The most widely read magazine for Canadian lawyers
Issue link: https://digital.canadianlawyermag.com/i/50803
REAL ESTATE unrecognized risks for landlords and lenders — risks that real estate lawyers need to consider in drafting leases and contracts and in advising clients about potential liabilities. bills from their back pockets. Due dili- gence is essential, he says, because of the risk that it could be shown in a civil suit that a landlord failed to screen tenants and watch out for illegal operations on the property. And this brings us back to the disputes between the Crown and the mortgage- lending institutions in B.C. Goldberg's concern was not only that clients might have their money tied up in potentially worthless properties for years pending the outcome of criminal proceedings, but also that they would have to show, according to the terms of the CDSA, that they "exercised all reasonable care to be satisfied that the property was not likely to have been used in connection with the commission of an unlawful act." "How does a mortgage lender or a landlord prove that? How would the av- erage person? Parliament does not say," Goldberg asserts. Though the Crown was not seriously arguing that the finan- cial institutions were complicit, he says the prosecutor was seeking to delve into confidential or proprietary information about how the institutions screened and approved the mortgages in question — information the institutions did not want to reveal for competitive reasons. Goldberg was successful in both cases, one of which was finally resolved with a Supreme Court of Canada decision not to grant the Crown leave to appeal a ruling in favour of Scotia Mortgage Corp. and another institutional lender involved in a parallel case. But, he says, the issue has not necessarily been put to rest, as the courts left room for debate over what constitutes "offence-related property." While the courts have clearly indicated that the Crown can't stall fore- closures in situations where there is no evidence whatsoever of complicity on As marijuana grow ops and methamphetamine labs have become big business, they have created hitherto www. C ANADIAN mag.com M AY 2008 21