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Archive for November, 2017

Liberals unveil affordable housing strategy

The government announced November 22nd a 10-year, $40 billion National Housing Strategy aimed at improving housing affordability for Canadians.


“Everyone deserves a safe and affordable place to call home. Canada’s first ever National Housing Strategy is a once-in-a-generation vision to reduce homelessness, support community housing and shelter spaces, and address challenges of housing affordability,” Prime Minister Justin Trudeau said in a statement. “We took a major step forward on housing today, and we will continue to deliver initiatives that strengthen the middle class and lift more Canadians out of poverty.”

The National Housing Strategy is aimed at helping Canada’s most vulnerable citizens meet their housing needs.

The national plan, which is the first of its kind, aims to reduce “chronic homelessness” by 50%.

It also aims to remove 530,000 households from housing need; quadruple the number of federal housing units built under federal programs; repair three times as many existing units under the same programs; and protect an additional 385,000 households from losing an affordable place to live.

As part of the $40 billion investment, the federal government will work with provinces and territories to develop a $4 billion Canada Housing Benefit, to be launched in 2020, which will address local housing needs.

The investment in the National Housing Strategy also includes; $15.9 billion for a new National Housing Co-Investment Fund, $8.6 billion for a new Canada Community Housing Initiative, $2.2 billion to reduce homelessness, $300 million to address housing needs in the north, and $241 million for research and data.

“Our Government is establishing a federal leadership role in housing,” Jean-Yves Duclos, Minister of Families, Children and Social Development and Minister Responsible for CMHC, said. “The National Housing Strategy will create a new generation of housing in Canada. It will promote diverse communities and will build housing that is sustainable, accessible, mixed-income and mixed-use that will be located near transit, work and public services.”

By Justin da Rosa

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Ottawa named second-best tech city in Canada

According to a new report, Ottawa’s tech sector is second only to Toronto’s, and it’s having a noticeable impact on the local housing market.The report, 2017 Scoring Canadian Tech Talent, was released last week by CBRE Ltd.’s Ottawa office, and concluded the national capital is becoming an international tech hub. Mostly concentrated in the city’s west end in Kanata and Stittsville, the tech sector has started competing with the federal government as a hub that attracts talent.

“One of the key findings for us is Ottawa, on a national and international front, is a true hub and true tech city,” said Shawn Hamilton, CBRE’s senior vice president, managing director and broker in Ottawa. “We rank second-overall in Canada behind Toronto. Toronto is a world-class city, and the GTA being five or six times the size of Ottawa—the fact that we can hold the same stage as Toronto is exciting for us.”

Hamilton says the report goes a long way towards dispelling the notion that Ottawa is merely a government city and nothing more, especially after the implosion of its tech sector in the late ‘90s and early 2000s. Kanata comprises 14% of CBRE’s property inventory, however, it accounts for 35-40% of the city’s leasing.

Hamilton says that’s being driven primarily by tech, which isn’t surprising considering Shopify announced earlier this year that it’s tripling the size of its Ottawa headquarters.

Additionally, Apple’s announcement that it’s opening an Ottawa office could be interpreted as an affirmation that the city is an international tech hub.

Ryan Jones, a sales agent with Coldwell Banker First Ottawa, has noticed an influx of tech companies in the last few years—and with jobs come people.

“Tech is one of the reasons the West End is growing so well,” said Jones. “A lot of companies have come to town in the last few years, like Amazon. We’re making headlines as a city because of sustainability and housing prices, and that’s attracting companies to move here.”

Ottawa has in the past been rated Canada’s most educated city, and it’s reflected in salaries.

“If you can pay people well and have them in an affordable city from a cost of living perspective—‘Hi, come to Ottawa. You’re going to get paid better and your money will go farther.’—that will make Ottawa a more desirable place for talent to migrate,” said Hamilton. “These companies can’t exist without talent. Residential affordability is what will drive talent coming to Ottawa, which in turn will make businesses look to Ottawa more favourably.”

By Neil Sharma
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Resale home prices drop for second straight month

Resale home prices across Canada fell 1% in October from the previous month, marking a back-to-back decline, according to recent figures from the Teranet-National Bank Index.

This was mainly due to Toronto, which saw its index drop by 2.8% from September, National Bank of Canada said in a statement. The index also fell in five other metropolitan areas:

  • Hamilton (-1.8%)
  • Edmonton (-0.7%)
  • Winnipeg (-0.7%)
  • Ottawa-Gatineau (-0.3%)
  • Calgary (-0.2%)

But gains were also observed in Halifax (+1.3%), Vancouver (+0.7%), Quebec City (+0.6%), Montreal (+0.4%), and Victoria (+0.1%).

However, National Bank economist Marc Pinsonneault believes there are signs that the downward pressure on prices in Toronto is fading. “Following the introduction last April of a tax on foreigners’ acquisitions, market condition
loosened in Toronto. But they went from extremely tight to balanced.” He said this is a positive development for affordability.

But the same cannot be said for Vancouver, “where conditions remained tight despite the implementation in August 2016 of a tax on foreigners’ acquisitions. Pinsonneault pointed out that the prices of Vancouver condos – the most affordable category of dwellings – have risen more than 17% over the last 12 months.

by Paolo Taruc of Real Estate Professional magazine

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How to avoid renting to the tenant from hell

Nightmare tenants are afforded a lot of protection under Ontario law, even when they refuse to pay rent or move out, but, fortunately, steps can be taken to ensure your due diligence is foolproof.

While asking potential tenants for references and credit reports, as well as having criminal background checks performed, is par for the course, they can be forged or otherwise circumvented, as one Toronto landlord recently found out.

A tenant named Mike Lemke had documents forged and friends acting as references—he even enlisted a legitimate real estate sales agent, who happened to be his friend, to represent him—to move into a high-end  condo rental. Having experience exploiting the system, he stopped paying rent and refused to move out.

Steve Arruda, a sales agent with Century 21 Regal Realty, represented the landlord in that case, and had the displeasure of dealing with Lemke. Upon moving into the condo in October 2016, Lemke’s metamorphosis into the tenant from hell didn’t take long.

“He paid the first and last month’s rent, then he was there rent-free for six months,” said Arruda. “He’s one of those guys who knows the system and knows exactly how much time he has.

“He was bragging about how he’d be there for six months, and bragging about how he has rights, like the right not to pay rent.
We went to the tribunal, but he’d always stall the hearings, make false accusations—it was just a big mess. It was the most stressful time of my life.”

Fortunately, landlords can take certain precautions to avoid scenarios like this. Some require a small fee, but Arruda says they’re worthwhile.

A website called uses artificial intelligence to compile and analyze data about everything from the rental property and market conditions to, of course, the potential tenant, in a bid to determine whether or not the landlord is vulnerable to risk. The assessment predicts risks of eviction, late rent payments and even property damage, among other things.

Rent Check Credit Bureau, which bills itself as the housing industry’s credit bureau, has been around for over 40 years and screens potential tenants in depth.

Arruda emphasized the importance of getting criminal background checks and meeting potential tenants in person.
He owns rental properties and says face-to-face meetings are revealing.

“I’ve been a landlord for a long time and I find the best thing is meeting the person,” he said. “I’m very hands-on. I even do properties where I have a property manager who takes care of that as well.”

Many unsuspecting house hunters were caught in another of Lemke’s scams. He advertised renting one of the condo’s bedrooms, and took off with many deposits. Don’t be surprised if that becomes more common after the new mortgage rules take effect, says Arruda.

“People will be forced back into [condo rental s], putting more pressure on the rental market,” said Arruda. “People are getting a bit cocky and brave and realize there’s no recourse. This story might not stop it; it might encourage it because they know they can live rent-free for six months.”

This case is a lesson for real estate agents

A decision from the Ontario Superior Court in the last year highlights the obligation of real estate agents to review home inspections with their clients. Mrs. P. and her mother wanted to buy a property in Toronto’s west end.  Their real estate agent introduced them to a house they liked. When they visited the house, they were shown a summary of a home inspection report prepared for the owner.   It indicated, among other things, leakage of water around a skylight on the second floor.The agent prepared an offer for the buyers to sign.  It required the seller to fix the skylight.I represented the buyers when they closed their $730,000 purchase.   After closing, a serious mould problem appeared throughout part of the house which was occupied by tenants, forcing them to move out.

A mould growth expert was called in and he reported significant contamination in several areas due to water seeping into the basement through the foundation and upstairs through leaks from the skylights.

Unknown to the buyers, two years before their purchase there had been a major flood in the basement, resulting in considerable evidence of mould and mildew.

As a result of the mould infestation, the buyers incurred damages exceeding $141,000, including repair costs and lost rent.  Subsequently they sued the sellers and their agent.

At the trial before Justice Thomas Lederer , a key issue turned out to be whether the agent had an obligation to alert the buyers to the significance of the summary of the home inspection.

After hearing evidence from Barry Lebow, an expert in the duties of real estate agents, the judge wrote, “It is not as if there were no hints or indications that something was amiss. The summary of the inspection undertaken on behalf of the seller and available at the time of the inspection should have or, at least, could have raised concerns in the alert reader.”

“As seen by Barry Lebow this was a wake-up call. It should have been apparent, particularly to an experienced agent, that, at the least, this required an examination of the full report to be assured that there were no further or unforeseen problems.”

The buyers were never shown the full report.

In ultimately assessing liability, Justice Lederer wrote:

“The agent owed the buyers more than drawing up an offer that had the best chance of success. She was required to provide advice as to the risks of doing so in order that her clients could make an informed choice as to how best to proceed. … she did not counsel her clients as she was obliged to do.”

A reasonable agent, the judge concluded, would have obtained and reviewed the full report.  Had she done so, “a great deal of the problems that ensued could have been avoided.”

In the end, the agent was required to pay 25 per cent of the $141,105 in damages, or $35,276. She also paid $35,000 in costs.  The buyers had to absorb 25 per cent of the damages themselves.  For the buyers, it was a moral victory if not a financial one. Prior to trial, the seller signed a confidential settlement agreement with the buyers, so we will never know what share of the damages, if any, he absorbed.

But the case is a lesson for real estate agents who are now on notice of their obligation to review home inspections with their purchaser clients.

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, phone 416-364-9366 or fax 416-364-3818.

No excuse for delaying consumer protection sections of the new Condominium Act

The Government has no timetable for many key consumer protection amendments to the former condo act.

With parts of the new Condominium Act coming into force on Nov. 1, prominent Toronto condominium lawyer Audrey Loeb has expressed concern over the government’s failure to protect consumers from developer “schemes” in the proclamation of the legislation.

The amendments to the Condominium Act 1998 were enacted in December, 2015, by the passage of Bill 106, the Condominium Management Services Act, 2015. Although the legislation has received Royal Assent, the amendments do not come into effect until they receive section-by-section proclamation by the Lieutenant Governor.

Some of the amendments have already been proclaimed – many of them come into effect on November 1, and still others will become law on January 1, 2018.  But there is no timetable for proclamation of many of the most important consumer protection parts of the new law.

Audrey Loeb, condominium law expert and author of two books on the Condominium Act, is among the critics of the delay to enact the protections for buyers of newly-built condominiums.

She was harshly critical of the government for failing to proclaim significant changes to the Act which would prohibit some of the worst builder abuses in the process of selling new condominium units.  These changes, she said, should have been proclaimed to come into effect next week.

“I don’t understand,” Loeb says, “what the government’s excuse is for not proclaiming these sections on Nov. 1.”

Some of the consumer protection sections not yet in force:

  • A prohibition against buyers being required to share in the cost of purchasing units intended for the collective use of all owners, such as guest suites, superintendent suites, and green energy facilities.
  • A prohibition against purchasers being required to contribute lump sums to the reserve fund at the time of purchase.
  • A prohibition against purchasers being required to compensate the builder for any lawsuits against it by the condominium corporation – an effective bar to suing the builder for any reason.
  • A new duty on builders to take all reasonable steps to register a condominium declaration without delay, and a prohibition against terminating a purchase agreement due to the failure to register the declaration.
  • A requirement that any money paid to reserve a right to enter into a purchase agreement must be credited against the purchase price.
  • A new provision that within one year of the builder turning over control of the building to a member-elected board, the condominium owners can terminate an insurance trust agreement or any agreement entered into by the builder that provides for delivery of goods, services or facilities to the corporation on a continuing basis, or a lease of the common elements. This applies even if the builder has signed an agreement which would otherwise bind the condominium owners.  In the event of termination, there would be no liability on the corporation, the directors, officers or owners for any penalties set out in the agreement.

This provision would cover, for example, a contract for the long-term lease of geo-thermal equipment or the supply of telephone, cable TV or internet services to the building.

There is also a new provision that the corporation may sell the building, land and all the units if 80 per cent of the unit owners vote in favour of the sale.

Is the government deliberately delaying implementation of the consumer-protection provisions until after the election next June?

The government simply has no excuse for delaying implementation of these critical consumer protections.

Bob Aaron

Bob Aaron is a Toronto real estate lawyer and frequent speaker to gorups of home buyers and real estate agents. He can be reached by email at, phone 416-364-9366.