Circumstances when Ontario lawyers are not required to use a Form 9D nor a Form 9E under By-Law 9

When Ontario lawyers represent lenders or handle money on their behalf, they must generally maintain specific financial records. These include preparing an "Investment Authority" and a "Report on the Investment." However, there are exceptions to these requirements. Here’s a breakdown of when lawyers do not need to prepare these documents:

1. Institutional Lenders: If the lender is a recognized financial institution or similar entity, certain documents are not required. Specifically:

   • The lender must be a bank (listed in Schedule I or II to the Bank Act, Canada), a licensed insurer, a registered loan or trust corporation, a subsidiary of any of these entities, a pension fund, or any business that lends money as part of its regular operations.

   • The lender has signed a loan agreement with the borrower and provided a written commitment outlining the terms of the loan.

   • The lender has given the lawyer a copy of this written commitment before any money is advanced to the borrower.

2. Non-Arm's Length Transactions: If the lender and the borrower have a close relationship (i.e., they are not dealing at arm’s length), the usual document requirements are waived.

3. Employer-Employee Relationships: If the borrower is an employee of the lender or a related corporate entity, there is no need for the Investment Authority or Report.

4. Disclosure Statements: If the lender has executed an Investor/Lender Disclosure Statement for Brokered Transactions (approved under the Mortgage Brokerages, Lenders and Administrators Act, 2006) and has provided written instructions for the lawyer to accept this disclosure statement as proof of the loan agreement, the additional documents are not needed.

5. Small Loan Amounts: When the total loan amount does not exceed $6,000, the requirement to prepare an Investment Authority and Report is waived.

6. Property Sales by Lender: If the lender is selling real property to the borrower and the loan is part of the purchase price, the usual documentation requirements do not apply.

These exceptions aim to streamline the process for specific types of transactions where the risks and complexities are reduced, or where other safeguards are in place. Understanding these exceptions helps lawyers efficiently manage their record-keeping responsibilities while ensuring compliance with regulatory requirements.