Mod 6

Question 1

What can the lender do if a corporation defaults on a mortgage vs. if an individual/partnership defaults on a mortgage?

Answer 1

-they can seize the property and then go after the corp for the remainder of the mortgage
-they can only seize the property and cannot go after the individual/partnership for the remainder of the mortgage

Question 2

What searches are always conducted on a commercial mortgage file?

Answer 2

-Title Search
-Plan Search
-Property Tax Search
-Court House Search

Question 3

What is a Commitment Letter?

Answer 3

-it puts the agreement between the borrower and lender in writing
-outlines the conditions of when the lender will advance the loan funds
-terms and conditions the borrower must follow before and after the loan advance

Question 4

What search is done to ensure the borrower is submitting employee deductions (CPP and EI)?

Answer 4

Canada Revenue Agency search

Question 5

What search is done to ensure the borrower owns the intellectual property?

Answer 5

Patents, Copyrights, and Industrial Design

Question 6

What search is done to see if the borrower is in bankruptcy?

Answer 6

Industry Canada

Question 7

What search is done to determine if the borrower is being sued or in bankruptcy proceedings?

Answer 7

Court House Search

Question 8

What search is done to determine if another party has a security interest in the personal property?

Answer 8

Personal Property Registry Search

Question 9

What search is done to confirm no outstanding property taxes or local improvement levies?

Answer 9

Property Tax search

Question 10

what search is done when there are environmental concerns about the land to be mortgaged?

Answer 10

environment search

Question 11

what search is done to see if there are any orders issued against the borrower when the borrower has employees?

Answer 11

employment standards

Question 12

what search is done to confirm the registered owner?

Answer 12

title search

Question 13

What is the purpose of an Opinion Letter?

Answer 13

advises the lender’s lawyer that the borrower’s minute book has been properly maintained

Question 14

What is the Certificate of Incumbency?

Answer 14

proof to the lender who the directors and officers of the corp are

Question 15

What is a Guarantee?

Answer 15

essentially a co-sign; a promise by a third party to pay the debt should the borrower default on the loan

Question 16

What is a General Security Agreement?

Answer 16

allows the lender to collect personal property of the borrower as payment if the borrower defaults