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Notice from the Law Society of Manitoba - Re: Receipt of Cash at Mortgage Auction Sales

Posted January 26, 2005

The issue of whether a lawyer may receive or accept cash deposits in excess of $7,500.00 at a mortgage auction sale was recently raised for consideration by the Law Society. The Law Society is currently reviewing federal and provincial legislation that may impact on the Society's rules restricting the receipt of cash and also canvassing other law societies to determine how cash deposits on mortgage auction sales are being handled in those jurisdictions. In the short term and pending the Society's final determination of this issue, members are advised that where an order for sale is made by the District Registrar, a lawyer acting for a mortgagee at a mortgage auction sale may accept a cash deposit in excess of $7,500.00 pursuant to Law Society Rule 5-53.3(2)(c). Under Rule 5-53.3(2)(c), cash received pursuant to a court order or an order of a tribunal is exempt from the $7,500.00 cash restriction.

Members are reminded that cash in excess of $7,500.00 received at a mortgage auction sale [or pursuant to any other exception set out in Rule 5-53.3(2)] must be reported in the law firm's Annual Trust Account Report (Self-Report andForm D).

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