Condo Corp applies the money you owe where it likes first

If you are behind and have other claim or insurance items outstanding with a Condo Corporation in Ontario;  Case law is clearly on their side.

Owner had set up a pre-authorized payment plan for her common expense payments. In addition to falling behind in the payment of several monthly common expense payments, the owner also was indebted to the Corporation for two chargebacks. One was for plumbing services relating to a leak which the Corporation claimed emanated from the owner’s unit, and the other related to damage caused by the owner to the common element garage door. A lien was then registered against the unit, a notice of sale was issued and the Corporation subsequently commenced an action for possession of the unit. By this time, the Corporation claimed that the total amount owing was in excess of $42,000. This included arrears of common expenses, the two chargebacks, legal costs relating to the lien and the sale proceedings, plus interest. 

This case  is reassuring for condominium corporations as it upheld the practice of most condominium corporations: allocating common expense payments to the oldest indebtedness, including chargebacks. 
http://www.condoreporter.com/allocation-of-common-expense-payments-by-condominium-corporations/


What's the moral of this story? 

Controlling the Condo Inventory

Growth of Condo Units sales has slowed appreciable but has not stopped.  The Rental Price Index has actually increased by 4.6%.  Toronto continues it's stride to become a world class city and destination for money, education and health care. 

Now that the Toronto TTC will receive Federal Funding, the provincial Government, that has had its own spending problem, will increase taxes of its own to raise money for subway construction.

Development charges are only permitted to fund 90 per cent of the capital cost of new transit services, Miller noted. But the charges can be used to fund 100 per cent of the cost of other municipal services, including roads.“Transit is not treated fairly,” says Ontario’ s environment commissioner Gord Miller.
Development charges are fees paid by developers in recognition of the fact that new housing and commercial development increases the strain on municipal services.
http://www.thestar.com/business/2013/09/24/development_charges_should_fund_transit_environment_commissioner.html

Toronto City Council is meeting to decide the fate of the additional taxes for the portion they need to Co -Fund the TTC Subway Dig.

The Provincial Development Charges Act requires municipalities to adopt a development charges bylaw every five years, if not sooner, in order to implement its development charges rates. The City's development charges bylaw will expire in early 2014. The review is being conducted in order to adjust the development charges rates to reflect updates to the City's growth related capital expenditure plans, including the recently adopted 2013-2022 Capital Budget & Plan.Executive Committee Meeting – September 24, 2013

• Staff Report - Development Charges Bylaw Review – Results of Additional Consultation (with Appendix 2) – September 13, 2013

• Appendix 1 - Proposed Development Charges Bylaw (Revised)

• Appendix 3 - 2013 Development Charges Background Study Addendum – September 13, 2013

• Appendix 4 - Letter from BILD

http://www.toronto.ca/finance/dev_charges_bylaw_review/2013.htm

So if you are condo shopping and want to secure your purchase you will CAP your Closing Costs confirm the final square footage, ensure all development charges are included in the contract so the Purchaser's are not shocked by the fees to close.

Lets get you started on your way to living debt free.

Coverage for Special Assessments

Why Should you be Scared?

Why should you be afraid of Special Assessments? You can have coverage.

You can indeed get coverage for Special Assessments in a Condominium
1) You are covered; If through the Title Insurance it was OMITTED from the Status Certificate 
2) You are covered; Through your Home Insurance Coverage 

 II.  SPECIAL ASSESSMENT INSURANCEA unit owner can also obtain insurance coverage specifically for special assessments. This coverage will benefit a unit owner in circumstances where a condominium corporation suffers an insured loss, the insurance proceeds are inadequate to cover the costs, and the corporation levies a special assessment for the difference. This would only occur in very unusual circumstances.
A real life example involves a condominium corporation that incurred environmental clean-up costs because of a heating oil leak into the common elements. The town home units in this condominium had oil tanks that were buried in the common elements, which serviced each individual unit’s furnace. Pipes ran through the concrete basement floors of the units from the heaters to the oil tanks. As a result of a pipe break, oil seeped into the ground and the resulting environmental clean-up cost was over $300,000.
- See more at: http://www.condoreporter.com/special-assessments-insure-your-risk/#sthash.AJsAjsce.dpuf

If you have not requested this coverage from your Independant Insurance Broker  I suggest you pick up the phone immediately and call someone who knows.

 

Coverage Chart – Condominium

Condominium Protection	Comprehensive
.
Insured Perils	All Risks
Unit Improvements and Betterments Unit Additional Protection Common Elements Loss Assessment	$500,000 Single Limit Limit is per occurrence for any one or combination of these coverages   $1 million condominium protection available
Building Fixtures and Fittings	10% of single limit

. 

 

 

Will Chan, B.A., FCIP, CRM   Branch Manager (Mississauga)  Pacific Insurance Broker Inc. 

(P) 905-565-5565 x 118  (F) 905-565-5562  (C) 416-844-7660 www.pacins.ca

Contact Will at William Chan <wchan@pacins.ca>

If you are looking for professional representation in the Toronto Condo Market call David 

Pylyp    647.218.2414

Home Verified Report - For Sale after damage

Photo Cred Tom Ryaboi

We have had two major floods in Toronto in the last few years. Storm Damage has been swift.   

They sweep out the water.   The broadloom has dried and dehumidified for weeks / months.  Now, that house is up for sale.     How will you find out what happened in the past.    I do.

Home Verified Reports are available to real estate agents through Geo Warehouse. This provides a documented 5 year claims history of that property's activity including if its been a GROW HOUSE.

   

HomeVerified Brochure by David Pylyp

The Home Verified Report allows you access to the exclusive database for property insurance claims.  Any claim by any insurer in Canada is recorded here incl; fire, flood, sewer back up, hail etc., going back a five year period.  Grow OPS Records are also included.

This  means that our team is able to provide you more details about the home you are considering as a resale home purchase and give you clarity and confidence to move forward.

Is this the type of information you need?

Lets get started buying your next home.

Stan Gelman - Hiring Real Estate Lawyer Mississauga

At what point during your real estate purchase you should consult a lawyer to clearly understand what you are committing to?

The Lawyer handling your real estate purchase carries out the instructions that are agreed upon in the contract.  The time to make changes and corrections is before the document is Firm and Binding.

Your contract should include a condition for Financing for a specific period of time, if you are obtaining Financing. It should also include a Clause for a Home inspection  by a Qualified and Licensed Home Inspector. Additional Visits into the subject property for trades, people to quote for repairs, renovation and measurements require an additional clause.  Be sure to include that the SELLERS will give permission for trades to take pictures and measurements. Visits are meant to show your family what you purchased or re-measure for draperies.

This is a good time to include the Home Owners Insurance Broker and a Search of the Insurance Claim history.  Have there been any previous flood or fire damage claims? Does the house have old wiring or an oil tank?  Call for details.

It's most important today, to make sure that all your closing costs are capped from the builder/ developer to be a specific amount should municipalities change their lot Levy's; while you are dealing with the Period of Rescission. (cooling off period)

Once an Offer to Finance has been received; Commitment Letter, it will often detail the LENDERS requirements.  Review this carefully with your lawyer and Mortgage Broker that you can accommodate all the required terms. 

The contract should clearly state IF there is additional HST applicable above the purchase price. 

Title Insurance is often a mandatory request that is purchased at the time of closing.
You will also pay Land Transfer Tax on the amount of the Purchase Price. 

Searches need to be conducted for any outstanding work orders from the City PLUS any judgements or liens against the property. (that the previous owners may have) The utilities and taxes need to be verified. You may be eligible for Tax Rebates as First Time Home Buyers. Land Transfer Tax calculator.

Your real estate lawyer works in your best interests to secure, probably the most expensive purchase families make.  During the time you are at the lawyers office,  give some thought to how you hold title (who's name the house be registered) whether it is Joint Tenancy or as Tenants in Common. This is the time to discuss survivorship, your will and testament.   
  
You will receive a Statement of Adjustments (who pays for what) prior to closing, preparing you for the amount of funds to bring to the closing inclusive of fees, taxes and net of your deposit. You will need to bring Photo ID and a credit card for Identification.

Here at Stan Gelman QC wiselawyer.ca use trusted and knowledgeable real estate lawyers and Law clerks. For more information, or a detailed quote please contact me at 905.270.5110.

Stan Gelman QC

Rent Controls will impact your Toronto Investments

A lack of affordable housing has been problematic in Toronto for decades. Metro Housing is in decay and has a huge backlog of repairs in addition to a long waiting list of applicants.   Rent geared to income housing is a small portion of the rental pool and in the last 20 years individual investors have purchased units for rental purposes and placed them in the secondary markets.

The Federal Government has introduced the Affordable Housing Act with Bill 140 passed in January or 2012 but municipalities have yet to embrace available 140K per unit in construction or remodelling assistance. 

The LTAHS provides recognition of the important role played by municipal Service Managers in long-term planning of the housing and homelessness service systems in Ontario. The Strategy also proposes a new approach for funding of housing and homelessness services that is intended to reduce administrative complexities and create greater local flexibility in identifying priorities and innovative solutions. In some areas, the new Housing Services Act is less prescriptive and gives Service Managers greater flexibility than the previous SHRA.
http://www.toronto.ca/legdocs/mmis/2011/cd/bgrd/backgroundfile-39040.pdf

It's not that a landlord has a tough time finding tenants;  The Residential Tenancies Act provides free legal services to Tenants in addition access to Duty Counsel at Hearings.  The Landlord must now be represented by a licensed Paralegal or Lawyer, unless they are experienced in the process.

The Human Rights Tribunal has decided that Credit Bureau's and Beacon Scores can not be used to determine the applicants ( tenants ) worthiness for an apartment or rental unit. (I would like to try that at my Bank with a Mortgage Application)  http://www.ohrc.on.ca/en/about-commission

But the governing Liberals are unlikely to see the rent control question the same way. Ontario’s Minister of Municipal Affairs and Housing Linda Jeffrey said this in a statement at the end of April:
The post-1991 rent exemption was originally introduced – and has been maintained over time – as an incentive for private landlords to build new rental accommodation. This incentive not only helps to renew the rental housing stock but also creates jobs in the construction sector. As such, any changes to this incentive could have an adverse effect on the rental housing sector, the economy and job creation.The NDP are hoping for a change of heart, especially as the provincial opposition have the Liberals survival — with a crucial budget vote yet to come — in their hands. They’re also arguing that the construction boom intended by the rent control changes haven’t been successful.
Forster notes that most of the new construction have been condos, sold to investors and then rented out second-hand, and not rental buildings.
“This misguided rule has not accomplished what it was meant to, and very little new rental housing has been built,” said Forster. “For tenants living in these newer buildings, it has been 20 years of uncertainty and unfairness.”http://o.canada.com/2013/06/04/ontario-ndp-wants-to-close-rent-control-loophole-open-since-1991/

Backgrounder - Rent Increase Loophole by William Wolfe-Wylie

Governments control increases to HST/GST that have increased maintenance fees; The Ontario Government controls the Hydro Billing Rates (because they need approval)   Cities and Municipalites control Tax rates, water and sewage pick up fees billed directly to Condo Buildings.  NONE can be lawfully passed to a tenant in a Rent controlled building.

Vacancy Factors in Toronto are current near 1%.

If there is no available social housing, and Independent Condominium Investors have stepped up to invest in their properties and the Government then CAPS the rental increases [while clearly charging more for different services] there will be a sharpened increase in the number of TENANTS looking for units as landlords EXIT the rental pool as their profit margin is impacted.

If the NDP are successful in capping the Rent will you keep your rental unit or sell?

I personally think there are too many PLAYERS  tinkering with the real estate market; from Double Land Transfer taxes in Toronto to increasing Lot Levies, Shortened Amortization Periods, multiple providers of tenant counselling services and well meaning but hazzardous legislation setting profits and ROI.

When did it become embarrassing to make money? What's your opinion?

Keeping It?  or Selling it?  Call me!

https://plus.google.com/109283965469179719942

Humber Bay Shore Condos Provide strong ROI

For those who are concerned about a "bubble" there needs there needs to be an excess of inventory that causes Toronto condominium to go vacant ( without a tenant ). There seems to be a continuing population growth in Toronto, Ontario that IMHO is summed up as safe have and educational / vocational opportunity.

This is borne out by many years of competitive markets not only for condominium purchasers but also renters.  New buildings  ( mini communities IE Beyond the Sea, Windermere by the Lake or Eau de Soliel ) are attracting buyers worldwide. Stable and Low Mortgage Rates are just feeding the buying.

The rental market in Toronto condominiums is heating up, with increasing numbers of units being leased rather than sold and rents continuing to rise in the first quarter of 2013, an analysis by the market research company Urbanation suggests.
There were 31 per cent more condo units leased in the first quarter than a year ago, Urbanation found, and rents were up 4.4 per cent, a gentler jump from the 5.9 per cent increase that occurred between the first quarters of 2011 and 2012 but still a significant rise, said Pauline Lierman, Urbanation's director of market research.
The average rent was $1,856, or $2.33 per square foot, in the first quarter compared to $2.11 in Q1 2011.
That jump in rent of more than 10 per cent in two years is mainly a product of demand, with the most desirable units in downtown locations close to transit lines and amenities, Lierman said.
"The vacancy rate is barely over one per cent for rental condominiums," Lierman said. "The market has remained tight." http://www.huffingtonpost.ca/2013/05/14/toronto-condo-rents-soar_n_3274279.html?utm_hp_ref=canada-business

In my own experience I have observed that condos are renting for half their purchase price divided by 100 to calculate monthly cash flow. For example at $400,000 for a well appointed two bedroom, two full bath unit, it is not uncommon to seek rents at $2,000 to $2,200 depending on building amenities. [ 400k divided by 50% then divided by 100 results in a rental of $2,000 per month ]

With average downpayments of 35 - 40% Investors can calculate a reasonable ROI   compared to keeping money in the bank or a GIC.

With restricted credit policies and aging buyer demographics larger homes eventually will fall out of favour by cost and size.  Then add in a vacancy rate near 1%,  Condo investors are looking at the upside of holding their investment long term and that is what real estate is all about. 

Would you like to invest in a few condos?   Call me.