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Notes from Robert

Condo corporations need to prepare plans to deal with marijuana use

Questions are being raised about whether landlords will be able to restrict cannabis in residential units. When marijuana becomes legal next summer, landlords, tenants and condominium owners can expect an increase in disputes related to both indoor and outdoor smoking.

Effective July 2018, anyone 19 and over will be able to smoke marijuana in their units and grow up to four plants per residence. The maximum height of the plants may not exceed one metre.

This raises the question of whether landlords and condominium boards will be able to prohibit both the cultivation and smoking of marijuana in residential units.

In the landlord-tenant sphere, landlords may legally prohibit smoking both tobacco and marijuana in new leases, but it may not be possible to prohibit existing tenants.

Condominium corporations can enact smoking bans by amending their declarations, provided that 80 per cent of the unit owners vote in favour of it.

Condo boards can also attempt to regulate cannabis use by enacting reasonable rules, striking a balance between the rights of smokers and non-smokers.

Any new rules might exempt existing owners or occupants as long as efforts are made to ensure that the second-hand smoke is self-contained. In addition, under our human rights legislation, some accommodation should be made for disabled individuals who smoke marijuana in their units for medical reasons.

In a growing body of cases in courts, landlord and tenant boards, and human rights tribunals, many rulings have been sympathetic to the plight of non-smokers unwillingly exposed to drifting second-hand smoke in their own homes. To date, the cases have dealt exclusively with tobacco use. But it is not unreasonable to expect more litigation starting next summer due to the effects of marijuana smoke.

Until now, court cases which focus on objections to second-hand smoke have usually been based on the legal principle of nuisance.

The first court case I was able to find on this topic is the pre-Confederation Upper Canada decision in Cartwright v. Gray in 1866. The plaintiff complained about smoke from a neighbour’s carpentry shop — which burned pine shavings and other refuse.

The judge said: “A man may not use his own property so as to injure his neighbour . . . Every man, by common law, has a right to pure air, and to have no noxious smells or smoke sent on his land…”

Court cases, rental housing tribunal decisions and human rights cases across the country, even as high as the Supreme Court of Canada, have followed this legal principle.

A British Columbia decision in 2003 involved drifting second-hand smoke in a social housing project. The tenant was evicted, even though he argued that he had a Charter right to grow and use marijuana.

The judge wrote that that the odour made neighbouring suites virtually unlivable and the government was obliged to protect them from unreasonably disturbing odours. The decision was upheld on appeal and the Supreme Court of Canada dismissed an application for permission to appeal to that court.

In the 2014 MacKay case in Toronto, the owners of a condominium were forced to move out due to noxious cigar smoke migrating from a neighbouring unit. The owners sued the condominium corporation for failing to respond adequately to their complaints. The judge was critical of the condominium corporation and ordered it to pay $32,500 in court costs.

In light of the impending legalization of cannabis, landlords and condominium corporations would be well advised to prepare action plans to deal with the issue before it becomes a problem.

Bob Aaron is a Toronto real estate lawyer and frequent speaker to groups of home buyers and real estate agents.  Bob Aaron
He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818.

 


Save on Airbnb, but is it legal?

Airbnb? I’d never heard of it. Mark Weisleder sounds a few alarms though.

A friend told me that she went to the Caribbean for a holiday on a deal and it cost her $1,000 for 10 days. While she was away, she rented out her downtown Toronto condo on Airbnb for $1,500. Sounds good. But is what she did legal in Ontario?

Here’s what Airbnb is all about:

Airbnb is a website that connects travellers from all over the world to homeowners who are looking to make extra money by renting out their entire homes, or in some cases, an extra room, for short periods of time. In just 6 years, the company has grown to now have over 550,000 room listings available on their website. You hook up with your prospective homeowner through the website and Airbnb takes a cut of the money that you pay. You can see the appeal.

Travellers can find a place in some of the best parts of a city such as Paris, London or San Francisco and pay a fraction of what it would cost to stay in a hotel. Some travellers prefer to stay in a private home so that they can obtain an authentic local experience. Still others warn that you must do your due diligence in advance and check for references so you are not disappointed when you arrive.

The company offers insurance to a host to cover some damages that may be caused by a traveller, but there are many exclusions so read the policy carefully. The company, which doesn’t own any hotels, is now valued at over ten billion dollars, more than many of the large hotel chains.

As you can imagine, the hotel industry is not happy about this and some cities are fighting back. In New York City, for example, it is now illegal to rent your home for less than 30 days. Quebec also has passed laws against renting homes for short periods of time.

Is this legal in Ontario? While Ontario does not have express laws against renting your home for short periods of time, there are other matters to consider.

For example, most condominiums have rules that do not permit short term rentals. This is primarily due to security concerns, as the owners are wary of different people just showing up each night at a neighbouring unit. In the case of Skyline Executive Properties v. Metro Toronto Condominium Corporation #1280, Skyline was renting out units at 109 Front St. East as hotel rooms for visiting executives on behalf of the owners. The building had rules preventing short term rentals and took Skyline to court to stop this.

The court agreed and in a decision dated September 6, 2001, Ontario Superior Court Judge EM Macdonald agreed with the condominium corporation and stopped the short term rentals, stating as follows: “the use of the building by transients offends the reasonable expectations of the majority of the other owners, who use their units for private single family purposes only.”

It is interesting that property addresses are not included on the Airbnb website. You can find out about the property through pictures, information about your host and reviews by other travellers. If anyone in the building complains, the board can bring an action against you and you will likely have to pay the board’s legal fees if you do not stop.

I am also hearing that many tenants are doing this without their landlord’s permission. This is probably a violation of Ontario’s Residential Tenancies Act, since a tenant is not permitted to sublet their unit for an amount greater than what the landlord is charging. In most cases, the daily rent charged will be much higher than what the tenant is paying in rent.

If you do rent out your home for short periods of time, you’d better advise your insurance company. While this may cause your premiums to rise, failure to advise could result in your insurer denying coverage if something does happen during the stay, since the risk increases when strangers use your home.

As you can imagine, the hospitality industry is not pleased with Airbnb. Tony Elenis, President and CEO of the Ontario Restaurant Hotel and Motel Association, sent me a list of all the regulatory burdens that hotel and motel operators must follow, including items such as having proper business and liquor licenses, Health and Safety requirements, proper signage and customer identification. As Tony states:

“The hospitality industry is extremely regulated and topping the list is the rules on health and safety of our employees and guests. We take pride in compliance here. This takes much training and understanding of meeting these objectives that only comes within a business structure and people involved in this profession.”

Even bed and breakfast companies must obtain proper licenses to operate from their local city and are subject to health and safety inspections to ensure the safety of their guests.

If you want to make extra money on Airbnb, be aware that if one neighbour complains, you may be shut down. If you want to use the site for a cheaper travel experience, remember to do a lot of due diligence in advance, to make sure you are not disappointed later.

By Mark Weisleder


Seven questions to ask when building a deck

Now that summer has finally arrived, many home owners may think about building a backyard deck by themselves. Be careful; if it is not done correctly, you may run into problems later when you try and sell your home. Here are seven things to remember:

1. Do you need a building permit?

Every City has its own rules, but typically, if your deck is higher than two feet above the ground and is larger than 108 square feet, you will need a building permit before starting. In some cities, if the deck is attached to your home, then you always need a building permit before you build. In my opinion, by getting a proper permit in advance, it is easier to answer any questions about your deck when you sell your home later. This is because the City will do a proper inspection when your deck is completed to make sure that everything was built correctly.

2. What material should I use when I build a deck?

David Power, President of www.thedeckbuilders.com in Toronto, tells me that while the foundation of most decks is usually pressure treated wood, the veneer and railings are usually cedar. David warns that if you decide to stain your cedar deck, you should pre-stain all six sides of the wood before you install it. In addition, make sure that there is at least a one-quarter inch gap between each piece of wood.

3. Will it matter how large I build a deck or whether it is close to the boundary line?

The answer is yes. As explained to me by planner Michael Goldberg of www.goldberggroup.ca, the square footage area of a deck may count when determining whether your home complies with the zoning by-laws regarding how close any structure can be to the lot lines and how much square feet is permitted to be built inside your entire lot. For example, if the deck is at least 48 inches off the ground or the foundation is extended for construction of the deck, then it will count towards how many total square feet you can build on your land. In addition, if the deck is built too close to the lot line, it could also violate the local zooming by-laws. If you make a mistake, you could be forced to remove all or part of your deck.

4. Should you do it yourself or use an expert?

In my opinion, you should always use an expert. If the deck is not properly secured to your home, it could lead to water in the basement later. In addition, improper design and construction could lead to the deck rotting out and collapsing under the weight of people on it. If it happens, you will be liable for any injuries caused to guests who may be injured while visiting your home. Experts will make sure that your deck has the proper footings in place for the foundation so that it meets all building code requirements and that it is properly secured to your home to prevent problems later.

5. Is deck design important before you start?

It is very important. Figure out in advance where your barbecue is going to go, and any furniture you may want to include. If you are going to install a hot tub as part of your deck, make sure you leave enough space for this as well. Some owners prefer the hot tub close to their home so they can use it in the winter. Others prefer it in another area of the yard, so that they can have more room to entertain on the deck.

6. Will I need guard rails?

If the deck is higher than 24 inches off the ground, you will likely need a guard rail that is at least 36 inches high. Once the deck is higher than six feet off the ground, it will require a 42 inch high guard rail. In all cases, the openings in the guard rails cannot be larger than four inches so that no one falls through.

7. Should a deck be inspected as part of any home inspection when buying a resale home?

The answer is yes. Professional home inspectors should be able to tell you whether the deck is deficient in any way and whether it may have to be replaced as a result of poor workmanship.

When you are looking for a deck contractor, get references and look at examples of the work they have done elsewhere. Properly constructed decks should last for at least 20 years.
by Mark Weisleder
Real estate lawyer, speaker, author


Ten tips for first time real estate investors

First time investors in real estate are often very confused with the process. Here are some helpful tips to guide your buying decision.

1. Visit a mortgage broker or your bank to determine how much money you can afford to borrow responsibly for your investment.

2. Look for properties that generate a positive cash flow. What this means is that the rent that you receive from tenants should be enough to pay your mortgage payment, property taxes, utilities and insurance bills. Budget an additional ten percent on your overall payments to pay for minor repairs that will invariably arise. Currently this is very difficult to find so do not be afraid to expand your search to smaller communities, where you will be able to find more properties that match your search criteria.

3. Use an experienced local real estate agent who also invests in real estate themselves. Investors learn about the process through first-hand experience, both good and bad, and you want that experience working for you as well.

4. Have any property inspected by a professional home inspector. In addition, find a contractor that you trust to give you the right advice for any minor repairs or renovations that may be required, especially for older properties, in order to add the most value to your investment.

5. Consult with your accountant and lawyer as to how you will take ownership of the property. There are some benefits in taking title in the name of a limited company in order to protect yourself against personal liability should someone get hurt on the property and for other tax planning purposes. However, on the other hand, you will also have to pay about $1,000 in incorporation fees and have to file a separate tax return each year for your company.

6. Keep proper records of income and expenses for your investment property. Do not mingle these with your personal bank account as it will become difficult to properly trace this when you have to file a tax return at the end of the year, regardless of whether you own the investment in your personal name or in a company name.

7. If you are buying with a partner, make sure you have a proper partnership or joint venture agreement to protect both of you should things not work out as planned. In particular, provisions should be made covering the situation if one of the partners wants to sell and the other one doesn’t, one partner is not paying their share of expenses or what happens if one of the partners dies.

8. Hire an experienced property manager to assist you in finding suitable tenants and dealing with any ongoing maintenance, repairs or other complaints by tenants. You do not wish to be woken up in the middle of the night to handle emergency repairs. Budget an additional $100 per month for this service.

9. Be careful not to buy and sell properties quickly. The Canada Revenue Agency may view this activity as business income. This means that you will have to pay tax on any profit you make on your investment. It is preferable to buy properties for the long term, rent them out and use your positive cash flow to reduce the amount of your mortgage owing, building equity in your property. If you then sell years later for a profit, it will likely be classified as a capital gain and thus one half of your gain will be tax free.

10. Don’t be afraid to walk away if the deal does not work for you, no matter how much time you may have invested in the property.

Be prepared before buying any real estate investment.

Mark Weisleder
mark@markweisleder.com
Mark Weisleder is a real estate lawyer, author and speaker


Disclose problems you know about when selling your home

By Mark Weisleder

Buyer beware, or Caveat Emptor, is a phrase used to describe the outcome when you buy something and later find a problem with it. In plain English it means tough luck – you’re buying the thing ‘as is’ with all the defects in it.

In some cases involving the purchase of a house, it’s not as easy as that for a seller to get off the hook. If you know there’s something seriously wrong with your house, something that might not be found in a home inspection and you don’t disclose it, you can be successfully sued later.

Here’s why:

In October, 2011, Buyers A and B agreed to buy a 35-year-old home from Sellers C and D. The buying couple had a home inspection done before they put in an offer and the inspection found no sign of plumbing drainage problems.

The deal closed in mid-December. Two months later on Feb. 20, Buyer A found sewage backing up into the basement bathtub and sink. Roto-Rooter cleared the drain, but could not get past a certain point in the pipe. A TV scope showed water pooling inside the pipe. A quote of $6,000 plus HST was given to repair the problem.

Mr. A contacted his insurance company and the work took longer to do and cost more because the basement had 36 inches of concrete. The buyers had to move out while the repairs were being done because of the dust and noise from the jack hammering. Also Buyer B was pregnant at that time. The insurance company paid for them to stay in a hotel while the repairs were completed.

Buyers A and B contacted their Region and learned that they had been out to the property twice in 2010 to inspect and clean out blockages from the same sewage line. The Region had sent a letter to Sellers C and D after the second visit in July, 2010 suggesting other repairs be done.

Buyers A and B sued for $14,945, which were the additional costs not covered by their insurance to repair the problem. They asked for $5,000 more in aggravated damages, because they had to move out and have their baby while outside the home.

Mr. C admitted in court that he had a problem with the basement bathroom but that after the Region came out and cleared the blocked area, they told him that if he had no further problems for six months, he would be good to go. He also said in court that the basement bathroom was used every day and did not have any problems from July 2010, until the sale in 2011. He stated in court that he did not mention this to the buyers because he felt that this was no longer a problem.

In a decision released this month, the Judge at the Small Claims Court used the law of hidden defects to reach his decision. He said that if the seller knows about a defect that has caused any loss of use or enjoyment of a meaningful part of the premises, then it must be disclosed to the buyer. The Region inspectors testified that they discussed the potential sewer pipe problem with Seller C.

This. together with the letter, convinced the Judge that Seller C. knew about a structural problem with the pipe which should have been disclosed.

He awarded the buyers $10,500 for the repairs to the pipes but nothing for aggravated damages as the sellers did not do this with any ill motive and there was no evidence of mental distress.
The buyers were fortunate to have uncovered the evidence from the Region to support their position. Without it, it would have been difficult to prove that the sellers knew anything about this.

Here are lessons:

• Buyers may be wise to consider a separate test for the drainage system as part of any home inspection with older homes, even if this costs an extra $200 to $300.
• Sellers should disclose any structural problems to avoid getting sued later.


Seven things to remember when choosing a closing date

By Mark Weisleder

moving truck

Spring means more people are signing real estate deals. Besides the price to be offered, you also need to think carefully when choosing your closing date, so that your deal will close smoothly. Here are seven things to remember:

1. Do not choose a Friday at the end of a month. This is typically the busiest day in most real estate law offices, especially in the summer. This results in many deals not being able to close until late in the day, close to 5 or 6 pm. Worse, if the deal has to be extended, you don’t get keys until the following Monday, or maybe Tuesday if it is over a long weekend.

2. Close your deal on a Wednesday, if possible. If there are delays, it is much easier to manage a one day extension than an extension over a weekend.

3. Sellers, you need to plan to be out of your home by 3 pm on the closing day. Under most real estate contracts, sellers must turn over possession as soon as the deal is registered electronically. In normal practice, when the closing is not at the end of a month on a Friday, the deal will likely be registered by 2 – 3 pm. Vacant possession must be given to the buyer at that time. There was a case where a seller had to compensate a buyer for increased moving costs when they were late getting out of the home.

4. If you are buying and selling a home in the same time period, close your purchase 2 days early and get bridge financing to assist you. You will close your deal without pressure and have a few days to move in while you wait until your sale closes. This will also make it much easier to negotiate an extension, if you have to, as you will not be dependent on the money from your sale to close your purchase.

5. Sellers, remember that you must turn the house over in broom swept condition, which means no garbage. Buyers, make sure you schedule you schedule your final visit two days before closing to make sure that the seller is properly cleaning up.

6. Buyers should not plan to move in until late in the day or the day after closing, as you do not want to have to pay extra to your movers if the closing does not happen until late in the day or the deal has to be extended.

7. Even if you are not moving in on the day of closing, buyers must make sure to get in and check the condition of the home on the day of closing, to make sure that nothing has been broken or damaged since the date that you signed your contract to buy. The seller typically only warrants that everything will be working on the closing date, not afterwards, so find out right away if you need to make a claim about anything after closing.

By doing your homework before choosing a closing date, you should be able to avoid pitfalls later.

Click here to view and/or print a PDF copy of this article.


Floor plans can be your best defence

By Bob Aaron, Real estate lawyer.

New home purchase agreements have loopholes

What happens when the new-build condominium unit you buy from just the plans is significantly different from the one the builder has completed? Are you obliged to close the deal?

That was the issue in a case heard in the Ontario Superior Court late last year.

Ms A, signed an agreement of purchase and sale with a developer back in January, 2011. The $543,400 unit, which the buyer purchased from floor plans, was marketed as a “two-bedroom + loft plus roof deck.” The condominium was to be a stacked townhouse on three levels in a 63-unit project in Toronto.

Although no floor plans were attached to the agreement, a subsequent amendment contained a sketch of the 1,140-square foot unit. The plans showed a living, dining and kitchen area on the first floor, two bedrooms and a bathroom on the second floor, and a loft on the third level with a laundry area and stairway to the roof for access to the roof deck. The loft was to be 9’10” by 11’4”. As construction progressed, it became apparent the loft had disappeared and in its place was an enclosed stairway to the roof deck.

The agreement provided that:

●   any changes made at the request of the city would not be considered a material change;

●   the builder had the right to “change, vary or modify the plans and specifications,” and

●   the purchaser had no recourse for any changes, deletions or alterations.

It turned out that the city of Toronto would not permit a rooftop loft area to be used as livable space, but only for mechanical use and a landing. The builder’s position was that it never guaranteed Ms A. the exact size of any room on the third floor. Ms. A. repeatedly asked the builder for revised floor plans, but her requests were ignored. The builder later took the position that any changes made at the request of the city were specifically permitted under the agreement, and were not a “material” change to the agreement which entitled the buyer to rescind the deal.

Under the Condominium Act, a purchaser has 10 days to terminate a transaction after being notified of a material change in the required disclosure statement.

Ultimately, the buyer terminated the agreement and demanded return of her deposit of $79,611. She applied to the court for a declaration that the disappearance of the all-important loft space was a material change entitling her to cancel the agreement and have her deposit refunded. In the face of the clear wording of the agreement, her refusal to close carried considerable risk. Losing the legal battle would have meant forfeiting the deposit and paying legal costs for both sides.

In November, the judge ruled that a material change was indeed made by the builder when the loft disappeared into an enclosed staircase. The builder was aware that the buyer had chosen the townhouse so that the loft space could be used as a home office. The change in the plans, the judge ruled, was “drastic” and significant enough to affect a reasonable buyer’s decision to purchase the unit. That required the builder to disclose the change and allow the buyer 10 days to back out of the deal. The judge allowed the buyer to terminate the agreement and receive a deposit refund.

This case clarifies that a builder who makes a material change in the plans for a condominium unit will not be able to rely on contract clauses which would appear to force a purchaser to accept changes made at the insistence of the municipality.

It also emphasizes how important it is to have floor plans with measurements attached to any agreement of purchase and sale of a new condominium or house.


Landlords and tenants need to co-operate when selling a home

There is lots of confusion as to the rights of landlords and tenants in Ontario when a home is put up for sale. Landlords are trying to bully tenants into leaving and tenants are refusing to permit potential buyers to see the home. Here are the rules:

  • Landlords can sell their home at any time;
  • If the tenant has a lease, they cannot be evicted before the end of their lease term;
  • Tenants must permit showings to potential buyers, as long as 24 hours’ advance written notice is given and the showing takes place between 8 am to 8 pm. Tenants need to make sure that any pets that they own are kept securely during showings. Tenants are permitted to be at the home during showings, although it is not mandatory.
  • If a tenant’s lease has ended, they automatically become a monthly tenant and must still be given 60 days’ notice to vacate, provided that a buyer has already unconditionally agreed to buy the home.

Some tenants believe that if they still have a lease for several months, the landlord cannot show the home to potential buyers. Wrong. If the buyers do purchase the home, they must still respect the terms of the lease when they take over as landlord. At the end of the lease term, the buyers, now the owner, can provide a 60 days’ eviction notice based on the fact that they need the home for themselves or their family. If a tenant refuses to permit showings after proper notice has been given, the landlord can start eviction proceedings as this is a breach of conduct by the tenant. The landlord could also potentially claim damages from the tenant if the tenant’s actions prevent the landlord from selling the home in a timely manner. Landlords cannot trick tenants into leaving either, pretending to move in so that the tenant vacates and then immediately fixing the place up and selling it. The tenant can sue the landlord for damages if this occurs. This can include all the tenant’s moving costs and higher rent that may have been paid elsewhere. The Board may also add additional fines for breaking the law. If you are planning to sell your home, my advice is to approach your tenant first to work out a plan for showings that accommodates everyone, so that the tenant can properly plan to protect their valuables and secure any pets and the landlord can permit potential buyers to see the home on a timely basis. As an example, agree to permit showings only from 4-6 pm each day. Some landlords assist their tenant first in finding another place to live, even before putting the home up for sale. This is also an excellent solution, in my opinion. The tenant gets to find another place, without the stress of an eviction proceeding, and the landlord then gets to later fix up their home and make it more presentable to a wider range of potential buyers. When landlords and tenants understand the rules and co-operate when a home is being sold, everyone wins.

Click here to view and/or print a PDF copy of this article

Mark  Weisleder, Real Estate Lawyer, Author, Speaker


Be careful when you advertise property for sale

Sellers and real estate agents will advertise the top-selling features of a home in order to attract the largest number of potential buyers. However, be careful what you say. If it turns out wrong later, you may have to pay for it.

Here’s why:

Mr. A. bought a detached home in Toronto in September of 2009 for $439,000. He purchased it “as is” from a family who had owned it since 1967. The basement was not finished.

He then obtained the proper permits to extensively renovate the home, including a refinishing of the basement, and sold it to Ms. B. and her mother  in September of 2010 for $658,000.

When the house was listed on the MLS service in May of 2010, it stated that “This house was gutted to the bare bones, and has literally been rebuilt from scratch. Except for the four exterior walls, almost everything else is new. New insulation, framing, walls, floors, roof, electrical, plumbing.”

In another brochure which was given out to potential buyers at the property, it stated “Fully insulated from basement floor walls all the way to attic. Basement designed as a comfortable entertainment centre and/or spacious home office. Gutted to the bare bones.”

A home inspection was done for the buyers. In the report it indicated some concerns about potential basement leaks. In particular, it said that “Cannot predict how often or badly crawl space or basement will leak and that there were “efflorescence, stains dampness on the exposed foundation wall, and that these are typical conditions not out of the ordinary for a home that age. It turned out that 99% of the foundation wall was not visible, as is usually the case when homes are inspected.

The report further stated that since the inspector could not see behind the walls, the buyers were encouraged to consult a licensed contractor or engineering specialist.

The buyers stated that they started to smell musty odours and dampness almost immediately after closing. No investigation was done behind the drywall as they did not wish to do any unnecessary damage to the finishes. There was then a major flood one year after closing. Most of the costs incurred to repair the damage were covered by insurance.

The clean-up crew did discover that the north foundation wall of the basement leaked water. In order to repair this, it was discovered that there were exposed cracks in the mortar between the cinder blocks, including one crack that appeared to have been crudely plugged with a piece of wood in an attempt to stop the flow of water.

The buyers sued, claiming that the defect was hidden, and that the seller must have known about it if he did in fact gut the basement to the bare bones. The seller stated that he never saw any leaks and did not notice the piece of wood because he did not strip the basement walls to the cinder blocks, but rather just insulated and dry walled the area in front of the existing plaster.

The buyers sued for $8,659, being the cost to repair the leaky basement wall. They also claimed $1,000 in punitive damages, stating that the seller deliberately concealed the problem.

In a decision dated April 2, 2014 in the Toronto Small Claims Court, Deputy Judge Jack Prattas determined that even though the seller did not know that the problem existed with the basement walls, he was still responsible to pay because he had carelessly represented that the property was gutted to the bare bones, and the buyers relied on this when buying it.

Thus he found that the buyers were misled into believing that they were getting a basement which did not have any hidden defect.

However, the judge also found that as a result of the warnings by the home inspector, the buyers should assume part of the risk since they chose not to do any further inspections. He awarded the buyers 50% of the damages, or $4,329.50. No punitive damages were awarded.

There are important lessons for buyers and sellers from this decision:

  • Sellers, make sure that any statement you make about your home in any advertising is true and correct
  • Buyers, when inspecting older homes, it is always a good idea to do further due diligence about water penetration issues, from the roof or the basement.

Click here to view and/or print a PDF copy of this article

Click here to view the original article on the Toronto Star site


Protect your rental investment with a professional property manager

More and more Canadians are buying rental residential real estate for investment purposes. These properties offer in most cases, stable income that pays almost all expenses, with a real estate asset that will typically appreciate in value in the long term. However, there are many pitfalls with becoming a first time landlord. The good news is that with the assistance of a professional property manager, you can be protected and have peace of mind that your investment will be secure for the long term.

Tenant lease

Here’s why:

Tenants are properly screened

One of the toughest parts of owning a rental property is properly screening tenants in advance. If a mistake is made and the tenant stops paying rent and uses the system to delay, the owner will be faced with unpaid mortgage and other bills that could threaten their ownership. A property manager knows what information to look for and what questions to ask before renting out your unit, to assure that this does not occur. Problem tenants typically stay away when they see that a professional manager is reviewing all applications.

Rents are collected in a timely manner

Property managers generally have offices where it is easy for tenants to pay the rent, if they cannot pay by post-dated cheques or pre-authorized payments. You do not have to arrange to meet with the tenants at odd hours to collect rents. If rents are late, the property manager will likely start eviction proceedings to make sure that tenants get the message and pay the rent on time.

Repairs and Maintenance are attended to promptly

Do you really want a call at 11 pm that the furnace just broke down? With a property manager, all problems, 24/7, are directed to the property manager office. The property manager will have a list of approved contractors who can complete any repairs in a timely and cost-efficient manner, to keep both the landlord and the tenant happy. The property manager will also conduct routine maintenance checks to make sure that furnace filters, eavestroughs are cleaned in a timely manner, so that problems do not arise in the future. The  president of a well-known property management company which specializes in condominium properties downtown, tells me that his firm will also conduct property visits every three to six months to make sure that the tenant is properly looking after the unit. If the place is a mess, follow up visits are scheduled to make sure that the tenant properly looks after their own obligations.

All income and expense statements available online

Property Managers will typically collect all rents and pay some bills for the owner, usually property taxes and insurance. Most management companies have their own insurance policies that offer better rates and coverages than what an individual owner can negotiate in the market. The manager can then add the owner as an additional insured on the policy, making sure you have all the required coverage should anything happen. They will also ensure that the tenant takes out proper contents and liability coverage to protect the tenant as well. Landlords then have access on-line to these statements, which can be easily printed and given to their accountants for income tax preparation.

Managers believe in relationships

Managers are not exclusively on the landlord’s side. If the tenants are happy, they look after the property better. That is why the main goal of property managers is to solve problems quickly, so both landlords and tenants are happy long term.

The cost is very reasonable

A professional property manager tells me that for a little over $100 a month, an owner can enjoy the benefits of a professional manager. As Brandon says, if your time is worth at least $30 an hour, then for 4 hours each month, you can have peace of mind. It is true that for most investors, they do not think twice about trusting their stock portfolio to a professional manager. Why would you not do the same with your real estate properties?

It is not easy being a landlord. Using a professional manager will give you peace of mind and a safe investment over the long term.

 

http://www.thestar.com/business/2014/03/23/professional_property_manager_helps_protect_rental_investment_weisleder.html


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