Thursday, March 27, 2008

New condo delayed-closing rules coming

- Would apply after July 1 if approved by province, but documents' legalese is certain to baffle many

Feb 23, 2008 04:30 AM Bob Aaron

Tarion Warranty Corporation is getting ready to implement changes to its new delayed closing regime for condominiums. Earlier this month, I wrote about the proposed changes to the delayed closing rules for freehold homes, and now details of the condominium rules have emerged from closed-door meetings with Ontario condominium builders.

After July 1, 2008, following expected government approval, all purchase agreements for residential condominiums which have not yet been built will have a new, compulsory, seven-page attachment containing a summary of the delayed occupancy warranty, along with a Statement of Critical Dates on the first page.

At present, virtually all builder agreements for condominiums, where the occupancy date is uncertain because construction has yet to be started, contain turgid and confusing explanations of the proposed and final occupancy and closing dates. The legalese in many of these agreements makes the Income Tax Act seem like a children's book for new readers. As well, the terminology differs from builder to builder, and can be confusing to buyers. Now, builder agreements will be required to set out and define a series of five differently-named occupancy dates, but at least the terminology will be uniform throughout the industry.

Here are the new terms that will be used in all builder condo offers:
  • First Tentative Occupancy Date – the date the builder anticipates the unit will be completed and ready to occupy;
  • Tentative Occupancy Date – a target date if the unit is not ready on the First Tentative Occupancy Date;
  • Final Tentative Occupancy Date – a new date, which is not final at all, but a new, semi-finalish target date for the builder to provide occupancy;
  • Firm Occupancy Date – not a firm occupancy date at all, but it cannot be any later than 120 days after the Final Tentative Occupancy Date.
The right to compensation for delay only starts if the builder misses the Firm Occupancy Date; Outside Occupancy Date –the latest date by which the builder agrees to provide occupancy.

Each builder agreement will be required to set out clearly the actual calendar dates for the First Tentative Occupancy Date and the Outside Occupancy Date. As purchasers watch their condominium being constructed, they are to receive a series of notices from their builder. These notices will set new dates using words like tentative, final tentative, firm, and outside. It remains to be seen whether purchasers will be more or less confused by the introduction of five new definitions of occupancy dates, some of which may amount to little more than wishful thinking on the part of the builders.

In the new delayed occupancy documents, I was unable to find any provision that would prevent the builder from insisting on the purchaser signing an amendment to start the clock running all over again with new target dates. Nor was I able to find any prohibition on builders demanding that purchasers sign amendments waiving rights to compensation for delayed closing. Both of these practices have become increasingly common under the current regime.

In the new Tarion warranty attachment, the builder must disclose whether or not formal zoning approval has been obtained and when construction is expected to start. The agreement may not be made conditional on receipt of a building or occupancy permit, or completion of the condominium unit, but it may be made conditional on the happening of up to 10 separate events, including obtaining certain municipal or provincial approvals, completion of utility services and compliance with municipal agreements. Other conditions may include the vendor reaching a minimum sales target and obtaining the necessary construction financing. No other conditions may be inserted by the builder into the agreement. Public release of the new, delayed closing warranty is awaiting fine-tuning of some of the provisions, and government approval.

Wednesday, March 26, 2008

Give your bathroom a Facelift

Give your bathroom a facelift with a few small changes without the cost of bathroom renovations.

From time to time, even the prettiest bathroom could use a facelift. We're not talking major bathroom renovations here, or even involved do-it-yourself stuff; just a few small changes designed to give maximum zing for minimum effort (and cash) and without the effort of bathroom renovations.

Your local bath, home or building supply store has all kinds of products designed to lift the spirits of even the most depressing bathroom, and many of the ideas that follow require no more than a few tools and a free weekend. Think of it as a spa retreat for your bath.

1 Clear out everything -- everything! -- in your bathroom and give the room a good scrubbing, right down to the grout between tiles, any hidden build-up under the faucet escutcheons, and corners inside cabinets. Then throw out or give away anything you don't use regularly: half-filled shampoo bottles, makeup you'll never wear, expired medicines. Be ruthless.

2 Nothing updates a room more quickly and dramatically than a new coat of paint. The bathroom is often the easiest room in your house to paint, since there's little or no furniture to move and the wall area is fairly small. Pure white is a classic look that's very fashionable right now; or choose a shade that contrasts elegantly with coloured tile or fixtures. If you have cabinets, paint them (inside and out) as well.

3 Replace your chipped or too-small medicine cabinet with a handsome new one. Restoration Hardware and IKEA both have attractive options, as do many building centres. Or, if storage is not a concern, replace it with a large, beautifully framed mirror.

4 Contrary to popular belief, replacing your basin faucet is a fairly easy DIY job, and there are many beautiful styles available for $100 or less. And you'd be surprised how much it improves the overall look of the room.

5 If the floor is ugly or worn, you don't always need to rip it up and start over. Linoleum and wood floors can be painted out with special flooring paint; epoxy paint can be used to update yucky tile. Peel-and-stick vinyl tiles are another inexpensive option.

6 Install ready-made tab-top curtains in a gorgeous fabric, combined with sheers if privacy is an issue. Some companies offer co-ordinated sets that include shower and window curtains and other bath accessories. Or, for a streamlined look, consider shutters or roman blinds.

7 Designers often choose neutral colours or white for bathroom fixtures and other permanent elements, since all it takes is new towels and other linens to give you a whole new look. Natural shades -- warm grey, chocolate brown, wicker -- are "in" at the moment, but super-brights such as chrome yellow, tangerine and fire engine red are equally fabulous in a neutral setting.

8 The popularity of the hotel look has inspired product designers to come up with all kinds of attractive and intelligent options for maximizing and organizing storage. Lisa Brdar, of Harvest Kitchen & Bath in Toronto, says one of the store's hottest sellers is their luggage rack, a tubular nickel shelving unit with hooks on the bottom rail for towels or a bathrobe. The store also offers a range of acrylic or wicker trays and baskets for organizing countertop essentials, including one that's shaped to fit perfectly on the back of the toilet.

9 Nothing sabotages the look of a bathroom -- or any room in your home, in fact -- than inadequate lighting. In many cases, you don't need an electrician to replace an old lighting fixture with a pretty new one, though if you're planning to change its location or add fixtures, you should call in a professional. Other options: replace incandescent bulbs with energy-saving compact fluorescents, or add a dimmer switch to give you bright light for makeup, softer light for a relaxing bath.

10 Bathrooms need not be all business; treat yourself to new accessories, functional or not. A trio of starfish (real or fake) can march along a chair rail; a basket of sea sponges adds some texture on the edge of a bath. Use attractive glass or metal canisters to store Q-Tips, cotton balls and other everyday items within reach; or display a fabulously designed toothbrush holder, soap dish and water glass on the counter. Finish with a framed print or two (either sealed to protect against moisture, or inexpensive enough to discard as soon as damage shows.)

Tuesday, March 25, 2008

No where to go but [building] up

Toronto has solidified its spot as North America's largest condominium market, according to a report to be released today that says 259 projects are in the works in the city's census area.

Urbanation, one of the country's major condominium market research firms, says condo sales skyrocketed over the first nine months of 2007. There were 16,790, sales --more than all of 2005, which was a record year. Sales will likely reach 21,000 by the end of the year. By comparison, New York City usually records about 10,000 condo sales a year.

"This is the highest number we've ever tracked since we started in 1981," said Jane Renwick, executive vice-president of Urbanation. "If you look at our [research], sales just keep going up, up, up."

Urbanation, which tracks just about every condo in the city, says its quarterly research report has grown into a 360-page mini-encyclopedia from modest beginnings when it looked more like a small pamphlet on the condo sector.

The city's red-hot condo sector came under scrutiny last week when sales at a tower planned for Yonge and Bloor streets resulted in lineups and prices skyrocketing overnight.
The proposed 80-storey One Bloor St. is said to have started with prices of $650 per square foot for VIPs and has escalated since. The site is located near the most expensive hub of the 52 submarkets in the census metropolitan area, which stops at Ajax in the east, and Burlington to the west.

Bloor-Yorkville gets the nod as the most expensive submarket in the city with an average price of $839 per square foot, which would get you a small one-bedroom apartment for $1-million. The market is home to Toronto's most expensive condo tower, the Four Seasons Hotel and Residences.

Sale prices in the Four Seasons' east building have averaged about $1,250 per square foot, while prices in the west tower go for $1,450 per square foot. Prices have since climbed, and the west tower is now asking about $1,600 a square foot, making it Toronto's most posh address.
The 53-storey Ritz-Carlton Hotel and Residences has the largest condominium under construction in the city, with a 10,820 square foot mansion in the sky planned, according to Urbanation.

While the so-called trophy buildings are getting all the attention in the city, Ms. Renwick said, they are hiding the fact that the condo market is growing at a steady pace across Toronto. The 416 area code accounts for 79% of transactions and 905 accounts for 21%.

The average sale price across the Toronto census area is $371 per square foot, up 10.1% from a year ago. Sale prices have jumped from about $180 per square foot in 1996. It has eaten into affordability. To carry a 700-square-foot apartment -- the average size of a unit in the city -- a consumer would need about $70,000 in household income, based on a standard mortgage with 25% down.

Affordability has eroded quickly after remaining relatively stable for most of the decade. From 2001 to 2005, a buyer needed about $54,000 to $57,000 to carry that same 700-square-foot apartment in Toronto. It climbed to $63,000 by last year, rising another $7,000 this year.
Despite the cut in affordability, some of which has been driven by rising interest rates, Ms. Renwick said speculation is hardly rampant.

Urbanation said of the 259 projects in the works, it estimates 30% of units were bought by investors. The other 70% of the condos to go up in the next five years will be owner occupied. That 70% is made up of 30% first-time buyers, 20% move-up buyers and 20% people downsizing. Garry Marr, National Post Published: Thursday, November 22, 2007
Published just such a short time ago, PRIOR to the US market exposure and Miller Tax in Toronto. What do you think will happen?

Friday, March 14, 2008

Housing affordability at worst level in 18 years

Housing affordability at worst level in 18 years, says RBC Economics

Alberta on watch but Canadian Household Finances in Better Shape than Stateside

Housing affordability continued to deteriorate
through 2007, but relief is on the horizon for most markets in 2008, according
to the latest housing report released today by RBC Economics.

"Housing affordability deteriorated across the country in every quarter in 2007, to end the year at its most unaffordable level since 1990," said Derek Holt, assistant chief economist, RBC.
"Back then, soaring interest rates and a recession sparked much of the trouble. Today, a long upward trend in house prices driven by sounder macroeconomic fundamentals, like job growth, is primarily responsible for the deterioration in affordability."

The RBC Affordability measure captures the proportion of pre-tax household income needed to service the costs of owning a home. During the most recent quarter, affordability for all four housing classes eroded across the country, with the exception of the cooling Alberta market where all housing segments experienced a drop in average price that resulted in improved
affordability. Across the country, the standard condo remained the most affordable housing type, requiring about 30 per cent of pre-tax household income. A standard townhouse was next at 34.5 per cent, followed by a detached bungalow at 42.5 per cent while a standard two-storey home remained the least affordable housing type at 48 per cent.

According to the report, the delayed effects of higher fixed mortgage rates continue to be a significant part of deteriorating affordability, but itis expected that the popular five-year mortgage rate will drop a further 75 basis points by year-end. Going forward, falling mortgage rates, weakening house price gains and decent income growth should all lead to improved
affordability across most markets.

The report also presents a comparison of Canadian and U.S. household finances, and shows that Americans are still modestly richer, but much more heavily leveraged and further in debt with less liquidity than Canadians. That, in turn, makes them more vulnerable to ongoing credit market turmoil and risks towards house prices than Canadians. In fact, the sharp depreciation in
the U.S. dollar over the past six years has made Canadians relatively richer over time, by raising the value of what their wealth will buy in world markets compared to that of their American counterparts.

In addition to major urban centres in Canada, the report includes housing affordability conditions for a broader sampling of smaller cities across the country. For these smaller cities, RBC has used a narrower measure of housing affordability that only takes mortgage payments relative to incomes into account.

RBC's Affordability measure for a detached bungalow for Canada's largest cities is as follows: Vancouver 74 per cent, Toronto 47 per cent, Calgary 42 per cent, Montreal 37 per cent and Ottawa 32 per cent.

The Housing Affordability measure, which RBC has compiled since 1985, is based on the costs of owning a detached bungalow, a reasonable property benchmark for the housing market. Alternative housing types are also presented including a standard two-storey home, a standard townhouse and a standard condo. The higher the reading, the more costly it is to afford a home. For example, an Affordability reading of 50 per cent means that homeownership costs, including mortgage payments, utilities and property taxes, take up 50 per cent of a typical household's monthly pre-tax income.

Saturday, March 8, 2008

Landlords can keep properties smoke-free

A decision of the Ontario Landlord and Tenant Board last month underscores the right of a landlord to insert a non-smoking clause in a residential lease, and that the clauses are enforceable in the event of breach by a tenant.

The decision is relevant to non-smoking tenants who live within breathing distance of smokers in condominiums, apartment buildings, multiplexes or even homes with basement apartments. It will also resonate with the landlords of those units.

Christine Cebula owns a unit in a highrise condo building in Yorkville. She rents it out as a luxury, furnished apartment to executives and others who need short-term, upscale accommodation for periods of three months to one year.

Some time ago, the unit was leased to a tenant named John Davidson. The lease clearly stated that no smoking was allowed in the unit.

Despite the prohibition, it became apparent that some smoking occurred. The landlord delivered a termination notice to the tenant, and when he failed to move out, she brought an application before the Landlord and Tenant Board to terminate the tenancy. In the wake of the difficulties with the tenant, she also listed the rental unit for sale.

Among the grounds for evicting the tenant, Cebula claimed that the smoking in the unit created undue damage, causing it to smell of cigarette smoke. Her application to the board also argued that the smoking in the unit substantially interfered with her lawful right, privilege or interest as the landlord.

Cebula's agent, Allistair Trent, asked the board for damages exceeding $10,000 to repair the unit and replace the smoke-damaged furniture.

The hearing before board member Egya Sangmuah took place over the course of four days last June, October and November.

One of the issues argued before the board was whether the smell of smoke constitutes damage within the meaning of the Residential Tenancies Act.

The board found that cigarette smoke contains contaminants that are absorbed by the furnishings and broadloom, and are difficult to remove.

The tenant argued – unsuccessfully – that the breach of a non-smoking clause could not result in termination of the tenancy unless it interfered with the enjoyment of the unit by the landlord – which did not apply in this case.

But Sangmuah found that the tenant or his guests permitted smoking in the unit, and that the landlord had incurred or will incur costs of $10,958.85 to repair the damage or replace property that was damaged and cannot reasonably be repaired.

The tenancy was terminated and the tenant was ordered to pay damages of $10,000 (the monetary limit of the board's jurisdiction), plus costs, interest and compensation for rent after the termination date.

The board ruled that the tenant's smoking did, in fact, interfere with the landlord's business of renting furnished luxury accommodation to a clientele of non-smokers.

The landlord's target market was individuals seeking short-term, smoke-free accommodation, and the board found that smoking in the unit reduced its marketability until the "remnants of smoke" could be permanently eradicated.

The lesson is that it is lawful to include a non-smoking clause in a residential lease.
If the smoking causes damage to the unit or interferes with the rights of the landlord or another tenant, the tenancy agreement will be terminated and the tenant may be held liable in damages.
Regular readers of this column may recall that I am on the boards of a landlord association and the Non-Smokers' Rights Association. In my view, the marketplace has room for rental accommodations that appeal exclusively to either smokers or non-smokers, or those with no preference.

Bob Aaron is a Toronto real estate lawyer whose Title Page column appears Saturdays. He can be reached at Visit his website at

Thursday, March 6, 2008

Special offer for Clients and Customers

I have some rather exciting news to announce.

We have struck a special arrangement with Canadian Floor Coverings Ltd., from Toronto to help people prepare their homes for sale.

Simply put, if you need to re do the carpet, hardwood or linoleum & ceramics, these costs can be deferred until the sale of your home is completed.
In this instance only 35% of the job is required as a down payment. The balance is paid from the proceeds of the sale.

Not only does this make the home more desirable but it directly adds to the sale value. Improves property presentation and puts more money into your pocket.

Take a moment and think about whom, either at work or at home, could benefit from this and forward this email to them, please.

Canadian Floor Coverings over view

In addition, I am seeking Advertising Partners to promote their business or service. The Elegant Homes website has exceeded 12,000 hits since the first of the year.
If you know someone who would like to offer special discounts my clients, I can create a web page for them as Home Resources. This could be a restaurant or a retail brick and glass location but also extended to service providers. I am not seeking people to pay me. These would be Advertising Partners, where we help each other to promote ourselves.

Wednesday, March 5, 2008

February Market Watch Results

GTA Resale Housing Down but Healthy

March 5, 2008 -- President Maureen O'Neill announced today, Toronto Real Estate Board Members recorded 6,015 resale home transactions last month, down 11 per cent in the Greater Toronto Area overall , 14 per cent in the City of Toronto and 9 per cent in the 905 suburbs compared to February 2007.

“To get an accurate perspective of current market conditions, a number of factors have to be considered,” said Ms. O’Neill. “With 18,018 properties available for sale, inventory has decreased seven per cent from last February."

“This indicates that despite moderate sales, there is not an over-supply of homes on the market. Generally, properties that are listed are selling fairly quickly and with a list to sale price ratio of 99 per cent, for the most part, sellers are realizing their asking price,” O’Neill added.

Despite the decrease in the number of sales from this time last year, there was positive news with respect to prices in February. At $382,048 in the Greater Toronto Area and $424,235 in the City of Toronto, the average price increased four and two per cent respectively compared to February 2007. As well, the time on market in February was 30 days compared to 35 days a year ago.

Despite the overall decline, some GTA neighbourhoods experienced strong sales in February.
In Pickering (E13) sales rose 28 per cent overall compared to a year ago due to a strong increase in condo townhouse and condo-apartment transactions.

Strong condo-apartment sales also drove transactions in Rexdale (W10) to an overall increase of 18 per cent compared to February 2007.

Richmond Hill North (N05) experienced a 19 per cent sales increase compared to a year ago primarily as a result of strong detached home transactions.

“All economic indicators are in place for an active year in the GTA, and as the weather improves sales are expected to increase as well,” said Ms. O’Neill.