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Declaration of Intention to Retain Beneficial Interest and Exemption (joint) (35 downloads)

Ken Proudman - view Arbitrator profile
BARR LLP (Alberta. Joined 2017)

I developed this form after reading all of the decisions following Jackson and Harrower which discussed rebutting the presumption of advancement when an exemption is placed into joint names.

I'll be presenting it to the CBA real property section tomorrow, in hopes that real estate lawyers will use it as an opportunity to discuss exemptions with clients, so that they can make informed decisions. See more about the webinar tomorrow here:

You'll see that there's a disclaimer in the form, because it is a murky area that's circumstance-dependent, and if they really want to protect land they should get a pre-nup. This version has them both sign, but as a back-up that isn't ideal, there's also a version where only one signs:

What do you think?

Download Declaration of Exemption Joint - DOCX file attached - Jun 16, 2020

Caution: we recommend that you scan this file for viruses and malware prior to opening or otherwise using it.

1 19 months ago - edited 19 months ago

Wayne Barkauskas, Q.C. - view Arbitrator profile
Wise Scheible Barkauskas (Alberta. Joined 2020)

One of my pet peeves. A real estate lawyer should get sued one of these days to wake them up to the legal advice obligation they are often overlooking!

1 19 months ago

(Alberta. Joined 2019)

I see a problem in referencing case law but equally suggesting that a real estate lawyer is obliged to deal with exemptions

0 18 months ago

Ken Proudman - view Arbitrator profile
BARR LLP (Alberta. Joined 2017)

The case law isn't necessary, it's just an added measure so that lawyers reading it will know what the purpose of the document is, or otherwise enable them to educate themselves about the issue. I received several questions about this during the CBA presentation, so I suspect that many real estate lawyers aren't aware of the halving of exemptions.

I'm not sure whether real estate lawyers are legally obliged to address exemptions, but they'd be doing their clients a service by helping them to ascertain their true intentions and obtain more accurate instructions. During the CBA presentation, I suggested using a promissory note to address situations where funds are paid into joint property, because I've had so many clients who were shocked to see that a significant portion of years of their savings was lost simply for contributing towards a down-payment on a joint home, especially where it was a very short relationship. When clients are routinely shocked about the consequences of transactions involving lawyers, it signals to me that there's a problem.

I don't know if anyone has ever tried to sue or file a complaint against a real estate lawyer for failing to advise them of exemptions, but it might be possible. Under Rule 3.1-1, the duty of competence includes identifying issues, ascertaining client objectives, considering possible options and developing and advising the client on appropriate courses of action.

If a real estate lawyer noticed a strange encumbrance on title, they'd point it out to the client to ascertain whether their client is aware and accepting of that encumbrance. So shouldn't they also point out when a client may be giving up a significant exemption, so that they can ascertain their client's objectives, and advise the client of appropriate courses of action? Isn't part of the point of hiring a lawyer to be advised of when a course of action may result in significant harm that isn't readily observable by laymen?

0 18 months ago

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