The Bank of Canada slashed its key interest rate yesterday by three-quarters of a percentage point to the lowest level in half a century and confirmed Canada's economy is "entering a recession" because of the deepening global economic slump.
But chartered banks refused to match the deeper-than-expected cut, dropping their prime rates by only half a percentage point, the second time in the past few months some have balked at passing on the full savings to consumers and businesses.... Read complete here
Wednesday, December 10, 2008
Sunday, December 7, 2008
Sellers should move out when deal closes
The typical Ontario Agreement of Purchase and Sale provides that, "Upon completion, vacant possession of the property shall be given to the buyer...". In this case, the buyers were moving from Toronto to London and arranged for movers for the closing date. They arranged for their London closing to happen at 3:09 p.m. and their sellers closed their own purchase at 4:24 p.m. on the same day.
The buyers' movers arrived at the London home at 6:00 p.m. but the sellers would not permit them access. The movers waited until around 9:00 p.m. but then left as their truck was needed in Toronto the next day. The movers returned the following Monday and billed the buyers an extra $1,393.91. The buyers incurred hotel and extra expenses totalling $401.55 and they sued the sellers for their losses.
The judge ordered these sellers to pay. She held that sellers are required to give vacant possession to their buyers on completion, and that means the closing of the transaction. If they do not, they are liable for any loss.
Foord v. Smith 33 RPR(2d) 279
COMMENTS: This case stands for the proposition that if the deal is closed and the buyers are the owners they are entitled to move in. If the sellers want to delay the closing, the contract should specifically say so. The judge also said, "It is often that parties are moving in as others are moving out, and most of the time this is done in a co-operative spirit which recognizes the problems inherent in moving in and moving out, along with the timing of transactions at the registry office." The practical realities are that keys and monies change hands usually between 9:30 and 4:30 and reasonable people make sensible arrangements with each other. If it were otherwise the system would never function at all. Of course, cautious buyers could always arrange for an overnight loan and stagger their closing dates and make their lives simpler, although somewhat costlier.
Hopefully, REALTORS® and lawyers representing sellers will bring this to their attention.
Where applicable, the information being used is from TREB, OREA, CREA or other professional associations, which the user is a member of.
The buyers' movers arrived at the London home at 6:00 p.m. but the sellers would not permit them access. The movers waited until around 9:00 p.m. but then left as their truck was needed in Toronto the next day. The movers returned the following Monday and billed the buyers an extra $1,393.91. The buyers incurred hotel and extra expenses totalling $401.55 and they sued the sellers for their losses.
The judge ordered these sellers to pay. She held that sellers are required to give vacant possession to their buyers on completion, and that means the closing of the transaction. If they do not, they are liable for any loss.
Foord v. Smith 33 RPR(2d) 279
COMMENTS: This case stands for the proposition that if the deal is closed and the buyers are the owners they are entitled to move in. If the sellers want to delay the closing, the contract should specifically say so. The judge also said, "It is often that parties are moving in as others are moving out, and most of the time this is done in a co-operative spirit which recognizes the problems inherent in moving in and moving out, along with the timing of transactions at the registry office." The practical realities are that keys and monies change hands usually between 9:30 and 4:30 and reasonable people make sensible arrangements with each other. If it were otherwise the system would never function at all. Of course, cautious buyers could always arrange for an overnight loan and stagger their closing dates and make their lives simpler, although somewhat costlier.
Hopefully, REALTORS® and lawyers representing sellers will bring this to their attention.
Where applicable, the information being used is from TREB, OREA, CREA or other professional associations, which the user is a member of.
Saturday, November 1, 2008
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.
- Client arrives at a real estate closing with a significant amount of cash.
- Client purchases property in the name of a nominee such as an associate or a relative.
- 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.
- Client inadequately explains the last minute substitution of the purchasing party’s name.
- Client negotiates a purchase for market value or above asking price, but records a lower value on documents, paying the difference “under the table”.
- Client sells property below market value with an additional “under the table” payment.
- Client pays initial deposit with a cheque from a third party, other than a spouse or a parent.
- Client pays substantial down payment in cash and balance is financed by an unusual source or offshore bank.
- Client purchases personal use property under corporate veil when this type of transaction is inconsistent with the ordinary business of the client.
- Client purchases property without inspecting it.
- 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.
- Client pays rent or the amount of a lease in advance using a large amount of cash.
- Client is known to have paid large remodeling or home improvement invoices with cash.
- Client does not want correspondence sent to home address.
- Client over-justifies or over-explains the transaction.
- Client’s home or business telephone number has been disconnected or there is no such number.
- Client uses a post office box or general delivery address
Thursday, April 5, 2007
Growth in GTA
The provincial government's Growth Plan for the Greater Golden Horseshoe area includes the Greater Toronto Area. The plan establishes how and where growth will occur in this region over the next 25 years. Copies of the Growth Plan are available from the government’s Growth Plan web site.
The Growth Plan establishes policies that municipalities must conform with when planning for and approving development. Primarily, the Growth Plan attempts to prevent urban sprawl, revitalize urban centres, and reduce congestion by intensifying growth in existing urban areas and requiring new development to make provisions for transportation alternatives such as transit, walking, and cycling.
Highlights
The Growth Plan establishes policies that municipalities must conform with when planning for and approving development. Primarily, the Growth Plan attempts to prevent urban sprawl, revitalize urban centres, and reduce congestion by intensifying growth in existing urban areas and requiring new development to make provisions for transportation alternatives such as transit, walking, and cycling.
Highlights
- By 2015, 40% of all new residential development, occurring annually within each municipality, will have to be within already built-up areas.
- Identifies 25 “urban growth centres” to be targets for higher amounts of growth.
- Establishes various minimum density targets for new development.
- Promotes mixed-use, transit-supportive, pedestrian-friendly communities.
- Restricts conversion of employment land uses to non-employment uses.
- Restricts the expansion of areas designated for development by municipal Official Plans.
Population and Employment Projections
The policies of the growth plan are based on population and employment growth forecasts for the Greater Golden Horseshoe Area. According to the Growth Plan, the entire region is expected to grow by 3.7 million people by 2031, with 75% of that growth occurring in the GTA.
The largest increases in the GTA will be experienced in the Regions of Peel (up 59%), Durham (up 81%), York (up 97%), and Halton (up 100%). The Cities of Toronto and Hamilton will also see significant increases (19% and 29% respectively).
Employment in the GTA will also see significant increases by 2031 with more than 1.3 million more jobs, a 47% increase. Once again, the largest increases will be experienced outside of Toronto, with Peel up 64%, Durham up 84%, York up 100%, and Halton up105%. Toronto and Hamilton will see employment increases of 14% and 43% respectively.
Details of the Growth Plans population and employment projections are available at the Growth Plan web site.
Where will growth take place?
The objective of the Growth Plan is to establish how and where the tremendous amount of growth coming to this region will be accommodated while preserving and enhancing the region’s quality of life and economic competitiveness.
The key strategy is to increase the capacity of existing built-up areas. Therefore, the Growth Plan requires that, by 2015, 40% of all new residential development,occurring annually within each municipality, be within already built-up areas.
In addition, the Growth Plan establishes 25 specific areas as targets for growth. As the primary areas for growth, these so-called “Urban Growth Centres” will be the focus for transit and infrastructure investments. By 2031, development in these urban growth centres will be required to achieve minimum density targets that are higher than other areas.
New development in Urban Growth Centres in Toronto will be required to meet a target of 400 people and jobs combined per hectare. New development in Urban Growth Centres in the GTA will be required to meet a target of 200 people and jobs combined per hectare. New development in Urban Growth Centres outside of the GTA will be required to meet a target of 150 people and jobs combined per hectare.
Details on the locations and policies of the 25 urban growth centres are available at the Growth Plan web site.
What if existing areas can’t accommodate growth?
The Growth Plan acknowledges that not all of the expected population and job growth can be accommodated within existing areas. Some growth will occur on “greenfields”, areas already designated for growth by municipal official plans but not yet developed.
However, the Growth Plan sets strict expectations for how these areas will grow. In particular, greenfield development will have to be designed with densities and street configurations that support public transit and alternative transportation modes such as cycling and walking. New “greenfield” development will be required to meet a minimum density target of 50 people and jobs combined per hectare.
Future of Employment Lands
It is expected that the Greater Golden Horseshoe will continue to be an important economic centre, seeing significant job growth. As a result, the Growth Plan establishes policies to preserve an adequate supply of land to accommodate employment uses. Specifically, the conversion of employment lands to non employment uses will be restricted.
Thursday, March 29, 2007
Buyer's Guide to Real Estate
Buying property can be stressful, but it doesn’t have to be. By keeping yourself informed, and aware of all aspects of your purchase, you can easily avoid the many pitfalls that an uninformed buyer may encounter, ensuring that your deal runs smoothly, and risk-free. The following ‘buyers tips’ will highlight such pitfalls, and give you the tools that you need so that you may avoid them.
Buying the Right Property to Suit Your Needs:
Before you enter into any kind of real estate transaction, it is imperative that you fully understand your own reasons for wanting to purchase property. Whether you are buying for investment purposes, or planning on living in the home yourself, many factors must be considered to ensure that your purchase fully meets your needs.
Purchasing as an Investment
Are you purchasing for investment purposes? Do you plan on renting out the property? If so, you need to research the area where you are planning on buying. First, you must determine that there is a demand for rented homes or apartments in your selected area. For example, a town with a university or college is always a good place to invest in real estate a there is high demand for rentable living space for the many students who live off campus. Further, consider the common rates charged for rent in the area, the cost of hydroelectricity and heat, and other factors that would affect your return. These factors will help you to determine if you are buying in the right area.
Alternatively, you may be interested in purchasing as a personal investment, seeking a return from selling the property when it increases in value. In this case, you must inform yourself of the market, and have an understanding of what types of property will give you the greatest return. For example, new developments will often have a great increase in value within the first five years. Know your market before you purchase, and you will be sure to get the greatest return from your investment.
Purchasing Your Own Home
Are you planning to live in the property you purchase? If so, you need to consider your personal wants and needs, and ask yourself if your purchase will accommodate you. For example, if there are children, elderly, or disabled persons living in the home, you may want to avoid purchasing a house with a lot of stairs. Instead, you may want to consider purchasing a bungalow. You will also want to consider the amount of people living in the home, and whether or not that number will increase in the future if, say, new children are born into the family, or an elderly parent is planning on moving in. Having the right amount of space, especially with bedrooms and bathrooms, is key to ensuring that you can enjoy your home with little stress for years to come.
As well, you must consider the property itself, and whether or not it is suitable to meet your needs. For example, if you are interested in putting in a pool, you must consider the size of the property, and whether or not it will accommodate this desire. Is there enough garden space? Are you interested in putting in a deck, and will the space accommodate one? These are all questions you must ask yourself before you purchase a property.
Finally, you must be informed of the surrounding area where you are buying. If you have young children, you will want to purchase in an area that is close to schools. You may also want to consider commutes to work, proximity to shopping centers and hospitals, availability of public transit, and many other factors that can and will affect your day-to-day living. By being aware of your surrounding area, you can assess and determine whether or not the community will meet your wants and needs, and this can greatly eliminate any stresses that could occur from buying in the wrong area.
Ensuring Your Home is up to Code:
Before you purchase any property, you must always ensure that the building is up to code. Have a building inspector look at the house, and make sure you have a full report before you decide to buy. Doing this can save you a lot of money, as you will know in advance of any problems with the foundation, the frame, etc., and you can assess whether or not the building is worth purchasing.
Also be sure to have a pest and mould inspection performed before you purchase. Once again, this will save you the time and money you would spend correcting these problems, had you been uniformed.
Purchasing an Apartment or Townhouse:
If you are planning on purchasing an apartment or townhouse, there are many unique factors to consider that deal with living in such close proximity to your neighbours. An important one to think about is noise levels. For example, young families with children may create more noise than an elderly couple would. These two types of people may not do well to live in close proximity to one another. Get to know the neighbours before you decide to purchase, to determine if you will feel comfortable sharing a living space with them. This will avoid the hassles of conflict between neighbours who simply cannot get along.
Considering Your Price Range:
Before you purchase any property, you must consider your financial situation, and determine how much you are willing to spend. From there, it is a matter of negotiation, and there are different ways to go about securing a purchase. If you feel that the property is in high demand, you may want to give your best offer upfront. That way, you have a better chance of avoiding being outbid by other purchasers seeking the same property. Alternatively, if you feel more secure in your ability to negotiate for the property, you can begin with an offer that is lower than your top price. By doing this, you may get the property for less than you were willing to pay, but you also may lose it to someone with a better offer, before you get the chance to raise yours. Consider your options. Each situation is different, and there are benefits and drawbacks to each style of negotiation. Assess the situation, and move forward as you feel appropriate, and you will feel confident that you paid the right amount for your property.
Buying the Right Property to Suit Your Needs:
Before you enter into any kind of real estate transaction, it is imperative that you fully understand your own reasons for wanting to purchase property. Whether you are buying for investment purposes, or planning on living in the home yourself, many factors must be considered to ensure that your purchase fully meets your needs.
Purchasing as an Investment
Are you purchasing for investment purposes? Do you plan on renting out the property? If so, you need to research the area where you are planning on buying. First, you must determine that there is a demand for rented homes or apartments in your selected area. For example, a town with a university or college is always a good place to invest in real estate a there is high demand for rentable living space for the many students who live off campus. Further, consider the common rates charged for rent in the area, the cost of hydroelectricity and heat, and other factors that would affect your return. These factors will help you to determine if you are buying in the right area.
Alternatively, you may be interested in purchasing as a personal investment, seeking a return from selling the property when it increases in value. In this case, you must inform yourself of the market, and have an understanding of what types of property will give you the greatest return. For example, new developments will often have a great increase in value within the first five years. Know your market before you purchase, and you will be sure to get the greatest return from your investment.
Purchasing Your Own Home
Are you planning to live in the property you purchase? If so, you need to consider your personal wants and needs, and ask yourself if your purchase will accommodate you. For example, if there are children, elderly, or disabled persons living in the home, you may want to avoid purchasing a house with a lot of stairs. Instead, you may want to consider purchasing a bungalow. You will also want to consider the amount of people living in the home, and whether or not that number will increase in the future if, say, new children are born into the family, or an elderly parent is planning on moving in. Having the right amount of space, especially with bedrooms and bathrooms, is key to ensuring that you can enjoy your home with little stress for years to come.
As well, you must consider the property itself, and whether or not it is suitable to meet your needs. For example, if you are interested in putting in a pool, you must consider the size of the property, and whether or not it will accommodate this desire. Is there enough garden space? Are you interested in putting in a deck, and will the space accommodate one? These are all questions you must ask yourself before you purchase a property.
Finally, you must be informed of the surrounding area where you are buying. If you have young children, you will want to purchase in an area that is close to schools. You may also want to consider commutes to work, proximity to shopping centers and hospitals, availability of public transit, and many other factors that can and will affect your day-to-day living. By being aware of your surrounding area, you can assess and determine whether or not the community will meet your wants and needs, and this can greatly eliminate any stresses that could occur from buying in the wrong area.
Ensuring Your Home is up to Code:
Before you purchase any property, you must always ensure that the building is up to code. Have a building inspector look at the house, and make sure you have a full report before you decide to buy. Doing this can save you a lot of money, as you will know in advance of any problems with the foundation, the frame, etc., and you can assess whether or not the building is worth purchasing.
Also be sure to have a pest and mould inspection performed before you purchase. Once again, this will save you the time and money you would spend correcting these problems, had you been uniformed.
Purchasing an Apartment or Townhouse:
If you are planning on purchasing an apartment or townhouse, there are many unique factors to consider that deal with living in such close proximity to your neighbours. An important one to think about is noise levels. For example, young families with children may create more noise than an elderly couple would. These two types of people may not do well to live in close proximity to one another. Get to know the neighbours before you decide to purchase, to determine if you will feel comfortable sharing a living space with them. This will avoid the hassles of conflict between neighbours who simply cannot get along.
Considering Your Price Range:
Before you purchase any property, you must consider your financial situation, and determine how much you are willing to spend. From there, it is a matter of negotiation, and there are different ways to go about securing a purchase. If you feel that the property is in high demand, you may want to give your best offer upfront. That way, you have a better chance of avoiding being outbid by other purchasers seeking the same property. Alternatively, if you feel more secure in your ability to negotiate for the property, you can begin with an offer that is lower than your top price. By doing this, you may get the property for less than you were willing to pay, but you also may lose it to someone with a better offer, before you get the chance to raise yours. Consider your options. Each situation is different, and there are benefits and drawbacks to each style of negotiation. Assess the situation, and move forward as you feel appropriate, and you will feel confident that you paid the right amount for your property.
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