Purchase Money Deed Of Trust for Canada

Purchase Money Deed Of Trust Template for Canada

A Purchase Money Deed of Trust is a legal instrument used in Canadian real estate transactions that creates a security interest in property being purchased with borrowed funds. It serves as a three-party security instrument where a trustee holds legal title to the property as security for a loan made by the lender to the borrower. The document establishes the terms of the trust arrangement, including the obligations of all parties, default provisions, and remedies. Under Canadian provincial law, this document provides an alternative to traditional mortgages, offering specific advantages in terms of enforcement and administration of the security interest.

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What is a Purchase Money Deed Of Trust?

The Purchase Money Deed of Trust is a critical document in Canadian real estate financing transactions, particularly when a property purchase is financed by a lender. This instrument is used across various Canadian provinces, though specific requirements may vary by jurisdiction. The document creates a three-party arrangement where a trustee holds legal title to the property as security for the lender's benefit, while the borrower maintains equitable title and possession of the property. The Purchase Money Deed of Trust typically includes detailed provisions regarding the property description, loan terms, payment obligations, default procedures, and remedies available to the lender. It's particularly useful in situations where a streamlined foreclosure process is desired, as it can provide more efficient enforcement mechanisms compared to traditional mortgages. The document must comply with provincial real estate and secured transactions laws, and typically requires proper registration in the relevant land registry system.

What sections should be included in a Purchase Money Deed Of Trust?

1. Parties: Identifies the Borrower (Trustor), Lender (Beneficiary), and Trustee, including their full legal names and addresses

2. Background: Outlines the context of the transaction, including the purchase of the property and the loan arrangement

3. Definitions: Defines key terms used throughout the document

4. Property Description: Detailed legal description of the property being held in trust

5. Secured Obligations: Details of the debt being secured, including the principal amount, interest rate, and payment terms

6. Grant in Trust: Formal conveyance of the property to the trustee to hold as security

7. Borrower's Covenants: Borrower's obligations including property maintenance, insurance, taxes, and permitted uses

8. Default Provisions: Circumstances constituting default and the consequences thereof

9. Remedies: Lender's and Trustee's rights and remedies upon default, including power of sale

10. Insurance and Tax Requirements: Specific requirements for property insurance and payment of property taxes

11. Assignment and Transfer Rights: Terms governing the transfer or assignment of rights under the deed

12. Release Provisions: Conditions and process for releasing the trust deed upon satisfaction of the debt

13. Governing Law: Specification of applicable Canadian provincial law

14. Execution: Signature blocks and attestation requirements

What sections are optional to include in a Purchase Money Deed Of Trust?

1. Condominium Provisions: Additional terms specific to condominium properties, used when the secured property is a condominium unit

2. Construction Provisions: Terms relating to ongoing or future construction on the property, used when property improvements are planned

3. Environmental Matters: Additional environmental warranties and indemnities, used for commercial properties or properties with environmental concerns

4. Secondary Financing: Terms governing additional financing arrangements, used when secondary financing is permitted

5. Rental Provisions: Terms governing rental of the property, used when rental of the property is permitted

6. Cross-Collateralization: Provisions linking multiple properties or loans, used when multiple properties secure the loan

7. Future Advances: Provisions for additional loan advances, used when future advances may be made under the same security

What schedules should be included in a Purchase Money Deed Of Trust?

1. Schedule A - Legal Description: Detailed legal description of the property including lot numbers, plan numbers, and boundaries

2. Schedule B - Permitted Encumbrances: List of existing liens, easements, or other encumbrances that are permitted to remain on title

3. Schedule C - Payment Schedule: Detailed amortization schedule showing payment amounts, dates, and allocation between principal and interest

4. Schedule D - Insurance Requirements: Detailed specifications for required insurance coverage

5. Schedule E - Property Maintenance Standards: Specific requirements for property maintenance and repair

6. Appendix 1 - Promissory Note: Copy of the promissory note evidencing the debt secured by the deed of trust

7. Appendix 2 - Property Photographs: Current photographs documenting the condition of the property at the time of execution

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Genie AI

Document Type

Trust Deed

Cost

Free to use
Clauses
Relevant Industries

Real Estate

Banking & Financial Services

Property Development

Mortgage Lending

Legal Services

Construction

Property Management

Insurance

Relevant Teams

Legal

Real Estate

Mortgage Operations

Risk Management

Compliance

Property Management

Investment

Transaction Processing

Document Management

Title Services

Relevant Roles

Real Estate Lawyer

Mortgage Officer

Real Estate Agent

Property Developer

Title Officer

Loan Officer

Mortgage Broker

Real Estate Investment Manager

Property Manager

Legal Counsel

Compliance Officer

Risk Manager

Real Estate Transaction Coordinator

Trust Officer

Real Estate Paralegal

Industries
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