Quote:
Originally Posted by troutman
Usually, a lawyer is representing the purchasers and the lender at the same time, and has a duty to both parties. There are certain "red flags" the lenders ask that we watch for. The lender is also the lawyer's client.
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The red flags on the Law Society site came out in an advisory in May, 2009. Not exactly helpful for the lawyer practicing in 2006. Plus you would think a sophisticated businessman like BMO would explicitly put in their trust conditions what they expected you to do. I have never seen a trust condition that states that you have to advise the bank if it is a straw buyer. I am not even sure how you would know that. What happens when you advise a bank that it is a straw buyer and it is not and they lose their 20K deposit? Does the purchaser sue you for interference in contractual relations?
As someone who got called in 2008, I am glad that I am in all likelihood clear on this thing. Although they do name the unknown defendants of Jane and John Doe in their Amended Statement of Claim, so nobody can be "sure" they are not named. But I feel for these guys who were practicing in 2006, real estate was moving fast and quick, with values going up over 50% a year on average in some neighborhoods. The banks were pushing these things out because the guys there are paid on commission and the only way a bank makes money is if it loans money. And now that the music has stopped everyone is looking for a chair.