Shared Equity Mortgage

Government of Canada offers Home-ownership Incentives


The First-Time Home Buyer Incentive launches September 2, 2019*.

* The program will be ready to receive Incentive applications on September 2, 2019 (barring any unforeseen circumstances). The first closing will take effect on November 1, 2019.

There are a few qualifiers to apply for this incentive:

• you need to have the minimum down payment to be eligible
• your maximum qualifying income is no more than $120,000
• your total borrowing is limited to 4 times the qualifying income

If you meet these criteria, you can then apply for a 5% or 10% shared equity mortgage with the Government of Canada. A shared equity mortgage is where the government shares in the upside and downside of the property value.

How does it work?
The Incentive enables first-time homebuyers to reduce their monthly mortgage payment without increasing their down payment. The Incentive is not interest bearing and does not require ongoing repayments.
Through the First-Time Home Buyer Incentive, the Government of Canada will offer:
• 5% for a first-time buyer’s purchase of a re-sale home
• 5% or 10% for a first-time buyer’s purchase of a new construction

How do I know how much I have to pay back?
You can repay the Incentive at any time in full without a pre-payment penalty. You have to repay the Incentive after 25 years or if the property is sold, whichever happens first. The repayment of the Incentive is based on the property’s fair market value.

• You receive a 5% incentive of the home’s purchase price of $200,000, or $10,000.
• If your home value increases to $300,000 your payback would be 5% of the current value or $15,000.
• You receive a 10% incentive of the home’s purchase price of $200,000, or $20,000 and your home value decreases to $150,000, your repayment value will be 10% of the current value or $15,000.

NOTE: If your property value goes down, you are still responsible for repaying the shared equity mortgage based on the current home value at time of repayment.

This has so many reasons to avoid the whole program. Let's talk about it  You will be glad we did

You are entitled to every condo document except priviledged

Can you ask for Condo Documents?

Condo Authority Tribunal-Tips

The 2017 amendments to the Condominium Act, 1998 (the “Act”) created the Condominium Authority Tribunal (“CAT”), an online tribunal that helps settle and decide condominium-related disputes in Ontario. Since its inception CAT has exclusively handled record related disputes between owners and condo corporations. It is expected that CAT will handle other owner-condo related disputes sometime in the future.

Our office had the pleasure of representing a few of our condo clients in CAT proceedings. So we thought we’d share some tips and “tricks” for managers and boards to avoid and handle record-related CAT disputes.

TIP 1: Don’t fur-get to respond!. Do not ignore a records request, even if the forms aren’t correctly completed. A corporation has 30 days to respond to a records request using the standardized board response form, outline the estimated fees for preparing the records (if applicable), and indicate any records that the Corporation will not disclose. Responding to a records request on the prescribed form and within the prescribed timeline may entirely avoid a CAT proceeding!

TIP 2: Purr-haps production? The 2017 amendments to the Act enhanced the “open-book” principle for corporation’s records. What does this mean for corporations? An owner is likely (not always) entitled to most records of the Corporation unless they are exempt from production pursuant to section 55(4) of the Act or for instance, solicitor-client privilege. Of course every case is different and there may be other instances where records could be reasonably withheld from an owner. When in doubt, consult your legal counsel.

TIP 3: Fur-ward to CAT: If an owner submits a dispute to CAT, the corporation will receive a “Notice of Case”. Once you receive the notice, the corporation must respond by joining the case on the CAT’s online system within seven days. If you fail to join the case, CAT may make an order without the corporation’s input or participation, which as evidenced in numerous CAT decisions, can lead to costs implications against the corporation, upwards of $5000. Moral of the story, join the case!

TIP 4: The CAT’s meow: The CAT process has three stages: negotiation, mediation and adjudication. In the negotiation phase, users will work collaboratively to try to resolve the issues in dispute, including providing settlement offers and exchanging messages. In the mediation stage, a CAT member is assigned as mediator to assist in clarifying the issues in dispute, help users understand their rights and responsibilities and suggest settlements to the parties. If the parties are unable to reach a settlement, the owner has an opportunity to move the matter onto the third stage, adjudication. At the adjudication phase, a CAT member is assigned to consider and render a decision based on all the evidence before it. Just like any type of litigation, settling in the early stages of the CAT process will help avoid corporations incurring avoidable costs.

TIP 5: Meta-fur-kitty speaking: The CAT Rules of Practice provide that every user or representative must check the CAT online system and their emails for communication related to their case at least once every business day, or as often as directed by CAT. The CAT member assigned to your case will also dictate deadlines for the submission of items in the adjudication phase. Failure to meet these deadlines can lead to costs implications against the corporation. Whoever is representing the corporation should keep a close eye on their emails and frequently access CAT for new updates.

http://www.lashcondolaw.com/condo-authority-tribunal-tips

HST on Condo Purchase 2019

Obtain Clearance Certificate

The recent court decision has profound chilling effects on the entire real estate and legal community;

REALTORS® are obligated in Ontario to complete a Fintrac Report on your purchase or sale (rental)  This consists of two valid pieces of ID used to IDENTIFY the transaction participant.

No where do I have access to verify if the seller of a property is a Resident or Non Resident for the purposes of Revenue Canada.

THE STORY
This is the case of Kau v. the Queen (2018 TCC 156). In June, 2011, Mr. Kau purchased a condo in Toronto from Mr. Y for $368,000. Mr. Y might have been a non-resident for Canadian tax purposes (he had a California address), although Mr. Y himself said that he was “not a non-resident.”
Why does this matter? Well, Section 116 of our tax law will require a purchaser of Canadian real estate to withhold 25 per cent of the purchase price and send it to the taxman if buying the property from a non-resident person. This is meant to ensure that non-residents who own and then sell Canadian real estate pay their share of taxes on any capital gains.
Section 116 requires the buyer to make a “reasonable inquiry” and have “no reason to believe that the seller is a non-resident of Canada.” Without this reasonable inquiry and belief about the seller, the buyer is supposed to withhold 25 per cent of the purchase price and send it to the taxman.
In our story, Mr. Kau didn’t withhold 25 per cent when paying Mr. Y. You see, Mr. Kau’s lawyer did ask about Mr. Y’s residency status. The response received was a signed affidavit that read “I am not a non-resident of Canada within the meaning of Section 116 of the Income Tax Act (Canada) and nor will I be a non-resident of Canada at the time of closing.”
This “declaration” by the seller wasn’t good enough for the Tax Court judge, because it wasn’t a “solemn declaration” (which carries the weight of an oath). He concluded that Mr. Kau did not undertake “reasonable inquiry” and should have had reason to believe that Mr. Y was a non-resident.
The result? Mr. Kau lost his case, and must now fork over $92,000 (25 per cent of $368,000) to the CRA, representing the withholding tax that should have been deducted from the purchase price paid to Mr. Y.
THE NONSENSE
So, the onus is now on the buyer of real estate to not only collect taxes on behalf of the CRA when a non-resident is selling a property, but to also make a judgment on when to investigate further the tax residency of the seller – as though a layperson is qualified to know when and how to make that inquiry.    https://www.theglobeandmail.com/investing/personal-finance/taxes/article-ensure-youre-in-the-clear-tax-court-decision-serves-as-warning-to/

So, in addition to collecting your fintrac data  I am now required / should to protect my buyer make enquiries about Residency Provisions of the Home / Condo Sellers.  This form is called the Individual Identification Information Record.   See for yourself 

Asking for your Drivers License with your home address is not sufficient.   I followed this story 3 if not 4 years ago with this enquiry with Stan Gelman  https://youtu.be/VP4wlqELB5g

DID you agree to receive Notices via Electronic Transmission

We all agree E Mail is convenient

But sometimes a written letter; weighty in its importance will make you observe and deal with the contents.

If you agree to receive notice by email the importance may be missed or the JUNK folder filled.

RE:          New Lien Instruction Form  We attach here our new Notice of Lien/Lien Instruction Form. As you know, there have been some recent changes to the Condominium Act, 1998. One particular change which may affect the way lien notices are communicated to owners is the section governing Service on an Owner, Section 47(4). We will require you to complete the "Consent to Electronic Delivery" section of the instruction form, in the following cases:

• where a unit owner has indicated, in writing, that they agree to receive service electronically; and/or

• where the corporation has, on record, a duly completed "Agreement to Electronic Delivery".  (Must comply with Section 47(4), 47(6) of the Condominium Act, 1998, and 12.7 of O. Reg. 48/01.)

... office will send all notices by both mail and email, where an email address is provided.

 It is more convenient, but have you ever missed something important?  

What do you think? 

Court refuses to Amend Declaration of Condo Corporation

Do you have a unit at Toronto Standard Condo Corp 1556 Also Known As Skymark Center at Avondale - West Structure. Toronto Standard Condominium Corporation #1556. Address 78 Harrison Garden Boulevard?

Do you have a unit at Toronto Standard Condo Corporation 1600 Also known as  SKYMARK AT AVONDALE II, 80 HARRISON GARDEN BLVD, Toronto, Ontario?

Should you have known about this before your purchase? 

In a recent case, (TSCC No. 1556 and No. 1600 v. Owners of TSCC No. 1556, et al), the Ontario Superior Court of Justice refused to grant a court order to amend the declarations of two corporations to eliminate provisions in their declarations which specifically permitted transient, short-term rentals in the condominiums.

The two corporations were developed by the same builder and contained identical provisions in their declarations dealing with short-term rentals. The declarations specifically stated that transient short-term rentals were permitted in accordance with the applicable zoning by-laws. In addition, there were also numerous provisions in the declarations that any restrictions in the declarations were not to be construed to prohibit or restrict short-term rentals.

The condominium corporations took the position that the short-term rental provisions:

§ were inconsistent with the Condominium Act, 1998 (the “Act”) because they impermissibly granted rights relating to occupancy and use (when the Act only allows declarations to contain conditions or restrictions with respect to occupancy and use), and because they interfered with the ability of the board of directors to make rules;

§ were inconsistent with the City zoning by-laws; and

§ were inconsistent with a restrictive covenant registered against the condominium properties which prohibited the construction of commercial space.

All three of these arguments failed on the following basis:

§ The declarations did not grant any rights as the right to lease property is a right of ownership. The declarations merely confirmed that any provisions in the declarations which restricted uses, did not restrict the right to lease, and thus there was no inconsistency with the Act.

§ As section 58(2) of the Act specifically states that rules must be consistent with the declaration, the condominium boards clearly could not make any rules prohibiting or restricting short-term rentals, as this would be inconsistent with the declarations.

§ The wording in the declarations specifically stated that short-term rentals must be in compliance with the applicable City zoning by-laws in effect from time to time.

§ While short-term rentals of residential units may be a commercial use, this was not contrary to the restrictive covenant, as there was no construction of commercial space in the condominiums and the restrictive covenant did not prohibit leasing residential units for a commercial purpose.

§ The disclosure documents delivered to purchasers when they entered into their agreements of purchase and sale specifically stated that short-term rentals were permitted and some purchasers relied on the ability to lease their unit on a short-term basis when making their purchase decision.

As the court application failed, the only avenue to amend the declarations would be to obtain the written consent of the owners of 80% of the units in accordance with section 107 of the Act. Eighty per cent consent is a high threshold and often difficult to obtain. In this case, as the disclosure documents and the declarations clearly stated that there were no restrictions on the leasing of units, many of the owners may have relied on this when making their purchase decision, and thus would not consent to amending the declarations to prohibit or restrict short-term rentals. http://www.lashcondolaw.com/court-refuses-to-amend-condo-declaration-to-ban-short-term-rentals/ 



So these BUYERS who acted in good faith to purchase a suite for occupancy or investment;

a) Did they take the condo status documents to a lawyer to have it things explained?
     ....... 80 % do not  assuming that all condo documents are the same
b) Are you content to remain in your purchase?
c) Has your investment been soured by this experience?

Add your comments below 

A Guide to the New Condominium Act Forms

Nov 1,  2017

As of yesterday, many changes to the Condominium Act came into effect that affect the day-to-day responsibilities of condo corporations.

Some of the changes require corporations to use Ministry forms where they weren’t previously required.

The Ministry released the new forms corporations will have to use for: proxies, to provide notice of meeting, and the three types of information certificates, among others. Here is a list of the new forms:

Information Certificates

1. Periodic Information Certificate

This “mini status certificate” provides owners with updates on finances, insurance, reserve fund, board, and other matters throughout the year.
Tip: This must be sent out twice per year – within 60 days after the last day of the first and third fiscal quarter.

2. Information Certificate Update

This certificate is triggered on certain events, such as a change in the directors, or change of the corporation’s address for service.
Tip: There are different time periods for sending out the Information Certificate Update depending on the type of triggering event. For example, if the board loses quorum, this must be sent out within 5 days of losing quorum, whereas a corporation has 30 days to send out the notice for a mere change in the number of directors.

3. New Owner Information Certificate

This notice contains the most recent Periodic Information Certificate and Information Certificate Update.

4. Notice of Online Posting of Information Certificate

A corporation must send this notice to owners if it decides to post any of the information certificates online (such as through property management’s web portal)

Proxies

1. Proxy Form

This form must be used by owners or mortgagees voting by proxy at a meeting of owners.
Tip: Proxy forms can be used at an adjournment of a meeting of owners. If, for example, there weren’t sufficient owners present at an AGM to pass a by-law, proxies submitted for the purpose of passing a by-law at that AGM can be used at a subsequent meeting of owners.

Notices

1. Preliminary Notice of Meeting of Owners

This notice is meant to give owners an advance notice of the purpose of the meeting of owners.
Tip: This must be sent out at least 35 days before the meeting date.

2. Notice of Meeting of Owners

This form is required for sending owners notice of an upcoming meeting of owners.
Tip: This must be sent out 15-20 days before the meeting date.

Record Requests

1. Request for Records

This form must be used when an owner, mortgagee or purchaser requests records.

2. Board’s Response to Request for Records

This form must be used by the board of directors when responding to a record request from an owner, mortgagee or purchaser.
Tip: The board must respond to the request within 30 days.

3. Waiver by Requester of Records

This is an agreement between the requester and the corporation that allows the requester to waive certain rights with respect to the corporation’s response to the record request.

Other Forms for Owners

1. Notice of Meeting of Owners under s.34(5) of the                                   Condominium Act

This must be used by owners who wish to call a meeting to fill vacancies on the board if the board loses quorum and the remaining directors do not call within 15 days of losing quorum, or if there are no directors in office.

2. Submission to Include Material in the Notice of Meeting of Owners

This form must be used by owners if they wish to submit material to the board to be included in the upcoming Notice of Meeting of Owners
Tip: Although owners can request material to be included in the notice of meeting, the board is not obligated to include this material unless the submission is made on behalf of owners of 15% of the units (or more), and the submission would not add anything that is contrary to the Condominium Act or the regulations.

C/O Lash Condo Law