Wednesday, May 24, 2017

Why Leave that Condo Empty

The discussion around a Toronto vacancy tax is based primarily on numbers: Statistics Canada’s 2016 census numbers, to be specific, where 65,000 Toronto homes were listed in the category of “unoccupied by usual residents” while 100,000 people move to the Toronto area every year. 
It’s important to break that number down. While it’s simple to picture tens of thousands of neglected units locking their doors to desperate new Torontonians, Statistics Canada’s definition of usual residents is more about who considers a space their primary residence and lives there year-round or close to it, not whether a space is housing anyone at all. With the census conducted in the summer, unoccupied by usual residents can mean anything from a student rental that will fill up again in September to a space that’s been sublet while the usual resident travels or visits family in another country. Mayor John Tory’s office isn’t troubled by that distinction, saying to the Toronto Star that if even half those units were unaffected by a vacancy tax, the gap the other half represented is still “worrying”.
The decision to bring in a vacancy tax does rest with the City of Toronto specifically, and City Hall has proven much warmer to the idea than they have a foreign buyers’ tax—at least so far. Efforts are already underway to use Toronto Hydro and Water data to winnow down those 65,000 units to a more realistic picture of vacancies, and turn that data into a feasibility report.
In the meantime, Ontario’s Finance Minister, Charles Sousa, has hinted that this year’s provincial budget is going to bring in cooling measures for the Toronto real estate market. With the budget being unveiled at the end of April, it’s not too long a wait to see which conditions will be on the table for landlords and tenants.
All in all, the impact, if a similar vacancy tax were put through in Toronto, could be significant to smaller investment owners. Vancouver’s 1% tax rate would likely be used as a model—legislation is much more easily drawn up when there’s a working model in the country—and even if a Toronto vacancy tax had its differences, it’s not a bad model to use when making your own decisions.
In Toronto, where home prices have skyrocketed a record 33% in just one year, the average condo price hit $550,299 last month with no real signs of stopping—which puts Toronto condo owners in an even tighter situation than Vancouver’s in the event of a vacancy tax. Paired with other proposals such as increasing the rent control guidelines to buildings built post-1991 and discussions around heavily regulating AirBnB in Toronto, it’s plausible that renting investment property in Toronto could quickly become an environment where making smart, deliberate choices really matters—and attention to property management becomes the core of your small rental business.
Consider why your property is empty—and make a plan

Less than 35% of rental units is comprised of condo units; with 20,000 coming on stream annually.
Why would I hesitate renting? 
Loosen the Rules on Owner Occupied Properties with rental potential. [owner]  has a complete basement apartment that i have never rented - and NEVER WILL RENT - under the current legislation. I would not be able to restrict people smoking in my home or restrict what pets they could have. 
In fact, I could not restrict them from growing pot as long as they had a legal license to do so, despite the fact that by doing so, my home has suddenly become a "grow op" and my property value could (would) be greatly diminished and could make it impossible for me to get insurance or a mortgage for.
I believe that these ideas could be implemented and would serve to reduce demand and slowly raise supply, which is largely the real cause of the rapidly escalating price of housing in the GTA without causing a major crash.

What keeps you from renting?

Making 10% ROI the retail value of your rental without any tenant cashflow? 
Add your thoughts 

They bought Firm but haven't sold Now what?

Our buyer cannot sell their existing home, now what?

Your buyer cannot sell their existing home, now what?
By Mark Weisleder
I am now being consulted by buyers who have purchased homes without any conditions and cannot sell their existing homes. This could be as a result of the recent government housing policy announcements, increased number of listings, uncertain lending conditions and fewer bidding wars. As such, you need to understand all the issues and consequences to provide timely advice and do what is necessary to protect your clients and your deals. Here are 5 things to understand:
1.      What if the buyer cannot close?
If the buyer cannot close, they will likely forfeit their deposit and be subject to a lawsuit from the seller, for the difference in the sale price if the seller now sells the property for a lower price than the buyer agreed to pay.
2.      What are some options available to the buyer?
One option is to approach the seller and request an extension of their own purchase agreement, so that they have more time to sell their existing home without panicking. Another option is to sell or assign their agreement to a third party buyer, to have another buyer take over their agreement, pay them back their deposit, and close directly with the seller.
3.      Do you need the seller permission to assign this agreement to another buyer?
Under the terms of the OREA re-sale agreement, no permission is required. However, it is best to be up front and work with the seller for a number of reasons. The seller salesperson could have a list of buyers who have already seen the property who may be willing to take over this deal. In addition, any new buyer would want to see the home and since your client does not yet own it, they have no right to show the home. By obtaining the assistance of the seller, you can show the home and hopefully arrange for a new potential buyer to take over.
4.      Who will pay the real estate commission?
The real estate commission will still have to be paid on both transactions. Therefore, the original buyer will likely have to sell for more than they paid, just to break even. In my experience, this should be made clear when trying to arrange this with the original seller, that the buyer will not be making any profit on this re-sale, and is just looking for someone to take over their purchase obligation.
5.      Who pays land transfer tax?
Land Transfer tax will only be paid once in this scenario, by the new buyer who finally closes the transaction with the seller.
In my experience, it is best to deal with all these issues early in the process, by being up-front and honest with your seller and finding a solution that works for everyone. By working together, you can likely reduce the potential losses on all sides and in most cases, complete the transaction to the satisfaction of everyone.
At our firm, we not only close real estate deals all over Ontario, we also provide timely advice on how to deal with any closing issue you or your clients may face.If you have any questions about any closing issue, do not hesitate to contact me toll free at 1-888-876-5529 or at
Mark Weisleder is a Partner, author and speaker at the law firm Real Estate LLP. Contact him at or toll free at 1-888-876-5529

Monday, May 8, 2017

Home Buying Rules have changed

Home Capital is one of a number of lenders that provide a path to home ownership for people who would otherwise find it hard to borrow money for a house. But at the same time, the company has come under scrutiny for what some critics say are lax lending practices that have added fuel to real estate prices.

TRUMP imposes additional tariffs on Farmers and Softwood Lumber

United States will impose preliminary anti-subsidy duties averaging 20% on imports of Canadian softwood lumber, Commerce Secretary Wilbur Ross said on Monday, escalating a long-running trade dispute between the two neighbors.


Kathleen Wynne introduces Rent Controls further strangling the supply of rental units 

Ontario will impose a 15 per cent tax on residential real estate purchases by anyone who is not a citizen or permanent resident, if they are not living in the province. Called the "Non-Resident Speculation Tax," it is similar to the tax imposed in Metro Vancouver last year, but with a rebate for homebuyers who become resident within a limited time period after the purchase. 
The tax will apply to purchases in the Greater Golden Horseshoe, an expanse of land that includes the Greater Toronto and Hamilton Area, as well as the surrounding region stretching from Peterborough through Barrie, Waterloo and the Niagara Peninsula to the U.S. border.
the government will bring all tenants under the province's existing rent control system, ending the exemption that currently allows unlimited rent increases in units built after 1991. The change will mean annual rent increases for all tenants who stay in their rental housing will be limited to Ontario's inflation-based guideline (which this year is set at 1.5 per cent), unless the landlord gets approval from the Landlord and Tenant Board.
If you have been considering a consolidation to reduce interest costs or make home improvements; with a pool of ever more critical lenders this may be the time to Renew Your Mortgage.

Give Veronica Thompson a call to see if you qualify*


5 Things to know about the New Ontario 15% Non- Resident Speculation Tax


Although the Province has just announced the 15% Non-Resident Speculation tax, there are already more questions than answers. Here is what you need to know.
1.      The tax is for non-residents of Canada buying 1-6 residential units in the Golden Horseshoe area of Ontario.
This tax is in addition to any Land Transfer Tax payable. It applies only on 1-6 units of residential property purchased by a Non-resident of Canada in the Golden Horseshoe Region of Ontario, including Toronto, Niagara, Hamilton, Peterborough, Simcoe, Waterloo and York. It thus does NOT apply to any apartment building with at least 7 residential units, or any commercial property, industrial property or vacant land.
2.      What if you are a Canadian citizen but also a non-resident?
If you are a Canadian citizen, you do not pay the tax. Even if you are a non-resident, living in the US, Great Britain or Hong Kong, as long as you are a Canadian citizen, you will not pay this tax.
3.      What if there are 3 buyers buying a property that cost $500,000.00, each owning a third of the property, with 2 owners being Canadian citizens and one being a non-resident?
Here it becomes very problematic. Even if the non-resident will own only one third of the property, they must pay 15% on the entire purchase price of $500,000.00, or $75,000.00
4.      Lenders ask for parents to sometimes co-sign a mortgage for their children buying a home and take a small percentage of title, even 1%, to do so. What happens if the children are permanent residents of Canada but the parent is a non-resident?
This is a disaster, because under the new rules, even if the parent was holding the 1% title in trust for the children, they must pay 15% of the tax on the ENTIRE purchase price.  Mortgage brokers, lenders and realtors must be aware of this when qualifying potential buyers. In this regard, lenders will have to start giving serious consideration to accepting a guarantee instead from the non-resident parents, to avoid the non-resident parents having to take any interest in the property, triggering this tax. The issue, however, is that if the children do not qualify based on their income, the parent may have to go on title to satisfy the lender requirements. In addition, the guarantee will likely require the parents to obtain independent legal advice , and permit them to raise more defences if the bank tries to enforce it. As you can see, this is not easy, and this must be determined before anyone in this situation puts in an offer to buy a home.
5.      Rebates
Even if the tax is paid, rebates will be available if the non-resident becomes a resident of Canada or a Canadian citizen within 4 years of closing, or if the non-resident is a foreign student who has been enrolled as a full-time student at an approved Ontario institution for at least 2 years after closing, or the foreign national has worked at a full-time Ontario job for at least one year after closing.
At our firm, we close real estate deals all over Ontario including the Golden horseshoe area.  With our mobile signing service we can come to you at the time and location of your choice to sign your closing documentation.  
f you have any questions about the 15% non-resident speculation tax, do not hesitate to contact me toll free at 1-888-876-5529 or at

Mark Weisleder is a Partner, author and speaker at the law firm Real Estate LLP. Contact him at or toll free at 1-888-876-5529