Your rental property can be seized as Proceeds of Drug Money Laundering

Here is the situation;

Couple owns a few rental properties that they rent to [second chance] ex cons, people down on their luck, homeless people trying to re establish themselves, low income housing.

Police decide that rent payments made to the Landlord in cash must be the proceeds of crime since the only form of income for the tenant is dealing drugs.

This very scenario is playing out right now in the Ontario Courts under the Civil Forfeiture Act.  

Here are the details in Broad strokes;

Margaret and Terry Reilly are from Orillia, Ontario. The Reilly's own several rental properties, some of which are former single-family homes that they have converted into rooming houses for low-income tenants. Margaret has been involved in alleviating poverty and homelessness since her father became the priest at an inner-city Anglican church in Toronto and opened a youth hostel there, while Terry has served on the City of Orillia Homeless Committee. Providing housing to marginalized members of society has always been a deliberate choice for the Reilly's.In 2008, after police surveillance confirmed drug activity at two of the Reilly's rental properties, a branch of the government called the Director of Asset Management took control of them. Since then, the properties have languished largely unoccupied, falling into progressively worse repair. Stripped of their rights as landlords, the Reillys had no choice but to watch their properties deteriorate physically and depreciate in value. Then, in 2012, the Government of Ontario brought a motion to permanently seize and sell the properties on the grounds that some of the tenants’ rents may have been paid, in part, with the proceeds of their drug activity. There is no evidence that any funds paid by tenants was derived from drug money; the state merely assumed that cash payments must have come from the proceeds of illegal activity. http://theccf.ca/r-v-reilly-civil-forfeiture/ 

This property(S) were seized under the Forfeiture Act without anyone being charged.
This family has NEVER had their day in court but had their property taken away.

The lesson here is monitor your tenant activity; visit twice of more time per year to ascertain the activity in YOUR PROPERTY.   Be more diligent in your tenant screening. Bad things can happen to good people. 

#ASKPYLYP

Use a realtor to screen tenants in your rental condos.

Ready to invest?   If  I haven't scared you call me at 647 218 2414
http://Davidpylyp.com 

Investors need to pay Landlord License Fee

Toronto has not yet joined other municipalities to license Landlords but that may be short lived as the City looks for new sources of Revenue. The average tax appears to be at $825.00 per unit.

Condo Units in a Building are exempt.

Compulsory licensing for small landlords is rapidly spreading throughout Ontario, having come into effect most recently in Waterloo on April 1 and North Bay on May 1. Other Ontario cities which have already implemented a licensing regime are Guelph, London, Mississauga and Oshawa.
The idea appears to be contagious, and many other cities are looking at the concept, including Hamilton and Kitchener.
Waterloo’s licensing regime is typical. Licensed rental properties in homes or townhouses can have no more than four bedrooms, but units in apartment buildings and condominiums are strangely exempt.
Landlords are required to pay application and annual fees of as much as $825 to rent bedrooms in houses and townhomes.
Regulated units are theoretically subject to higher standards for health and safety, and landlords are subject to a criminal records check. The new bylaws set maximum occupancy limits (apparently regulating how many people can sleep in one bedroom), and minimum distances separating one licensed building from a neighbouring one.
Previously required fire inspections have been eliminated, and landlords now have to self-certify compliance with six different bylaws, including, strangely, fence bylaws, as well as building, fire, electrical and health codes.
The ability of Ontario municipalities to implement landlord licensing came into force in 2007 with changes to the province’s Municipal Act, which allowed municipalities to regulate businesses and business transactions.
Many observers — including this one — are concerned that the new regulatory scheme is either a municipal money grab, or a crude attempt to regulate and limit housing for students and large families. Both groups are often classified as low income. In Waterloo, for example, two tenant families with three children each cannot live in houses within 150 metres of each other.
A North Bay city statement about its new bylaw says that the purpose of regulation includes ensuring that rental properties “do not create a nuisance to the surrounding neighbourhoods, and . . . protect the residential density, amenity, character and stability of the residential areas.”
Similar arguments were used to justify restrictive property covenants based on race and religion prior to the 1950s. In a horrendous 1949 decision of the Ontario Court of Appeal, the judges wrote that a restriction on title to land preventing purchase by those of “Jewish, Negro or coloured” race or blood was just to assure that the residents were “of a class who will get along together.”
It seems that in Waterloo, North Bay and elsewhere, today’s students and large families are being treated like yesterday’s minorities.
In fact, the Ontario Human Rights Commission (OHRC) is currently investigating whether rental housing licensing bylaws in North Bay and Waterloo create discriminatory barriers to rental housing.
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 Toronto Star column archives at http://www.aaron.ca/columns for articles on this and other topics or his main webpage at www.aaron.ca.

Are you interested in acquiring tenants for a unit in Toronto?    Give me a call at 647 218 2414

Go Ahead Raise the Rent!

Landlord and Tenant Issues

Did you know that if a building in Ontario was built after November 1, 1991, then rent review does not apply. What this means is that if you own a condominium, home or apartment building that was built after this date, then once the first year of the lease is over, you can raise the rent as much as you want, as long as you find a tenant willing to pay it. This is just one of the issues that I will cover in my new course on residential tenancies.

I am attaching recent columns about landlord and tenant issues that I have written in the Toronto Star and which all will be covered in more detail in my new course. Let me know what you think and if you have any questions, please send them along.

• Why rent increase rules may be an election issue

March 11, 2011

Parkdale-High MPP Cheri DiNovo wants to make changes to the way residential rents can be increased.

• Should tenants pay for utilities separately?

February 25, 2011

One of the big choices when it comes to looking for an apartment is whether to rent with utilities included or to pay separately.

• Is it the tenant's job to shovel snow?

February 18, 2011

A tenant who agreed to shovel her own snow, slipped and fell and sued the landlord. Does she have a case?

• The ins and outs of subletting

February 12, 2011

The rules around subletting your apartment are fairly clear. It pays to know them.

• Why you can't ask tenants if they plan to have kids

February 7, 2011

Most landlords get along with their tenants, but there is always the tenant from hell. What can you do? to protect yourself?

• Why no-smoking rental clauses are a problem

January 29, 2011

Even if a tenant signs a no-smoking lease, and they later smoke, you cannot evict them just because they broke their promise.

• Why a no-pet rental clause is unenforceable

January 21, 2011

Many landlords put no-pets clauses in their leases. In the first of a Moneyville series for landlords and tenants we look at this contentious issue.

About Mark Weislander Mark is a lawyer, author, course developer, instructor and keynote speaker for the real estate industry. Please contact me personally if you have any questions or issues that you would like to discuss. My weekly articles are now published on the Toronto Star Moneyville website at www.moneyville.ca. I am very pleased to advise that 2 of the stories that I wrote in 2010 were voted as the number 1 and number 5 stories of the year. I am pleased to attach the article as well as the 2 stories. You can see all of my articles by just clicking Star Columns on my website www.markweisleder.com. Remember, if you would like to use any of my articles in your own email newsletters, just send me an email request.

David Pylyp Accredited Senior Agent. There you have it Definitive answers on a number of pressing tenancy issues; Most useful to me is the residential limits imposed by the Landlord Tenant Act, that are providing 1% increases while hydro and insurance are taking 20%. Justify your increases and raise the rents! HST has been added and that alone impacts the rents.

Buy Five and get 3 for FREE

If only that concept worked with Real Estate Investments in Toronto.

The property captioned on the video is a 10 unit residential and commercial mixed use property in close proximity to the (new and improved TTC ) Kipling Subway station. Superb commercial location for a few small stores and or business' that want extra eye's on their sign.

The property if compared to a row attached townhouse with condo fees of the same size would be selling for approximately $600.0 thousand. Three have a wooden patio deck back yard, Two have a rooftop Terrace. (Times 5 Units) . In addition there are 3 completely legal and NEW basement apartments that are one and two bedroom units. PLUS the two commercial units on the Bloor Street facade.

Buy Five you get three for free. Plus the additional cost of the two commercial units, places this Building at a replacement cost of $3.5 Million as the asking price.

So here we are; The Investment Handbook says that good invest is a building that has a CAP Rate of 6 0r 6.5% The Good Book never explained Interest Rates at the 2.5% annual APR or the Landlord Tenant Tribunal with rent limitation annually of 1.2%

The Good Book is also mute on Toronto Land Transfer Tax and GST.

Builders need to build and be permitted to market their finished products. Landlords need to be able to buy renovated or new product for rental purposes that meet market rents.

Do you have a spare million floating around that could earn EBIT 180.0K then give me a call. With a 1.0MM investment the return on investment is 18% or you could keep pushing money into the mattress and hope the kids don't throw it in the landfill. OH, That happened Right?

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Capital losses and tax loss selling

If you have investments in your securities portfolio (non registered) that are in a loss position, you may face the possibility of realizing capital losses when you dispose of these investments.

This article describes how you can maximize the opportunities associated with tax loss selling to help reduce your tax liability or obtain refunds of taxes paid in previous years.

When you sell a security at a loss, you can use 50 per cent of this capital loss (called an "allowable capital loss") to offset taxable capital gains that you realize in the same year. This may reduce your tax liability for that year. Unfortunately, losses realized in your investment portfolio may be used against capital gains only - they cannot be used to reduce your other income for the year such as employment income.

Net capital losses

Capital losses realized in a given year must first be used to offset capital gains realized in the same year to reduce the current year's tax liability. When you have no capital gains in the current year or your capital losses in the year exceed your capital gains, the remaining capital loss is known as a "net capital loss."

You can carry a net capital loss back and apply it against taxable capital gains realized in any of the previous three years, which could result in a refund of capital gains tax paid in those years. For example, losses realized in 2008 could be applied against net capital gains realized in 2005, 2006 or 2007. You can also carry net capital losses forward indefinitely to use against taxable capital gains in future years.

Why use capital losses? There are a number of reasons why you may wish to trigger capital losses. For example:

• A particular security no longer meets your investment criteria
• You wish to reduce your tax liability for the current year by offsetting your capital gains realized in the year
• You wish to recoup taxes paid on capital gains realized in 2005, 2006 and 2007 by carrying back net capital losses realized this year
• You have triggered gains by making gifts of securities to your beneficiaries during your lifetime as part of your estate plan and wish to offset these gains to minimize the tax impact of such transfers
• You have sold your business and have realized a sizable gain on the disposition of your shares
• You have realized a capital gain on the sale of real estate that is not your principal residence

Other ways to realize capital losses

According to our tax rules, there are certain situations where you could realize a capital loss if a security declined in value even if you did not sell it on the market. These include deemed dispositions such as:

• Transferring a security to an individual other than your spouse
• Transferring assets to any person other than your spouse or a spousal trust upon your death
  

Be aware of superficial loss transactions. In order to be able to claim a capital loss on the sale of a security, it's important to ensure that the transaction is not a superficial loss. A superficial loss is triggered when both the following events occur:

• During the period that begins 30 days before and ends 30 days after the settlement date of the disposition, you or a person affiliated with you acquires the identical property that was sold at a loss
• At the end of that period (i.e. 30 days after the settlement date of the disposition), you or a person affiliated with you owns or has a right to acquire the identical property.

Note: The material in this column is intended as a general source of information only, and should not be construed as offering specific tax, legal, financial or investment advice. Every effort has been made to ensure that the material is correct at time of publication, but we cannot guarantee its accuracy or completeness. Interest rates, market conditions, tax rulings and other investment factors are subject to rapid change. Individuals should consult with their personal tax advisor, accountant or legal professional before taking any action based upon the information contained in this column.

* David Konning is an investment and retirement planner at Royal Bank. He can be reached at David.Konning@rbc.com or by phone at 856-0406.

David Pylyp; These tax laws are available for multi unit property owners who can offset capital gains from Real Estate investments against other capital losses. PLEASE CONSULT YOUR ACCOUNTANT FOR PROPER TAX PLANNING.