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A worrying share of Canadian homeowners may be risking serious financial consequences by not knowing enough about their home insurance. Almost a quarter of respondents to a recent survey said they had not read their home insurance policy and 3 in 10 said the matter was like their daily commute – tedious but necessary.
Nearly 10% of respondents to the poll by belairdirect said they did not know if their home is covered for animal damage, from rodents for example.
Four-in-ten Canadians with home insurance believe their policies automatically protect all of their valuables, while only 36% believe they are covered for a sewer back-up.
Almost 1 in 5 Canadians believes they can grow pot at home without any impact on their home insurance.
Many also believe the cannabis they grow is covered by their home insurance policy but belairdirect says that the rules vary by province. The insurer has a limit on recreational cannabis products under home insurance policies in Ontario, Alberta, and British Columbia while no coverage is provided for plants growing outdoors.
Overall, 52% of respondents said they find their home insurance policy hard to understand.
by Steve Randall
July 16, 2019
We have attached this survey directly from belairdirect
How many Canadians lose sleep when they think of insurance? We asked people around the country what their perception of home and auto insurance was. Discover the results here:
The duty of a condominium corporation to accommodate disabled residents is highlighted by a decision from the Ontario Human Rights Tribunal released earlier this year.
Mr. P. moved into a condominium in Toronto, in September, 2016. He still lives there.
He uses a scooter and has difficulty entering the building’s front doors. His disability affects his hands and he must pull one of the doors open then wedge his scooter between the doors.
Mr. P. asked the condominium to install automatic door openers at the front of the building to allow him to enter more easily and without risk.
A year after Mr. P. moved in, an engineering report commissioned by the condominium concluded that it was not possible to install automatic openers compliant with the Ontario Building Code.
Instead, the corporation proposed installing automatic door openers at the back door, but Mr. P. was not satisfied and commenced an application to the Ontario Human Rights Tribunal in October, 2017. In December, 2017 — some 15 months after he moved in — automatic door openers were installed at the rear entrance.
Mr. P. rejected the rear door as inappropriate and stated in his human rights application that he had been discriminated against because of his disability. He felt the rear-door automatic door openers were not a reasonable accommodation, saying it was embarrassing and an injury to his dignity, since other residents were entitled to use the front door.
In its decision this past April, the tribunal found that Mr. P.’s condominium had a “duty to take positive action to ensure that members of disadvantaged groups benefit equally from services offered to the general public.”
After concluding that the installation of automatic openers at the front door was not feasible, the tribunal decided that their installation at the rear entrance was a reasonable solution.
However, the tribunal also determined that the building owners failed to deal with Mr. P.’s request with “due diligence and dispatch” since it took about 15 months from the time that he moved in to make an entrance to the building accessible. As a result, the building’s owners were ordered to pay $10,000 in general damages as compensation for injury to dignity, feelings and self-respect.
Denise Lash, a condominium law expert at Lash Condo Law in Toronto, cautioned in a recent blog on her website that the case underlines the necessity to accommodate disabled residents.
“Not only must the corporation assess the request and all accommodation options open to it, it must do so promptly and within a reasonable time period …” Lash wrote.
by Bob Aaron
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 email@example.com, phone 416-364-9366 or fax 416-364-3818.
Stimulating residential construction and sales activity might fuel a vicious cycle that could eventually derail the national housing market, according to the head of the Canada Mortgage and Housing Corporation.
The problem, as Evan Siddall described it in a recent contribution to The Globe and Mail, leads to the same element feeding into consistently elevated housing prices: unchecked speculation and investment activity.
“Economic growth and immigration strongly influence demand for housing. When they exist together with slow housing supply, the problem compounds even further. Opportunistic investors – both domestic and foreign – seize an investment opportunity and prices climb higher still,” the CMHC president and CEO wrote.
“Making home-buying easier, by easing mortgage eligibility requirements for example, can increase demand; but unless supply keeps up, prices rise even higher,” Siddall added. “Counter intuitively, if we focus housing programs only on helping people buy homes, we make it harder for people to afford places to live. If more people can afford to spend more to buy houses, prices increase. And higher-priced housing leads to higher rents.”
This is particularly problematic, as housing currently represents a disproportionate share of the Canadian economy, at 7.5%. The ratio is far above that seen in other global economies like the United States (4.9%), the United Kingdom (4.1%), and Australia (5.9%).
“Simply put, building more single-family homes is not the foundation upon which our economic prosperity will be built,” Siddall explained. “If we aren’t careful, housing will eventually eat our economic future from within.”
“Canadians spend 50% on real estate transaction costs (broker fees, land-transfer taxes and legal costs) than we do on research and development. In comparison, our American friends spend 25% more on research and development than they do on real estate transactions.”
by Ephraim Vecina
There was an increase in Canada’s jobless rate in June as more people looked for work.
The economy shed 2,200 jobs according to data from Statistics Canada, disappointing the economists who had predicted a gain of 10,000.
But despite the pause, the overall state of the Canadian labour market continued strongly in the second quarter of 2019 with employment up 132,000, mostly full-time jobs.
Year-over-year employment in June was up 421,000 or 2.3%.
Employment in June increased in Alberta and Saskatchewan, while it decreased in Manitoba and Newfoundland and Labrador. Employment was little changed in the remaining provinces. In Alberta, employment rose by 10,000 in June, as an increase in full-time work more than offset a decline in part-time work.
There were more jobs in healthcare, education, transportation, and information; but fewer in retail, manufacturing, and natural resources.
There was also a decline in the number of self-employed workers as the number of employees increased.
Employment among people aged 55 and over grew by 22,000 in June, driven by increases among men (+16,000) while there was a decrease of 18,000 among men in the core working ages of 25 to 54, with little change among women. There was little change for youth employment (15-24 years).
by Steve Randall
08 Jul 2019
Is a homeowner obliged to disclose to a potential purchaser that the house was the site of a gang murder?
This was the key issue last month in a trial court decision of the British Columbia Court of Appeal, which reversed a 2018 decision
The lower court had ruled that the seller was liable to the buyer for fraudulent misrepresentation in the 2009 purchase-sale deal. The seller, Mrs. W., had failed to disclose to buyer, Mr. S. that her son-in-law was killed in a 2007 gangland-style shooting on the sidewalk in front of the residence.
The son-in-law, Mr. H, was an alleged member of the Big Circle Boys, a Chinese gang. The murderer was never found.
During negotiations for the $6,138-million house, when asked why the home was for sale, the owner’s agent merely said that the owner’s granddaughter would be attending a school located elsewhere. She did not add that the granddaughter was asked to leave the school because her father had been murdered outside the home.
When the buyer learned about the murder, she refused to complete the transaction, and the seller resold it for $5.55 million.
The buyer sued for the return of her $300,000 deposit and the seller counterclaimed for $638,000 in damages based on the difference between the two sale prices.
The trial judge concluded the owner’s statement that there were no hidden defects in the Property Condition Disclosure Statement, and the oral response to the buyer’s real estate agent which misstated the reason that the house was being sold, amounted to a fraudulent misrepresentation. He said it entitled the buyer to back out of the purchase agreement.
Appeal court Justice Mary Newbury wrote that the seller was not obligated to provide further disclosure because she had no reason to know that the fact of the murder would be material to the buyer.Newbury added that, if the seller had to disclose why the granddaughter had left her previous school, “the law relating to real estate transactions would be turned on its head.”
“If the law were now to be modified to require that, upon being asked a general question like the one asked in this case (why is the vendor selling?), vendors must disclose all of their personal reasons and explain the causes for those reasons, even when they bear no relationship to the objective value or usefulness of the property, the door would be open to a huge number of claims.”
She noted, “Buyers, perhaps unhappy with their purchases, could claim that information was ‘concealed’ or that a misrepresentation by omission had occurred — despite the fact the undisclosed information is, on an objective view, completely irrelevant to the value and desirability of the property.”
The lesson for buyers is to ask specific, detailed questions before the contract is firm, and to do your due diligence.
Bob Aaron is a Toronto real estate lawyer. He can be reached at firstname.lastname@example.org.
With climate change such an enormous challenge globally there are some major changes needed to avoid the worst effects.
And one of the biggest is tackling the amount of carbon that our homes and commercial buildings are responsible for as consumers of around a quarter of total energy consumption in the country, mostly from heating and cooling.
Now a new report from the International Energy Agency (IEA) and the National Energy Board (NEB) says that we can cut the amount of CO2 emissions from Canadian buildings by 80% by 2050.
But that will mean major energy intensity improvements and shifts away from fossil fuels to low-carbon energy sources.
"There are significant opportunities to lower energy usage and emissions through greater reliance on existing technologies in Canada's buildings including homes and businesses. The joint IEA/NEB report presents a scenario where major progress could be made by 2050," said Jean-Denis Charlebois, Chief Economist, National Energy Board.
Buildings of the future
Although under the Clean Energy Scenario set out in the report still has electricity dominating in provinces with large hydroelectric infrastructure like Manitoba and Quebec, changes could include electric resistance heating being replaced with more efficient electric heat pumps.
Use of modern biomass technology rises for heating in Quebec, Atlantic provinces, and the prairies. While in Western Canada and Ontario, natural gas will continue to be used with steady shifts taking place to more efficient equipment such as gas thermal, hybrid and electric heat pumps.
By 2050, high-performance zero-energy-ready buildings will become the market standard, while all other construction moves to today's best practice.
Cost and savings
The report notes that capital spending for building improvements in the Clean Technology Scenario would correspond to an extra four to five billion dollars (CDN) annually to deploy low-carbon and energy efficient technology solutions for buildings; however, annual savings could reach as much as 24 billion CDN in 2050.
by Steve Randall
30 May 2019
The Ontario Real Estate Association is lobbying the Progressive Conservative provincial government to take action and make laundering money through real estate difficult.
“We’ve called for a searchable public database to find out who the beneficial owners are of the numbered companies or numbered trusts,” said OREA’s CEO Tim Hudak. “If money is coming from a corrupt politician in China and they need to get the money out because a corrupt politician higher up the chain might take it from them, they layer it through numbered companies and eventually purchase property in Western jurisdictions like Canada, the U.S. or England, and they never attach their name to it—it’s usually a son or daughter, brother, sister or someone higher up in organized crime.”
A beneficial ownership registry could also help law enforcement identify criminal activity domestically or perhaps even in the country of the crime’s provenance.
“Police overseas can also identify that the politician’s daughter, let’s say, owns this property in Toronto, Vancouver or Montreal and will notify the RCMP,” said Hudak. “Similarly, the RCMP can connect a person, who has little income but is buying up many properties, to the original crime in, say, South America or an Asian jurisdiction.”
The association, alarmed by the reports on money laundering in British Columbia earlier this month, did its due diligence before reaching out to Premier Doug Ford’s government with recommendations. However, the government appears aloof.
“We suggested a beneficial ownership registry that would be publicly searchable and mandatory declarations of beneficial ownership with meaningful penalties for false declarations, so if a numbered company or numbered trust is set up, the owners must be named otherwise there will be steep fines or jail time for lying,” said Hudak.
Tom Storey, a Royal LePage Signature Realty team leader, notes that sales representatives aren’t privy to enough information in transactions involving dirty money to clearly ascertain that a crime is taking, or has taken, place, but he knows who could.
“Where they need to start first, if they’re going to get information on this, is with developers because this problem isn’t as pronounced in the resale market as it is in preconstruction,” said Storey. “Nobody knows who’s buying these preconstruction units other than the builders, but without the government going to them and asking for information they’re not going to openly give it up.”
Other professionals, like lawyers and mortgage brokers, involved real estate transactions aren’t regulated by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), but they could possess useful information the government agency can use to identify criminal activity.
“We do have solicitor-client privilege in Canada, but surely there must be some way to work with the Law Society to alert authorities about suspicious transactions, or to identify who’s putting funds into trusts,” said Hudak. “Countries like the United States and England, as well as the European Union, have addressed that, so we should be able to find a way forward as well, and if those countries are making it harder for money launderers, that means more is going to come to Canada, and the sad reality is every dollar of dirty money could take that home or investment away from law-abiding Ontarians.”
by Neil Sharma
22 May 2019
Parents and grandparents are stepping up to help their children and grandchildren become homebuyers in the US, even if that means scrapping their retirement plans.
A survey from the Legal & General Group has found that over one million US parents and grandparents helped the next generation of homeowners to the tune of $41 billion with 54% of that coming from their retirement savings.
In fact, 29% of ‘Bank of Mom and Dad’ (‘BoMaD’) lenders helped financially with homebuying but 15% said they are financially worse off as a result and 14% feel their future is less financially secure; 7% had even delayed their retirement due to helping out a younger homebuyer.
“The Bank of Mom and Dad is playing a major role in the U.S. housing market, but the generosity and support many people choose to provide family members is compromising their own quality of life,” said Legal & General Group Chief Executive Nigel Wilson. “This generation is helping kids and grandkids purchase property throughout the country, but it would appear that many don’t really have sufficient wealth to do so without impacting their own retirement plans. It’s disturbing to see that some Moms and Dads have even had to postpone retirement in order to help.”
Other ways that BoMaD lenders have helped with homebuying including raiding their IRAs or their 401(k)s (8% each); refinancing their own homes (7%); downsizing to a smaller property (6%); or even coming out of retirement (5%).
37% of BoMaD lenders give the money outright, meaning they don’t expect to recoup any of it; an additional 33% provide a loan with no interest
23% of parents and grandparents helped first-time buyers, while 4% helped those upsizing
Those unable or unwilling to help family members financially cited 3 main reasons:
Low income (25% of respondents)
The belief that family members should be self-reliant (20%)
Lack of savings (13%)
51% of lenders think it’s harder for younger generations to buy than it was for them, citing out-of-sight property prices (71%) and incomes not increasing (63%)
16 May 2019
by Steve Randall
Buried in last month’s provincial budget is a measure designed to reduce the cost of obtaining probate — “to provide tax relief for families when they need it most, as the death of a loved one is a difficult time.”
Effective Jan. 1, 2020, the Estate Administration Tax will be eliminated for estates with assets of $50,000 or less. For larger taxable estates, the tax will be reduced by $250.
The estate tax is collected on filing an application for a certificate of appointment of estate trustee, commonly known as probate. Since June 1992, when the Ontario government tripled its probate fees, the amount payable is $5 per $1,000 on the first $50,000 of estate assets, and $15 per $1,000 on the balance, with no maximum.
With real estate prices soaring in recent years, the probate tax payable on an estate with an average $1 million home, without a mortgage, is almost $15,000. Realistically, a $250 reduction is just a drop in the bucket.
A more serious problem the government failed to address is the chronic understaffing in the Estates Court branch of the Superior Court of Justice in Toronto. The lack of personnel has resulted in delays of up to eight months to obtain a straightforward, over-the-counter court order. Court offices in less busy jurisdictions can turn around a probate application in days.
When the family home is the principal asset of an estate, and it can’t be sold without a court appointment of the estate trustee, a Toronto house or condo often sits empty for months waiting for court approval of the probate application.
There are a number of ways to avoid paying most or all of the estate administration tax. It can be avoided, for example, by gifting assets like real estate or bank accounts to adult children while the owner is still alive.
Another option is to register assets, including real estate, in joint names with the beneficiaries so that the survivors can become the owners automatically on the death of the parent. This can have serious adverse tax consequences, however, if the asset is subject to a taxable capital gain on any transfer.
Gifting assets to children also means the homeowner gives up control of the home’s value that may later be needed for age-related nursing or housing.
As well, the value of the property gifted to the children could be exposed to a claim by an unhappy spouse.
Houses that were registered under the old Land Registry system when they were initially acquired can be transferred without probate tax or applying for probate, even though title has now been converted to the computerized Land Titles system.
Increasingly common is the preparation of multiple wills: one for assets that do not require probate, like shares in a private business corporation. The second is the general will and is used for all the estate assets which require probate in order to be liquidated.
Estate planning and the preparation of individual or multiple wills require sophisticated legal advice to deal with the tax consequences, family law issues and all the possible “what-ifs.”
I often tell clients there is no such thing as a simple will.
May 10, 2019
By Bob Aaron – a Toronto real estate lawyer and frequent speaker to groups of home buyers and real estate agents.
He can be reached by email at email@example.com, phone 416-364-9366 or fax 416-364-3818.
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The flow of new homes into Ontario’s bustling housing sector is hampered by extremely lengthy development approval timelines, according to the Ontario Building Officials Association.
Strong funding and construction activity are seemingly having negligible impact in ensuring new supply. Per OBOA estimates, it takes as long as 10 years to complete the required planning to get new building permits in the province.
“We have the best building codes in the world, which is why Ontarians feel safe in the places they live, work and play,” OBOA president Matt Farrell said.
“We need to be cutting the red tape throughout the approvals processes to bring this housing to the market as quickly as possible.”
A significant portion of funding is slated to come from the federal and provincial governments, which will make the implementation of a streamlined approvals process even more important.
“Premier Ford announced $1-billion in funding for affordable housing last month, and the prime minister committed another $1.3-billion before that, but cumbersome processes are going to delay making that housing available to the people who so desperately need it,” Farrell emphasized.
Any new supply will most likely be on the higher end, as shown by developer Cortel Group’s latest projects across the province.
The Towers 3 and 4 luxury condo buildings, the final phase in the highly anticipated Oak & Co. luxury condominium complex in Oakville, have been launched late last month. Units are expected to enter the market starting at the $300s.
Meanwhile, the 60-storey CG Tower is expected to become the tallest building in Vaughan, as well as the tallest structure in Cortel Group’s Expo City development. It is scheduled for completion by September 2021
by Ephraim Vecina
01 May 2019