Hi,

We, Levy Zavet PC (the “Firm”), will be pleased to provide you with our services in connection with the registration of your Private Mortgage Loan Security against the real estate property of the borrower and as against the borrower and guarantors, if applicable in your mortgage commitment (the “Transaction”).  This letter contains our standard terms of engagement for your review.  It also confirms our billing procedures, practice regarding potential conflicts and requests certain information we need from you our client in order to ensure an expedient and accurate transaction.  We acknowledge that in most cases the borrower pays the lender’s legal fees and disbursements in closing such transactions, but ultimately the obligation falls on the lender.  Furthermore, you acknowledge and agree that at our discretion we may also act for the borrower in accordance with the Law Society of Ontario’s Rules of Professional Conduct, rules 3.4-12 and 3.4-14 (i.e. exception sub-rule (c.1), where the consideration for the mortgage or loan does not exceed $75,000 ).

Services and Billing

Our legal fee is generally between $1,195.00 and $1,395.00 for this type of Transaction.  This does not include HST and your disbursements, where applicable. You will be charged separately for these.   The legal fee will be quoted to you by email sent from the lawyer or clerk on your file. The fee quote emailed to you will be deemed accepted upon us beginning any work on your Transaction, or reviewing your documents or instructions, and as pursuant to this retainer.

We will provide you with our standard routine closing service for private lenders that are providing mortgage financing to be secured by registering a mortgage charge against the subject real estate property of the borrowers, covenantors (e.g. beneficial owners, shareholders, partners, nominees), guarantors or indemnifiers.  The scope of service for this Retainer is limited to attending to the execution by such parties of your standard form of security documents and instruments, address any valid requisitions and questions we or you may have and with your help, and address any relevant questions such parties may have. Where you require that we register or discharge any security, you agree that we assume no liability, and nor are we required to discharge such security or any other or prior security unless we are provided with sufficient funds to completely and without recourse payout such amounts that may be required. In the event we are required to procure any registrations of security or other instruments (e.g. mortgage charge, PPSA) and/or opinions from such parties and/or their counsel, you agree to indemnify us from any claims, recourse, liability, damages, costs, harm or other remedies we may suffer or as may be required from us, now or in the future, known or not known, from you or such other parties that may rely on such registrations and/or opinions and seek indemnity or damages or other remedies from us.

The fee noted above is in respect of our standard routine closing service that we typically encounter when completing the registration of the security required for a private mortgage loan against one residential property and borrower (including spouses) and as described above. In the event of complexities, which result in additional work or extra disbursements we shall advise you of the increase in costs.  In particular please note:

If the title to the property you are securing against is defective and additional work is required in order to clear the title you will be charged for the extra time spent on the file.

In the event that your closing is advanced or postponed for any reason by mutual extension or otherwise, extension fees may apply.

Should you decide to withdraw your retainer prior to closing or your closing does not take place for any reason, you will be charged for all disbursements incurred and a reasonable fee for services rendered.

Please arrange for the signed mortgage commitment and instructions to be sent to us at least five (5) business days prior to the closing date to ensure that there are no complications to the closing due to delays in receiving instructions and mortgage funds.  A fee may apply if the signed mortgage commitment and instructions are not received five business days prior to closing to accommodate for a rush closing.

We may not at this time ask for an initial retainer to start work as we will deduct all fees from the proceeds received on the day of closing. Due to circumstances beyond our control, on some occasions we are unable to estimate the balance of the funds owing until a day or two before closing and in this situation we would require your co-operation in delivering the funds to our office promptly upon request, by wire or certified cheque, in any event at least one day before closing.

Our statement of account and trust ledger will be provided to you after closing outlining all your receipts and expenditures. A draft of same will be provided as soon as we can prepare it, having all the information we need.

Unless otherwise agreed in advance, any services in addition to the Transaction will be charged at our usual hourly rates.  If required, we will be assisted in the performance of certain work by our other lawyers whose rates can be higher or lower.

We will provide you with complete, accurate and fair monthly accounts for any work in addition to the Transaction, if any.  We encourage you to promptly raise any questions or comments you have regarding any account.  In return, we ask for payment of our accounts within 7 days of receipt.

WHEN GETTING US MORTGAGE INSTRUCTIONS PLEASE MAKE SURE TO IDENTIFY THE ASSIGNED LEVY ZAVET LAWYER, AS WE HAVE MANY AMAZING REAL ESTATE LAWYERS EACH HELPING ALL OUR CLIENTS

Tax Consequences

We will not be providing you with advice on tax issues related to the above mentioned transactions.  Please note that your proposed Transaction may have tax consequences.  We encourage you to contact an accounting professional to obtain tax advice.

Business, Financial, Risk, Economics, Building, Zoning Considerations: No Advice or Opinion

We do not provide any advice or opinions, and nor do we conduct any such searches necessary to provide such advice or opinions, on any business, financial, value, pricing, economics, risk, loan to value, appraisal, building or zoning considerations of your transaction and any assets or property involved, including, but not limited to, current and future economic feasibility, operations, uses, construction or development, road widenings, setbacks or how other lawful authorities may influence your intended uses and future plans for the business, its operations, the security you have, valuations, risk and any property involved including intangible assets and real estate. We encourage you to contact other professionals such as appraisers, accountants, actuaries, business consultants, property managers, mortgage brokers, loans officers, surveyors, planners and architects to obtain any such advice, opinions, guidance, assurances, surveys and reviewing and advising on any such appraisals, financials, reports, plans and drawings, involved, to be prepared or procured, or as provided or as in public records, such as registered on title.

Title Insurance in Lieu of a Lawyer’s Opinion on Title

Title insurance is not mandatory although we strongly encourage that coverage is obtained for this Transaction, as we will not be providing a title opinion.  Regardless of your choice or the borrower’s choice, we will not provide you, the borrower or any other lender with a title opinion. We will explain to you the various options available to protect your mortgage security and any other lender’s security interests and the advantages and disadvantages of protecting your interests through title insurance as compared to a lawyer’s opinion on title (which we will not provide). Please be advised that we may be paid an examining counsel fee by the insurer. For more information, please visit Understanding Title insurance | Financial Services Regulatory Authority of Ontario (fsrao.ca).

Important Note: It is your responsibility to notify us if the secured property has any non-residential uses or components or of any tenancies (i.e. more than one dwelling unit), and therefore what type of title insurance policy you want.  If the secured property has other uses such as commercial, farming, agricultural, work-live, office, manufacturing, mineral, recreational, industrial, mixed uses, hotel, multi-residential or more than one dwelling unit, a traditional residential title insurance policy will not provide adequate coverage and most of the other coverages may be exempt.  This means you may require a multi-residential or commercial title insurance policy.  Please review your title insurance policy and verify the endorsements covered and the exemptions that apply.  You can also change your title insurance policy after it is purchased, including after closing your transaction.

Privacy

The Firm is subject to the Personal Information and Protection Electronic Documents Act (PIPEDA).  By retaining us, you understand that we will be collecting personal information, including your address, telephone number and e-mail.  We will use that information to communicate with third parties on your behalf and will use it to advise you of our services.  However, we can assure you that we will not share this information with anyone without your instructions and will not sell your personal information.

Email Communication:

We are always happy to communicate with you by email.  We find that this saves time and we feel that the use of email fits in with the way most companies and individuals conduct business nowadays. Although we employ electronic and physical protection measures which meet our industry and regulator’s standards, there is a risk of interception of information when communication is exchanged by emails. If you do not wish to use email communication with us, we will employ traditional communication measures (telephone, fax, mail) but additional charges may apply.  Regardless it is incumbent on you to protect any correspondence and communication received by us and we assume no liability in this regard.  You must let us know immediately if you no longer wish to continue to communicate through email.

We have performed a conflicts check of our other clients to see if representing you in this matter would create a conflict of interest.  To the best of our knowledge, there are no conflicts.  But please let us know otherwise.

If a conflict arises, we will advise you as soon as we become aware of it and will attempt to resolve it in a manner acceptable to all parties.  If we cannot resolve the conflict, we may be required, under our Rules of Professional Conduct, to withdraw from representing you, the other party, or both, depending on the nature of the conflict.

If the Firm or any of its lawyers have been requested to act for you, which may mean more than one party, or more than one owner, lawyer, borrower or guarantor, in connection with the above-noted transaction (the “Transaction”):

1. The Firm has recommended that each of the said parties obtain Independent Legal Advice about jointly retaining the Firm or any of its lawyers in connection with the Transaction.
2. In acting for the said parties, no information received by the Firm or any of its lawyers from either party in connection with the Transaction can be treated as confidential insofar as the other parties are concerned;
3. If a conflict of interest should arise which cannot be reasonably resolved, arbitrated or settled, the Firm or any of its lawyers cannot continue to act for the undersigned, and in such case the Firm or any of its lawyers may have to withdraw completely from the Transaction, however you hereby confirm and agree that, and if allowed or granted in law, the Firm or any of its lawyers may choose to act for and represent any one or more of the parties herein to the extent granted and that you waive any such rights to otherwise object to same; and
4. The Firm or any of its lawyers may take instruction or communicate with any of the said parties in regards to the Transaction, without having to notify the other said parties.  For example, this is very common between co-lenders, co-borrowers, co-guarantors and spouses, where often only one of the parties are providing us with instructions.

File Retention

After this Agreement and engagement (the “Retainer”) terminates or expires, we will close all files relating to the Retainer, Transaction or matter, in accordance with its File Retention and Destruction policy. The file will be stored off-site during this period and destroyed as soon as its Destruction policy allows. In the event that you instruct us to extract the file from off-site storage and reopen it, you will be required to pay an administrative fee over and above any legal fees in connection with the Retainer. This clause will survive the termination of this Agreement indefinitely.

The Retainer will terminate on the sooner of the closing date of the Transaction contemplated herein or as extended and the date in which the Transaction may be cancelled or fail to close, unless otherwise terminated by the parties hereto with notice by email or in writing.

Indemnification

You shall indemnify us, our Firm, our lawyers and employees harmless from any and all losses, costs, liabilities and expenses (including legal costs) in connection with:

1. A breach by you of this Agreement (including any third party legal proceedings arising out of that breach);
2. A claim against us, our Firm, our lawyers and employees from a third party arising out of us representation you pursuant to this Retainer.  Provided, that the indemnity in this subparagraph will not apply if the third party claim is a direct result of a breach of this Agreement solely by us, our lawyers and employees or professional negligence solely on the part of us.

This paragraph will survive the termination or expiry of this Agreement.

Our Liability To You

We acknowledge that we have solicitor/client liabilities to you (such as possibly a duty of loyalty and duty of care), arising out of our services in this Retainer as contemplated in Section 22 of the Solicitor’s Act (Ontario).

You acknowledge and agree that we, our Firm, our lawyers, our contractors and employees, are prepared to accept liability where decided in law, together in aggregate of up to $1,000,000.00, that being the maximum potential insurance claim under our lawyer’s basic errors and omissions insurance, with no exception and regardless of any excess insurance we may have, and that you will never claim for more in aggregate including all legal fees and disbursements, for any reason or cause no matter how severe or how large.

Change in Representation

If you choose to change lawyers at any time, in consideration of our review of documents and agreements and any other time spent on your file, the fees herein are deemed earned by the Firm and you will be responsible for the fees and disbursements.

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If no objection is raised with the above terms within one (1) business day after you receive this retainer by reviewing it here on our website and sending us your Transaction details, or if emailed to you, or we proceed with your Transaction for any reason as instructed or provided by you or your agents, directors, officers, shareholders, executors, realtors, mortgage broker, family members, or advisors, you are deemed to have agreed to be bound by the above terms.  If you have any questions, please do not hesitate to contact us.

Thank you very much for choosing our firm to assist you in this matter.

Note: This message is not intended to be or replace any family law advice, wills or estates or otherwise opinions or advice from your legal counsel or anyone, however, if you are going through a divorce or separation, you should question and consider changing your power of attorney(s), will(s), beneficiary designations of any pensions, RRSPs, other registered accounts and investments, and to sever any joint tenancies on real estate properties, should any of the foregoing include a separating/divorcing spouse as a recipient (e.g. joint tenant or account holder).