Mortgage Broker

CmB magazine cmba-achc.ca summer 2017 | 35 The Question You are a mortgage broker. Your client is looking to finance a new purchase being made in a foreclosure proceeding. e client is worried the registered owner may remove finishings (such as chandeliers, mirrors and ornamental items) from, and damage, the property before it is transferred. e proposed lender is worried that this will reduce the value of the property substantially and increase the loan-to-value ratio. Can anything be done to better protect the buyer and, consequently, the lender? Short Answer e court will apply the purchase contract to determine whether the buyer is to be protected from the loss. what happened? Tyk v Graham, 2017 BCSC 920 (CanLII) provides some guidance. e buyer made an offer on property that was being foreclosed upon. In the negotiations, the purchaser insisted that the property and all included items be substantially in the same condition on the possession date as they were on the viewed date (that is, the date when the buyer viewed the property). ere was resistance to that clause being included in the agreement but nevertheless an agreement was reached. e parties ended up with a contract, an addendum and a schedule. THE ConTRaCT Said: n e property and all included items will be in substantially the same condition at the possession date as when viewed by the buyer on the viewing date. n All buildings on the property and all other items included in the purchase and sale will be, and remain, at the risk of the seller until 12:01 a.m. on the completion date. Aer that time, the property and all included items will be at the risk of the buyer. THE addEnduM Said: n is home is being sold in an "As Is, Where Is" condition. n is home is to be delivered in the same condition as viewed on the viewing date. THE SCHEduLE contained standard language that a vendor in a foreclosure sale would desire, including that: n its terms replaced, modified and (where applicable) overrode the terms of the purchase contract; and n where a conflict arose between the terms of legalease Protect yourself from registered owners who strip foreclosure properties of finishings and value By rAy BASi, ll.B., StAFF, eDuCAtion AnD PoliCy review whAT IS "AS IS, whERE IS" And "AS VIEwEd"? e reference to an "As Is, Where Is" clause means that the buyer bears the risk of the property deteriorating between the time of the contract and the possession date. e buyer is to take the property in whatever condition the property is in at the time of possession. In foreclosure matters, it is a way of acknowledging and assigning the risk that a reluctant owner who is ordered to sell the property might damage it. e reference to an "As Viewed" clause means that on the possession date the buyer is to receive the property in substantially the same condition as it was when viewed by the buyer. In non-foreclosure agreements, buyers are routinely able to have such a clause included in the agreement. PlundeRing Pillaging and

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