Friday, May 27, 2016

Beware of Renting your Condo as AirBnb

Your mortgage does not say You are permitted to rent as a commercial landlord; then you would be a commercial investor like Trump Tower  [how many people couldn't get financed]

Your mortgage requires you to stay within the provisions of your Condo By Laws.   If you contravene your by laws your mortgage is considered in default.

In the condominium sector, where, according to Gerald Miller, a managing partner at Gardiner Miller Arnold LLP, 80 to 90 per cent of Canada’s Airbnb market is concentrated, there are definite risks for lenders – and homeowners.
“If you contravene the declaration of bylaws and rules of the condominium corporation,” he points out, “that means you’re offside here. It means you’re in default of your mortgage, because the corporation can take action against you and whatever costs are incurred; they can lien your unit.”Mr. Miller says Airbnb renters flew under the radar for the first few years of the service’s operation, “but now it’s become mainstream. It is everywhere. So in the end when you are exposed you could have a problem. You either stop doing it or you are going to have a problem, not only with the condominium corporation, but with your lender as well.”

What's the lesson?

Get Factual advice.   Follow the By Laws and Have the correct Financing in place.

Can we talk?   Call me. 

Professional Tenant Defrauding Landlords

Professional Tenant Defrauding Landlords
May 17, 2016 -- It has been brought to TREB's attention that the firms Handsmith Advocate and Paralegal and also Provincial Paralegal are currently in litigation with a sophisticated Professional Tenant involving multiple rental units.  There is reason to believe, based on a pattern of activity, that there may be more rental units involved and currently in this Tenant's possession. 
As this individual's MO is consistent based on four (4) known cases so far, it is the firms' belief that releasing the individual's profile may lead to the discovery of other units and will also perhaps interfere with future attempts by this individual to defraud Landlords.  The number of new cases is increasing daily, as it is clear this individual is attempting to grow by increasing the number of units in their possession.
The profile of the Professional Tenant is as follows:
They are primarily using RECO registrants to locate target properties in the downtown core of the City of Toronto.  The individual is targeting furnished units as well as unfurnished units in condos in the $2000–$3000 price range.  The individual presents as mild-mannered with a gentle demeanor.  The individual claims to be a senior director of an alleged charitable organization.  They use a letter of employment from the alleged charitable organization claiming a sufficient annual income to be able to afford the unit.  The Tenant uses a variety of phone numbers on the letter of reference, and if you try to contact the number to confirm the details, you are told the person is not available, but asked how the person who answered may help you. Then they proceed to confirm the details of the alleged employment and confirm that you are in fact speaking to the Tenant.  The alleged charitable organization has a polished looking website; however, what is notably missing is the Revenue Canada registration number for charitable organizations.  A search of the Revenue Canada database yields no record of any such organization.  The phone number to the alleged reference is in fact one of the numbers used by the Tenant. 
The tenant will pay one month's rent with the promise to pay the last month's rent deposit at a later date, which never comes.  They will generally stop paying rent as of the second month.  In some cases, both the first and last month rent cheque will bounce after they have gotten possession.  The Landlord will receive calls from the Condo's Property Management office with complaints that the Tenant appears to be engaged in running an Airbnb from the unit, with reports of numerous unidentified individuals accessing the unit on an ongoing basis, and this will begin immediately after the Tenant takes possession.  Often Condo Corporations have rules regarding short-term rentals and Condo owners find themselves in trouble for the conduct of the Tenant.
The Tenant has sufficient knowledge of the Landlord & Tenant Board process to know how to cause significant delays in their proceedings.  They have also become very covert in concealing their advertisements, as the first case was successful at obtaining the evidence of their activities.  Generally speaking, they will post their advertisements for short periods of time on one of (17) different sites used to promote Airbnb units, until they get a hit. Then, they will pull the advertisement down immediately so as to make it difficult to gather the necessary evidence of their conduct.  The Tenant will continue to not pay rent while rerenting the unit out on a per diem basis at a rate usually in the range of $125–$175 per night.  Currently, the rent arrears collectively between the (4) known cases are in the in excess of $25,000.00. 
This serves as a reminder to always be vigilant about these kinds of situations and to conduct detailed reference checks on all potential tenants to protect your clients.

I would take notice


David Pylyp

Monday, May 16, 2016

Guidelines for measuring Square footage

The CBC investigation found realtors had varying approaches to measuring home size and the guidelines were open to interpretation.
Some measurements, for example, included patios and balconies while others even counted decks and condo parking spaces.
The new measurement standard instructs realtors to:
  • Identify if the measurement system is metric or imperial, and apply it consistently.
  • For single detached properties, measure the outside surface of the exterior walls at floor level.
  • For properties with common walls, such as half-duplexes, townhouses, and apartments, measure the interior perimeter walls (paint-to-paint) at floor level. An additional area representation may be made assuming exterior measurements.
  • Include floor levels that are entirely above grade and exclude floor levels if any portion is below grade. Below grade levels may be measured, but the area must not be included in the RMS (residential measurement standard) area.
  • Include all additions to the main structure and conversions of above grade areas within the structure if they are weatherproof and suitable for year-round use.
  • The property must have a minimum floor-to-ceiling height of 2.13 metres (7 feet). If the ceiling is sloped, the area with a floor-to-ceiling height of at least 1.52 metres (5 feet) is included in the RMS area, provided there is a ceiling height of 2.13 metres (7 feet) somewhere in the room.
  • Include extensions from the main structure that have a minimum floor-to-ceiling height of 1.5 metres (5 feet), such as cantilevers, bay and bow windows, and dormers.
  • Exclude open areas that have no floor, such as vaulted areas.
Glad the Matterport™ can create instant floor plans