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Archive for October, 2016

October 2016

No fall(ing) back in Ottawa’s resale market

 Members of the Ottawa Real Estate Board sold 1,371 residential properties in September through the Multiple Listing Service® System, compared with 1,241 in September 2015, an increase of 10.5 per cent. The five-year average for September sales is 1,171.

“Again this month, we have broken the record for residential and condominium units sold, with 200 more units sold than the 5-year average for September,” says Shane Silva, President of the Ottawa Real Estate Board. “With average sale prices remaining virtually unchanged since the beginning of the year, this could be an indication that prices have adjusted to market expectations and sales have rebounded as a result.”

September’s sales included 269 in the condominium class and 1,102 in the residential class.

“Units listed in both residential and condominium classes continue to decline,” indicates Silva. “From 2,076 listed in September 2015 to 1,822 listed in September 2016 for residential properties, and from 637 condos listed in September 2015 to 588 listed in September 2016.” says Silva. “With fewer listings coming onto the market, combined with recent higher unit sales, overall inventory is declining. The basic economics of supply and demand will continue to have an impact on the Ottawa resale market.”

The average sale price of a residential-class property sold in September in the Ottawa area was $383,793, a decrease of 0.1 per cent over September 2015. The average sale price for a condominium-class property was $252,136, a decrease of 2 per cent over September 2015.

 

Type Sept. Sales Vol. % Change Average Sale % Change
Condo apartment (1 level) 141 18.5% $261,488 -8.3%
Condo townhome (2 storey) 101 20.2% $241,245 8.7%
Residential home (2 storey) 602 9.1% $403,703 -1.2%
Residential home (bungalow) 303 12.2% $353,998 -0.4%

September, 2016

Record-breaking year for Ottawa resales

 Members of the Ottawa Real Estate Board sold 1,484 residential properties in August through the Multiple Listing Service® System, compared with 1,276 in August 2015, an increase of 16.3 per cent. The five-year average for August sales is 1265.

“To date, this is a record-breaking year for the number of units sold,” says Shane Silva, President of the Ottawa Real Estate Board. “The year started off a little sluggish, but as soon as April hit we were either breaking records or out-pacing the year before considerably. Not only are we up 16.3 per cent over last year, this has been the best August on record ever for OREB member, blowing the average for August sales out of the water. This is a-typical of August when units sold normally start to decline as we approach fall. Units listed in both residential and condominium classes continue to decline, as well as active listings at the end of the month,” says Silva. “These numbers suggest that buyers have less option when looking to purchase, with the potential of entering into a sellers’ market soon.”

August’s sales included 295 in the condominium class and 1,189 in the residential class.

“Average sale prices have been keeping steady all year,” says Silva. “This past month however, there were six more properties sold in the $1 million plus range over last year, a possible explanation for the bump in average sale prices for both residential properties and condos.” says Silva. “Prices have remained quite steady in comparison to last year, with the increased number of units sold nudging the total sales volume up for the year,”

The average sale price of a residential-class property sold in August in the Ottawa area was $389,786, an increase of 2.5per cent over August 2015. The average sale price for a condominium-class property was $272,166, an increase of 11.1 per cent over August 2015.

Type August Sales Vol. % Change Average Sale % Change
Condo apartment (1 level) 160 28.0% $294,159 10.6%
Condo townhome (2 storey) 107 1.9% $231,919 4.6%
Residential home (2 storey) 660 13.2% $412,539 1.3%
Residential home (bungalow) 331 36.2% $358,995 4.1%

Make sure home seller’s promises are met before closing.

Court decision emphasizes it’s the house buyer, not the seller, who is most at risk.

A small claims court decision released last year underscores the importance of careful wording of seller promises in agreements of purchase and sale.

Back in March, 2014, Mrs. Smith bought a house in Milton, Ont., from Mrs. Brown. In the purchase agreement, the seller promised that the fixtures and movable items (chattels) being purchased would be in good working order on completion.

In a second warranty in the agreement, the seller also promised that the swimming pool and equipment would be in good working order on completion of the deal.

Robinson hired a home inspector to examine the house before the purchase agreement became binding.

The closing took place on May 30, 2014; Smith took possession on June 6 and two days later a Union Gas representative showed up to inspect the furnace — required as a condition of turning on gas service to the home. He “red-tagged” the furnace, and issued an order requiring replacement of the rusted and corroded venting liner and sleeve. A heating contractor later advised the new owner that the heat exchanger in the furnace was defective and had to be replaced.

Photographs taken the following month when a new furnace was installed showed rot and rust inside the old one.

Ten days after closing, a pool contractor came to the house and advised that the pool pump and solar auto controller were not working and required replacement at a cost of $1,778.

Smith sued Brown in small claims court for a total of $6,016 for the cost of a new furnace and pool repairs.

The trial was held before deputy judge Kenneth Kelertas last year. In finding against the buyer, the deputy judge ruled that the warranty expired on the closing date of May 30, 2014, and that it was up to the buyer to determine whether or not the pool equipment and furnace were working before closing — not after.

In my view, the court’s decision is wrong. It was obvious from a post-closing examination of the pool equipment and furnace that they had been inoperable for some time before the closing.

But, in the court’s opinion, the only issue was whether the items were working on closing.

“When representations and warranties of this sort are given,” the judge wrote in his decision, “purchasers should inspect the property just before closing to ensure that the vendor’s warranties are true.

“Otherwise, if the purchaser discovers a problem with respect to a warranted fixture, chattel, or the state of the property after closing and they do not have proof . . . that the problem existed at the time of closing, they will not succeed in a claim for breach of warranty . . . ”

Lessons from the case:

  • Purchase agreements should always provide for an inspection just before closing to ensure all promises are met.
  • Warranties should be very carefully drafted to ensure that any deficiencies in the warranted appliances or fixtures can be dealt with before closing.
  • Agreements can provide for a cash holdback to cover repairs if defects are found during the pre-closing inspection.

 

Bob Aaron is a Toronto real estate lawyer and frequent speaker to groups of home buyers and real estate agents.
He can be reached by email at bob@aaron.ca, or his website www.aaron.ca.

Note: Names have been changed. Robert