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FirstLine Matrix – April 2012 Page 3

  • (2)

    the mortgage is prepared on the form provided by or specified by us and the provisions thereof are in accordance with Mortgage Approval and the appropriate Schedule of Additional Provisions is completed (if applicable) and forms part of the mortgage document to be registered;

  • (3)

    if the mortgagor's interest in the Property is leasehold, you thoroughly review the lease to ensure that the lease is binding between the landlord and tenant, the lease is in good standing and will be charged as a first charge by our mortgage as instructed in our Mortgage Approval and that there are no unusual stipulations in the lease. Before funds are advanced, we require that consent to our mortgage be obtained from the landlord and a non-disturbance agreement also be obtained preventing the landlord from terminating the lease without first giving us adequate prior written notice and the right to remedy the default under the lease. You must ensure that the landlord is a government body or crown corporation/agency. For CMHC insured mortgages you must confirm the remaining term of the lease is at least 10 years more than the amortization period of the mortgage, and for all other mortgages you must confirm the remaining term of the lease is at least 5 years more than the amortization period of the mortgage. If the mortgagor's interest in the Property is leasehold and this is not indicated in our Mortgage Approval or if the landlord is not a government body or crown corporation/agency, refer to us for approval giving details of the lease;

  • (4)

    discrepancies in the legal description, title defects, reservations and restrictions, encroachments, encumbrances and easements (other than routine easements for public utilities, provided no part of the building on the Property is affected) are referred to us WITH YOUR OPINION as to its/their effect on the marketability of title. There are no executions or judgments affecting the Property;

  • (5)

    the building(s) and any ancillary building(s) or structure(s) do not, with respect to their location or use, violate any registered restrictions, or statutes or regulations of any provincial or other competent authority;

  • (6)

    fire insurance with extended coverage as set forth on page 6 and other insurance that may be specified in our Mortgage Approval is in force. DO NOT SUBMIT a copy of the fire insurance policy to us;

  • (7)

    all other security specified in the Mortgage Approval, such as chattel mortgage or assignment of rental under leases, is valid and binding, and has been registered or processed to give us, for our interest, all the protection necessary; and that all terms and conditions set out in the Mortgage Approval have been met and complied with;

(8)

If the Property is a condominium or strata unit, you must obtain a Status Certificate, an Estoppel Certificate or in British Columbia a Section 59 Information Certificate, in the form as required by the applicable condominium legislation. Any parking spaces and storage lockers intended to be used in conjunction with the subject unit shall form part of our security;

The Certificate must indicate that:

  • (a)

    all common expenses are paid to the date of advance;

  • (b)

    there are no special assessments levied and unpaid or pending increases in common expenses on the unit;

  • (c)

    the condominium or strata corporation is not a party to any legal action;

  • (d)

    the condominium or strata corporation has reasonable reserve funds;

  • (e)

    there are no pending major repairs to the condominium or strata; and

  • (f)

    insurance coverage is in place and protects us against loss.

Funds will not be advanced until the condominium or strata is registered. Please note that the estoppel certificate or Section 59 Information Certificate in B.C. should not be forwarded to Firstline Mortgages as we rely entirely on you to ensure they are in accordance with our Instructions to Solicitor.

  • (9)

    if the mortgagor is a corporation, it is valid and subsisting, a certificate of status of the corporation is obtained, it is incorporated with full power and authority to hold, mortgage and otherwise deal with the Property and all necessary corporate action has been taken to authorize the borrowing of the principal sum with interest as stated in the mortgage and the giving of the mortgage security;

  • (10)

    if the Mortgage Approval requires a corporate guarantee, the corporate guarantor is duly incorporated and properly authorized to guarantee this mortgage;

  • (11)

    if the Mortgage Approval requires a guarantee, an execution search is conducted against the guarantor(s) and reveals no outstanding writs of execution;

  • (12)

    our priority for all advances is maintained over any liens and that holdbacks from advances are made by you in such amounts and for such periods of time as may be required by the Construction Lien Act (or any similar legislation under a different name);

(13) if there is a Family Law Act (or any similar legislation under a different name) in force in the province or territory in which the Property is located, all requirements are complied with and our interest is protected in every respect;

(14)

  • (a)

    you to take all steps that would be taken by a careful and prudent solicitor on behalf of a client, including, without limitation:

    • advising us of any material fact known to you which might affect our decision to make the mortgage loan;

    • advising us of any significant escalation in the value of the Property over a short period of time or if the vendor under the Agreement of Purchase and Sale was not the registered owner at the time the Agreement of Purchase and Sale was executed; and

    • reviewing all the documentation, including the Mortgage Approval for this mortgage loan and the Statement of Disclosure (including the Fee Schedule), with all mortgagors and guarantors (if any) and ensuring that that there are no discrepancies between the information contained in the documentation and the information contained in the Agreement of Purchase and Sale, including, but not limited to, the purchase price.

  • (b)

    you advise us immediately, in the event that it comes to your attention, that any credits towards the purchase price in favour of the purchaser on a conveyancing transaction arise other than by way or payment of funds through your trust account and/or monies held in a licensed realtor’s trust account. This duty to report includes, but is not limited to, deposits allegedly paid directly from purchaser to vendor and allowances or credits in favour of the purchaser of an unusual nature. You are not required to report the normal adjustments relating to taxes, condominium fees, and the like;

(15) you ensure that all mortgagors and guarantors execute all copies of the Disclosure Statement prior to execution of the mortgage documentation, and that each mortgagor receives one signed copy of the Disclosure Statement (including the Fee Schedule) along with all other applicable mortgage documents.

You will receive a subsequent Disclosure Statement if the cost of borrowing changes.

This subsequent Disclosure

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