Telemarketing do-not-call list to be in operation Sept. 30: CRTC

OTTAWA — Canadians will be able to register on a do-not-call list to screen out pesky telemarketers starting Sept. 30.

The date announced Wednesday by the Canadian Radio-television and Telecommunications Commission is 2 1/2 years after the commission started its formal process to set up the registry, and five years after do-not-call legislation took effect in the United States.

The CRTC's arrangement will enable Canadians who do not want to be contacted by telemarketers to register their phone numbers. There will be no charge for this.
Telemarketer calls will not cease immediately, the federal regulator cautioned, as callers will have 31 days to update their phone lists.

And unsolicited calls will continue to be permitted from charities, political parties, pollsters, newspapers seeking subscriptions and companies with which customers have existing business relationships.

If consumers continue to receive non-exempt calls 31 days after they have registered, they will be able to file complaints with the national do-not-call list operator.

Bell Canada (TSX:BCE) was named last year as operator of the registry, under a five-year contract.

To put their numbers on the list, Canadians will be able to log on to http://www.lnnte-dncl.gc.ca/ as of Sept. 30, or call 1-866-580-DNCL (3625).

For the hearing impaired, the toll-free number will be 1-888-DNCL-TTY (1-888-362-5889).

Vendors take risk signing SPIS form

A recent leaky basement court case from the Ontario Superior Court in Thunder Bay is the latest in what might be called a flood of litigation resulting from the use of the Seller Property Information Statement (SPIS) by Ontario real estate agents. Rhonda Usenik is a young public health nurse who wanted to buy a low maintenance house in Thunder Bay, back in May 2004. When she found one she liked, she read the SPIS form that the vendors had prepared at the request of their real estate agent. In answer to the question, "Is the property subject to flooding," the sellers, Michael and Donna Sidorowicz, answered "no." They also answered no to the question, "Are you aware of any moisture and/or water problems?"Their answers to those questions resulted in almost three years of costly litigation when Usenik sued them for deceit or, alternatively, negligent misrepresentation.Pre-sale inspections of the house by the purchaser, her own agent, her boyfriend and her home inspector, failed to disclose any water problems. But shortly after she took possession, Usenik became aware of water leaking into the basement. The drywall began to blister, and mould was discovered growing behind the baseboard. At trial, the evidence revealed that the vendors told their real estate agent that there had been some water in the basement a number of years previously, but that they had fixed the problem. They said that the agent advised them that since the problem had been fixed, there was no need to mention it. It turns out that this was the wrong answer. Usenik obtained quotes totalling $47,040 for repairs and sued for these costs, as well as other damages for loss of rental income from the basement tenant, and loss in value of the house due to the leaky basement. The lawsuit was not based on a breach of the agreement of purchase and sale. Instead, it was framed as a case of damages resulting from the sellers' misrepresentation or deceit. The trial took place before Justice John Wright in Thunder Bay last year, and the judgment was released in February 2008. After hearing evidence for six days, the judge decided that either or both of the disputed SPIS statements were false. The vendors and, apparently, their agent, interpreted the SPIS question to mean "Is the property NOW subject to flooding?" But the truth of the matter, the judge reasoned, was the while it may not "now" be subject to flooding, it was subject to flooding ? in other words, "it was liable or exposed or prone to flooding."Wright also held that the statements were made negligently, that the purchaser relied on the misrepresentation, and that but for the misrepresentation, the purchaser would not have bought the house. Damages of $33,874.33, plus GST on part of that amount, were assessed against the vendors. Included in the award was the sum of $2,000 for aggravation. In addition, the buyers were awarded about $20,000 in court costs against the sellers.For home sellers, the prime lesson to be learned from the case is never - ever - sign an SPIS form. The problem is that the form currently in use in Ontario is far too complex and misleading for lay people - and many real estate agents - to understand and complete properly. The sellers' agent in the case was added to the litigation as a third party defendant, and did not escape liability. Just before trial a settlement was reached in the third party action which saw the agent making a contribution to the sellers' damages. This case may well be the beginning of a - pardon the expression - flood of actions against agents across Ontario who will be sued, or disciplined professionally, for instructing their clients to sign this very dangerous form.

Bob Aaron is a Toronto real estate lawyer. He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818. Visit the column archives at http://aaron.ca/columns/toronto-star-index.htm for articles on this and other topics.

Mimico Waterfront Park opens

Political push on for phase two; Amos Waites Park revitalization also in the works
BY TAMARA SHEPHARD July 24, 2008

Mimico's new multi-million dollar public waterfront access and ecological and recreational improvement plan opens Monday, with political pressure mounting to move on phase two of the project.

Record-breaking rainfall this week frustrated work crews' efforts to complete construction of Mimico Waterfront Linear Park, a $10.6-million project with new stone beaches, a sand beach, a 150-metre boardwalk and public trails for pedestrians and cyclists.
Public celebrations, including a barbecue, take place Monday afternoon from 2 to 5 p.m. at Amos Waites Park.

"It's a really big celebration for us," said Nancy Gaffney, waterfront specialist with the Toronto and Region Conservation Authority, the agency that designed and built the project after lengthy public consultation.

"It's something the community really needed. We think it will be a big hit. We really want it to be a park where people love to go."

The park boardwalk was borne of residents' suggestions, as was the preservation of a sand beach at Amos Waites Park.

New aquatic habitat has been added to two sheltered embayments. Thousands of wetland plants are in, protected from Canada Geese and carp by snow fencing. Grass has yet to take hold on the lookout node.

Meanwhile, pressure is on to complete the entire 1.1-kilometre project stymied for years because 171 metres of shoreline remain in private hands. Fifteen other property owners signed over their once-exclusive waterfront access to the TRCA for $3 million.

The missing link means only the first phase - about 500 metres of shoreline from Norris Crescent Parkette to Superior Avenue Parkette - is now complete.

Mimico Waterfront Linear Park currently sits isolated from the Martin Goodman Trail and the Waterfront Trail to the east, which begins at Humber Bay Park West and extends into downtown Toronto.

At present, cyclists and others on the Martin Goodman Trail must detour at Marina Del Rey condominiums north from the lake into road traffic on Lake Shore Boulevard West.

"Phase two is the critical link to increase the bicycle path and the Discovery Walk," Jim Lord, past president of Humber Bay Shores Condominium Association said in a previous interview. "We feel very strongly that phase two has to proceed as quickly as possible to integrate the whole lakeside park system."

The association. with 6,000 members in 13 condominiums, is one of Toronto's largest ratepayer groups.

Phase two - extending the trail another half kilometre farther east from Superior Avenue Parkette to Humber Bay Park West - won't happen until TRCA acquires three properties from two owners.

Years ago, one property owner refused to sell, while the other hasn't responded to written correspondence, and is believed to live outside the country, Gaffney said.

"There's such tremendous pressure from all levels of government, and from local politicians (to move on phase two) that we need to have another crack at (acquiring the properties)," Gaffney said, calling the process 'complex'. "We're not going to let phase two go. We need to make that 400-metre connection" (to the Martin Goodman Trail to the east).

Last month, Waterfront Toronto's board heard rare deputations from Etobicoke-Lakeshore politicians Ward 6 Councillor Mark Grimes, MPP Laurel Broten and MP Michael Ignatieff who pushed for phase two to move forward.

Waterfront Toronto, formerly known as the Toronto Waterfront Revitalization Corporation, is the project's funder.

"They got the message loud and clear that this project is a priority for our community," Grimes said yesterday. "The trail is not just in downtown Toronto; it extends into Mississauga. It will be a key piece of the economic boost of Mimico-by-the-Lake and the Vision 2020 project. It's good momentum."

At the same time, city plans to enlarge and revitalize Amos Waites Park - where the new boardwalk is located - is currently underway.

This week, bulldozers began demolition of three city-acquired businesses immediately adjacent to the park to the east: Rex Restaurant, a former Russian restaurant and a travel agency.
The vision is to enlarge the park, bring it to the street, build a 'festival plaza' and eventually add new playground equipment, a splash pad, and a new pool, Grimes said.

Some $400,000 in community benefit funding from developers is already secured, Grimes said, and will be invested in a 'festival plaza' for public gatherings, and possibly music in the park.
Additional anticipated developer funds will be dedicated to other park improvements, such as play equipment, Grimes said.

Plans to enlarge and revitalize the park met with enthusiasm from David Pritchard, Mimico-by-the-Lake BIA chair. The BIA hosts its cramped, Christmas tree lighting at the foot of Amos Waites Park annually.

"It's certainly going to help revitalize the area, but to be a real catalyst, phase two needs to be completed," said Pritchard, who owns Birds and Beans Cafe.

"I think the investment in the park and the trail will really alert people to the opportunities there. There are still some vacant places that would be great to get a business going."
A second community consultation meeting on the redevelopment of Amos Waites Park will be held sometime in August or September, the date yet to be finalized.

Sizzlers and fizzlers

Jul 12, 2008 Catherine Farley Toronto Star

Toronto real estate has been on a roller coaster ride over the past 40 years, with soaring highs, gut-wrenching lows, strange twists and heart-stopping turns.

As an investment, you could always count on upscale areas like Rosedale, Forest Hill and the Bridle Path to produce good long-term returns. But if you put your money in the Beach or Riverdale in the last 20 years – or in more recent hot spots like South Riverdale and East York – growth has been spectacular. And, while new development has boosted prices in outlying regions such as Milton, King and north Pickering, other areas in north Toronto and parts of Markham are flatlining.
Surprisingly, 40 areas across the GTA have not even kept pace with inflation since house prices hit their 1989 peak.

Click here to download the PDF file with neighbourhood details

The three maps show how average house prices have evolved over the last 40, 20 and 10 years. The largest map – showing changes since 1999 – includes the outer regions, reflecting the increasing coverage of the Toronto Real Estate Board, which tracks resale housing sales.

This is a very well researched article and map. Worth the download and read. If you would like to receive a copy of the TREB MArket Watch on a monthly basis please subscribe here.

You bought a new home but decide not to close. Financial Truth and Consequences

There are Financial Consequences that you may not realize. I have set them out below:

You will lose your deposit plus being responsible for the vendor’s:

1. Legal Fees
2. Utility Fees
3. Mortgage Payments
4. Real Estate Commission

You will also be responsible for the difference of your purchase price and the subsequent selling of the property by the vendor if it’s less than your purchase price.

All of the above will be calculated from the time your purchase should have closed until your vendor is able to sell and close the sale of the property to another purchaser.

Furthermore, if your vendor needed the sale proceeds to purchase a new home then you will in addition also be liable financially for all the above to the person selling to your vendor.

No doubt you will be sued and involved in a lawsuit, which will cost you legal fees. You probably will lose the lawsuit and have a judgment against you. The judgment against you will affect your credit negatively. This may mean that it will difficult to get a mortgage in the future to buy a new home.

Do not believe that you can walk away from purchase with minimal financial consequences. You signed an Agreement of Purchase of Sale and you are bound by it and should honour it.


Stanley Gelman, Q.C.,Jur.Dr.

Stanley Gelman is a Mississauga real estate lawyer. He can be reached by email at sgelman.sglaw@rogers.com, phone 905 270 5110.

The Do's and Don'ts of Self Storage

Don’t wait until it’s too late to rent a storage unit. Reserve your unit at least two weeks in advance by calling us or stopping by one of our locations.
1. Don’t forget to wrap fragile items carefully and individually.
2. Don’t stack fragile items on top of each other. Instead place items like dishes and bowls on their sides and line them up.
3. Don’t pack heavy books in large boxes- they will be difficult to carry. Try smaller boxes.
4. Don’t let your items rust! Put a few drops of oil on tools and bicycles and store away from furniture.
5. Don’t store clothing in old boxes or bags. Use a wardrobe box to hang clothes in and store shoes at the bottom. Folded clothes can be stored in dressers.
6. Don’t forget to label each box for easy identification.
7. Don’t leave bulky items assembled. Disassemble lawn mowers and snow blowers and remember to empty the fuel.
8. Don’t close refrigerator doors. Keep a box of baking soda inside to keep the fridge fresh.
9. Don’t forget to use the space inside appliances for maximum storage.
10. Don’t forget to use the height of the unit to store items.
11. Don’t store mattresses flat on the floor. Instead lean them against the end wall. The same can be done with most couches.
12. Don’t leave furniture out in the open. Cover with an old sheet to prevent dust buildup.
13. Don’t put items you use frequently in a place you can’t get to easily. Store most used items at the front.
14. Don’t forget to leave an aisle down the middle of your items so you can get to everything with ease, and leave at least two inches of space from the walls to allow air to circulate.
15. Don’t forget that shelving should be placed close to the walls. Boxes and small items should be stored on the shelves.
16. Don’t leave breakable mirrors and pictures unprotected. Wrap with protective pads or use a special mirror carton and store them on end.
17. Don’t forget to stack lighter boxes on top of bigger, heavier ones.
18. Do give us a call to reserve the unit you require.

Graciously provided by Storwell Self Storage- Locations in Toronto, Etobicoke, Scarborough, Markham, and Mississauga.

Landlords, if Only by Accident

THE main obstacle to Gavin Vallance’s plans for buying an apartment in New York City seems to be a three-bedroom colonial about 17 miles away, in West Orange, N.J. Barbara P. Fernandez for The New York Times.

Mr. Vallance, an information technology specialist at a financial services firm, bought the house about six years ago for $270,000 but has since decided he prefers the city to the suburbs. Selling it now isn’t the best option. “Maybe I could get $340,000, but four years ago I would have gotten $400,000,” he said.

And so he waits, leasing a one-bedroom in Midtown Manhattan while he rents out his house.

Dr. Lorena Siqueira, a pediatrician, is also dealing with unfortunate market timing. Three years ago, she bought as an investment a two-bedroom condominium on Brickell Key, a gated island in downtown Miami. She is concerned that the recently completed condo will not sell quickly for the price she wants — above the $1 million or so she paid at preconstruction prices. Stuck now with two homes that are near each other, she will rent out the new unit.
“I would rather take a loss on the rental and wait for the market to stabilize,” Dr. Siqueira said.
The housing market morass has created a new class of real estate investors: the accidental landlords. Some, like Mr. Vallance, have moved into new homes and can’t sell their old ones — at least for the prices they want — while others, like Dr. Siqueira, chose to invest in the changing market. Then there are those for whom renting has become a way to forestall impending foreclosure.
No one knows the exact number of unintentional landlords, but a survey a year ago by Completelandlord.com found that nearly one out of five landlords did not plan to rent out a property when he or she bought it.
For many of these people, though, the option of renting out a home is a godsend, enabling them to cover some or even all of their carrying costs while they regroup financially or wait out the market.
Some may prove so adept at being landlords that they choose to continue in that role. Of course, others may shrink at the mere thought of dealing with broken toilets, bounced rent checks or strangers living in what was once their home; they might be better off selling the property, or walking away from it, even if it means losses.
“The people who don’t succeed don’t have the ‘people skills,’ ” said Janet Portman, a real estate lawyer and co-author of several books, including “Every Landlord’s Legal Guide” (Nolo.com), “and they don’t know the difference between a Phillips screwdriver and a straight-edge screwdriver.”
More often than not, they also fail to treat the rental property as a business. “You have to segregate the income and expenses” from personal accounts, Ms. Portman said, and handle separately matters related to taxes, insurance and home maintenance.
So where does the neophyte landlord begin?
One of the first steps, experts say, is to become familiar with local landlord-tenant laws and laws pertaining to fair housing, or to consult an experienced real estate professional who is.
“People think they can do what they want with their property, but they are really constrained by some very complex rules,” Ms. Portman said.
(Landlords can check out www.hud.gov, the Web site for the Housing and Urban Development, to review rules and regulations, and thelpa.com, the Web site for the Landlord Protection Agency. Ms. Portman’s book also has state-by-state information.)
Landlords must exercise caution, too, when drawing up a lease or month-to-month rental agreement — the documents that spell out everyone’s rights and responsibilities. (Standard forms can be downloaded at Completelandlord.com, nolo.com, thelpa.com or myriad other places.)
One poorly worded clause could provide a dangerous loophole for a bad tenant who happens to be well versed in the law.
“I’ve had all kinds of tricks pulled on me by renters to try to avoid paying,” or eviction, said Alex Lazo, a real estate investor from Orange, Calif., who has had both good and bad experiences over the last few years. “It’s a lengthy process to get somebody out.”
For that reason alone, it is crucial to thoroughly vet tenants. “Call their references, ask for copies of tax returns, run a credit report,” said Danielle Babb, whose coming book, “The Accidental Landlord” (Alpha Books), devotes a section to tenant evaluation.
For $16.95, landlords can obtain a credit report from thelpa.com site, which includes a FICO score range and makes note of liens, collections or bankruptcy filings. Clearscreening.com also sells services.
Another option is to hire someone to do this work. Dr. Siqueira will hand over most of the rental duties to Daysi Morey, a listing agent for her new Miami condo building, the Asia. Mr. Vallance, meanwhile, found his tenants through Roberta Baldwin of Re/Max Village Square in Upper Montclair, N.J., the agent who sold him his house, but he is handling other chores.
Property managers not only find and screen tenants but also collect the rent and manage maintenance and repairs; some provide housekeeping services. Fees are around 6 to 10 percent of the monthly rent, experts say, though in some resort areas they can easily exceed 30 percent. (A real estate agent may charge 3 percent of one year’s rent to find tenants.)
But here again, landlords must be cautious. Managers “vary tremendously,” said Ms. Portman, who suggests asking other landlords for recommendations. Groups like the National Association of Residential Property Managers (narpm.org) can also help.
A good property manager will have a list of reliable contractors to fix the plumbing or repair the clothes dryer, although one way to minimize these problems is to ensure that the property is in good shape before it’s rented out. “Make sure the place is up to code — check local ordinances for requirements,” Ms. Portman said.
Because repairs will cut into profits, it’s important to keep an emergency reserve. “Even with the most minor repairs, you have to have a technician go out there — and there goes half the month’s rent,” said Mr. Lazo, the California landlord. “Sometimes it’s cheaper for the place to be vacant,” he said, adding that he derives most of his profits after the property, once appreciated, is sold.
All of these expenses — along with the mortgage, property taxes or homeowner association dues — should be kept in mind when calculating how much rent to charge. Will the home be furnished? If so, landlords can typically charge $200 to $500 more a month, according to Ms. Babb.
A real estate agent or property manager will know the going rates. Do-it-yourselfers can peruse places like Craigslist or rent-o-meter.com, a Web site that provides a spectrum of rents in a particular area.

Mr. Vallance charges $1,900 a month to rent his house; the tenants also pay for utilities and water. Still, the rent covers just 90 percent of his monthly expenses, and so he expects to write off any losses on his tax return, along with expenses associated with the property.

While tax deductions are an advantage of being a landlord, there are also drawbacks. Those who have not lived in the rented-out property in two of the last five years may have to pay a capital gains tax on any profit after the property is sold.

Landlords must also be cognizant of insurance. “Call your carrier and tell them what you’re doing,” Ms. Portman said, adding that homeowners’ policies might become null and void once a property is rented, unless changes are made. (Renters will need their own coverage for personal items.)

“You need to confirm that everything in your policy will kick in if the tenant starts a fire and burns down the place,” she said.


The lesson to be taken from this article is that often when you are considering a condo purchase; to the time it is constructed and registered may be 3 years from deposit to registration. Your life circumstances or even family unit may have changed in that time.

I recall a client who purchased a beautiful suite on Queens Quay ( Bathurst south of Front Street) that was a one bedroom plus den, with an incredible unobstructed view of the Toronto Islands and harbour. Prior to occupancy he was blessed with their second child. The thoughts of night life and living downtown became storage space for cribs and strollers. David Pylyp

Family feud sparked over ownership of cottages

A recent decision of the Ontario Superior Court of Justice provides a timely reminder that parents who want their cottages to remain in the family should consider a plan for orderly succession in ownership, and put those instructions in writing.
The court ruling, released in January, concerns Margaret Sheldrake, who owns two cottages in Bancroft, Ont. Although they were in bad condition, she wanted them to remain in the family. Back in 2000, she made an agreement with her son Douglas that he would move to the cottages and renovate them with her assistance. In return, he would receive title to both cottages on his mother's death or possibly earlier.
The arrangement would achieve his mother's objective to keep the cottages in the family. At the time, the cottages were worth about $300,000. Margaret told Douglas that the other siblings would be appropriately compensated in her will.
In the spring of 2001, mother and son confirmed the agreement orally and a few months later, put it in writing. Margaret told Douglas that the properties were his and she gave him the keys.
Douglas resigned his job in Toronto and moved into the cottages fulltime. The intention was that he would live in one and rent out the other when renovations were complete.
Over the next few years, Douglas arranged for and oversaw extensive repairs and improvements to both buildings. He did some of the work and contracted out the rest. During this period, Margaret provided most of the financial assistance, and from time to time, paid Douglas a stipend for his living expenses.
In the fall of 2003, the relationship between mother and son began to deteriorate. Margaret wanted to sell the cottages and compensate Douglas financially in her will. Margaret's other son, Donald, became increasingly involved in acting for his mother, and the relationship between the brothers became acrimonious.
In March 2004, Donald emailed Douglas to say that he had taken over control of his mother's assets with a power of attorney.
"It's all mine," he wrote, "I'm keeping everything, the rest of you can all die as far as I'm concerned."
By early 2006, Margaret had obtained a court order evicting Douglas from the cottages, and he moved out.
Eventually, Douglas sued his mother, asking the court to declare that he was the beneficial owner of the two cottages and that his mother held them in trust for him.
When the case came up for trial last year, Douglas was the only party to present evidence. Margaret did not testify and did not call any evidence on her behalf.
Justice A. deLotbinière Panet found Douglas to be a credible witness and accepted his evidence on all major issues.
The judge noted Margaret's failure to give evidence weighed heavily against her and amounted to an implied admission that her evidence would not support her position.
In the end, the court found there was an agreement between mother and son. Douglas' actions in moving into the cottages and repairing them supported his position there was an agreement to give him the cottages.
The judge ruled that Douglas was the beneficial owner of the cottages and that his mother was holding them in trust for him during her lifetime. Douglas was entitled to possession of the cottages and had to pay ongoing expenses of operation and maintenance except for property taxes, which were the responsibility of his mother.
The Sheldrake case illustrates how cottage ownership can stir up more emotion and sentiment than other types of real estate ownership. Cottagers who want their summer retreats to remain in family ownership through succeeding generations would be well advised to consult with their children and seek advice from tax and legal professionals.
Bob Aaron is a Toronto real estate lawyer whose column appears Saturdays. He can be reached at bob@aaron.ca. Visit his website at aaron.ca.

Reverse Mortgages

4 Reverse Mortgage scams and how to avoid them

Reverse mortgages are widely popular among seniors aged 62 and above as it provides them with a steady cash flow of tax free income in his retirement years. However, with the rising popularity of these loans, there has been a steady rise in reverse mortgage scams and frauds.

There are 4 types of reverse mortgage scams as given below:

Downplay loan counseling:Popular reverse mortgage products such as the HECM, Fannie Mae’s Home Keeper etc require borrowers to go through loan counseling with an experienced reverse mortgage counselor prior to taking out the loan. But there are predatory lenders who do not disclose how much seniors can borrow and thus offer them more than they can afford. And this may lead to payment problems as the borrower may have problems repaying the loan. Here’s where a counseling session can help the senior determine the amount he’s eligible for.
Charges for free loan information:The HUD does not recommend any service or company charging fee in order to provide reverse mortgage information. HUD offers free information on reverse mortgages through HUD approved counseling agencies. But there are scammers charging fees just to provide loan information to seniors.In order to avoid paying such fees, contact 1-800-569-4287 toll-free for the name and address details of a HUD approved reverse mortgage counseling agency in your area.
Document Forgery:The lender or the mortgage company may open an account for the loan proceeds and forge the borrower’s name in order to access the account. Also, there are lenders who may encourage borrowers to sign on unfinished documents thereby changing the loan terms and amount.The best way to avoid forgery is to keep away from signing blank papers or those in which corrections would be made later by the lender. Try to protect access to your checking and other accounts. Also, check your loan statements thoroughly so that later on you don’t come across any problem.

Posing as government representative:One of the most popular reverse mortgage programs is the HECM insured by the HUD. But the HUD does not offer reverse loan. The HECM is mainly offered by HUD approved lenders. However, certain salesmen are known to represent themselves as government representatives or volunteers for non-profit organizations thereby committing reverse mortgage frauds.

Reverse mortgages are loan products that can help seniors pull cash out of their equity, pay off unexpected medical bills, supplement social security income etc. Therefore, if you’d like to get the maximum benefit from the loan, it’s best to understand how a reverse mortgage works and avoid being a victim of scams associated with it.

Guest Contribution Jenny Jones Debt Consolidation

There are many TV adverts for CHIP (Canada Home Income Plan) If you are investigating this form of financing, I sincerely hope you involve a professional Financial Planner who will have access to products from Manulife Financial or Primerica Financial (Citigroup).

We welcome your calls.

What are Points on a Mortgage

Mortgage Points – Is it worth paying and are there tax benefits?
Whether you’re buying a home with mortgage or refinancing, paying mortgage points can help you get a lower rate and save in interest. And if the points are tax deductible, then you’ll save some more dollars as well. However, points may also constitute a part of the costs of making the loan.

What are mortgage points?
Mortgage points may be a kind of prepaid interest, or the costs of originating the loan. Each point is equal to 1% of the loan amount. There are 2 types of points as given below:

Origination Points: This is what the lenders charge as part of the costs of originating the loan. Depending upon the lender or mortgage company, the origination points are negotiable.

Discount Points: Such points are a kind of prepaid interest on your loan. The more points you pay, the lower will be the interest rate on your loan. Each discount point paid reduces your mortgage rate by 0.25% if it’s a fixed rate loan. For an adjustable rate loan, the rate will be reduced by 0.375%.

Is paying points worth it?

Whether you’ll pay mortgage points or more precisely discount points depends upon a number of factors as given below:

Length of your stay in the house: How long you’ll stay in the house determines your savings by paying points. The more the length of time that you live in the house, the more you will save through mortgage discount points. Use the mortgage calculator– “Calculate money saved by paying points” to find out how much you’ll save if you pay points.

Check your affordability: It’s for you to find out if you have enough cash to pay discount points upfront. After all, if you’re taking a purchase mortgage, you’ll have to pay the down payment also. And there are lenders who’ll charge prepayment penalty if you refinance your existing loan.

Are mortgage points tax-deductible?
Origination points are not tax-deductible. However discount points are deductible but you need to itemize your deductions whether you purchase a home or refinance.

For home purchase:
The points are deductible in the year you made the purchase. The criteria for deduction are:

The loan should be used to buy, build or improve your primary residence.
The points shouldn’t cover items (such as appraisal fees, title fees, property taxes etc) that are separately stated on the settlement sheet.
The points should be calculated as percentage of the principal loan amount.
What you paid at or before closing including the seller paid points should be at least as much as the points charged.

For refinance:

Mortgage points paid for a refinance are deducted over the life of the new loan. But if a part of the refinanced loan is used to improve your home and if you fulfill the criteria as given above for home purchase, then you can deduct that part of points in the year you paid them.

Apart from points paid during purchase and refinance, seller paid points are also deductible but only when the buyer extracts the amount from the cost of his residence.

No doubt, points are helpful in the sense that you can save a lot of interest and get tax benefits. But paying mortgage points makes sense only when you stay in the house for a longer period of time.

Guest Contribution Jenny Jones Debt Consolidation jenny@creditrepairfacts.com

Our system of financing in Canada is structured differently, however I have had many clients ask about paying points on mortgages and thought an explanation worth posting as we keep seeing references in the media.

T.O. home prices rise with gas costs

While some doomsayers warn of a real estate crash, a Royal LePage housing report released yesterday is far more optimistic. It points to a soft landing with house prices in Canada gaining another 3.5% this year, even though sales will be off by 11.5%. Only in hot-beds like Calgary and Edmonton will prices depreciate and come back down to earth.

In Toronto, high gas prices are actually giving the market a boost with "an influx of purchasers relocating to the city's core, placing properties near public transit at a premium," Royal LePage said.

Perhaps that explains an explosive 36.4% year-over-year hike in the value of waterfront condos in Toronto, with prices averaging $450,000 in the second quarter of this year.

Royal LePage predicts average Toronto home prices will rise by 3% to $388,500 by the end of this year, while sales slump by 13.8%.

"While the market is less frantic than last year -- the most active year on record by far, it's important to keep in mind that Toronto's market is performing well, and that 2008 will also end up being one of the strongest years we've seen," said Gino Romanese, Royal LePage senior vice-president.

Yesterday, the Toronto Real Estate Board's mid-month report again reported slumping sales, while home price gains slow. But while Royal LePage said high gas prices were bringing more buyers into the city, the TREB report showed the opposite.

Following a trend since Mayor David Miller introduced his municipal land transfer tax on Feb. 1, City of Toronto sales were down another 17% with 1,369 homes changing hands, while average prices gained 1% to $419,199.

Sales were also down in the 905 region, but by only 8%, with 2,128 sales. They were also up 7% from 1,987 sales a year ago. Average prices in the 905 were up 2% to $345,741.

When I read all these conflicting facts, sometimes it just makes my head spin. The only Values for real estate that can be accurately projected are historic. I routinely find questions on forums asking if its the right time to buy. Now I am seeing people trying to avoid closing on purchases often with dramatic results. Stay tuned for that tale of woes.

Your comments are always invited.

Province pulls plug on power station

Queen’s Park has categorically ruled out the old Lakeview Generating Station lands as a potential home for a new gas-fired power plant.The announcement was made today by Deputy Premier and Minister of Energy and Infrastructure George Smitherman at a press conference on a small hill overlooking the site.

Smitherman did not mince words.“Lakeview’s future in electricity generation is over,” he said to loud cheers from the gathering that included MPP for Mississauga South Charles Sousa, Mayor
Hazel McCallion, several City councillors, and Jim Tovey, president of the 800-member Lakeview Ratepayers’ Association.The LRA has fought against putting another power plant at the Lakeview site, which is still owned by Ontario Power Generation.

The Lakeview Generating Station was demolished just over a year ago after 43 years of producing electricity — and, critics say, polluting the community. It was closed as part of the government’s plan to phase out coal-fired plants.Smitherman said it was tempting to keep Lakeview’s transmission lines “humming with new forms of electrical generation.“But it’s our conclusion — and faced with strong (opposition) from local voices — that there was an opportunity to bring to the Ontario waterfront this prominent public asset.”Smitherman, however, noted south Mississauga hasn’t been eliminated as a potential site for locating a natural gas plant. In fact, says Smitherman, his ministry will direct the Province’s energy planner, the Ontario Power Authority, to launch a bidding process for an 850-megawatt station in the area.(Currently, there are proposals for two power plants in south Mississauga).

“Ruling out Lakeview as a site for this new gas plant is an important moment in the history of our community,” said Sousa. “Many people in our community have worked hard for this, and now we can continue to work together on the next chapter, to revitalize our waterfront.”Calling Smitherman a “decision-maker,” McCallion noted the City of Mississauga had been kept in the dark on its plan for the site by Queen’s Park for a long time. City Council voted unanimously in February to approve a citizen-driven plan to build a $2-billion waterfront community on 200 hectares around the site.

Although she welcomed the announcement, McCallion wanted more from the minister.“I had hoped you would announce this morning that Eastern Power was off the list because it, too, is a major concern and has been approved, unfortunately by the OPA.“We’re prepared as a City — have always been — to look at power generating plants. So we have accepted our responsibility to make sure we don’t object to them if they are in the right location,” she told Smitherman.

Tovey also hailed the announcement. Lakeview residents, he said, have been vehemently opposed to locating another plant on the site and instead have recommended the land be used as part of an extensive waterfront renewal project that will include parks and recreation facilities.jchin@mississauga.net July 16,08

Lakeview Land Future Proposal

High-rise robbery

City's garbage fees will hammer condos By SUE-ANN LEVY, TORONTO SUN 7.13.08

Two weeks ago -- on Canada Day to be exact -- the new socialist garbage fee meter, a.k.a. waste reduction levy, turned on with little fanfare, catching most apartment and condo dwellers completely by surprise.

The city did not provide any in-unit blue boxes or soft-type bags to tenants and condo owners to ease the collection of recyclable materials, as had been promised.

The request for proposals for those 500,000 containers or soft-type bags will be issued next month, with the 12-month rollout expected to start in November, says Rob Orpin, the city's director of collections.

As for the green bin (kitchen catcher), that rollout is also expected to start in November -- provided that processing capacity for the material is found. "We're still working on it," Orpin said late last week.

About the only thing officials did do was put some propaganda on the city's website about the dire need to divert more, along with suggested materials on what residents can put in their blue boxes.

At the Yorkville condo building where I own a unit, that extra levy will amount to some $16,000 per year.

It seems my condo puts out four large bins for collection weekly, which places us in the highest garbage tax grab -- er, pricing -- category. If you divide those costs between 100 residential and seven commercial units, that could mean I'll be on the hook for an extra $149.50 in garbage taxes next year.

As an owner of a 900-square-foot condo, garbage collection will cost me more than what a homeowner will pay for a large garbage bin (at $133 per year) -- even though, I'm told, it is far less costly to collect garbage from a 100-unit condo than from 100 single-family homes.

'AMAZING' JOB That's despite the "amazing" job my building does of recycling. Our superintendent told me that full blue boxes in each garbage room are emptied twice per day and the condo sets out more recycling than regular garbage per week.

So if I ever thought the garbage levy was a tax grab, I'm even more convinced now. How the city can begin charging condo owners and apartment dwellers the levy when they've provided none of the tools to cut back on garbage is beyond me.

Orpin said it's up to condo and apartment dwellers to "maximize" their recycling to reduce their fees.

Perhaps so. But I suppose I already know the story behind the story. Orpin says they have to recover $54 million to pay for the new waste diversion initiatives (the brontosaurus recycling and garbage bins) and some $24 million is to come from the multi-res sector per year (tools or no tools provided).

Still, how they even came up with the fees is a mystery.

Brad Butt, president of the Greater Toronto Apartment Association, feels the city has been totally off-base comparing the multi-res sector to single-family homes because he does not believe the city will ever get the "same level of involvement" from apartments.

"The target shouldn't be one-for-one," he said, noting that most condos and apartments will be assessed at a large or extra-large garbage fee level based on the ambitious recycling goals city staff expect the multi-res sector to achieve.

He has no doubt some of his buildings are going to get whacked. He's already heard from one member with 2,100 units in various buildings who expects to pay $120,000 more a year.
Butt also takes issue with the fact that apartment owners will be charged for a full year before they can even think of applying for a rent increase. Meanwhile, their tenants -- whose diversion rates are supposed to be influenced -- will not be impacted one bit.

METER ADJUSTED Coun. Glenn De Baeremaeker, chairman of the city's public works committee, claims the garbage fee meter has been "adjusted" to compensate for the fact that condos and apartments don't have a green bin.

He contends that all condos and apartments "should have been recycling" for 20 years. "There's nothing new here," he said, claiming that the garbage fees for condos and apartments are less than for single-family homes.

"It's amazing when it comes to money what people will do," adds Orpin.

But Butt doesn't buy that argument. It may work in condos where there will be a line item in the budget specifying the Toronto Waste Levy (although I suspect the Socialist Garbage Levy will never go down), but not in apartments, he said.

"Tenants are going to have no clue this cost is there unless owners apply for a rent increase," Butt said. "That's another year down the road."


How is recycling garbage being addressed in your building? Your comments are invited.

Phantom Bids

Phantom Bidding? Give it a rest!
I'm not sure who to blame for the latest rant about phantom bids. Is it Michael Manley, Owner/Broker of Prudential Properties who ran unsuccessfully for President of the Toronto Real Estate Board (TREB) last year, or The Toronto Star? Regardless, yesterday's article on the subject was another case of a reporter or an unsuccessful candidate making something out of nothing.

A phantom bid occurs when (I presume) an agent takes it upon him/herself to lie about an offer that doesn't really exist thereby potentially driving up the price of the real offer. RISKY indeed. This could back fire big time. Ask experienced agents how many times an existing offer is withdrawn because they are now in competition. Many buyers simply refuse to compete and choose to back off instead.

Besides, as I've mentioned before here in this blog, it would be very easy to confirm the existence of an offer if something was smelly and suspicious. Highly skilled agents have a nose for this kind of skulduggery.

The article stated that "many agents agree (the practice of phantom offers) is widespread in Toronto" and yet in all my years of selling houses in the city, I've never met one of these agents. Come to think of it, I've never encountered a phantom offer. What's all this fuss about?

TREB concluded after studying the issue that this kind of unethical activity is governed by the Real Estate Council of Ontario (RECO) and no further action was required. It seems to me this is true. We are governed pretty strictly by RECO and they'd pursue this with enthusiasm I'm sure.
Manley on the other hand wants an online registration system. However, as TREB president Maureen O'Neill points out, this would be "cumbersome and unworkable. For instance, it wouldn't allow for last-minute bids" and believe me folks, last minute bids not only happen frequently, they're often the highest offer. I don't feel like sitting in front of an eager Seller and saying, "sorry, we can't look at this offer because it wasn't listed on the TREB online registration system that we set up to prevent phony bids that are so rare, few of us have seen them". Nope. That's not a chat I'm going to have anytime soon.

I'd be more inclined to pay heed to this complaint if Manley and his brokerage were bigger players in the local market. As it is, compared with RE/MAX and others, his share of the market is pretty tiny.

Come to think of it, I'd like to hear what the other companies have to say about this. Duncan Fremlin RE/MAX Hallmark Ltd.

Toronto Star Article that revived this topic string; http://www.thestar.com/article/459084

Who's Right - Sotheby's Insiders or Their Clients?

It's very interesting reading about the dismissal of Maurice Levin as the public relations officer for Sotheby's International Realty. It seems that he released a memo to the media that quoted Lew Geffen, owner of the agency, as predicting a 40% drop in local luxury house prices, as well as advising franchisees to convince their seller clients to reduce prices by 25% to get properties sold.
It seems that Mr. Levin was not authorized to release that memo, though according to the article at the link above, Mr. Levin had not previously been required to get permission to release internal memos. It's become a bit of a media interest story because, in close proximity time-wise, Sotheby's and Architectural Digest issued a press release of the results of a survey of luxury buyers showing very much the opposite opinion. A few survey responses:
72% of respondents believe their primary home value has remained constant or increased in value over the last 12 months (46% remained constant; 26% increased).
Nearly two-thirds of respondents report that current conditions have “no effect” on their likelihood to sell their primary home (63%).
In the coming year, 79% believe the value of their primary home will continue to remain constant or increase (55% remain constant; 24% will increase).
Let's hope that the affluent respondents to this survey are much more right than Mr. Geffen.

New delayed occupancy warranty benefits consumers

Tarion Warranty Corporation has introduced a new set of rules for delayed condominium occupancies. The new delayed occupancy warranty came into effect July 1, 2008, and applies to every new condominium project as long as no unit in the project was sold before July 1.

If any unit in the project was sold before that date, the old rules apply, but if the first unit in the project was sold after July 1, 2008, the new rules apply.

Where the new warranty applies, every agreement of purchase and sale for a newly-constructed condominium unit will now have a seven-page attachment entitled Statement of Critical Dates – Delayed Occupancy Warranty.
The attachment will show calendar dates for each of the following:

First Tentative Occupancy Date – the day the builder anticipates the unit will be completed and ready for occupancy. I call this the Wishful Thinking Date.

A subsequent Tentative Occupancy Date – a later date when the builder estimates the unit will be finished. I call this the Second Wishful Thinking Date.

Within 30 days of completion of the roof, the builder must give 90 days' written notice of either a Final Tentative Occupancy Date or a Firm Occupancy Date. I call these the We're Getting Closer Dates.

In fact, the Final Tentative Occupancy Date is not final at all, and can be extended by up to 120 days to the Firm Occupancy Date. This is the Almost But Not Quite Date.

As it turns out, the Firm Occupancy Date is not firm at all, but is the date on which the right to compensation starts running, and the date on which the builder must set a Delayed Occupancy Date. I have run out of new names, so I also call this the Delayed Occupancy Date.

But we're not finished yet. The Delayed Occupancy Date is followed by the Outside Occupancy Date – which is more or less the final date by which the builder agrees to provide occupancy of the inside of the unit.

If the inside of the unit is still not finished by the Outside Occupancy Date, the purchaser has a further 30 days in which to terminate the transaction and obtain a full refund of all monies paid. This 30-day period is called the Purchaser's Termination Period. The builder does not have a similar termination right.

If the purchaser does not terminate the transaction, the builder and purchaser are going to have to come to some new extension agreement, since the Delayed Occupancy Warranty at this stage has run out of names and dates.

In a case where a unit is purchased as the building is nearing completion, a separate document can be attached to the offer, limiting the date options to the Firm Occupancy Date and the Outside Occupancy Date.

Tarion's new Delayed Occupancy Warranty for freehold and condominium homes was designed to bring greater disclosure and transparency to the problem of delays in construction of new condominiums. It is the result of 2 1/2 years of intensive study by a committee chaired by former Supreme Court Justice Frank Iacobucci, who is now chairman of Torstar, which owns the Toronto Star. Despite the overabundance of confusing and misleading new names for the possession date targets, the new delayed occupancy warranty is actually beneficial to consumers in several ways.

Firstly, financial compensation for delayed possession is increased by 50 per cent from the previous rules, to $150 a day with a cap of $7,500.

Secondly, for the first time in living memory in Ontario, builder agreements of purchase and sale for new condominiums will have actual calendar dates for the tentative and firm occupancy dates. At present, those dates in most builder condominium agreements are obscured in paragraphs and paragraphs of turgid legal prose.

Next, the first page of the Tarion attachment cautions buyers that if they agree to change any of the dates, other critical dates may change as well.

And finally, builders must deliver to the buyers a signed municipal occupancy permit on or before the date the purchaser takes possession – a marked change from the current rules.
Full details of the new delayed warranty are available at tarion.com. Enter Bulletin 47 in the search box or navigate to http://www.tarion.com/NR/rdonlyres/20D2537A-D7E6-4DD3-A214-B6A716B1F3B1/0/Builder_Bulletin_47_Condo_Final.pdf.

Bob Aaron is a Toronto real estate lawyer. He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818. Visit the column archives at http://www.aaron.ca/columns/toronto-star-index.htm for articles on this and other topics.

Landlord Tenant Comment Toronto Sun

Small landlords will pay the price
Re "Not right at home" (July 9):

The release of the long-awaited report on human rights in housing was remarkable but predictable given the author, the Ontario Human Rights Commission. The commission's report was based primarily on anecdotal evidence provided by poverty groups, legal clinics, and tenant advocacy groups along with input from landlords, government agencies, etc. In their recommendations the commission ignored all input by the landlord groups that would not advance its cause.

Those interested in the future of housing should read the report fully and in particular the recommendations in part 6. A main objective of the consultation seems to have been to produce a report that has Ontario declare housing as a universal human right. In the secondary housing market, small landlords can look forward to a regime that includes no right to do criminal background, credit or tenancy checks, no right to take rent deposits, mandatory expensive modification to rental units, no limit to the number of guests or occupants who can live in the unit, mandatory certification programs, and a requirement that every landlord, big and small, accommodate a tenant's disability to the point of undue hardship prior to attempting to evict a tenant.

While the words sound noble, in the area of human rights in an employment context, the courts have held that the point of undue hardship was that point just shy of insolvency. The commission report also recommends that the Ministry of Municipal Affairs and Housing re-examine the issue of vacancy de-control with an eye to scrapping it and bringing in rent control which would be extended to vacant units to replace the system now in place where landlords and tenants can freely negotiate rent for a new tenancy. This approach has been rejected by both the Conservative and Liberal governments to this point.

How this new world of housing, where small landlords renting out their basements are turned into social workers and become funding partners, can bring about positive change is beyond most in the industry.

The real issue here is that the government, using the Human Rights Commission as its shill, is being disingenuous. If the government wished to make housing a universal human right and pay the cost of providing low-income and affordable housing to achieve that goal, then that should be a ballot question.

Instead, the government, through the commission, has found a way to make landlords responsible for providing this proposed universal right. If it comes to pass, this will surely decimate the industry and result in fewer units for tenants in need.

Harry Fine President Landlord Solutions Harry Fine, a former adjudicator with the Ontario Rental Housing Tribunal up until November 2004, Landlord Solutions can provide you with the edge that only a former adjudicator can provide.

Respected as one of the Tribunal's top Members, Harry knows the law as well as the process, and is committed to providingyour company with the best in paralegal representation both
at the Tribunal and in Small Claims Court.

Recreational facilities set atop rooftop of latest Mystic Pointe project

Shelly Sanders Greer THE STAR July 10, 08

Camrost-Felcorp is bringing what it calls "the highest beach club in the world" to south Etobicoke.

California Condos is the newest phase of the six-hectare master-planned Mystic Pointe community. And what sets it apart from other condos in the GTA, says David Feldman, president and CEO of Camrost-Felcorp, are the recreational facilities atop the 32-storey building.

"There is nothing like this," Feldman says. "It will be a whole lifestyle situation with an infinity swim pool, hot tub and a glass wall residents can look through to see downtown Toronto. The auditorium will have incredible views and the sundeck will transform into an open-air theatre with movies projected onto the wall. Residents will be able to enjoy outdoor movies. I think that's a first."

In addition to the rooftop facilities, there will be the Bayside Sports Entertainment Centre atop the fourth-floor podium, featuring an outdoor pool, running track, squash courts, craft room, library and private dining room.

"If you add up all the amenity space there is 75,000 square feet of total space indoors and outdoors," Feldman says. "This is almost two acres."

Prices will start at $198,900 and go to just over $1 million for the penthouses. Parking will be included and maintenance fees will be 36 cents a square foot, plus the separately metred hydro.
"The reason we can keep the maintenance fees so reasonable with all the amenity space at California Condos is that the costs will be amortized over our other Mystic Pointe communities – iLofts, TIDES and California Condos," Feldman explains.

With the big focus on amenities, Feldman says the market will likely be young professionals who "want and deserve an enjoyable lifestyle when they come home from work.

"And the beauty of California Condos is that because it sits on a landscaped podium, even the ground level suites will be on the third floor, which means great views for everyone in the building."

To take advantage of the lake and city views, Feldman adds that residents will have large windows. There will be 300 suites and California style was the inspiration for the interior layouts.

"Most of the kitchens have islands with cook tops and fan hoods above," says Feldman, "and the ceiling has an interesting design. It is not just a typical flat white ceiling. These will be true designer kitchens."

Nine-foot ceilings will be found in all suites except the penthouses, which will have 10-foot ceilings.

There will be one-bedroom suites, one bed plus den, two beds and two beds plus-den plans. Flooring will be laminate and tile.

To increase energy efficiency, heat pumps will be installed so residents will be able to control their own heat and air. California Condos will be walking distance to Humber Bay Park and local amenities. The Mimico GO station, TTC, QEW and Highway 427 are also nearby.

Register for more information by calling 416-251-8888 or by visiting californiacondosto.ca.
Feldman says the sales office, located at 515 The Queensway at Parklawn Rd., will be up and running in a couple of weeks.

A Porsche Boxster will be given away in a draw at the sales office. You don't have to purchase a suite to enter.

Government of Canada Moves to Protect, Strengthen Canadian Housing Market

The Government of Canada today announced adjustments to the rules for government guaranteed mortgages aimed at protecting and strengthening the Canadian housing market. The new measures include:

Fixing the maximum amortization period for new government-backed mortgages to 35 years;
Requiring a minimum down payment of five per cent for new government-backed mortgages;
Establishing a consistent minimum credit score requirement; and Introducing new loan documentation standards.

Today’s announcement marks a responsible and measured approach by the Government to ensure Canada’s housing market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada.

The new limits are planned to take effect October 15, 2008. This would allow existing mortgage pre-approvals with the common 90-day duration to be used or expire. Certain exceptions would also be permitted after October 15. The Government will work closely with all stakeholders to ensure timely and effective implementation of these measures.
As these measures relate only to new, government-backed insured mortgages, Canadians who already hold mortgages will not be affected by this announcement.
The measures announced today will build on the strength of Canada’s housing market. According to the International Monetary Fund, the increase in house prices in Canada is based on sound economic factors such as low interest rates, rising incomes and a growing population. A recent Statistics Canada report concluded that home ownership is at record levels, with over two-thirds of Canadians owning their own home.
Mortgage arrears—overdue mortgage payments—have also remained low. In recent years, the percentage of mortgages in arrears for three months or more continues to be at low levels not seen since 1990.

Boomers own more homes – and owe more – than ever before

SARAH BOESVELD AND JAMIE KOMARNICKI From Globe and Mail June 4, 2008

Baby boomers are bucking the tradition of Canadians paying off their mortgages by their 60th birthdays, instead finding themselves with two mortgages and deeper in debt, a census report on housing finds.

Rather than paying off their mortgages before their senior years, the way their parents did, boomers are struggling to pay for their homes and an increasing number are taking out mortgage No. 2.

One in six households has a mortgage – the highest rate since 1981 when baby boomers entered the housing market, the Statistics Canada report says. The number of Canadians 60 or older who still had mortgages had been declining, but between 2001 and 2006, the opposite occurred.
Analysts point to recent splurges on renovations and big purchases such as cars, boats and furniture to explain the trend. A recent Statscan report says spending on renovations increased 63 per cent in that time period.

The trend of paying for big-ticket items the value of which decreases while the borrowing period stretches on, sets off alarm bells for financial planner Peter Andreana.

“You're mortgage should not last longer than the asset,” said Mr. Andreana of Burlington, Ont.
“If you spend your second mortgage on a car or something with depreciating value, you could really find yourself in a bind.”

Divorced couples seeking new residences may also be boosting the percentage of mortgaged homes, the Statscan report notes.

Also, more Canadians are making the jump from renting to buying a home, taking advantage of low interest rates to shoulder their first mortgage, it says.

A strong labour market coupled with low rates is helping ease first-time buyers into the market, pushing the percentage of mortgaged Canadian households to an all-time high.

Buyers purchasing older homes are likely to look at low-cost ways to pay for renovations, said Bob Dugan, chief economist with the Canadian Housing and Mortgage Corp.

“Mortgage rates are so much lower than other personal lending rates available,” Mr. Dugan said, adding that smaller, second mortgages used to finance renovations actually help increase the home's value in the long run.

He said that there is little concern over the increase in mortgages as long as Canadian banks continue guarding lending criteria. Default rates on monthly mortgage payments have remained low since the early 1990s, he said.

“That suggests these households are in good shape going into the mortgage: There hasn't been an increase in risk.”

The Statscan report comes at a time when homeowners, particularly in Western Canada, are grappling with skyrocketing housing costs.

The scope of the report – between 2001 and 2006 – doesn't capture much of the record-breaking housing prices of the past few years, particularly in the West, Mr. Dugan said.
In the report, Statscan made these observations:

8.5 million Canadian households, or 68.4 per cent, owned their home in 2006.
3.9 million households, or 31.2 per cent, rented their home, a decrease from 33.8 per cent in 2001.
An estimated three million households, or 24.9 per cent, spent 30 per cent or more of their income on shelter in 2006.

Of the households owning their home in 2006, about 4.9 million or 57.9 per cent, had a mortgage.
913,000 households owned a condominium in 2006, up 36.5 per cent from 2001.
Albertans have the biggest share of mortgaged households at 62.1 per cent, while residents of Newfoundland and Labrador had the lowest proportion at 44.8 per cent.

Comments made on this posting;

Skip to the latest comment
diane marie from calgary, Canada writes: Boomers are succumbing to the need for status symbols. Whatever happened to their earlier interest in matters social, environmental, and humanitarian? Advertising is very powerful - I regularly sense the sucking power of the words "stainless steel". Apparently, when one's career leaves one numb, one can always become a consumer. It's a moving target, however. I suspect that many older people see what are, from memory of the 1980s, very low interest rates and think, "oh, what the h*ll". Many people in the U.S. thought the same thing until their equity disappeared.
Posted 04/06/08 at 10:30 PM EDT Alert an Editor Link to Comment

Hornsworth Portswiler from adanac, Canada writes: It's a subscription lifestyle, just figure out what you want and let the bank work it out for you. Of course, when something goes wrong the bank isn't going to help you, but that's what parks (and park benches) are for.
Posted 04/06/08 at 10:41 PM EDT Alert an Editor Link to Comment

Bad decisions on two levels will raise taxes

Comments on this story (1)

Re:T.O.'s debt balloons $497M in 2007 July 3

Toronto's debt is not the only thing going up. Our taxes are about to take a huge hit due to two bad decisions.

• David Miller's odious Land Transfer Tax was added at the worst possible time. It lowered the values on middle class houses by the 2 per cent his tax added to the sale price of a home. It also made people realize that they were spending well over $50,000 in unrecoverable money to move into such a home, taking into account the land transfer taxes to Dalton McGuinty and Miller, the GST on the money spent on furnishings, movers, realtor fees and all the costs associated with the "economy of moving." A minimum of $50 million of the $300 million Miller budgeted in 2008 revenues from his new tax is now lost. How do you think Miller is going to make it back?

• McGuinty's vote-buying Property Tax Assessment freeze from 2006 ends this summer. Homes will be revaluated for tax purposes to their absolute peak of about a year ago.
What does all this mean? You're going to soon pay at least 20 per cent more in property tax thanks to Miller and McGuinty.

Timing is everything. Miller's tax hike in a slowing capitalist economy was idiotic. That move is about to be repeated by McGuinty. Jean-Pierre Boutros, Toronto

The link with the comment is directly on point. The economy is a balance of interest rates, job creation, media, and the perceived confidence in long term continuation of prosperity. When this confidence is disturbed, not matter how low the interest rates there is a lack of consumer confidence to proceed with big ticket items. David Pylyp

What you should know before you agree to buy a condo

Click here to watch the video

Great towers of glass and steel are going up in every big city in this country, and in many of the smaller ones too. If you’re looking to buy your first home, or if you're looking to downsize, chances are good you’re looking at condos. You may be surprised to learn that the beautiful rooms you see in the model suites are not necessarily like the ones you’ll live in once your building is complete. The den on your floor plans may become a walk-in closet by the time you move in. Your ceilings may turn out to be a foot or two lower than the ones you saw in the model suite when you decided to buy. As Wendy Mesley reports, buying a condo is fraught with risk for you, the buyer. The developers? They’re pretty well protected.

"This is typical of many model suites that I have attended at their GALA openings". I noticed the model suite was enlarged by approximately 25% from the measurements that I held in my hand. When I enquired, the response was the model suite was for illustration purposes only and not to represent a specific suite. David Pylyp

The other "marketing technique" used is scaled down furniture. While that plush sofa may look large and inviting, usually they are slightly larger than a love seat.

The old adage Buyer Beware really does apply. You should take your own agent to Sales Offices when you are purchasing, Take the documents to the lawyer for a full and complete review, but more importantly examine your long term needs.

Closing dates you can take to the bank

On July 1, Tarion Warranty Corp. introduced a completely new set of rules and procedures for delayed closings of freehold homes and condominiums purchased from builders.

According to Howard Bogach, Tarion's recently appointed president and CEO, the updated warranty is intended to protect new-home buyers from the impact of delays in the closing of their purchases.

In my view, it also provides more disclosure and transparency to the process, while acknowledging industry realities that construction completion dates are often a moving target.

A new addendum must be attached to all freehold house purchase agreements signed on or after July 1, 2008. In it, builders have to set out a specific closing date and whether that date is firm or tentative – the builder has a choice.

If the builder chooses the firm option, the agreement must provide a specific calendar date for a "firm closing date," as well as an "outside closing date" which is 365 days after the first date.
If the house is not complete by the outside date, the purchasers have 30 days to terminate the agreement. They will then receive a full refund of all money paid, plus delayed closing compensation of up to $150 a day after the firm closing date, up to a total of $7,500.

The same compensation is available if the purchaser completes the deal but closing takes place after the builder has used up all of its permitted extensions.

If the builder chooses the tentative closing date option in the initial purchase agreement, the buyer will know right up front that the date may be changed. In that case, the agreement must show calendar dates for each of the following:

First tentative closing date: The date of the builder's original closing estimate.
Second tentative closing date: A date up to 120 days after the first date. The builder can unilaterally extend closing to this date without penalty.
Firm closing date: A date 120 days after the second date. This is the maximum limitation on the builder's ability to extend without setting a "delayed closing date" and paying compensation.
Outside closing date: This is 365 days after the second tentative date or the firm closing date, whichever is earlier. If the house is still not finished and final closing does not take place by this outside date, the purchaser can terminate, receive a full refund, and claim delayed closing compensation.

If this all sounds terribly complicated, that's because it is. To that end, Tarion has provided a web-based calculator on its website so that consumers can do their own calculations or verify those of the builder.

Using this calculator, I entered a sample home purchase with a first tentative closing date of Jan. 7, 2009. Using that date yields a second tentative closing date of May 7, 2009, a firm closing date of Sept. 4, 2009, and an outside closing date of May 7, 2010.

In a real purchase situation, those exact dates would be clearly set out in the builder agreement, so there would be no confusion in the mind of the purchaser.

The new addendum also limits the builder's ability to terminate the agreement unilaterally if, for example, it does not get financing or achieve a sales target.

However, it can still be permitted to terminate unilaterally if it is unable to obtain a building permit, register the subdivision plan, or complete utility services to the site.

Purchase agreements must now clearly disclose the status of development approvals and construction so that purchasers can better assess the risk that a delay or termination may occur.
One of the best aspects of the new delayed closing regime – which I enthusiastically applaud – is a requirement for a builder to deliver a signed municipal occupancy permit to the purchaser on or before the date of closing.

This marks a significant change in the Tarion warranty program from the old days, when the occasional municipal occupancy approval would not be granted until long after the purchaser moved in.

Full details of the new delayed warranty are available at tarion.com. Enter Bulletin 46 in the search box or go to http://www.tarion.com/NR/rdonlyres/0C0D8F16-C891-4EA6-BEBD-3AF3654091B9/0/Builder_Bulletin_46_FreeholdFinal.pdf

Separate rules apply to condominium closings. Watch this space for details.

Bob Aaron is a Toronto real estate lawyer. He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818. Visit the column archives at http://www.aaron.ca/columns/toronto-star-index.htm for articles on this and other topics.

June Market More Balanced

July 4, 2008 -- TREB Members reported 8,600 sales in June, TREB President Maureen O’Neill announced today. “Sales were down 18 per cent from the 2007 total of 10,451, which was the best performance ever for that month,” noted the president. “Nevertheless, the 8,600 figure is the fifth best June on record, and indicative of an active, healthy market.”

Sales within the City of Toronto totaled 3,481, down 18 per cent from the 4,238 recorded in June 2007. Sales within the 905 suburbs, at 5,119, were also down 18 per cent from the 6,213 recorded during the same period last year.

On the pricing front, June’s GTA average came in at $395,866. This was up four per cent over the $381,963 recorded during June of 2007. Prices increases were roughly equivalent in both the City of Toronto and the surrounding suburbs. Within Toronto, prices averaged $433,082, up three per cent over the $421,139 recorded in June of 2007. Within the 905 suburbs, the average price came in at $370,559, up four per cent over the $355,240 recorded during the same period last year.

“With summer coming, and a 22 per cent increase in inventory to nearly 27,000 this June over last, the market is slowly shifting towards balance after several years of favouring sellers,” said the President.

Breaking down the total, 3,357 sales were reported in TREB’s 28 West districts and averaged $374,043; 1,483 sales were reported in the 14 Central districts and averaged $518,471; 1,697 sales were reported in the 23 North districts and averaged $430,498; and 2,063 sales were reported in TREB’s 21 East districts and averaged $314,755.

NEIGHBOURHOOD CORNER
Etobicoke
Etobicoke has seen 2,356 sales thus far in 2008, down 14 per cent from the 2,734 recorded during the first six months of last year. The average price was $406,197, up two per cent from the $399,525 recorded during the earlier time-frame.

Realtor.ca is up and running

The new upgrades have been installed at Realtor.ca the successor to website to MLS.ca.

They [Realtor.ca] have successfully integrated the features of Microsoft Virtual Earth to allow people to search by map directly off the main screen.

It is rather novel and seems easy to use.

While a great tool to understand neighbourhood values and search for listed properties, it still does not encompass the entire database available to agents. (REALTORS)

I would remind users that the database of displayed properties is permission based by the seller at the time they list their home. They choose not to display their homes for a variety of reasons. Sold listings merely drop off, so you cannot search or research sold data.

By signing up at an Agent's real estate portal it is possible to obtain the entire database of properties posted and sent directly to your email inbox on a daily basis.

But the issue is whether you would like to see and surf, or are directly interested in buying a home and making value comparisons.