPE* 8BTIJOHUPO%$ȕ+VOF 0UUBXBȕ+VOF CHANNELS OF DISTRIBUTION: GROWTH STRATEGIES AND CHALLENGES /FX:PSL/:ȕ+VOF 5PSPOUPȕ+VOF LATEST DEVELOPMENTS IN CANADIAN CONSTRUCTION INSURANCE LAW: NEW WAYS TO MANAGE RISK AND AVOID LIABILITY 5PSPOUPȕ+VOF *Webcast option not available REGISTER ONLINE www.cpdcentre.ca/lexpert WEBCAST OPTION AVAILABLE! For more information or to register, please contact Lexpert® Events at 1-877-298-5868 or e-mail: register@lexpert.ca Untitled-1 1 14-03-19 3:33 PM

• Cover