6 Questions You should Ask when Choosing a Lawyer for Your Real Estate Closing

It is typical to use a lawyer for real estate closings and all the related work that is involved. While the amount of fee charged is one criterion to determine which lawyer to work with, what should you do when you get relatively the same fee or similar fee quoted to you by multiple lawyers? An informed consumer will often ask the following questions:

1. What sort of experience does the lawyer have? Make sure that the lawyer has been dealing in real estate closings and that is his or her primary business. 
2. Whether the lawyer offers “the personal touch.” Will you as the Buyer or Seller, actually meet the lawyer in person or will you be left to deal with assistants? 
3. Is the office staff experienced and competent? Sometimes lawyers will hire law students and expect them to know the intricacies of real estate transactions. Obviously, you don't want to have someone practice on the sale and purchase of your single biggest asset. 
4. What sort of accommodations can the lawyer's office offer? Let's say you have someone with limited mobility on title. Will the lawyer be able to assign a representative who can visit your house as opposed to you struggling to bring your family member to his or her office?
5. Will the transaction be processed within the office or will the work be outsourced to a third party? 
6. Does the lawyer have litigation experience or have someone that he or she can consult if there is a problem with a transaction? The lawyer’s ability to stick-handle the players if the transaction starts to go sideways is very important. 

Whatever the fee, it’s always a good idea to make sure that the lawyer will be accessible throughout the process and especially on closing. Make sure you check for all of these and

more. And if a lawyer gets uneasy answering these questions or makes it seem that you are taking up their precious time, then that in itself tells you something, doesn't it?

If you find yourself stuck in an unpleasant situation with a lawyer, then you have the option to reach out to The Law Society of Upper Canada. The Law Society’s authority to license and regulate lawyers and paralegals in the public interest is granted by the Ontario government through the Law Society Act and regulations made under the act. Here you can find the rules and legislations governing the lawyers.

Filing a Complaint against a lawyer: If you wish to file a complaint against a lawyer, then The Law Society of Upper Canada provides Complaint Services. There are various methods to reach the complaints department or you can simply download the complaint form to file a formal complaint. 

Formally educated as an Architect, Jagdeep Singh is Toronto REALTOR™ consulting on both resale real estate and new developments. Powerful Local Focus on Real Estate with a Global Perspective™.  This post is for information purposes only. Though effort has been made to ensure the accuracy of the contents, the reader is advised to verify the information independently. This post may contain contain information that is privileged, confidential and exempt from disclosure under applicable law. The reader is not allowed to reproduce it in any medium without the author’s prior written permission. Jagdeep Singh is a broker with Century 21 Heritage Group Ltd., brokerage (416) 798-7133 which is independently owned and operated. This post is not intended to solicit parties currently under contract.

Lease Cheque Fraud in Toronto

A Toronto Real Estate Board Member with a condo lease listing has reported that he received a fraudulent cheque in relation to the property.

An individual claiming to be a doctor at the Hospital for Sick Children called the REALTOR recently, indicating that he had seen the listing on www.REALTOR.ca

After asking a number of questions about the listing, the individual indicated that another doctor would act as his representative to view the property. Telephone numbers with (647) and (210) area codes were provided, however, when the REALTOR attempted to make arrangements to show the property, the representative indicated he was unable to do so due to travel arrangements to Austin, Texas and the United Kingdom.

On November 5, the REALTOR received a cheque for a full year's worth of lease payments. The property had not been viewed nor had any paperwork been completed.

The cheque was made out to the individual REALTOR, rather than the Brokerage and it was drafted in the name of a third party company. Upon contacting this company, the REALTOR in question learned that it was indeed a fraudulent cheque. The company's Vice President of Finance advised that they are aware of a previous attempt made to issue the cheque, which included a request that the recipient provide funds in return.

To report such occurrences, individuals are encouraged to contact www.phonebusters.com, a joint anti-fraud initiative of the Royal Canadian Mounted Police, the Competition Bureau, and the Ontario Provincial Police.

Taken and modified from Toronto Real Estate Board's News section.

How Corrupt is Your Country?

With governments committing huge sums to tackle the world’s most pressing problems, from the instability of financial markets to climate change and poverty, corruption remains an obstacle to achieving much needed progress.

The 2010 Corruption Perceptions Index shows that nearly three quarters of the 178 countries in the index score below five, on a scale from 10 (very clean) to 0 (highly corrupt). These results indicate a serious corruption problem.

This information is compiled and provided by Transparency International, the global coalition against corruption. Some countries that interest me rank as follows

Denmark #1

Canada #6

United Kingdom #20

United States #22

Ghana #62

Rwanda #66

Italy #67

India #87

Pakistan #143

Iraq #175

Afghanistan #176

Somalia #178 (most corrupt)

Download the full report at http://transparency.org/content/download/55725/890310

Photos of Marilyn Monroe - Update

Hello Everyone

Why am I writing this blog in a letter format? Because I wish to thank everyone in first person. Thanks to all of you who have been following my blogs and sending me emails regarding them. I received a lot of feedback regarding the photos of Absolute Towers in Mississauga that I had posted. After all, a picture is worth a thousand words. And of course since I my formal education is in Architecture, I enjoy the Absolute Towers and their clever design even more.

So here we go; I was in Mississauga day before yesterday and I took some more pictures. Let's see if you can spot the difference in the amount of construction of the Absolute Towers between now and then. The link to the previous photos is as follows. Enjoy.
http://realestate1on1.blogspot.com/2010/05/photos-of-marilyn-monroe.html

Thank you.
Jagdeep Singh, B.Arch.
Real Estate Broker
647-287-4644

Bank of Canada's Interest Rate Hike

Economists have been predicting with about sixty percent likelihood that September 8th, the Bank of Canada would raise rates again by another quarter point. It turns out, the economists were right. The BoC has announced that the overnight rate will increase by an additional quarter percentage point to 1 percent. The real question now is what this means for the economy as a whole, and the housing market in particular.

With the increase to 1 percent for the overnight rate, the Bank Rate is correspondingly 1.25 percent, and the deposit rate is .75 percent. Financial conditions in Canada have tightened modestly since April, with the changing monetary policy measures, but overall still remains highly simulative from a global perspective. This increase is consistent with the previously stated objective of achieving a 2 percent inflation target by next year. The global economy and Canadian economic indicators are what drove today’s decision to increase the rate. Canada’s economic recovery is expected to be more gradual that the July Monetary Policy Report had suggested, although the dynamics of inflation have remained fairly consistent.

The Bank of Canada’s second quarter projections were slightly more optimistic than how economic activity panned out, however consumption and investment has evolved in line with targeted expectations. Accommodative credit conditions due primarily to sharp declines in global bond yields in recent weeks support the expectation that consumption growth will remain solid and business investment in Canada will rise strongly.

Canada Ranked High in Real Estate

Jones Lang LaSalle’s Global Real Estate Transparency Index quantifies real estate market transparency across 81 markets worldwide. The Transparency Index is updated every two years and has been charting the steady progress in real estate transparency across the globe since 1999. The Index aims to help real estate investors, corporate occupiers and retailers understand important differences when transacting, owning and operating in foreign markets. The Index is also a helpful gauge for governments and industry organisations who are interested in improving transparency in their home markets. Rising levels of transparency are associated with rising levels of foreign direct investment – a powerful incentive for encouraging the free flow of information and the fair and consistent application of local property laws.

Jones Lang LaSalle made a number of refinements to the 2010 Index in response to feedback from clients and the ever-changing demands of cross-border investors, corporate occupiers and retailers. In recognition of the increasing relevance of real estate debt transparency, the company has introduced new elements relating to the availability of information on commercial real estate debt and the role of bank regulators in monitoring and publishing data on real estate debt. New markets have been added from North Africa and the Levant (i.e. Tunisia, Lebanon and Jordan) to reflect the ever-widening real estate universe now being targeted by investors, corporate occupiers and retailers.

Out of all the countries rated, Canada is ranked number 2 on the list. This means that Canada is the second most transparent market. The Asia Pacific region has shown the most broadly-based improvements in transparency over the past two years. It is in India and China where the region’s greatest advances have been recorded, a trend that has now filtered across each of their secondary and tertiary cities. U.K. is a close 3rd while number 6, 8 and 10 are United States, France and Germany respectively. Number 1 spot goes to Australia. India is 41 on the list and Pakistan is 73.

Among the world’s most transparent real estate markets, Canada differentiates itself on having a combination of a sound banking system, well-developed commercial real estate lending standards and stable property markets with relatively low vacancy and rental volatility. Historically, lending in Canada has been dominated by large, domestic financial institutions with conservative underwriting standards. Indeed, cash flows and collateral values of commercial real estate loans are monitored regularly. Unlike many other advanced economies, Canada’s major chartered banks are regulated depository institutions which had strong deposit bases and high capital reserve ratios going into the global recession. The largest investment banking operations in Canada are housed within the major chartered banks, making the banking system inherently less prone to bank runs, since chartered banks have access to cash in the form of deposits. In liquidity constrained environments, access to cash via deposits is crucial to the wealth of banks.

Transparency Index provides valuable insights into the changes in real estate transparency across the globe. On an ongoing basis, this will prove to be a valuable decision making tool for the international investor.

A Tale of Toronto

In its Scorecard on Prosperity – 2010, Board of Trade’s study ‘Toronto as a Global City’ continues its examination of Toronto’s economic development, benchmarking Toronto against 23 other great metropolitan areas around the world.

Founded in 1845, the Toronto Board of Trade is Canada’s largest local chamber of commerce, representing 10,000 members. It connects more than 200,000 business professionals and influencers throughout the Toronto region. BoT plays a vital role in elevating the quality of life and global competitiveness of Canada’s largest urban centre.

The board updated data and included new indicators, allowing it to offer an enhanced picture of Toronto’s performance, including a new analysis of Toronto’s relative attractiveness for capital investment. In this way, providing a more comprehensive picture of how Toronto is doing compared to other world-class cities around the globe. The study used a scorecard of 34 indicators grouped into two domains of Economy and Labour Attractiveness. Overall, Toronto ranked 4^th, which is the same as last year.

In my opinion, considering the high net migration into the Greater Toronto Area each year, resulting mainly from immigration, we could have done far better as a city. How can a city attract the world’s best and brightest people and still produce only average economic results? Well, the answer is simple. The world’s best and brightest people are not put to their highest and best use. Qualified professionals are prevented from entering into their professions and forced to drive taxis or work in call centres to support themselves and their families. Only a handful have enough resources or piggy back on their relatives for sustenance, while they struggle full time for years to get a mere foot hold in their profession. After such long struggle, most of this already small group, loose the drive, relevance and creativity that they brought over with them. No wonder Toronto’s poor performance in innovation and productivity growth is troubling, even though these two forces are the major drivers of future prosperity.

The Scorecard on Prosperity introduces the “Capital Lens”: a combination of eight of the Economy domain indicators most closely linked to capital attractiveness (including productivity, venture capital and office rents). The purpose of the capital lens is as an indicator of a metropolitan area’s capacity to attract capital investment — a key determinant of economic prosperity. Despite Toronto’s relative affordability as a place to do business, it falls short when it comes to attracting significant capital investment. Boston ranks first in this category based on outstanding levels of venture capital investment, boosted by the availability of affordable office rents that are better than Toronto’s and a reasonable tax burden.

Toronto has proven itself an attractive place to live, drawing in enough well-educated, skilled newcomers to keep it near the top of the labour attractiveness domain. Toronto leads the pack in its share of high-tech and professional workers and remains competitive in its share of the population with university degrees. Within an easy day’s drive of the populous North-eastern and Midwestern US, Toronto has the market size to generate good investment opportunities and sustain solid productivity growth. With its relatively low business taxes and office rents, Toronto is affordable on the global stage as well.

Toronto is number 10 on the list for Gross Domestic Product (GDP) - $42,538, with Paris leading the pack in GDP category - $79,681. In GDP growth, we rank 14^th. Five-year average annual percentage growth in total employment puts Toronto’s five-year average of 2% at 7^th place, ahead of every US metro area.

Residential building permit growth indicates the rate of investment activity in the residential sector. As an important sector of the economy, housing is a proxy for confidence in the growth of the metro region. The percentage increase in the number of residential building permits is calculated for the five-year period from 2003–08. Toronto, which had negative growth (-0.9%) in the five-year period, is placed 9^th, behind Seattle (1), Montreal (3), Vancouver (4) and Calgary (8). Perhaps building more houses would have met the demand for housing and thus controlled the upward spiral of prices in Toronto’s real estate market.

Toronto’s most pronounced weakness is its lengthy commuting time. Citing under-investment in transit as one of the reasons, the Organisation for Economic Cooperation and Development (OECD) warned in a recent report that congestion in Toronto is costing the Canadian economy over $5 billion a year. A personal observation: Diversity brings diverse driving habits. The commute time problem is compounded by lack of enforcing progressive driving habits. To make our roads safer, the only way known to Greater Toronto’s traffic policy makers and traffic enforcement agencies seems to be reducing speed. This only adds to the commute times. The focus should be on sharing the road and making traffic efficient.

Overall, Toronto is a world class city and a great place to live or invest in. After Montreal, Toronto’s crime rate is lowest in North America (measured by average number of homicides per 100,000 people). It is economically, socially and culturally vibrant. The city fosters an environment conducive to promote powerful collaborations among businesses, government, technology leaders and community builders. Globally, Toronto plays a vital role in elevating the quality of life and global competitiveness of Canada.

Opinion regarding "Why doesn't Century 21 want more people viewing its real estate listings?"

Cliff Peskin's has written about "Why doesn't Century 21 want more people viewing its real estate listings?" and about Century 21 suing Rogers Communications Inc regarding over its website Zoocasa (source: Financial Post).

Listing data by REALTORS® is up loaded on MLS® system directly through their regional boards. MLS®, which is a trademark, thus enables members of the public to see the information protected under strict data integrity guidelines. Century 21 REALTORS, like other licensed REALTORS, are part of this trademark. Any business would and should protect its trademarks - wouldn't you?

The writer's claim that CREA and Century 21 have an "iron like grip...thereby any individual looking to purchase a home must go through them" doesn't hold much ground. If one reviews the flow of any real estate transaction, the answer to this will become obvious. Once the Seller has retained a REALTOR® to exclusively protect its rights, then no matter where the buyer sees the information about the house, the buyer has to come through the REALTOR® representing the Seller. This is for the protection of the Sellers since REALTORS® are professionals safeguarding the Seller interests.

There is strong possibility that by scraping and aggregation of the listing data, a loss of control occurs and the information might be misquoted or misrepresented, thereby putting the Seller’s interest at risk. Moreover, isn't the data on MLS aggregated anyways? Why is there a need for scraping it and aggregating it again, other than that the company doing so wants to scrape some advertising dollars from such websites. That is my opinion. – Jagdeep Singh is a Century 21 REALTOR® and the Team Leader of the Residential Club at Century 21 New Star Realty Inc., a flourishing Brokerage based in Toronto.

The Federal Budget 2009 and REALTORS®

2009 Canadian Federal Budget is out. Announced by the Federal Conservatives and Stephen Harper’s minority government, we have all seen what the “Budget Fallout” has been. From the New Foundland Premier’s comments about Prime Minister Stephen Harper, to the official opposition Liberal party leader Michael Ignatieff’s press briefing and to NDP leader Jack Layton’s allegation of Harper and Ignatieff’s “new coalition”.

But what does the Federal Budget mean for the REALTORS® and the Canadian real estate consumer.

It could be said that the lobbying efforts of REALTORS® have achieved significant victories. In particular, the expanding the RRSP Homebuyers’ Plan to make it more useful for homebuyers is a significant step forward. The federal budget proposes to increase the withdrawal limit for first-time homebuyers using the Homebuyers Plan from $20,000 to $25,000 (per individual). Under this program, first-time homebuyers are allowed to withdraw funds from their RRSP, tax-free, to put towards the down payment on a home. Amounts withdrawn under the Home Buyer’s Plan must be repaid over a 15-year period, starting the second year following the year of the withdrawal.

Since 1992, an estimated 2 million Canadians have used the Home Buyers’ Plan to purchase approximately 900,000 homes, making this program a huge success. Unfortunately, as time has passed, the usefulness of this program eroded because withdrawal limits were not adjusted.

Under the first time home buyer’s tax credit, the Budget proposes a 15 per cent credit that would be applied to a $5,000 amount, and would provide up to $750 in tax relief to reduce costs associated with first home purchases. This will assist the first-time home buyers with the costs related to the purchase of a home such as legal fees, land transfer taxes, etc. An individual will be considered a first-time home buyer if neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the calendar year of the home purchase or in any of the four preceding calendar years.

The Budget also proposes a 15 per cent Home Renovation Tax Credit, to be claimed on the portion of eligible home renovation expenditures exceeding $1,000, but not more than $10,000, meaning that the maximum tax credit that can be received is $1,350. This will apply to eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010, pursuant to agreements entered into after January 27, 2009. Credit can be claimed on eligible expenditures incurred on one or more of an individual’s eligible dwellings, including houses, cottages, and condominium units owned for personal use.

Renovation costs for projects such as finishing a basement or re-modelling a kitchen will be eligible for the credit, along with associated expenses such as building permits, professional services, equipment rentals and incidental expenses. Routine repairs and maintenance will not qualify for the credit. Nor will the cost of purchasing furniture, appliances, audio-visual electronics or construction equipment.

Additional information on the Home Renovation Tax Credit will soon be available on Canada Revenue Agency’s website at www.cra-arc.gc.ca

All of this will of course only become a reality if the budget passes the vote in the House of Commons. Let’s see how it unfolds.

Money Laundering and Real Estate - My take on it

It is believed that criminals will find ways to conduct their activities no matter what. But I am a strong believer that we shouldn't make it easy for them. New law requires real estate agents to verify ID of buyers and sellers and track deposits. This is an excellent enhancement to existing procedures. Simply because, apart from other things, it enables you to know your client better. New federal laws and regulations dealing with money laundering and anti-terrorist financing went into effect on June 23rd, 2008. These require real estate agents and brokers to collect and verify more personal information from buyers and sellers. Real estate agents must also now track the source of funds received during the course of a real estate transaction, such as the deposit.

These new regulations are part of federal legislation (Bill C-25) passed in 2007 that requires a number of industries, including real estate, to do more to help stop money laundering and terrorist financing. The regulations are enforced by the federal agency known as the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC.

Real estate agents are now required to ask for proof of the identity of all buyers or sellers involved in a Canadian real estate transaction. If the client is a corporation, that information must include corporate documentation, and the names of the corporation directors. They must also ascertain if a third party is involved in the transaction.

The following scenarios in a real estate transaction are of particular concern.

1. Client arrives at a real estate closing with a significant amount of cash.
2. Client purchases property in the name of a nominee such as an associate or a relative.
3. Client does not want to put his/her name on any documents that would connect him/ her with the property or uses different names on offers, closing documents and deposit receipts.
4. Client inadequately explains the last minute substitution of the purchasing party’s name.
5. Client negotiates a purchase for market value or above asking price, but records a lower value on documents, paying the difference “under the table”.
6. Client sells property below market value with an additional “under the table” payment.
7. Client pays initial deposit with a cheque from a third party, other than a spouse or a parent.
8. Client pays substantial down payment in cash and balance is financed by an unusual source or offshore bank.
9. Client purchases personal use property under corporate veil when this type of transaction is inconsistent with the ordinary business of the client.
10. Client purchases property without inspecting it.
11. Client purchases multiple properties in a short time period, and seems to have few concerns about the location, condition, and anticipated repair costs, etc of each property.
12. Client pays rent or the amount of a lease in advance using a large amount of cash.
13. Client is known to have paid large remodeling or home improvement invoices with cash.
14. Client does not want correspondence sent to home address.
15. Client over-justifies or over-explains the transaction.
16. Client’s home or business telephone number has been disconnected or there is no such number.
17. Client uses a post office box or general delivery address

Will this legislation and procedures be effective in stopping money laundering? In my opinion, it will certainly make a dent. What do you think?