Taking Control of Cash and Financing Offers

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Buyer’s Financing Can’t Be Met, Now What?

Let’s say you receive an offer on your listing conditional on the buyer obtaining a mortgage. In discussing the offer, your salesperson has no information on whether the buyer has been pre-qualified to buy. You still decide to negotiate and accept the offer. After all, you reason, if the buyer’s financing condition can’t be met, the home can go back on the market. What’s more, your salesperson can publish on MLS that the property can continue to be shown to other buyers.

Buyer Claims Financing is Approved, Now What?

What if the Buyer removes his mortgage condition? What assurance do you have that he has, in fact, been approved for the mortgage? At times a buyer will remove his financing condition without having the financing in place. He doesn’t want the condition to expire making the offer null and void, especially if there is the chance of another offer waiting in the wings. If you accept the offer as written, the buyer has total control and you can only hope the deal will close. Of course the buyer continues looking for financing.

How Does This Happen?

This scenario sometime happens. Either the buyer’s agent has not made enough of an effort to have the buyer pre-qualified or the buyer will not share any information regarding his financial ability to buy.

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As a suggestion, why not assume more control. Here’s how. Counter offer to the buyer with something similar to the following: “Upon the buyer removing his mortgage condition, this offer is further conditional upon the Seller receiving written verification from the buyer’s lender that the mortgage has indeed been approved without conditions. Unless the Seller gives notice to the buyer not later than one (1) day from the buyer removing his mortgage condition, this offer shall become null and void and the Buyer’s deposit is returned.”
This way you maintain some control and you have received 3rd party confirmation of mortgage approval.

What About Cash Offers?

Consider something similar with cash offers. Over 90% of all purchases require some kind of financing. Yet some buyers, without checking things out with their lender, choose to make a cash offer. Usually on the basis that once the offer is accepted, if no other conditions exist in the offer, the home is sold. But is it? Sometimes this backfires and funds aren’t available on closing. At times buyers also make cash offers in an effort to beat out the competing offers. As well, with a cash offer the buyer hopes to avoid or minimize negotiations on price. In either case, the same risk applies as above.

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So before You Accept a Cash Offer, why not consider including a similar condition stating something like the following: “This Offer is conditional upon the Seller receiving written verification from the buyer’s lender, that the buyer has the money in place and on account to close on the purchase of this property without the need of a bank appraisal; otherwise this Offer shall be null and void and the buyer’s deposit returned. Once again you arm yourself with some assurance of closing, especially if you are also buying.

First Time Buyer Incentive Now Available

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The new First Time Buyer Incentive came into effect on September 2, 2019. Here are some excerpts.

Do you know of a first-time buyer struggling to save for a downpayment-- maybe a son, a daughter or even yourself--consider looking into this Government Program. It is meant to:

  • Reduce the amount of downpayment needed, as well as

  • Lessen your “monthly mortgage carrying costs.”

Incentive Percentage for Different Property Types:

For New Construction: 5% of 10% of purchase price,

For Resale Homes: 5% of purchase price,

New or re-sale mobile/manufactured homes: 5% of purchase price.

Eligibility Requirements

  1. You are considered a first-time buyer if you have never owned a home, you are going through a marriage or common-law break-down; you and your spouse or common-law partner have not owned a home in the last four years.

  2. You are a Canadian citizen, permanent resident, or a non-permanent resident legally working in Canada.

  3. You must occupy the property; investment properties are not eligible.

  4. Whether applying yourself or with a spouse or friend, the total combined qualifying income must be $120,000 per year or less, whether it comes from investment, rental or work income before taxes.

  5. The mortgage amount and qualifying incentive cannot exceed 4 times the combined income.

  6. The incentive is registered on title as a 2nd mortgage, is not interest bearing, requires no principal payments and has to be repaid in 25 years or when the property is sold, whichever comes first.

  7. Mortgages must be insured by CMHC, Canada Guarantee Mort-gage Insurance or Genworth.

  8. The minimum downpayment must be from traditional source; meaning savings, RRSPs or non-repayable financial gifts from a relative.

CMHC Example of What is Owed if Resale Sold After 5 Years

With Increase In Value


Original Home Value at Purchase

Buyer Incentive (5% of $400,000)

Assume Market Value at Time of Sale

Repayment: Buyer Incentive of $20,000 + 5% of Equity Gain
($80,000 x 5% = $4,000)





With Decrease In Value


Original Home Value at Purchase

Buyer Incentive (5% of $400,000)

Assume Market Value at Time of Sale

Repayment: Buyer Incentive of $20,000 - 5% of Equity Loss
($68,960 x 5% = $3,448)





Niagara Real Estate Residential Sales Statistics - September, 2019

For the Niagara Region:

From 01-Jan-2019 to 30-Sep-2019 vs. the same period last year*

The real estate market in the Niagara Region remains balanced. It is a great time to get top dollar for the sale of your house or to invest in the market.

To learn more about how the market might affect you contact Ashley Czinege or Barbara Grumme for a no obligation, no charge consultation.

How to Utilize your Mortgage Prepayments

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Utilizing your mortgage prepayments can drastically reduce your principal and amortization. If you follow this guide you can be mortgage free sooner than ever!

1. Knowing your prepayment privileges

Most mortgages have allowances for you to prepay down your mortgage faster. The standard prepayments allowed per payment can vary dependent on who your mortgage provider may be. Typical prepayments allow between 10% - 20% per payment depending on your lender. Some lenders also allow the use of double up payments which is an increase of 100% of the payment! Lump sum payments are another great way to reduce your mortgage and are typically ranging between 10% - 25% based off the mortgage amount and dependent on the mortgage provider. The easiest way to access this information would be discussing with your Mortgage Broker or mortgage provider directly.

2. Increasing payments

Anytime you are increasing your payments the excess that you pay per payment goes directly onto the principal portion of your mortgage. The great function of this is drastically reducing the interest you will have to pay over the term of your mortgage. The prepayments can range from 10% - 20% on average depending on your mortgage provider. It is always a good tip to talk with your Mortgage Broker about the goals you have with your mortgage to ensure you have the flexibility you require to pay your mortgage faster. Your mortgage provider may be able to increase and decrease your prepayment privilege at any time throughout the life of your mortgage. This means that if any life event occurs and you need to reduce your payment to the minimum you can with ease. This allows you to manage your payments at all times throughout the life of your mortgage. Mortgage providers allow this typically free of charge but with some providers you can only change your payments a set number of times throughout the year. Always discuss with your Mortgage Broker or mortgage provider to learn your flexibility options.

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Here are how the prepayments can affect your mortgage!

All calculations are based off of a $400,000 mortgage with a 5 year term, 25 year amortization at a rate of 2.89% with monthly payments.

No Prepayments

Monthly payment: $1,870.48

Principal paid over 5 year term: $58,401.49

Interest paid over 5 year term: $53,401.49

Mortgage amount remaining: $341,172.69

Years remaining on mortgage after 5 years: 20 Years

Utilizing 15% Prepayments

Monthly payment: $2,151.05

Principal paid over 5 year term: $76,907.34

Interest paid over 5 year term: $52,155.66

Mortgage amount remaining: $323,092.66

Years remaining on mortgage after 5 years: 15 years & 7 months

As you can see you reduce your mortgage by $18,080.03 and save $1,245.83 in interest! This reduces your mortgage by 9 years and 5 months in only 5 years! If you continue to use your prepayments, you can get your family mortgage free sooner! Ask your Mortgage Broker about your prepayments today!

3. Lump sum payments

Utilizing your lump sum payments is a great option for paying down your mortgage but it may not be ideal for everyone. Lump sum payments are usually between 10% - 25% per year. This means you can make a lump sum payment every year onto your mortgage. The lump sum payments can help you reduce the amount of interest you will be required to pay or reduce your mortgage amount before selling your home reducing the penalty you will be required to pay. Every mortgage provider has their own specific guidelines to how you can make a lump sum in a calendar year. Your mortgage provider may require you put down a minimum amount for a prepayment or only eligible on the anniversary date of your mortgage. It is always a great idea to discuss your goals with your Mortgage Broker to ensure this is the right option for you and your family.

If you decide that prepayments are for your household, you can become mortgage freedom sooner than ever!

Reach out to your today to set your goals into motion!

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Sherri Vigna - Mortgage Agent

CENTUM Omni Mortgage Corp.

282 Geneva Street, St. Catharines, ON

T: (289) 337-1304

How to Have a Green Halloween

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Leaves are falling, pumpkin spice lattes are pouring and kids excitedly plan what they will be for Halloween. With all the excitement of fall and Halloween just around the corner, this year try something a little different when it comes to decorating your home. But individually wrapped chocolate bars, mini bags of chips and plastic decorations create a lot of waste every Halloween.

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1. Ghost Votives

These cute ghost votives are easy to make and give off a “Casper the Friendly Ghost” vibe and let’s be real - who doesn’t love Casper? Here’s what you’ll need and how to make them:


  • Mason jars (for as many as you would like to make)

  • Cheesecloth

  • White glue

  • Scissors

  • Sharpie black marker

  • Tealight

  • Cardstock

Step One: Glue the cheesecloth on the outside of the mason jar. Keep the cheesecloth loose and longer than the length of the mason jar to give it that wispy ghost look.

Step Two: While you wait for the glue to dry on the mason jars, get out the scissors, cardstock and black marker. Cut out the eyes and mouth for your ghost and draw on any expression you want.

Step Three: Glue the ghost face on to the mason jar and now for the finishing touch - place the tealight inside and ta-da, you have your own little Casper!

2. Bat Branches

If you are running low on time and energy and just want a quick decoration to get in the Halloween spirit, then decorate your home with these bat branches. No prep necessary, simply take some black ribbon and cut strands to be about 20cm and tie the ribbons around the plants in your house. They will look like bats and will make the house look spooky in no time!

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3. Painted Pumpkins

These painted pumpkins are fantastic if you really want to keep your waste to a minimum this year. They don’t require any plastic and are biodegradable. Here’s what you’ll need:

  • pumpkins (mini gourds and white pumpkins work well)

  • biodegradable paint and brushes

  • newspaper

  • stencil *optional*

Step One: Lay down some newspaper around where you will be to avoid any unwanted mess.

Step Two: Choose what colours you would like to use and start painting your pumpkins. #C21 tip: Use the stencil on a white pumpkin, the colours really pop with the white background.

Step Three: Leave them to dry overnight and enjoy! Later, simply compost to prevent landfill waste.

11 Foods Banned in Other Countries that North Americans Should Stop Eating

Below are some of the most commonly used food ingredients and practices that are allowed in the United States, but banned elsewhere.

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Banned Ingredients #1 — Dough Conditioners

Dough conditioners, such as potassium bromate and azodicarbonamide are chemicals used to improve the strength and texture of bread dough.

Banned Ingredients #2 — Brominated Vegetable Oil (BVO)

Brominated vegetable oil (BVO) was originally patented by chemical companies as a flame retardant. But now, BVO can be found in certain colorful sports drinks and citrus-flavored sodas as an emulsifier.

Banned Ingredients #3 — Propylparaben

In the United States, propylparaben is used as a preservative in tortillas, muffins, trail mix, pies, sausage rolls, and more. Research has found that it can affect sex hormones and sperm counts in young rats.

Banned Ingredients #4 — BHA and BHT

BHA and BHT are popular man-made antioxidants used in dry mixes, cereals, and dehydrated potato products to preserve them and increase shelf life.

Banned Ingredients #5 — Synthetic Food Dyes

Food manufacturers use synthetic food dyes, such as blue 2, yellow 5, and red 40, to enhance the coloring of certain foods and ingredients to make them more appealing to consumers juices, sports drinks, and sodas, candy, mustard more yellow, salmon more pink.

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Banned Ingredients #6 — GMOs

Genetically modified organisms (GMOs) have been around since the 1980s. But they have become a controversial topic — and for good reason. While they’re widespread in the U.S. — with most U.S. soy, sugar beets, corn, canola, cotton, and alfalfa being GMO crops — many European countries have banned or regulated them due to public safety concerns.

Banned Ingredients #7 — Roxarsone

The arsenic-based drug roxarsone, was routinely used in chicken in the U.S. until July 2011, when Pfizer decided to stop selling it. Roxarsone was used to increase the pink coloring of raw chicken meat, to speed the growth of the birds before slaughter, and to prevent parasites in the chicken’s stomach.

Banned Ingredients #8 — Ractopamine

In the U.S., ractopamine is a muscle enhancer for pigs, cows, and turkeys. And, like other harmful substances used during the raising of animals, it doesn’t just go away when the animal is slaughtered. Some of it is still left in the meat you buy. Ractopamine is banned in 122 countries including Russia, mainland China, Taiwan, and many countries across Europe. This is because it’s been linked to reproductive and cardiovascular damage in humans, as well as chromosomal and behavioral changes.

Banned Ingredients #9 — Herbicides, Insecticides, Fungicides

Herbicides, insecticides, and fungicides are widely used on crops in the U.S. food system to keep them free of bugs and diseases. Meanwhile, other countries see (and act on) the danger they pose to humans. Of the 374 active ingredients authorized for agricultural use in the U.S. in 2016, the European Union banned 72 of them. Wow.

Banned Ingredients #10 — Olestra

Olestra, or Olean, is a cholesterol-free fat substitute created by Procter & Gamble. The FDA approved it for use in foods in the 1990s and it’s still used in certain potato chips and french fries. But Olestra may cause extremely unpleasant digestive reactions, like diarrhea and leaky bowels. Consuming a lot of it can also lead to deficiencies in fat-soluble vitamins A, D, E, K, as well as carotenoids. Both Canada and the United Kingdom have banned the ingredient.

Banned Ingredients #11 — Synthetic Hormones

Synthetic hormones, such as rBGH and rBST, are widely used in the U.S. dairy industry. The primary reason for this is to increase milk production in dairy cows. However, rBGH increases IGF-1 levels in humans and may increase the risk of developing cancer. Additionally, cows treated with rBGH are more likely to develop mastitis, an udder infection, requiring treatment with antibiotics. Canada, the EU, and other countries have banned these compounds.

Risk and Reward of Short-Term Rentals

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A Growth Industry, more and more people are playing in the short-term rental business to make additional income through Airbnb and other digital sites. Statistics Canada reports, “In 2018, private short-term accommodation in Canada generated an estimated $2.8 billion….”

Short-term rentals, however rewarding can pose challenges and risks for Owners, Mortgage Lenders and Insurance Companies.

Mortgage Lenders

Being risk-averse, mortgage lenders are negative toward short-term rentals. Unlike income property with leases of one year or more which lenders like, short-term rental income cannot be counted on. There is also the potential for damage.

As a result, obtaining a residential mortgage for a non-owner occupied short-term rental poses a major challenge to say the least. After all, a short-term rental can be rented to a responsible couple one week and trashed the following week. The best option, though more expensive, is to apply for a commercial mortgage as lenders view such rentals as a business operation.

Insurance Companies

Though companies like Airbnb offer host damage of up to 1 million dollars, there are a number of exclusions and limitations. For additional protection, one should consider obtaining “home-based business insurance” for as little as $10 per month added to a standard home insurance policy. Otherwise, your insurer is not obligated to cover a claim with standard insurance and may decide to cancel the policy.

Examples of risk and damage in the short-term rental market:

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Up to $75,000 Damage on an Airbnb Rental in Calgary

As reported by The Calgary Herald in 2015, “A Calgary couple who rented out their Sage Hill home for a weekend returned home Monday to find it had been the site of what police described as a ‘drug-induced orgy.’” They found the renters through Airbnb, who told them they required the rental to attend a family wedding; so the owners felt confident the home was in good hands for that weekend and stayed at one of their parents during the rental period. Neighbours soon reported a busload of people arrived and were partying. When the owners got back to their house, the police were already there but they couldn’t enter. According to their agreement with Airbnb “the renters were legal tenants at the time, meaning their privacy was protected under the Residential Tenancies Act.” The resultant damage was estimated between $50,000 and $75,000 which Airbnb agreed to cover.

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$80,000 Damage for this Short-Term Rental in London, ON

The London Free Press, on August 20, 2019, reported that these homeowners thought they were renting to a young couple from out of town. Police reported that the home became the site of a graduation after-party with “scores” of young people attending, resulting in $80,000 damage. “Police charged seven people – a female and four males aged 18 and 19 and two boys under the age of 18 – with one count each of mischief over $5,000,” a far cry from the estimated damage.

Other cases with varying damage caused by short-term tenants have been reported. They range from as little a $299, to $8,000.

Municipalities and Condo Corporations are now grappling with restricting short-term rentals.

New, fast-growing digital enterprises come with rewards as well as challenges and risk. Taking protective measures are recommended.

3 Ways to Protect Yourself When Selling

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Here are 3 suggestions for Sellers when negotiating an offer to purchase your home or other property.

1. Buyer Wants to Assign and be Released

You may receive an offer that states that the buyer named can assign the agreement “to any person, persons or corporation, either existing or to be incorporated” and the buyer named in the offer “shall stand released from all further liability....”

Don’t accept this clause as written, releasing the named buyer. In Ontario, the buyer has the right to assign the offer. The buyer, however, cannot assign their obligation to the contract. In other words, if the assigned buyer not close on the transaction, the buyer named in the offer remains liable. So you want liability to remain with the buyer who negotiated the offer with you.

Alternatively, you can agree that the buyer will not assign the Buyer’s rights without “your express written consent” as the seller, and “such consent may be granted at the seller’s sole option.” You at least have some control over who takes over the agreement to close.

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2. Warranting Working Order of Chattels

Are you leaving any chattels with the sale of your home? You know: a stove, refrigerator or anything not attached to the home. If so, the offer you receive may state that the seller represents and warrants that the chattels are in good working order and such warranty shall extend beyond closing.

Don’t accept this clause. Chattels, especially those with working parts can break. One day they work and the next day they don’t, and it doesn’t matter if they are newer or older. People misunderstand the warranty clause and expect the seller to make good after closing if there’s a breakdown.

Alternatively, you might change the clause to say that the seller does not warrant the condition of any chattels remaining with the property.

The typical clause reads as follows: “The Buyer acknowledges that there is no express or implied warranty by the Seller on the chattels included in this Agreement of Purchase and Sale.”

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3. Final Buyer Inspections

Most offers include a clause stating that “The Buyer shall have the right to inspect the property one further time prior to completion....” The clause is valid as the Buyer wants to ensure that what they saw prior to making the offer hasn’t changed, that nothing has broken or is missing.

Don’t allow other third parties to enter as part of this final walk-through unless you know why and you have given your consent. The sale at this point is firm and binding. A buyer shouldn’t be allowed to bring in an appraiser or a home inspector under this clause, as these inspections should be addressed as buyer conditions in the offer.

Alternatively, if the buyer wants other third parties to view the property, they should insert a clause that partially reads as follow: “The Buyer shall have the right to inspect the property prior to completion for the purpose of inspection for (e.g. financing, insurance, estimate(s) from contractor(s) etc.) to a maximum of ___time(s).” NOTE: remove financing example if the offer is cash or the mortgage condition is removed.
We will cover other cautions to address in future articles.

Niagara Real Estate Statistics for Residential Sales - August, 2019

For the Niagara Region:
From 01-Jan-2019 to 31-Aug-2019 vs. the same period last year*

The real estate market in the Niagara Region remains balanced. It is a great time to get top dollar for the sale of your house or to invest in the market.

To learn more about how the market might affect you contact Ashley Czinege or Barbara Grumme for a no obligation, no charge consultation.

Minimalist Mindset

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Admit it, you’re fascinated by Marie Kondo. If nothing else, how can she sort through so much stuff and fold it so perfectly? Even if that lifestyle isn’t manageable for your family, embracing minimalist habits help us shape our lives to be peaceful and organized. Minimalism doesn’t have to mean living with the bare essentials. Take inventory of your life to see if there are ways you can simplify.

  • Start a packaging challenge- Take a set period of time, two weeks or one month, and see if you can reduce your weekly amount of garbage and recycling. Decluttering or purging can be daunting tasks, but simply reducing your consumption can have similar effects. Being thoughtful about what you bring into your house can encourage you to reassess your habits.

  • Don’t buy new until you use up the old- How many shampoo, conditioner, body lotion, shower gel containers do you have stuffed in a drawer waiting until you can pack them in a suitcase for another trip--- but you never do and instead just add to your collection? Or spice mixes you keep picking up for a quick dinner? Before you buy new, try to use up those containers and packages. You’ll thin out your cupboards and closets and save some money too!

  • Create don’t consume- We live in a consumer world: buy stuff, eat at restaurants, invest in (often expensive) experiences. While there is a time and place for all of it, removing the money from your free time means you have to make your own fun. You can go for a walk or hike, make a meal from scratch, play music or make art. You may be surprised at how fulfilling it is.

  • Reassess your furniture- Coco Chanel famously said, “Before you leave the house, look in the mirror and take one thing off.” If your home feels cramped, do the same thing. By removing a few pieces, you’ll quickly free up floor space. Store them elsewhere for a couple of days and see if you miss them. If not, sell it online and appreciate the money and a more minimal home.

  • Realize this is a journey- Just because you can’t throw out half of your belongings in one day doesn’t make you less of a minimalist. Remember that the idea behind the mindset is to make time and space for the things that are important to you. Small changes over time add up to a big change. You may find your tea cup collection is valued, but twelve white t-shirts are not. It’s your journey and you get to write the story.

Getting Back to School Ready

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As much as we don’t want it to be true, summer is coming to an end, which means back to school time is just around the corner. Make your life a little easier by getting prepped for the mayhem of back to school now. Follow these tips to help ease back into the work routine and help your kids get excited about going back to school (OK- excited might be a stretch, but mitigate the tantrums at least).

For You

Meal Prep

The biggest service you can do for yourself is to meal prep! After summer vacations and working shorter hours it can be hard to get back into a strict schedule. Pick 3 recipes and make a big batch to freeze for the upcoming weeks. That way, you’ll have a few different options ready to go. You can also make calendars for what you want to eat to make meal planning easier.

C21 Tip: Get inspiration from you local meal prep service. Their descriptions often list many ingredients needed.

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Weekly Planner

Everything is easier when it is written down and scheduled in. Have a weekly planner up on your fridge so you can plan out your work/ leisure activities for the upcoming week. Don’t forget to schedule yourself some fun!

Ease into Routine

If you’ve been working a lighter schedule over the summer it can be hard going straight back into a 9-5. Start by getting up earlier a couple days a week to get your body back into a regular schedule.

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For Your Kids

First Day Gift

Start the day off on a positive note and present your child with a little back-to-school gift. By starting this tradition at an early age it will help to instill a positive attitude about going back to school. It doesn’t have to be a fancy present-- a new backpack or a book--- but it will get them excited about school!

Lunch Box Note

The first day back can be very long and kids can get homesick during the day. A little note in their lunchbox will remind them that home isn’t too far away.

First Day/ Nervous kids

For kindergarteners starting school for the first time or nervous kids, it can help to go up to the school a couple times before the first day. If they take a bus to school, show them where the bus will pick them up or walk them to school if it’s walking distance. Walk them around the school so they can get familiar and minimize surprises on the first day.

Short-term Rentals and Airbnb: What You Need to Know

By Mark Weisleder

What are the rules for Airbnb?

Every city will set its own rules for renting out all or part of a property on Airbnb or other short-term rental websites. In Toronto, for example, it is expected that only a principal residence will be able to be used for Airbnb. You can either rent out up to three of your bedrooms, or you can rent out the entire home, up to 180 days per year. You will also have to pay $50 to register the unit with the city and charge a four-per-cent tax.

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Are guests considered tenants under the Residential Tenancies Act of Ontario?

This is not a simple answer. If you are living in a home or condominium and you just rent out rooms to guests on Airbnb, they are not tenants and can be treated as a guest and must leave when you ask them to leave. You do not have to use the Ontario Standard Form Lease. However, if they are renting your entire home, even for a few days, an argument can be made that they are in fact tenants and you need to sign the Ontario Standard Form Lease, which will govern the relationship. It will make no difference if this is a furnished apartment or not.

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Can you evict a tenant to turn the unit into an Airbnb?

The likely answer to this is no in Ontario. While an eviction is possible if you are converting the unit to a commercial use, it is not permitted when the business will be for Airbnb. It will also likely not be possible to evict someone using the personal use family reason and then trying to rent all or part of the home on Airbnb before one year after the eviction. This could lead to penalties under the act.

Can you evict a tenant who is renting your unit on Airbnb without permission?

The answer is likely yes. This would be considered either an illegal sublet if no permission was granted in advance and a violation of the act, in that the tenant would be subletting for more money than they are paying in rent. However, the landlord would have to start eviction proceedings regarding any sublet within 60 days of finding out.

Will insurance cover any damage caused by guests?

Airbnb and similar sites offer insurance coverage, but it is recommended that you also inform your own insurance company if you are planning to rent it out, since the risk of damage will increase. For example, if the guest and owner privately agree to extend their stay without going through the short-term website, the website insurance policy will likely deny any claim. Further, if damage occurs that was not caused by the guest, the owner’s insurance claim to their own company will likely be denied if they were not advised about the new use of the property.

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Mark Weisleder is a partner, author and speaker at the law firm Real Estate Lawyers.ca LLP. Click here to contact Mark.

Ending a Tenancy Early

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By Natalka Falcomer

There are different circumstances in Ontario where a tenant can terminate a lease early – some require simple notices while others require an order from the Landlord and Tenant Board (LTB). Generally, circumstances that permit early termination are:

  • The tenant and landlord agree to terminate a lease early. While you don’t have to, it’s highly suggested that you get this in writing. You can use the Agreement to Terminate a Tenancy (Form N11).

  • The tenant gives proper notice to terminate the lease at the end of the term (more about the notice periods below).

  • The tenant assigns – not sublets – the lease to someone else (unless your lease says otherwise, tenants require landlord approval to assign a lease. Note that assigning a lease doesn’t absolve the original tenant from a variety of legal obligations to the landlord, but it does generally terminate the tenant’s right to occupy the unit).

  • The LTB issues an order ending the tenancy agreement early.

  • The tenant or the tenant’s child is a victim of sexual or domestic violence (tenants who believe they could be abused if they don’t leave the rental unit can terminate the tenancy by giving 28 days notice at any time during their tenancy).

  • The tenant entered into a lease with the landlord on or after April 30, 2018, the landlord did not use the provincially mandated standard lease form, the tenant has sent a written demand within 30 days of the receipt of the “non-standard lease” requesting that the landlord provide a standard lease form and the landlord has not provided the standard lease form.

Since each of the termination rights listed above have a variety of technicalities, this article will dissect the requirements for situations where the tenant wants to terminate the lease at the end of the term. Speaking from experience, notice periods and correct spelling of the landlord’s name are crucial details to get right – failure to be precise may render the notice invalid and unenforceable, causing the tenant to be on the hook for rent even if they are not occupying the space.

Giving notice and termination dates

Notice dates depend upon whether or not you are in a fixed-term tenancy or periodic tenancy (monthly or weekly). If you are in a fixed term, such as a one-year lease with a specific end date to the lease, then you must give notice at least 60 days before that specific end date. The LTB provides the following scenarios:

Example 1: You pay rent on the first of each month. The last day of your lease is August 31. You give the landlord notice on June 20. The earliest possible termination date you could put in the notice is August 31.

In this example, 60 days notice is August 13, but the termination day must be the last day of the monthly rental period, so you would need to use August 31.

Example 2: You pay rent on the first of each month. The last day of your lease is August 31. You give notice on July 31. The earliest possible termination date you could put in the notice is September 30.

If rent is paid monthly and you have no specific end date (a month-to-month periodic term), then the tenant must give at least 60 days notice and the termination date must be the last day of a rental month. The LTB provides the following example:

You have a month-to-month tenancy and pay rent on the first day of each month. You give the landlord notice on August 15. The earliest possible termination date you could put in the notice is October 31.

If rent is paid daily or weekly and there is no specific end date, the tenant must give at least 28 days notice and the termination date has to be the last day of a rental week.

Calculating the number of days

Do not count the day that you mail or deliver the notice to the landlord. In fact, it’s best to add on at least five days to the notice period. In other words, the notice period from when you mail the notice will be 65 days instead of 60 or 33 days instead of 28.

Include the termination date as part of the notice period.

Days include weekends and holidays.

Because February only has 28 days, the LTB allows for less than 60 days notice if the tenant is moving in February or March. For example, if the tenant is moving at the end of February the tenant doesn’t have to give 60 days notice so long as the tenant gave notice no later than January 1. If the tenant is moving at the end of March, 60 days notice is not required so long as the tenant gave the notice no later than February 1.

Note that, depending on the type of lease (periodic or a term lease) the termination date must still be the last day of the lease or the last day of the monthly or weekly rental period.

Although the residential market is booming and landlords may not mind tenant turnover if the original tenant was paying below market rent, abiding by the law is simply good practice for legal reasons as well as character development reasons. After all, how you do some things is how you do all things.

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Natalka Falcomer is a lawyer and Certified Leasing Officer who has a passion to make the law accessible and affordable. She founded, hosts and coproduced a popular legal call-in show on Rogers TV, Toronto Speaks Legal Advice. She founded Groundworks, a firm specializing in commercial real estate law, and is the EVP of corporate development at Chestnut Park.

What is Your Intention In Buying Property?

In Tax Court of Canada, a recent appeal sided with the person making the appeal and against CRA.

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Background: In short, Steven B. owned a townhouse in Ontario since 1998. At the time of purchase, his brother, Patrick, contributed to the downpayment, moved in and shared expenses. In and around 2006 the brothers discussed going their separate ways because of brother Patrick’s changing circumstances. So Steven wanted to sell the townhouse and move to a smaller home that was closer to his work.

The New Condo Purchase: In 2006 Steven purchased a preconstruction condo which was scheduled to close on April 27, 2008; yet the occupancy date was postponed by the builder to October 28, 2009.

Changing Circumstances: In 2008 Brother Patrick married, had a child and all lived in the townhouse. Also in 2008, their father passed away and in 2009 their mother moved in with her two sons. Steven soon refinanced the home and paid his brother for his interest in the property. Brother Patrick used the funds to buy a home for him and his family.

New Plan to Sell the New Condo Purchase: Steven had every intention to sell the townhouse but plans changed when his mother moved in. He now felt the condo he purchased was too small for them and by 2009 his plan changed to selling the new condo instead of the townhouse. Steven became the registered owner of the new condo on August 10, 2010. He now arranged to list the property for sale and the sale closed on November 2010.

Sale Results in a Questioned Gain by CRA: His gain on the sale was $13,412 and was reported as a capital gain. He appealed the Minister of National Revenue’s reassessment that this gain was unreported business income from an adventure or concern in the nature of trade, as opposed to a capital gain, so gross negligence penalties were levied against him. Tax on a capital gain is based on one half of the net gain. Tax on business income is on the entire gain after expenses.

The Court’s Decision: The tax court judge based her decision on the following four factors which are a good takeaway.

  • Intention: Steven’s intention was to sell his current property and move into the new condo. This plan was thwarted by the death of his father and his obligation to look after his mother. According to the Judge, “Therefore, this factor favors a finding on account of capital” as opposed to income.

  • Nature of business of trade of the taxpayer: Steven and brother were both transit operators. Prior jobs had no connection to real estate transactions and the townhouse was the first and only property he had ever owned until buying the new condo. Again this evidence favored capital.

  • The nature of the property: As a new condo which sold quickly after closing, “this factor favors a finding on account of income.

  • Extent and Use of Borrowed Money and length of time the real estate was held: The agreement to buy was September 2006, yet the closing took place in August 2010. Steven only borrowed money to refinance the existing townhouse to pay off his brother. There was no financing on the new condo and he could not afford to own both homes. The sale took place quickly but time between agreement to buy and closing was long: about 4 years. This factor was found to be neutral.

Decision: The sale of the new condo was determined to be a capital gain and properly reported. The appeal prevailed and CRA’s penalties were dismissed.

The Future of Real Estate Professionals

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Recently one of our salespeople asked our broker of record how he thought the role of the real estate professional would unfold in the future.

Big and highly financed technology companies have been and continue to make efforts to seize the real estate industry and in some ways attempt to bypass the real estate salesperson. Other technology sites are trying to capture potential buyers in most cases and sell these leads to real estate salespeople. Still other tech avenues involve a combination of agent and technology services at a discount.

As well, these large tech companies consider real estate “an appealing target for disruption.” That’s because of the fragmented nature of real estate, these companies claim. Fragmented is certainly one way to describe the industry. Possibly a better way to portray it is that real estate is hyper local. National figures talk about nationwide average prices and number of sales. That’s fine to see overall trends, yet what really matters to buyers and sellers is what is going on given market conditions, number of sales and prices on a local level. Take that one step farther and a home’s value is not based on averages but on comparable homes sold relative to the home’s neighbourhood.

According to the 2018 Profile of Buyers and Sellers, an annual study conducted by the National Association of Realtors, the following highlights how Buyers’ use Real Estate Professionals:

  • Eighty-seven percent of buyers recently purchased their home through a real estate agent. Most wanted to have an agent help them find the right home

  • About 41% used an agent referred by a friend, neighbour or relative.

  • 90% of buyers would recommend or use the agent again.

The following are Seller highlights from the same study:

  • 63% used an agent that was referred or one they previously worked with.

  • 85% would definitely (69 percent) or probably (17 percent) recommend their agent for future services.

Transaction Becomes More Complex

What’s more the real estate transaction continues to grow in complexity, requiring the help of a savvy real estate professional who can counsel, negotiate and help solve problems as they surface. So the most practical role of tech sites is their ability to identify potential buyers and in some cases sellers; in other words: to generate leads. Beyond that the one-to-one experience between the client and the real estate professional continues to be pivotal in successful buying and selling and the reduction of stress and anxiety that can play a part in the transaction for the most part.

Many top real estate people continue to invest more in technology annually. They also continue to employ traditional methods of obtaining business: direct response advertising, staying in touch with past clients and centers of influence, open houses and more. They see technology as another effective tool in their arsenal. Many casual salespeople seem to view it as the shiny new object to catapult them into more sales.

As well, the iBuyer concept for instant transactions, introduced in 2014 in the US, accounted for .2% of US transactions in 2018. That included 15,000 purchases and over $10,000 sales, this according to analyst Mike DelPrete.

Lastly, and in our experience, any attempt to buy a home sight unseen is anything but a good idea. Enhanced photography, in some cases digital staging and omission of negative features of the home can lead to disappointment at the very least, possible litigation and attempts to back away from the sale. None of the advertising and photography can take the place of physically walking through the property and neighbourhood and getting a feel for what is being purchased with a REALTORS® third eye.

Bottom line: Real estate professionals will continue to play an important role in successful buyer and selling.

How to Keep Your Home Healthy

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As we all welcome the prime of summer with watermelon, beaches and BBQ’s, it also means bare feet in the house and windows left wide open. This allows germs and bacteria to come in and gallivant around your home. The best way to protect your home from germs, toxins and chemicals is to keep them out in the first place.

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1. Dust

Dust is the silent but dangerous toxin floating around your house. Dust can cause allergies and respiratory issues. House dust aggravates allergies and hay fever. The best way to prevent dust form building up is to vacuum every week, even if your house doesn’t look dusty. Make sure you clean the vacuum bag/filter every time and use a vacuum with a strong suction.

2. Pesticides

Yes, weeds are a huge pain in any gardeners behind but spraying toxic chemicals is not the answer to combating these pesky little guys. You can make a natural homemade spray by combining, 1 gallon of white vinegar, 1 cup of salt and 1 tablespoon of liquid dish soap. Spray this directly onto your grass and continue regular weeding and your garden will be blooming in no time!

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3. Use natural cleaning products

You could be bringing toxic chemicals into your home without even realizing it with some of the cleaning products you might be using. A simple and easy fix is to replace harsh chemical cleaners with natural cleaners. You can either make these cleaners at home or opt for natural cleaners from the grocery store.

4. Watch for mould build up

Mould is a household problem that can turn from something small to a huge health risk if it is not dealt with properly. Mould accumulates in damp and poorly ventilated buildings, typically in bathrooms or around kitchen sinks. Mould can be very damaging to your lungs and can cause inflamed airways, nasal congestion and wheezing.

The treatment of mould will depend on how severe it is. A few ways to prevent mould are to ensure your bathroom has effective ventilation, regularly clean your shower curtains and immediately attend to leaky pipes.

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5. House plants to the rescue

House plants are an excellent way to clean the air in your home, plus they look so darn cute! Spider plants, aloe vera and peace lilies are especially hard workers when it comes to air purification.

Home sales increase, but local real estate market still robust

St. Catharines, ON (July 8, 2019) - Residential home sales activity recorded through the MLS® system for The Niagara Association of REALTORS® (NAR) totaled 702 units in June 2019. This was an increase of 4.8 per cent from June 2018 and a decrease of 5.3 per cent from May 2019.

On a year-to-date basis, a total of 3,673 homes have sold over the first half of the year, an increase of 9.4 per cent from the same period in 2018.

“Home sellers in Niagara enjoyed a robust spring market this year,” says Deanna Gunter, President of the Niagara Association of REALTORS®. “Although the number of units sold has increased over 2018, new listings coming onto the market and our inventory, as a whole, are still down. This keeps Niagara in a seller’s market moving into the summer months.”

The MLS® Home Price Index (HPI), tracks price trends far more accurately than is possible using average or median price measures. The overall MLS® HPI composite benchmark price for the Niagara region was $415,000 in June 2019. This was an increase of 6.7 per cent compared to June 2018.

The characteristics of the HPI composite benchmark is a home between the age of 51 to 99 with three bedrooms and two bathrooms. A full list can be found in the accompanying chart.

“Working with a Niagara REALTOR® to set a list price which reflects the current market value is key for sellers who wish to take advantage of a market moving in their favour,” says Deanna Gunter.

The dollar value of all home sales in June 2019 was $314.9 million, a 15.5 per cent increase from the same month in 2018. It was one of just a handful of times in history that the MLS® system for The Niagara Association of REALTORS® has processed more than $275 million in a single month.

Please refer to the accompanying chart for residential market activity in select areas in NAR’s jurisdiction. Note: these statistics now include the Township of West Lincoln.

About The Niagara Association of REALTORS® The Niagara Association of REALTORS® represents over 1200 REALTORS® serving the communities of Fort Erie, Fonthill/Pelham, Lincoln, Niagara Falls, Niagara-on-the-lake, Port Colborne/Wainfleet, St Catharines, Thorold and Welland. Our mission is to empower REALTORS® to thrive. Our vision is to foster an environment where leadership and members provide influence, advocacy, enhance professionalism and business acumen.

New Rules on Disclosing a Death In Home

How would you feel if…

… you purchased a home and after closing found out that someone had died, was murdered or committed suicide in the house?

Feelings Vary Among Buyers

We have found that some people wouldn’t care, and yet others would be quite put off simply because they were not informed. Still others would be disturbed that someone died in the home; had they known, they would not have purchased. Still, different buyers would have reservations about buying depending on whether it was a natural or a violent death such as a murder or suicide.

Concern Over Resale Value

As well, finding out after the sale can still be upsetting for financial reasons. They are concerned that it would affect the resale of the home down the road. Had they known, they argue, they either would not have purchased or they would have offered less.

Case Study 1: Don’t Tell

In one case, the buyer bought after he was told that the previous owner had committed suicide in the home. He purchased to fix and flip. Yet when he decided to sell, he did not want the suicide disclosed. His lawyer informed him that he did not have to disclose it. The salesperson, however, felt that it should be disclosed as it could be construed a material fact, meaning that it might influence the buyer’s decision to buy or how much to offer. The seller eventually did agree to disclose the death and the property sold without a problem, and with very little variance from the list price.

Case Study 2: In or Out

The buyer asked if anyone had died at the property. The listing representative said, “Yes,” and mentioned that the owner had died from natural causes. The buyer proceeded with an offer in which the death was restated in writing. The buyer then asked whether the owner had died inside the home. On being told the death occurred outside the back door, the buyer proceeded with the purchase.

Case Study 3: 2 Offers

Here two buyers were competing for the same home. On being told of the suicide at offer presentation, the buyer with full price cash walked away. The 2nd buyer didn’t care, increased his offer to full price, obtained the needed financing and closed the deal.

Buyer Beware Applies But Now A New Ruling Exception

In a recent Canadian case, Wang v. Shao, 2019 BCCA 130 the Court of Appeal dealt with dealt a buyer complaint for nondisclosure of a murder on the property purchased The appeal court ruled that “buyer beware” applies. That is, when a buyer has a fear or subjective concern about a death, it’s up to the buyer to ask specific questions. Once asked the Seller must answer truthfully and cannot be silent or fail to disclose. The buyer did not specifically ask if a death occurred at the property but only asked why the seller was selling.

This is a New Twist. Prior to this, if the seller did not want to disclose and the buyer asked, the agent would have to say that he/she was not at liberty to disclose.