Criminal Code of Canada - section 387 - Fraudulent sale of real property

section 387

INTRODUCTION AND BRIEF DESCRIPTION

Selling real property while intentionally hiding an unregistered prior sale or encumbrance is a criminal offence punishable with imprisonment up to two years.

SECTION WORDING

387 Every one who, knowing of an unregistered prior sale or of an existing unregistered grant, mortgage, hypothec, privilege or encumbrance of or on real property, fraudulently sells the property or any part thereof is guilty of an indictable offence and liable to imprisonment for a term not exceeding two years.

EXPLANATION

Section 387 of the Criminal Code of Canada is a provision that aims to prevent fraudulent sales of real property. The section prohibits the sale of any real property or any part thereof by an individual who has knowledge of an unregistered prior sale or an existing unregistered grant, mortgage, hypothec, privilege, or encumbrance on the property, with the intent to deceive or defraud the buyer. This provision is designed to protect the interests of the innocent buyers who may unknowingly purchase property with an unregistered prior sale or encumbrance. The section provides for a criminal offence that is punishable by imprisonment for a maximum term of two years. The offence is classified as an indictable offence, which is a more serious category of criminal offence that requires a trial in a higher court. Conviction for this offence can result in a permanent criminal record, which can have long-term consequences, including difficulty in obtaining employment, accessing financial services, and immigration. To be convicted of this offence, the prosecution must prove that the seller had knowledge of the unregistered prior sale or encumbrance, and that the sale was made with the intent to defraud the buyer. The burden of proof is on the prosecution to establish all elements of the offence beyond a reasonable doubt. In conclusion, section 387 of the Criminal Code of Canada is a provision that seeks to protect the interests of innocent real property buyers from fraudulent sales. It provides for a criminal offence that carries serious consequences and serves as a deterrent to fraudulent sellers who may seek to take advantage of unsuspecting buyers.

COMMENTARY

Section 387 of the Criminal Code of Canada deals with fraudulent sale of real property that has an unregistered prior sale or an unregistered grant, mortgage, hypothec, privilege or encumbrance. In simpler terms, this section of the code forbids individuals from knowingly selling real estate property without disclosing the existence of any previous unregistered ownership or financial interest in the property. The rationale behind this law is to protect the property rights of those who have an existing claim on the property, but whose claims have not been properly recorded. The law states that any individual who fraudulently sells real property without disclosing the existence of unregistered ownership or financial interest commits an indictable offence and can be imprisoned for up to two years. The term 'fraudulently' in this context refers to the intentional misrepresentation, concealment, or omission of facts that are material to the sale of the property. Section 387 of the Criminal Code of Canada is an essential tool for protecting the integrity of real estate transactions. In Canada, the sale and purchase of real property are usually completed through a legal process that involves having a lawyer or notary public conduct a title search on the property. A title search is a crucial part of the purchase process, as it helps uncover any outstanding ownership claims, liens, or other financial interests in the property. The existence of these claims means that the buyer cannot assume full ownership of the property and is sometimes unable to use it effectively. The law is also important in protecting individuals who have an existing interest in the property but who have failed to register their ownership or financial claim officially. In some situations, these individuals may have legal claims to the property, such as a previous owner who failed to record the transfer of ownership or a lender with a secured financial interest in the property. Therefore, the law helps to ensure that any individuals who could be affected by the sale of the property are notified of the transaction. The two-year imprisonment penalty for violating this law shows how seriously the Canadian justice system takes this offence. This punishment is important because it acts as a deterrent to those who may be tempted to defraud innocent buyers by failing to disclose unregistered ownership or financial interests in the property. Additionally, the punishment serves to promote a sense of justice for those who have been victims of fraudulent property sales. In conclusion, section 387 of the Criminal Code of Canada is essential in promoting the integrity of real estate transactions in the country. By preventing individuals from fraudulently selling real property without disclosing unregistered ownership or financial interests, the law protects the interests of those who could be affected by the sale of the property. The two-year imprisonment penalty for violating the law is an essential tool for maintaining the sanctity of real estate transactions in Canada.

STRATEGY

Section 387 of the Criminal Code of Canada is a provision that criminalizes fraudulent sale of real property in the presence of an unregistered prior sale or existing unregistered grant, mortgage, hypothec, privilege or encumbrance. This provision is aimed at protecting the interests of those who have prior legal claims to the property and ensuring that property sales are conducted in a fair and transparent manner. When dealing with this provision, there are several strategic considerations that should be taken into account. The first consideration is to ensure that all parties involved in the transaction are aware of any prior legal claims to the property. This requires conducting thorough due diligence to identify any existing encumbrances on the property, such as mortgages or liens, and verifying that all such claims are properly registered. Another important consideration is to ensure that all parties involved in the transaction are aware of their legal obligations under the law. This includes disclosing any prior legal claims to the property, as well as ensuring that all necessary registrations and filings are completed in a timely manner. To comply with the provisions of Section 387, there are several strategies that could be employed. One strategy is to ensure that all sales are conducted in a transparent and ethical manner. This means disclosing any encumbrances or prior legal claims to the property, as well as complying with all legal requirements and regulations. Another strategy is to work with experienced legal professionals who are well-versed in the relevant laws and regulations. Such professionals can provide valuable guidance and advice on all aspects of the transaction, including compliance with Section 387 and other relevant provisions of the Criminal Code of Canada. Finally, it is important to ensure that all parties involved in the transaction are aware of their legal rights and obligations under the law. This may require providing legal education and training to buyers, sellers, and other stakeholders to ensure that they have a clear understanding of their legal responsibilities. In conclusion, Section 387 of the Criminal Code of Canada is an important provision that aims to protect the interests of those who have prior legal claims to real property. To comply with this provision, it is important to conduct thorough due diligence and ensure that all parties are aware of their legal obligations. Employing experienced legal professionals and providing legal education and training can also help ensure compliance with the law and prevent fraudulent sales of real property.