British Columbia Order in Council — Order under Mortgage Brokers Effective September 1, 2000: B (O.C. 813/2000)

O.C. 813/2000

British Columbia — Orders in Council

Lieutenant Governor May 12, 2000 (specify):- "30? /2000/13 PROVINCE OF BRITISH COLUMBIA ' ORDER OF THE LIEUTENANT GOVERNOR IN COUNCIL , Approved and Ordered JUN - 8 200 Order in Council No. • — 813 Executive Council Chambers, Victoria On the recommendation of the undersigned, the Lieutenant Governor, by and with the advice and consent of the Executive Council, orders that effective September 1, 2000, B.C. Reg. 100/73, the Mortgage Brokers Act Regula- tions, is amended as set out in the

Schedule to this order. Minister of Finance and Carhorate Relations Presiding Mem 'er of the Executive Council (This

part is for administrative purposes only and is not part of the Order.) Authority under which Order is made: Act and section:- Mortgage Brokers Act,

section 23(2)

SCHEDULE 1 The following sections are added to B.C. Reg. 100/73, the Mortgage Brokers Act Regu- lations: Prescribed Forms 1 The following forms attached to this regulation are prescribed: (

a) Form 6 as the written disclosure statement required under

section 16 of the Act; (

b) Form 7 as the application for an order under

section 6 (7.1) of the Act; (

c) Form 8 as the affidavit that accompanies Form 7; (

d) Form 9 as the written information statement required by

section 17.1 of the Act; (

e) Form 10 as the written disclosure statement required by sections : 7.3 and 17.4 of the Act. Applications under

section 6 (7.2) of the Act 8.1 (

I) An application for an order under

section 6 (7.1) of the Act must be in Form 7 and must be accompanied by (

a) an affidavit in Form 8, and (

b) if the application is by a person approved under

section 6 (2.1) of the Act, a copy of the order under

section 6 (2.1) of the Act.

(2) An affidavit under subsection (1) (

a) must (

a) describe the inquiry for which the order is sought, (

b) state that the person swearing the affidavit has reasonable and probable grounds for believing that there may be records, property, assets or things that may reasonably relate to the subject matter of the inquiry located at or in the business premise, building, receptacle or place for which authority is sought to enter, (

c) state the grounds for the belief referred to in paragraph (b), and (

d) describe the records, property, assets or things referred to in paragraph (b). 2

Section 10 is amended by striking out "section 17" and substituting "section 16". 3 The following Divisions are added:

Division 6 - Conflict of Interest Disclosure

Definitions 13

(1) For the purposes of this Division, and sections 17.3 and 17.4 of the Act: "associate" means, if used to indicate a relationship with any person, (

a) a submortgage broker employed by that person, (

b) a partner of that person, (

c) a trust or estate in which that person has a substantial beneficial interest or for which that person serves as trustee or in a similar capacity. (

d) a corporation in respect of which that person beneficially owns or controls, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of the corporation, (

e) a relative, including a spouse, of that person, or (

f) a relative of that person's spouse, if the relative has the same home as that person; "related party" means, in respect of a person, any other person that is (

a) related to the person under subsection (2) to (4), or (

b) deemed to be a related party under subsection (5).

(2) Each of 2 persons is related to the other if (

a) either influences the other, (

b) both influence the same third person, or (

c) both are influenced by the same third person.

(3) For the purposes of subsection (2), a person influences another person if, through the beneficial ownership of or exercise of control or direction over, or through a combination of such ownership of or control or direction over (

a) voting securities of that other person, (

b) securities currently convertible or exchangeable into voting securities of that other person, or (

c) securities carrying a currently exercisable right to acquire voting securities of that other person or to acquire convertible or exchangeable securities referred to in paragraph (b). whether directly or indirectly and whether alone or in combination with one or more persons, the person exercises a controlling influence over the management and policies of that other person.

(4) For the purposes of subsection (2) and without limiting the generality of subsection (3), a person, in the absence of evidence to the contrary, is deemed to influence another person if the first person (

a) beneficially owns or exercises control or direction over securities that constitute in the aggregate more than 20% of the outstanding securities of any class or series of voting securities of that other person, or (

b) would, upon conversion, exchange or exercise of any security or right referred to in subsection (3) (

b) or (c), beneficially own or exercise control or direction over securities that would constitute in the aggregate more than page 2 of 6

20% of the outstanding securities of any class or series of voting securities of that other person. whether directly or indirectly and whether alone or in combination with one or more other person.

(5) If any 2 persons are related parties of the same other person, the 2 persons are deemed to be related parties of each other. Timing of Conflict of Interest Disclosure Statement 14

(1) The written disclosure statement referred to in

section 17.3 of the Act must he provided to the borrower at the earliest opportune time given the circumstances of the mortgage transaction and in any event before the borrower in the mortgage transaction signs the mortgage or any ancillary agreement with the mortgage broker or lender, including but not limited to an agency agreement with the mortgage broker, that commits the borrower to the mortgage transaction.

(2) The written disclosure statement referred to in

section 17.4 of the Act must be provided to the lender (

a) if the lender's funds are paid into trust, on or before release of the funds from trust at the direction of the lender, or (

b) if the funds are not paid into trust, on or before the advancement of timds by the lender. Division 7 - Exemptions from Sections of the Act Exemption from

section 14.1 of the Act 15

(1) In this Division "sophisticated person" means (

a) a government of Canada or any province of Canada or a crown corporation or agency of a Canadian federal or provincial government, (

b) a municipal corporation, public board or commission in Canada, (

c) a savings institution, (

d) a cooperative credit society as defined in the Cooperative Credit Associa- tions Act (Canada) or a savings and credit union, federation or confeder- ation as defined in the Savings and Credit Unions Act (Quebec), (

e) the Business Development Bank of Canada, (

f) a pension fund that is regulged by either the Office of the Superintendent of Financial Institutions (Canada) or a provincial pension supervisory authority, (

g) an insurance company, (

h) a trust company or insurer authorized under the laws of Canada or of a province of Canada other than British Columbia to carry on business in Canada, that province, (

i) a mortgage broker acting as principal, (

j) a subsidiary, as defined by the Company Act, of a person referred to in paragraph (

a) to (i), and page 3 of 6

(

k) a person registered under the Securities Act or the securities legislation of another province in Canada as an investment dealer or equivalent, acting as principal or as an agent or trustee for accounts that are fully managed by it, (1) a person registered under the Securities Act or the securities legislation of another province in Canada as a portfolio manager or equivalent, acting as principal or as an agent or trustee for accounts that are fully managed by it, (

m) a mutual fund or non-redeemable investment fund, if the investment portfolio of the fund is managed by a person that is registered under the Securities Act or the securities legislation of another province in Canada as a portfolio manager or equivalent, and (

n) a person or trust that acquires mortgages or interests in mortgages for the purpose of offering, as a security as defined in the Securities Act, interests in a pool of those mortgages or interests in mortgages.

(2) A mortgage broker is exempt from

section 14.1 of the Act if the mortgage broker is administering, or arranging for a person to administer, a mortgage on behalf of a sophisticated person. Exemption from

section 17.1 of the Act 16

(1) A mortgage broker is exempt from

section 17.1 of the Act in respect of a mortgage transaction described in

section 17.1 (1) (

a) of the Act or a sale transaction described in

section 17.1 (1) (

b) or (

c) of the Act in which the other person referred to in

section 17.1 of the Act is a sophisticated person.

(2) A mortgage broker is exempt from

section 17.1 of the Act in respect of a mortgage transaction described in

section 17.1 (1) (

a) of the Act or a sale transaction described in

section 17.1 (1) (

b) or (

c) of the Act in which the mortgage is (

a) part of a pool of mortgages and an interest in the pool is being offered by the mortgage broker as a security as defined in the Securities Act, and (

b) fully guaranteed by the government of Canada or by a province of Canada.

(3) A mortgage broker is exempt from

section 17.1 of the Act in respect of a mortgage transaction described in

section 17.1 (1) (

a) of the Act or a sale transaction described in

section 17.1 (

b) or (

c) of the Act if an offering memorandum or a prospectus has been provided to the other person referred to in

section 17.1 of the Act in accordance with the Securities Act. Exemption from sections 17.3 or 17.4 of the Act 17

(1) A financial institution, as defined in the Financial Institutions Act, acting in a mortgage transaction is exempt from

section 17.3 and

section 17.4 of the Act if the financial institution is, in respect of that mortgage transaction, in compliance with

section 90 of the Financial Institutions Act and B.C. Reg. 333/90, the Marketing of Financial Products Regulation, under the Financial Institutions Act.

(2) A mortgage broker is exempt from

section 17.3 of the Act if the matters required to be disclosed under that

section have been disclosed in an offering memorandum or a prospectus prepared in accordance with the Securities Act and the offering memorandum or prospectus has been provided to every person who is a borrower in the transaction to which

section 17.3 of the Act would otherwise apply. page 4 of 6

(3) A mortgage broker is exempt from

section 17.4 of the Act if the matters required to be disclosed under that

section have been disclosed in an offering memorandum or a prospectus prepared in accordance with the Securities Act and the offering memorandum or prospectus has been provided to every person who is a lender in the transaction to which

section 17.4 of the Act would otherwise apply.

(4) A mortgage broker is exempt from

section 17.3 and 17.4 of the Act if (

a) the only reason that

section 17.3 or sect ion 17.4 of the Act, as the case may be, would otherwise apply is that the "direct or indirect interest" required to be disclosed is an additional amount as defined in

section 15 of the Act, and (

b) the additional amount has otherwise been disclosed to the borrower in the case of

section 17.3 of the Act or the lender in the case of

section 17.4 of the Act.

(5) For the purpose of

section 17.4 (2) (

a) of the Act, the term "direct or indirect interest" does not include an interest in a mortgage that is registered in the name of the mortgage broker or will be registered in the name of the mortgage broker as a result of the transaction. Exemption for certain Securities Act registrants 18

(1) In this

section "limited dealer" has the meaning given to it in

section 6 of B.C. Reg. 194/99, the Securities Rules; "qualified syndicated mortgage" means a syndicated mortgage if (

a) the syndicated mortgage is (

i) not contained in or secured by a bond, debenture or similar obligation or in a trust deed or other instrument to secure bonds or debentures or similar obligations, and (ii) sold through a mortgage broker, (

b) the syndicated mortgage secured a debt obligation on property used solely for residential purposes and containing no more than 4 residential dwelling units, (

c) the syndicated mortgage does not secure a debt obligation incurred for the construction or development of property, (

d) at the time of issue, the amount of the debt secured by the syndicated mortgage, together with all other debt secured by mortgages on the property that have priority over, or the same priority as, the syndicated mortgage, does not exceed 90 percent of the fair market value of the property, excluding any value that may be attributed to proposed or pending development on the property, (

e) the syndicated mortgage is limited to one identified debt obligation, (

f) the rate of interest payable under the syndicate mortgage is equal to the rate of interest payable under the identified debt obligation, (

g) any amount charged for the administration of the syndicated mortgage is disclosed to the purchaser, and

(

h) the term of the syndicated mortgage is not different from the term of the identified debt obligation; "syndicated mortgage" means a security that provides an investment arrangement in which a person participates, together with others, as a mortgagee through the acquisition of a portion of an identified debt obligation that is secured by a mortgage.

(2) A person that is registered under the Securities Act other than a limited dealer is exempt from the Act for the purpose of offering for sale securities of syndicated mortgages other than qualified syndicated mortgages provided that person is in compliance with the Securities Act.

Exemption for persons licensed under the Real Estate Act 19 Effective January 1, 2001, a person licensed under the Real Estate Act is exempt from the registration provisions of the Mortgage Brokers Act if the person would otherwise be required to be registered only as a result of the person's activity in facilitating the sale of a vendor take-back mortgage where such activity is ancillary to the person's role in the transaction that gave rise to the vendor-take-back mortgage. 7 The following forms are added in proper numeric sequence at the end of the regulation. page 6 of 6

FORM 7 APPLICATION FOR AN ORDER UNDER

SECTION 6(7.1) OF THE MORTGAGE BROKERS ACT

Whereas I, [name], Registrar of Mortgage Brokers, have authorized an inquiry into [describe the inquiry for which the order is sought], I hereby make application for an order, pursuant to

section 6(7.1) of the Mortgage Brokers Act, authorizing [name of person designated to carry out the order] to enter [describe the business premise, building, receptacle or place to be entered] for the purposes of carrying out an inspection, examination or analysis of records, property, assets or things that may reasonably relate to the subject matter of the inquiry.

This application is supported by the information contained in the attached Form 8, an oath of [name of person providing information on oath] indicating that there are reasonable and probable grounds to believe that there are records, property, assets or things that may reasonably relate to the subject matter of the inquiry at or in [describe the business premise, building, receptacle or place to be entered]. Dated at the City of [name of city] Province of British Columbia this day of . [month], ........ [year] (Signature of Registrar) (Name of Registrar) Registrar of Mortgage Brokers

FORM 8 AFFIDAVIT IN SUPPORT OF AN APPLICATION FOR AN ORDER UNDER

SECTION 6(7.1) OF THE MORTGAGE BROKERS ACT I [name of person swearing the oath], [occupation or title of person swearing the oath] make oath and say as follows: [details of affidavit] Sworn before me [month, day, year], at (signature of person swearing oath) A in and for the Province of British Columbia

INVESTOR / LENDER INFORMATION STATEMENT FORM 9 Neither the Registrar of Mortgage Brokers nor any other authority of the government of the Province of British Columbia has In any way passed on the merits of the matters dealt with In this information statement. This information statement has not been filed with the Registrar of Mortgage Brokers and the registrar has not determined whether or not it complies with

Part 2 of the Mortgage Brokers Act. Please type or print clearly. If additional information is required, r- ,(erence and attach a

schedule to this form. PART A - CAUTIONS 1. All mortgage investments carry risk. There is a relationship between risk and return. You should very carefully assess the risk of the transaction described in this Investor / Lender Information Statement provided to you and in the supporting documentation before making a commitment. 2.

You are advised to obtain independent legal advice regarding your decision to invest and in completion of the investment documentation. 3 If you are one of several investors in this mortgage, you may not be able to enforce repayments of your investment on your own if the borrower defaults. 4. You should 'insure you have sufficient documentation to support the property valuation quoted in this Investor/Lender Information Statement. 5. You should be satisfied with the borrower's ability to meet the payments required under the terms of this mortgage. 6.

A mortgage broker must not administer, or arrange for another person to administer, a mortgage on your behalf unless the mortgage broker has a written agreement with you that covers matters set out in the Mortgage Brokers Act. 7. This Investor / Lender Information Statement and the attached documents are not intended to provide a comprehensive list of factors to consider in making a decision concerning this investment. You should satisfy yourself regarding all factors relevant to this investment before you commit to invest. PART B — RISK FACTORS There are risks associated with this mortgage investment.

These risks include, but are not limited to, the following:

a) Repayment of the mortgage is dependent on the borrower's ability to make payments under the mortgage and on the financial strength of any person offering a personal covenant, guarantee or financial commitment; there is no assurance that the obligations will be catislied and therefore you may not receive any return from your investment, including any initial amount invested.

b) Market values may have changed in the period between the date of the most recent property assessment or appraisal and the date that you complete the transaction set out in this Investor / Lender Information Statement.

c) Property values may change over time, which may impair your ability to recover your investment in the event of a foreclosure.

d) The insurance coverage on the property secured may be inadequate, cancelled or expire and expose the investor / lender tc potential loss of this mortgage investment.

e) The mortgage broker or related party of the mortgage broker may have or may acquire an interest in the mortgage or property that is the subject of the transaction set out in this Investor / Lender Information Statement.

f) There may be restrictions on the ability to transfer the mortgage. 9) There is no assurance that there will be a market for the resale or transfer of the mortgage.

PART C: BORROWER / GUARANTOR / COVENANTOR INFORMATION FULL NAME OF GUARANTOR COVENANTOR OF APPLICABLE) FULL NAME OF BORROWER ADDRESS ADDRESS OF GUARANTOR / COVENANTOR POSTAL CODE POSTAL CODE 1 PART D - DETAILS OF PROPERTY TO BE MORTGAGED 1 STREET ADDRESS AND LEGAL DESCRIPTION OF ALL PROPERTY TO BE MORTGAGED 2 TY PE(

S) OF PROPERTY VACANT LAND 1- 1 PROPERTY WITH EXISTING BUILDINGS INDICA re TYPE SINGLE FAMILY RESIDENTIAL CI] ONE•TO FOUR UNIT RESIDENTIAL FIVE OR MORE UNIT RESICIENTOL COMMERCIAL INDUSTRIAL L I, OTHER 3 IF THIS TRANSACTION IS OTHER THAN A PROPERTY PURCHASE, ARE THE PROPERTY TAXES IN ARREARS? LJ YES } NO If YES, indicate amount in arrears Is 4 VALUE OF PROPERTY VALUE OF PROPERTY TO BE MORTGAGED IS BASED OA: El APPRAISAL I SALE PRICE PART E: DETAILS OF MORTGAGE INVESTMENT I THE MORTGAGE IS ESTIMATE OTHER: • I A NEW MORTGAGE L AN EXISTING MORTGAGE II an existing mortgage, s the mortgage current?

YES I I Have there been NO any prior arrears? 1 YES 7 NC 2. a)Tho investment represents what percentage interest in Me mortgage? How many other parties have, or will have, an interest in the mortgage?

b) Will the funds be held in trust pending execution of the mortgage? E] YES ET NO _J c/o If YES, please indicate the party that will ho the !clods in trust: FIN 953 Rev 2000 / I / 25

PART E: DETAILS OF MORTGAGE INVESTMENT (continued) 3 MORTGAGE INVESTMENT REPRESENTS FIRST I: THIRD SECOND OTHER (SPEC/FY) of a L .) FEE SIMPLE ri LEASEHOLD of a FULL F-1 PARTIAL interest in the property to be mortgaged. 4 AMOUNT OF MORTGAGE INVESTMENT PRINCIPAL AMOUNT OF MORTGAGE AMORTIZATION PERIOD TERM Oi MORTGAGE $ ,NTEREST RATE PER ANNUM INTEREST RATE IS ❑ FIXED INTEREST IS CALCULATED AMOUNT OF BORROWER PAYMENT TIS THE PAYMENT INTEREST ONL' 0 MONTHLY ANNUALLY E VARIABLE 0 SEMI-ANNUALLY ❑ OTHER: YES NO 1$ FIRST PAYMENT DATE FINAL PAYMENT DATE FREQUENCY OF PAYMENT Amount of payment to be YYYY MM DD YYYY MM OD ❑ WEEKLY E MONTHLY received by investodlendor based on percentage 1 1 1 1 1 I I BIWEEKLY n OTHER: interest in mortgage 5.

List below the prior financial encumbrances (in order of priority) on the property to be mortgaged that will remain: ESTIMATED PRINCIPAL AMOUNT OUTSTANDING PRIORITY NAME OF MORTGAGE IN ARREAR! ❑ YES NO ID YES ci NO 7. MORTGAGE ADMINISTRATION / REGISTRATION

a) Will the mortgage be administered for the investor/lender? If YES, unless previously provided to the investor, / lender, the administration agreement is attachei to this document.

b) Will the mortgage be registered in the name of the investor / lender? If NO, provide name of the person mortgage will be registered in E YES NO El YES 0 NO 6. LOAN-TO-VALUE RATIO

a) Principal amount of mortgage

b) Total amount of prior financial encumbrances

c) Total amount of all financial encumbrances (a +

b) d) Value of property to be mortgaged (based on Part D Item 4) LOAN TO VALUE RATIO:

d) x 100) PART F: DOCUMENTS TO BE ATTACHED The following documents must be attached to this Information Statement, unless the mortgage broker has made best efforts to obtain the documents and has been unable to obtain them: 1. Borrower Disclosure Statement (pursuant to

section 16 of the Mortgage Brokers Act). 2. Borrower application on the property to be mortgaged.

PART G: POST REGISTRATION DOCUMENTS AND INFORMATION In addition to all other material and documentation mutually agreed upon, you should expect to receive a copy of the following documents and information from your lawyer or notary public acting on your behalf or, in the absence of the same, the lawyer or notary public acting for the mortgage broker in this transaction: 1. registered mortgage (and transfer of mortgage document if applicable); 2. confirmation signed by any prior financial encumbrances confirming the outstanding balance of the same and that the prior financial encumbrances are not in arrears; 3. written confirmation of valid insurance on the property secured, including confirmation the interest of the mortgagee is named; 4. written confirmation that all other conditions precedent to the transaction have been satisfied; PART H: CERTIFICATION I certify that I am the mortgage broker or an authorized representative of the mortgage broker in this transaction and based on my knowledge, belie and information provided by third parties, this Information Statement contains no untrue statement and does not omit to state a fact that is required to be stated or that is necessary to prevent a statement that is made from being false or misleading in the circumstances in which it was made.

FULL NAME OF MORTGAGE BROKER (PLEASE PH/NT) ADDRESS POSTAL CODE I S'GNATURE OF MORTGAGE BROKER OR AUTHORIZED REPRESENTATIVE NAME OF AUTHORIZED REPRESENTATIVE OF MORTGAGE BROKER DATE SIGNED (PLEASE PPM r, YYYY MM 00 X 5. written confirmation that there are no outstanding arrears or delinquent municipal property taxes on the property; 6. written confirmation that, where applicable, there are no outstanding arrears or delinquent strata fees on the property; 7. a lawyer or notary public letter of opinion concerning the State of Title or a policy of title insurance; 8.

State of Title Certificate; 9. trust documents (if applicable).

PART I: ACKNOWLEDGEMENT OF RECEIPT - To be completed at the option of the mortgage broker I certify that I am the investor/lender in this transaction and I acknowledge receipt of the above statement. FULL NAME OF INVESTOR/LENDER ADDRESS POSTAL CODE 1 i TIME RECEIVED I DATE RECEIVED SIGNATURE OF INVESTOR/LENDER SIGNATURE OF INVESTOR/LENDER : AM [2 PM YYYY ll MM DO ..••■•■•6r FIN 953 ;Reverse) Rev 2000 / 1 /25

CONFLICT OF INTEREST DISCLCSURE STATEMENT FORM 10 Neither the Registrar of Mortgage Brokers nor any other authority of the government of the Province of British Columbia has In any way passed on the merits of the matters dealt with in this disclosure statement. This disclosure statement has not been filed with the Registrar of Mortgage Brokers and the registrar has not determined whether or not it complies with

Part 2 of the Mortgage Brokers Act. Please type or print clearly. If additional Information Is required, reference end attach a

schedule to this form. FULL NAME OF MORTGAGE BROKER TELEPHONE NC'. I( ADDRESS POSTAL CODE POSTAL CODE , I 1 LEGAL DESCRIPTION OF PROPERTY TO BE MORTGAGED ADDRESS CF PROPERTY TO BE MORTGAGED Describe any direct or indirect interest the mortgage broker has or, as currently contemplated, may acquire in the transaction for which this disclosure statement is provided.

Describe any direct or indirect interest that a related party or associate of the mortgage broker, as defined in the Mortgage Brokers Act Regulations has or, as currently contemplated, may acquire in the transaction for which this disclosure statement is provided.

CERTIFICATION I certify that I am the mortgage broker or an authorized representative of the mortgage broker in this transaction and based on my knowledge, belie' and information provided by third parties, this Disclosure Statement contains no untrue statement and does not omit to state a fact that is required ti be stated or that is necessary to prevent a statement that is made from being false or misleading in the circumstances in which it was made.

FULL NAME OF MORTGAGE BROKER ADDRESS POSTAL CODE I SIGNATURE OF MORTGAGE BROKER OR AUTHORIZED REPRESENTATIVE NAME OF AUTHORIZED REPRESENTATIVE OF MORTGAGE EFIJKER I DATE SIGNED (PLEASE PRINT) YYVY MM DO X ACKNOWLEDGEMENT OF RECEIPT SIGNATURE NAME (PLEASE PRINT) X DATE SIGNED YYY? MM DO I I FIN 950 Rev 2000 / 1 / 25

Document details

Collection	British Columbia — Orders in Council
Citation	O.C. 813/2000
Type	order_in_council
Volume / chapter	arc oic 0813 2000
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	a75c5197921b402b57b2ba98b96919a64b99423a

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