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Archive for February, 2018

Homeowner tears strip (of land) off neighbour.

A dispute between next-door neighbours over a two-foot-wide strip of land illustrates the property-law principle of adverse possession.

Mrs. G. and Mrs. P. are next-door neighbours in London, Ont.

A narrow walkway, about two feet wide and 37 feet long, is located between Mrs. G.’s house at No. 569 and Mrs. P.’s house at No. 573.

The prior owners of the Mrs. G.’s house planted and maintained a privet hedge between the two houses for many years. They watered, trimmed and pruned it.

The hedge grew and eventually sealed off the walkway between the houses, and came to completely separate the two backyards. Since the hedge grew right up to the wall of Mrs. G’s house, the owners of that house were effectively excluded from using the walkway.

The relative harmony between the neighbours came to an end in 2012 when the parties began a series of confrontations about partially dismantling and repairing a 1992 fence between the backyards. Eventually the parties wound up in court, when Mrs. G. applied for an injunction and a judgment: She asked the court to declare her the exclusive owner of the disputed walkway based on adverse possession, or what is commonly known as squatter’s rights.

In Ontario, a landowner can claim possessory title to land if he or she meets all the legal requirements for a period of 10 years prior to the government’s conversion of the registered title from the old land registry system to the newer land titles system.

In this case, title to the two homes had been converted to the land titles system in June 1992. In order to prove her claim to exclusive ownership of the strip of land by adverse possession, Mrs. G. had the obligation to prove that her home’s prior owners, from at least 1982 to 1992, occupied and possessed all of the land:

  • exclusively;
  • without the consent of the prior owners of the Mrs. P.’s property;
  • openly and obviously; and
  • continuously without interruption by the owners of the Mrs. P. property.

Once the tests are met, it is still necessary to have a court rule on the validity of the claim. It is not something that can be obtained by simply building a fence or notifying the neighbours of a claim.

In her application for possessory title, Mrs. G. introduced undisputed affidavit evidence from two sisters who had previously lived in her house for more than 29 years. Their evidence satisfied the judge that Mrs. G. had met all the tests to acquire ownership of the disputed walkway.

In August 2017, Justice Ian Leach released a massive 21,000-word judgment granting Mrs. G. title to the disputed two-foot strip.

The judge wrote that once an owner establishes a valid claim of possessory title through adverse possession, recovery of the disputed land by the dispossessed owner is invalid, and re-entry constitutes a trespass.

The judge ordered Mrs. P. to remove a board fence she erected on the walkway, within three weeks, and remove all of the debris and garbage which had been placed there. She was also ordered to refrain from erecting any new fence on the walkway and from annoying or harassing Mrs. G. or members of her family.

In a separate court hearing last month, Mrs. G. asked the court to award her all of her legal costs of $109,158, or a lesser amount of $72,772. Ultimately, Justice Leach ORDERED Mrs. P. to pay Mrs. G. costs of $45,000.

That, plus Mrs. P.’s own lawyer’s bill, is a lot of money for a two-foot strip of land.

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.

 


Will your investment go up in smoke?

Landlords in Ontario have spoken and they want marijuana use and growth by tenants in their units banned immediately upon legalization—and, perhaps unsurprisingly, the reasons are largely financial.

However, proscribing use while leases are binding—as well as the legislation stipulating that Canadians can only smoke recreationally in their private residences—has rendered the situation hazy.

As with cigarette smoking, landlords will be able to prohibit marijuana use in their rental units once the lease is up, although that will do little to pacify them in the near-term with legalization looming.

William Blake, an experienced landlord of over 20 years and a senior member of the Ontario Landlords Association, says tenants are often bothered by plain cigarette smoke. As a landlord, he often has to intervene, but when tenants refuse to stop smoking, complainants threaten to break their lease and move out.

“A lot of people will say that’s a tenant’s right, but the reason most landlords feel this way is not for moral reasons at all,” said Blake. “Landlords have to protect the rights of their tenants, so it will put landlords in a difficult situation.”

In addition to potentially losing tenants, another issue at play for landlords, says Blake, is the cost of readying a unit for new tenants once the smoking tenant has moved out.

“After they move, the cleanup cost can be very expensive and hit us in the pocket book and bank account,” he said. “To fumigate and get it cleaned can cost up to $5,000. For a corporate landlord with economies of scale, $5,000 is still a lot of money, but if you have an investment property, $5,000 can eat up your entire cash flow and budget for the year.”

Zolo Realty sales agent Geoff Malisa says cigarette smoke devalues properties and he doesn’t see why marijuana would be treated any differently.

“I lump it together with cigarettes, so it could have an effect on property,” he said. “When I’m showing clients condos or single-detached homes and the tenants are smoking in the unit, because it was allowed in their lease, instantly if you bring a non-smoker into the property, some people get headaches or feel some sort of effect. It hurts the resale value. It gets into the carpet and the furniture, and if you’re showing a home with a carpet, those things need to be replaced. Cigarettes have a negative effect on resale value and I can imagine people would have the same viewpoint about marijuana. It’s case-by-case, but most people would agree it would have a negative effect on resale.”

Malisa noted that leases are binding, therefore, landlords face an uphill battle.

“Currently with leases that are structured now, you can include a condition for tenants not to smoke on the premises,” he said. “If there’s no indication of it, then by law tenants are allowed to smoke, but you’re not allowed to change anything mid-lease until it expires. But there are many proponents of landlords being able to change leases to ban marijuana smoke as soon as the law comes into effect.”

Alex Balikoev, a Core Assets Real Estate sales agent, is in favour of banning recreational marijuana use inside rental units because the smoke can travel into other units or hallways.

“I think it’s the right thing to do, and it sucks for someone who’s smoking, but it’s a benefit to most of the occupants and tenants who don’t smoke, so it’s certainly a good thing,” said Balikoev.

Balikoev also says that condo rentals are still regulated by condo corporations and not provincial legislation—meaning condo investors should have more leeway with enforcing a ban.

“It will be up to the condo corporation to prohibit smoke in the unit,” he said.

Article by Neil Sharma, reproduced from Canadian Real Estate Wealth magazine.

Both Canadian Real Estate Wealth and REP magazine are excellent online publications that we highly recommend for all sorts of real estate information.

https://www.canadianrealestatemagazine.ca

 


Home buyers should always meet with their lawyers

Property buyers should be aware of real estate lawyers’ legal standards

Home buyers should always meet with their lawyers, and not just clerical staff, during their purchase transaction.

When you know what to expect from your lawyer, you can avoid troublesome legal claims, writes Bob Aaron.

A fact sheet published last month by LawPRO — the Lawyers’ Professional Indemnity Company — provides an interesting insight into the practice standards expected of Ontario real estate lawyers.

LawPRO is the Law Society-owned insurance company, which provides a mandatory $1 million in liability insurance for every Ontario lawyer.

LawPRO’s fact sheet reveals that as the value of Ontario real estate has steadily risen, so has the value of real estate claims made against the insurer. Real estate claims are now the second-most costly area of law for the insurer, after civil litigation.

From 2006 to 2016, just 16 per cent of negligence claims made against Ontario real estate lawyers were successful. Another 35 per cent were resolved without any cost to the insurer, and 49 per cent were closed with payment of defence costs only.

The insurer’s experience is not only a lesson to lawyers about properly handling a real estate transaction, it is also instructive to buyers and sellers on what to expect from their real estate lawyers.

Among the most common malpractice errors made by real estate lawyers were misreading — or not reading — a survey, title search or registered reference plan of survey.

Another common error is failing to review a condominium status certificate and not bringing deficiencies to the client’s attention.

On a condominium purchase, lawyers have been sued for failing to ensure that the parking space and locker specified in the agreement of purchase and sale are actually for sale — and that the legal description of both units is correct.

Claims have also been made against lawyers for failing to ensure that the unit shown on the condominium plan meets the client’s expectations, for instance whether the unit overlooks the lake or a parking lot.

The lesson for purchasers here is always to insist that their real estate lawyers show them the location of their unit, plus parking and locker spots on the condominium plans. Experience has shown that closing a purchase without reviewing the condominium plans can be extremely risky.

Purchasers should always insist on meeting their lawyer during the transaction. Although clerical staff often prepare the transaction paperwork, LawPRO suggests that lawyers meet with the purchaser client in person at least once to review the transaction and understand the client’s instructions — particularly with respect to the intended use of the property.

Busy, high-volume real estate practices regularly lead to situations where the lawyer does not take the time to communicate with clients properly. Lawyers often completely rely on clerks, resulting in the lawyer being removed from the process.

Breakdown in lawyer/client communication is the most common cause of real estate claims against lawyers. LawPRO advises lawyers: “Spending more time meeting with clients and documenting discussions can be of great help in both preventing and defending a claim.”

Not every matter is straightforward, LawPRO cautions, and neither the lawyer nor the client should have to address a problem that was only noticed on the day of closing — or never noticed at all.

Meeting with a lawyer in advance allows a buyer to explain his or her intentions for future use of the property. If a purchaser intends to build a swimming pool, sewers or utility easements may make it impossible. Zoning may not permit a home-based business, or conversion to more than one dwelling unit.

Different types of title and non-title searches are required depending on the type of property being purchased, for example single unit vs. multiple unit, and commercial vs. residential.

Bob Aaron is a Toronto real estate lawyer. He can be reached at bob@aaron.ca.


Open houses will never be the same

Technology has become a great disruptor in too many industries to count, and the argument can certainly be made that real estate is perhaps the most susceptible.

The reason, says Ali Reaziat, marketing and training manager at Apostrophe Solutions, is technology has shifted consumer expectations. While open houses have traditionally revealed little beyond pictures prior to showings, house hunters can now practically visit properties without being present.

Reaziat asks: Why spend 25 minutes driving to a property you know little about in the likely event you’ll leave disappointed, only to drive another 25 minutes back home?

“You can use technology to give much faster and in-depth information during or after a visit,” said Reaziat. “It used to be that a realtor would have a feature sheet and people would carry that catalog sheet during the showing.”

Not anymore.

Realty brokerages offer virtual property tours at their offices wherein prospective buyers can visit every room inside a home and view its exterior.

“Before I go to a house to see the property, I have a good understanding of what the property looks like, but it gets further enhanced with virtual reality,” he said. “I can have a walk-through of the property. People can wear goggles and view a property without having to travel 45 minutes to see it.”

Potential buyers can also learn about a home’s most minute details, like when the roof was last replaced or what kind of furnace is in the basement. These particulars are salient because the buyer can factor a home’s future cost into their decision to purchase, or even use it as a bargaining chip.

With the help of sophisticated AI algorithms, social media is being used by clued-in sales agents and brokerages to precisely identify who might be interested in buying a particular home.

“On Facebook, you may know a lot about clients, like when they’re having a new kid or when they’re buying cars, and AI is training the automated features of social media to enable you to use technological tools to make sense of what’s going on out there in the lives of your target audience in order to create content that would resonate with them.

“AI lets you figure out who to promote properties to. If it’s a garage add-on, you’d find somebody who just a bought a new car. It finds those people for you—their financial status, whether or not they just bought an SUV or a sports sedan.”

Debbie Cosic, founder and CEO of In2ition Realty, says that, without a doubt, technology has changed the real estate industry, and that there’s no sign of it abating.

“Technology is changing real estate like a speeding bullet, and people who don’t get on the bandwagon will get left behind,” she said. “We’ve seen crazy things at conventions where they talk about robots holding open houses for agents.

“Even the technology being used for open houses has changed things immensely because now you can put goggles on and walk through not just one house, but five or six, without leaving the realtor’s office. You can even have a virtual walk-through of the neighbourhood to see what the schools and other amenities are.”
by

Neil Sharma

Reproduced with permission from REP magazine

http://repmag.ca