Decorate by Nature

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As hard as it is to say goodbye to summer there is something very comforting about snuggling up in a warm sweater, watching the leaves drop and of course the best part about fall- thanksgiving! As we cover up the BBQ and put away the patio furniture we must now bring our summer entertaining indoors. But don’t fret- we’ll help you bring some of the outdoors to your Thanksgiving entertaining with our nature inspired decorating tips!

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Fall Wreath

As hard as it is to say goodbye to summer there is something very comforting about snuggling up in a warm sweater, watching the leaves drop and of course the best part about fall- thanksgiving! As we cover up the BBQ and put away the patio furniture we must now bring our summer entertaining indoors. But don’t fret- we’ll help you bring some of the outdoors to your Thanksgiving entertaining with our nature inspired decorating tips!

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Thankful Tree

Thanksgiving is all about taking the time to be grateful for what we have so why not write these things down? You don’t need much to make a thankful tree, just a small potted tree, some scrap paper and fishing line or thread. During dinner get your guests to write down what they are thankful for and hang them on the tree. Keep the tree up past Thanksgiving to remind yourself of all the wonderful things in your life.

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Pumpkin Spice

Give your pumpkins some spice, elegance and charm by painting them. For an elegant look try painting them white and, for something jazzier, use teal or pink. It will give a little more attitude to your Thanksgiving table.

Net Cost of Owning Versus Renting Your Home

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Mr. Will Dunning, Chief Economist for Mortgage Professionals of Canada, released an insightful report called, Owning Versus Renting a Home in Canada, release September 2018.

Increase in Home Prices vs. Renting:

  • According to the Canadian Real Estate Association, over the last twenty years, home prices in Canada have appreciated by an average of 6.2% per year.

  • According to CMHC, rents over the past twenty years have increased by an average of 2.7% per year.

Given the discrepancy, does home buying still make sense and are young people better off renting?

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Yet Home Ownership is at an All-Time High

Notwithstanding the perceived “deterioration in affordability” due to price increases, “Canadians remain highly interested in becoming homeowners, and they continue to succeed at buying homes.” Mr. Dunning reports that compared to renting, those able to invest in ownership would be better off in the long term as opposed renting. He agrees that upfront monthly costs for renting can be cheaper in most locations. However, the net cost of owning a home compared to the comparable rental cost is less and more cost effective over time. And that’s without considering a home’s appreciation.

The Net Cost of Owning Trumps Renting

Over time the cost of owning or renting will both rise. The net cost of owning, however, takes the following into account. The largest cost of ownership is the mortgage payment which typically becomes a fixed amount over the term of a mortgage contract, as in a five year term. During this period, and with each mortgage payment, a portion of the principal is paid down increasing the owner’s equity in the home. This savings effectively reduces cost resulting in a net cost savings.

Here is the Result On Average

According to Mr. Dunning, the result, based on a Canadian average price of $569,849, 20% down and a 3.25% over 25 years is as follows: On average, the cost of owning exceeds renting a similar home by about $541 per month. Yet once the “the principal repayment is considered, the net cost of owning is $449 less than the cost of renting.” Over 25 years or less, once the mortgage is paid off, he projects the cost of ownership at about $1,549 per month versus $4,655 for renting a corresponding dwellings.What’s more, because the lifetime costs of housing is lower than that of tenants, owners have a greater opportunity to accumulate more savings tend to be better off financially.

How Does This Pan Out in Niagara?

The regional overall average price year-to-date is about $470,000. Based on the same parameters as above, the net cost of owning exceeds the cost of renting by about $640. Minus the principal repayment, the net cost of owning is $380 less in the first month. Over year it’s about $6,400 less.

Other Housing Costs

Average annual increases for housing costs in Canada for the past 5 years: Property taxes 2.8%; Repairs: 1.9%; Home insurance: 5.4%; Utilities: 1.6%; Rents: 2.4%; Utilities: 1.6%; Rents: 2.4%. For full report, do an internet search on “Owning versus Renting in Canada-Mortgage Professionals.”

5 Reasons Why October Is the Perfect Month for Your Niagara Falls Vacation

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It’s not uncommon for people from all over the world to get the urge to visit Niagara Falls. For over 100 years now, it’s been one of the world’s most popular destinations. While most visitors make their way to the Falls and surrounding area during the balmy summer months, autumn has an appeal that’s hard to deny. From the thinned out crowds to the fantastic foliage, here are four reasons October is the perfect month to take your Niagara Falls vacation.

  1. Hornblower Niagara Cruises Still Operates

    One reason people are often more inclined to visit the area during the height of the tourist season is due to the fact that all the fun rides and attractions are going full-tilt.While October does see some reduction in hours and entertainment, for the most part, the fun is still accessible.In particular, Hornblower Niagara Cruises is still in operation during the month of October.There is simply no better way to get up close and personal with Niagara Falls while getting doused with spray and deafened with what sounds like thunder, you can do it just as easily in October as you can in July.

  2. The Crowds are Gone

    Some people genuinely enjoy the thrill of a crowd, but if you aren’t one of them, planning an October trip is a perfect way to see the Falls without triggering your agoraphobia. Reservations at the area’s finest restaurants are easier to get. Tickets to shows are more readily had. Just strolling around town or gazing at the Falls is more easily accomplished when the happy glut of visitors has mostly gone home. It’s true that the summertime crowds can feel electric thanks to the energy and cosmopolitan nature of the thousands upon thousands who show up to experience the place. If you don’t need that sort of electricity, however, October’s slower and less-peopled pace is ideal.

  3. The Weather is Amazing

    It’s not as if it ever gets really hot in Niagara Falls. The weather’s remarkable mildness is one of the reasons the grapes produced along the Niagara Peninsula produce such excellent wines. That being said, the autumn weather is often perfect. The sweet chill in the air can often be taken care of with little more than an extra windbreaker or sweatshirt during the mornings and evenings. It can rain a bit, so you’ll want to bring an umbrella and galoshes, but overall, fall in Niagara Falls usually includes plenty of sun.

  4. The Fall Foliage

    The Niagara Region is a very fertile place, and the autumn highlights the ways the changing seasons affect it remarkably. Whether you love to hike or you love driving around the countryside, taking Niagara in during the month of October is often a feast of autumn colour that can rival New England. You’ll definitely want to bring your camera.

  5. Amazing Offers at Greystone Manor Bed & Breakfast

    We'd love to have you stay with us. As always, our rates include FREE onsite parking, FREE Wi-Fi, a full nutritious breakfast and so much more. In October, we are including some special treats to make your visit to Niagara Falls even more enjoyable. Click here to check out the offers on our official website: www.greystone-manor.ca

So, plan your vacation for the Niagara region during the month of October. As these five reasons more than show, it’s the perfect time to visit.

Abandoned Gas Wells and the Environment

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When an Abandoned Gas Well is Discovered?

The home purchased had an additional back piece of vacant land attached to the property. On viewing the home before buying, the buyer did not inspect the back parcel.  On searching title, the buyer’s lawyer obtained a copy of an old survey that indicated an abandoned oil well on a corner of the attached back parcel. With its discovery, the buyer inspected the back parcel found the well, visible from the surface and took a picture. He noted the smell of gas in and around the well. 

Disclosure of a Gas Well Should be Made

He was somewhat upset as he felt the gas well’s existence should have been disclosed. He discussed his concern with both his lawyer and real estate agent. His lawyer asked for a price reduction through the seller’s lawyer and some three days later still hadn’t received a response. The buyer now turned to his brokerage. He wanted the property but also wanted some resolution. Recognizing this as a problem, brokerage did some research and made some of the following discoveries.

According to the Niagara Peninsula Conservation Authority,

  • “An abandoned oil and gas well on your property is a hazard to the environment and your health and safety.”
  • They can also be obstacles to new development and “can be a financial liability to the landowner.”
  • So it’s important to report and plug abandoned wells.

Information from the Ministry of Natural Resources

We learned that the Ministry of Natural Resources and Forestry has what’s called the Abandoned Works Program to help “Ontarians properly plug wells on their property.”  They will:

  • Establish as to whether a well qualifies for the program,
  • Rank the well according to its “risk to public safety and potential for environmental damage to determine when it should be plugged…,
  • “Arrange for a certified well contractor to plug the well.’ 

If there is no gas well operator to be found, the landowner is responsible for plugging the well. In our search, we thought we located the well in the Oil, Gas & Salt Resources Library and reported our findings to the Ministry. As they could not find it in their database, they recommended the buyer hire a consultant. Apparently unlicensed and abandoned gas wells, not properly decommissioned, abound in southwestern Ontario.

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Cost to Plug the Well

The cost of plugging a well can range from as little as $2,500 to thousands. In one reported case the landowner ended up being on the hook for $20,000. By now some days had gone by and the closing date was fast approaching. The buyer hired a contractor who estimated a cost of $28,500 to properly plug the well. Armed with this quote, the parties negotiated a reduction in purchase price of $25,000, with the buyer agreeing to take responsibility to plug the well after closing.

More Pre-Listing Research by REALTORS Needed

This should have been disclosed before the buyer made an offer. Luckily it was discovered before the deal closed. REALTORS would be wise to walk the property prior to listing and have the seller fill out the “OREA Property Information Checklist" to uproot any required disclosures.

How to Seamlessly Transition from Summer to Fall at Home

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As hard as it is to say goodbye to summer there is something comforting knowing that it is almost time for sweaters, changing leaves and of course pumpkin spice everything. With the change of seasons comes a change of routines and the inevitable stress of switching from summer mode to back to school and work mode. But don’t fret- we are here to help you get your house ready so you’ll be able to enjoy fall!

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Schedule/Calendar

Your calendar will become your best friend this school year if you use it properly. We recommend having two calendars, one for the week and one for the month. This way you can see what you need for the day to day as well as into the future.

Century 21 Tip: Use a blackboard for your weekly calendar! This will allow you to change and add things as the week goes by. As we all know – nothing ever stays the same day to day!

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Food Prep

Prep your food to prep your life! Once you get into the habit of prepping your food for the week you will wonder how you ever survived before. Essentials for food prepping:

  • Freezer safe Tupperware
  • A food prep cook book with lots of yummy recipes
  • A slow cooker/ Instant Pot, this will help you cook faster and more efficiently. These are especially great for soups, sauces and meat!
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Home Chores

As it hard as it might be, it’s time to put away your summer clothes. Only keep out what you will use, this well help you mentally get ready for fall. When it comes to chores, decide what your top priorities are and set realistic cleaning schedules for your chores. Saying you will dust, mop and clean the windows every week is likely not going to happen (you are only human) so don’t set yourself up to fail. Like your weekly calendar, set up a cleaning schedule for daily, weekly and monthly cleaning duties and assign tasks to each family member. Many hands make light work!

*Source: http://www.organizedtransitionsllc.com/interesting-facts-organized/

6 Mortgaging Mistakes to Avoid

Avoiding Mortgaging Mistakes

The Inability to close a purchase for lack of mortgage funds can occur for any number of reasons. some of which are:

  1. Not Acting in Time: The buyer may not have acted within the time frame specified in the offer to arrange a mortgage and, instead of requesting an extension of time, removes the mortgage condition on the assumption that arranging a mortgage is “no problem. Left with a condition-free offer the buyer scrambles to get the mortgage funds and ends up with a high-rate private mortgage with high upfront fees and payout penalties. 
     
  2. a. Seller Won’t Extend: Alternatively, the seller is getting a lot of interest and refuses the buyer’s request to extend the mortgage condition. The buyer takes the risk of removing the condition making the agreement firm and binding. In this scenario, the mortgage company is often awaiting additional paperwork from the buyer before committing, such as: tax assessments or a letter of employment and income verification.

    b. A Conditional Approval: The lender may have given the buyer an approval conditional on the appraisal of the home being purchased and buyer removes condition. The seller who might not allow an appraiser to view the property once the mortgage condition is removed. 
     
  3. Buyer Misunderstand the Process: The buyer may fail to understand that aside from being approved, the lender may want to approve the home by way of an appraisal. The lender will approve a mortgage based on the lesser of the purchase price or the appraised price. The buyer could be caught short of downpayment funds if the valuation cannot justify the price paid.
     
  4. The buyer makes a cash offer in the hope of negotiating a lower price, all the while knowing that funds need to be borrowed to close the sale. This approach too can be harmful if sufficient funds cannot subsequently be borrowed. The mortgage stress test for conventional mortgaging added to this dilemma when it came into effect. 
     
  5. Credit Purchases Before Closing: Prior to closing the buyer makes substantial credit card purchases--for say furniture and appliances--that negatively affect credit qualification. Then the lender, as a common practice, checks the buyer’s credit one last time before closing and discovers that the credit purchases no longer qualify the buyer for the needed mortgage. Buyers would be wise to avoid this between signing an offer to purchase and closing date.
     
  6. Incomplete Paperwork: The mortgage agent or representative for the lender did not have all of the proper paperwork in place and the mortgage, conditional on documents to be received, was withdrawn.

Why It Is Better To Buy Now Rather Than Later

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It’s More Important Than Ever:

As you know, the internet can be a great source of information. Some buyers though are too anxious to start looking at homes without confirming what they can afford with a lender. And with today’s mortgage stress test, the need for a buyer to confirm their mortgage affordability is more critical than ever before.

Don’t Assume Affordability:

In one such case, a young couple assumed they could afford their desired price range in spite of the salesperson’s encouragement to obtain a pre-approval. So they viewed some ten homes and signed a purchase agreement conditional on obtaining a mortgage and a home inspection.

Stress Test Failure:

After meeting with their lender they were told they did not qualify for the price of the home they were buying. Though they did qualify based on the current mortgage rate, they failed the stress test. Such an occurrence affects about 18% of prospective buyers today. They would have to reduce their expectations by about $30,000 to buy or increase their downpayment.

Other Possible Measures by the Salesperson:

As well, the salesperson, against his better judgment, was influenced by their confidence, enthusiasm and motivation to buy. He also did not want to lose them as a client. He might have taken one more step though and suggested that, though he cannot pre-approve them, he can certainly run through the same exercise a lender uses to find out what buyers can qualify for based on their income and debts.

Opting to Wait and Improve Downpayment:

The couple was initially upset with the bank but mostly at themselves. They felt the salesperson had done a good job and admitted they should have followed his advice before proceeding. Because of their let down, they decided to put a hold on buying. They did not want to reduce their expectations on the home they wanted. They wanted to save a larger downpayment, about $20,000 more, which they determined would take about two years at a savings of $10,000 per year.

Why it is Better to Buy Now:

Yet buying a lower-priced home today might turn out to be the better strategy, and here’s why: According to the latest statistics, the average house price across Canada has risen by about 6.2% per year for the last 20 years. As an example, barring a downturn and if things remain equal, a $300,000 house today would potentially be worth around $338,000 in two years.

How Equity Can Increase:

If the buyers purchased a home at a lower price today of $270,000 to qualify, after their downpayment of $30,000 they would have a mortgage of $247,440 with CMHC insurance of 3.10% added. Given the 6.2% average annual increase, this home might be worth about $304,500 in two years. That’s a potential gain of $34,500. As well, if they paid down the mortgage by the $10,000 per year they planned to save, their equity would increase again by $32,738.

Their Total Equity:

They would then have the following equity: the original $30,000 down, the capital gain of $34,500, plus an additional $32,738 from reducing the mortgage principal. That’s a total of $97,238 allowing them to buy a better home in two years. It’s worth pursuing.

National Average Price Up 6.2% Per Year Since 1997

House Prices Up

In July 2018, the Mortgage Professionals Canada released their Report on Housing and Mortgage Market in Canada” authored by their Chief Economist, Mr. Will Dunning.

The following is a small but important indication of what is in the report.

1.     Adjusting the Purchase Price:

The report points out that 18% of buyers who could actually afford the home purchase of their choice would fail the stress test. It’s estimated these buyers would have to adjust their purchase by an average of $28, 750. They would also need to increase the amount of down payment. This affects about 120,000 buyers per year.

2.     Number of Resale’s:

To date this year, national resale home activity is down 12.5% compared to last year and 16.5% versus 2016. For the Niagara Region, the overall number of sales in resale homes is down by an average of 21% year-to-date to June 30, 2018.

3.     Average House Prices:

Since 1997 (2 decades) the national average price of resale homes has increased by 6.2% per year from $155,000 in 1997 to $510,000 in 2017.  To date for 2018, the average price of homes in Niagara varies from a low of $334,000 in Welland to a high of $755,000 in Niagara-on-the-Lake. The overall average lies at $471,000. The increase in average price to the end of June is up 1.7% compared to last year. Yet this varies: some cities are indicating an increase, others a decrease from last year.

4.     The Home Ownership Rate:

 In Canada the home ownership rate was at 67.8% in 2016 according to Census Canada. This is down from 69% in 2011. The report attributes this to first-time buyers taking longer to buy. Yet with the additional challenge of the stress test, Mr. Dunning expects that “will fall further during the 2016 to 2021 Census period, with the burden being borne, once again, disproportionately by young adults.”

5.     Sources of Down Between 2015 to 2018:

  • As the main source, 85% of down payments come from personal savings.
  • Another 39% derives from gifts from parents and other family members.
  • 25% is sourced from loans from parents and other family members.
  • Loans for a down payment sit at 43%.
  • From an employer, loans are at 8%.
  • Withdrawal from RRSPs through the Home Buyers Plan: 38%.
  • And finally down payments from other sources stands at 6%.

The total down payments are made up of a combination of any number of the sources mentioned above. The most prevalent source, personal savings accounts for about 50% of the total down payment for first time buyers.

During the 1990’s the average down payment for first-time purchases was about 22%. Between 2014 and 2017, the average has been 26%.

Repairs and Upgrades: How Much Will They Cost?

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During the process of buying or selling a home, your clients often learn about recommended or required repairs and upgrades. This can happen as a result of the home inspection as well as your expert knowledge of your market and comparable homes. Of course, the first thing homeowners want to know is, “How much will that cost?”

Pillar to Post is pleased to offer our popular Residential Construction and Remodeling Estimates cost guide, which provides estimated cost ranges for repair and/ or replacement of the major systems and components in a home. It also includes general guidelines for the life expectancies of those systems.

Request complimentary copies of the cost guide from your local Pillar To Post Home Inspector or download it at pillartopost.com/costguide.

 

Curious as to which upgrades will increase your home's value the most?  Which upgrades will get you the best return on investment?  Contact Barbara or Ashley today for the answers with their free, no obligation consultations.

Natural Home Cooling

Here are some ideas on passive cooling your home to reduce your need to turn on the air conditioning.

Quick Tricks to Reduce the Heat in Your Home

Keep Your Blinds Closed

This very simple tip can lower indoor temperatures by up to 10ºC.  Up to 30% of unwanted heat comes from your windows, especially those windows facing south and west.  By utilising shades, curtains you can prevent your house from becoming a miniature greenhouse.

Create a Thermal Chimney

Open the lowest windows on the side from where the breeze is coming. Leave interior doors open, and open the upstairs windows on the opposite side of the house. The warm air in your house will draw upwards and out the upper window, an effect called ‘thermal siphoning’. This is most effective when the inside temperature is higher than the outside temperature.

Create a Faux Sea Breeze

Fill a mixing bowl with ice or ice packs and position it an an angle in front of a large fan so the fan blows over the ice.  The breeze from the fan will be extra cooling and feel like an ocean breeze.

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Longer Term Heat Reduction Solutions

Insulation

Insulating, caulking and weatherstripping are essential to keeping your home warm in cold climates, but they also help keep your home cool in hot weather. The attics of most homes absorb heat through the roof, and insulating the attic floor will keep this heat from radiating down into the house. Fiberglass insulation, at least R-30, is easy to install. The cost will be recouped quickly in lower energy bills throughout the year.

Landscaping

Trees, vines and shrubs can be used to shade your home and reduce your energy bills. Trees or shrubs can also be planted to shade air conditioning units, but they should not block the airflow.

Rock walls, paved areas and rock features should be kept to a minimum on south and west sides of the home, because they increase temperatures by radiating heat.

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Reflective Barriers

An important consideration in passive cooling is house colour.  Dark-coloured home exteriors absorb 70% to 90% of the radiant energy from the sun that strikes the home’s surfaces. Some of this absorbed energy is transferred into your home by way of conduction, resulting in heat gain. In contrast, light-coloured surfaces effectively reflect most of the heat away from your home.

Absorption Rate and Months of Inventory - June 2018

The DOM (Days on Market) indicates the market time of homes that have sold. It’s not necessarily reflective of a home’s actual market time though. In a number of cases and as a marketing tactic, when a home’s list price is reduced, the salesperson will relist the home to have it show up on MLS as a new listing. This distorts a home’s DOM: it may have sold within 30 days from the new listing date but could have been on the market for any number of days prior.

The Absorption Rate and Months of Inventory

The Absorption Rate helps resolve any distortion in the DOM. It indicates the following:

  •  How many homes are absorbed (or sold) in the market on a monthly basis within a given period, say 6 months,
  • How many months it will take to sell the current listing inventory,
  • How the seller might position their listing to improve its marketability.

Positioning the Listing:

So, for example, if a seller wants to sell in one month and the months of inventory is 3, the seller would need to position the home in front of the market by pricing it more aggressively than its competition. This helps the seller to set realistic expectations and improve a reasonable buyer’s perception of value.

The following chart shows the absorption rate or average number of sales per month and the months needed to sell existing inventory.

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Buyers Want to Know Up Front Not After

There are a number of searches a lawyer may carry out when working for a buyer on a real estate purchase.

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There was a time when lawyers, by way of a requisition letter, would make inquiries to the municipality concerning the property to discover any issues affecting the property. Clause 10 of the standard Agreement of Purchase even speaks to the Buyer being allowed to satisfy himself that there are not outstanding work orders or deficiency notices affecting the property, a responsibility that was carried out by the lawyer.

Resolution of Certain Issues by Title Insurance

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Though some still do make a requisition to the municipality, many don’t since Title Insurance came into prominence some years ago. It saves the buyer the additional cost of requisitioning the city. As well, if an issue is discovered after closing Title Insurance would attempt to resolve it depending on what it is.

Yet Buyers Prefer to Know Up Front

In our experience Buyers want to know of any issues up front, or at least before they close and take possession of the property. That’s why the preprinted portion of the Offer to Purchase has certain provisions or built-in conditions. An issue discovered after closing tends to upset Buyers.

Here is an Example of a Municipal Drain Bill

Recently we received a call from one of our buyers who purchased his rural property in the fall of 2016. He was quite upset at having received a bill from the municipality for $2,635. It was noted as a “Drainage Maintenance Billing”. Under provincial legislation a Municipal Drain is part of a municipality’s infrastructure. The cost of repair and maintenance on the drain is “assessed to the lands within the watershed of the municipal drain; in other words to the affected property owners. The maintenance was performed between January 2010 and December 2016 and all land owners were notified.

The Previous Owner Was Notified but….

When the municipality notified all affected owners, the property was still owned by the seller yet the issue was not disclosed. This could easily happen as he seller could have forgotten about the notification. Further, the city letter went on to say that if the amount due was not paid it would be added to the property taxes. Upset, the Buyer felt that he should have been told at the time of buying and felt his lawyer should have discovered the matter. What’s more, in talking to the municipality, the buyer was informed that had a requisition been made, the matter would have been disclosed. This only frustrated the buyer more. We suggested enquiring with their Title Insurance Company to see if they would cover the cost of the billing.

Title Insurance: First No and then Yes

On contacting a representative of the Insurance company, the request was initially denied. The representative disagreed with the decision and went to bat for the buyer. The Title Insurance company reversed its decision and approved the payment. A happy ending but a requisition to the city before closing would have brought the matter to light.

Niagara's Class 6 Rapids - The White Water Walk

Experience a first-hand lesson in the raw power and peril of the Niagara River’s Class 6 white-water rapids. The roar of the river provides a deceptive calmness, the perfect ambiance for your walk among the many viewing platforms that put you right at the river’s edge. For those looking for an up-close and personal view of nature’s power, you will not want to miss this.

This self-guided tour includes many stories about the geology of the Niagara Gorge and the plant and animal life you may see on your visit to Niagara Parks.

Mandatory Lease Agreement in Ontario

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As directed by the Rental Fairness Act 2017, the Ministry of Municipal Affairs and Housing created the mandatory residential lease with 5 reasons in mind:

  1. To use “easy to understand language to help
  2. Landlords and tenants understand their rights and responsibilities,”
  3. To reduce illegal provisions,
  4. To reduce misunderstandings caused by verbal agreements, and
  5. To reduce dispute resolutions with the Landlord and Tenant Board.

The Act also introduced additional protections.  Here are some highlights.

Landlord’s Personal Use: Due to abuse of the Landlord’s own use provision, the landlord must give 60 days’ notice before the end of the tenancy, and pay the tenant one month’s rent as a penalty. Alternatively the landlord can offer another unit acceptable to the tenant.

What if a buyer requires a rental unit? The payment penalty of one-month’s rent is not required in this case, but the property cannot have more than 3 unit rental. Once an offer becomes unconditional, and notice to terminate is given to the tenant, the landlord can apply to the Landlord Tenant Board to affect the termination. The Buyer must sign an affidavit stating that they or a member of their immediate family will occupy the unit on closing, and be required to attend any court hearing to confirm.

Added Statement in Agreement of Purchase and Sale: In the notice of termination clause in the Offer, it should additionally state that the buyer intends to occupy the property for at least one year and to indemnify the seller for any damages suffered because the buyer did not move in. This is important because there are a number of penalties that can be imposed, as well as an administrative fine of up to $25,000.

You Can Add Additional Clauses to the Agreement.

As the lease agreement states, “An additional term cannot take away a right or responsibility under the Residential Tenancies Act, 2006. Any conflicting term will be void and not binding.

Smoking

In the lease, the landlord and tenant can agree to allow or prohibit smoking in the unit and on the landlord’s property. Even if smoking is allowed, the landlord can apply to the Board if it substantially interferes with “reasonable enjoyment of the landlord or other tenants, causes undue damage, impairs safety, or substantially interferes with another lawful right, privilege or interest of the landlord.”

What About Marijuana?

 “Landlords will be able to spell out a ban on smoking marijuana in rental units for new leases post-legalization — the same as they do for tobacco use,” this according to a Toronto Star article dated January 22, 2018 by Peter Goffin of the Canadian Press.

Author and Lawyer, Mark Weisleader, recommends a number of additional terms to include with the Lease Agreement. In it, he recommends a No Smoking/Marijuana Clause to disallow smoking of any kind including marijuana, as well as prohibiting the growth of cannabis in a unit.

The mandatory agreement does not apply to month-to-month rentals and lease agreements prior to April 30, 2018.

 

4 Tips for a Healthy Picnic

Summer is the season for fun in the sun and outdoor picnics are a popular summertime activity in Niagara. This is not surprising if we take into consideration the region’s unparalleled natural beauty, but when heading out for a picnic with family, friends, or a significant other this summer, remember to stay healthy while enjoying the great outdoors.

1.      Bring plenty of hand sanitizer!

While some picnic facilities have public restrooms, good soap and warm water are usually hard to find when you’re on a picnic. Hand sanitizers are a great way to kill the germs on your hands before eating or coming into contact with others, especially small children.

2.      Bring simple foods

When heading out for an all-day picnic, it can be tempting to bring lots and food and other knickknacks as you worry that you might need them all at some point during the day. Remember that the simplest options are both the easiest to carry and usually the healthiest ones. Instead of greasy foods and five-course meals, bring healthy alternatives like cherry tomatoes, grapes, berries, carrot sticks, celery, olives, cheese cubes, crackers, and sandwiches.

3.      Stay hydrated!

When spending time outdoors on hot summer days perhaps the most important thing to remember is to stay hydrated. Drinking alcoholic beverages like beer may be tempting, but the most effective way to hydrate your body is with cool fresh water. Bring plenty of water in a cooler or frozen and leave it out to unfreeze before enjoying it.

4.      Enjoy a healthy and refreshing desert

While cake, chocolate, and other calorie-rich foods sure taste great, when you are out for a long time on a hot summer day the healthiest and most refreshing option is fruit! Enjoy a slice of watermelon, some grapes, an apple, or a peach and you will feel refreshed without feeling guilty about consuming all those delicious calories.

For more tips about planning a health picnic, or for ideas about great picnic spots in Niagara, feel free to contact me at Barbara.Grumme@century21.ca.

Canada Revenue Agency (CRA) Cracks Down on Real Estate

Tax Avoidance on Real Estate over $636 Million

To crack down on non-compliance on real estate transactions, the Canada Revenue Agency reviewed 30,000 files over the past 3 years in Ontario and B.C. They found $592.6 million in additional taxes resulting in over $43.7 million in penalties. The CRA news release dated May 17, 2018 also said, “Specifically in 2017-2018, the CRA assessed $102.6 million more in additional taxes than in 2016-2017. Penalties increased by $19.2 million from one year to the next.”

To uncover tax avoidance on real estate deals, CRA collaborates with provinces, territories and municipalities and continues to improve on tools to combat non-compliance.  One legal tool to uncover taxes and GST/HST on assignment sales is their unnamed persons requirement.

So What is the “Unnamed Person Requirement?” 

New homes, rental properties and substantially renovated properties are subject to HST. So Builders and Developers are required to remit the HST on selling, renting a new unit for the first time or on personally moving into one of the properties. Under the “unnamed persons requirement” issued to developers and builders, CRA can obtain the identity of any buyer who is not reporting properly for income tax and HST purposes.

As well, purchasers of new homes can apply for a new home HST rebate provided the home is used for their primary residence. In many cases, as the builder includes the HST in the price of the home and pays it on behalf of the buyer, the builder also applies for the rebate as it is taken off the price to benefit the buyer. If the buyer is not going to use the property as their primary residence, the rebate does not apply and must be paid to the builder on closing. This HST rebate provision can also get abused by some buyers.

Flipping Property

On flipping property, any profit must be reported as business income and not as capital gain. Buyers also cannot avoid compliance by pretending to use the property as their non-taxable primary residence.

CRA is also looking closely at “pre-construction assignment sales” in which a condo or home is sold to another buyer before completion of the home or unit. 

Re-assessments and Gross Negligence  

Failure to properly report can result in re-assessment of taxes owing and arrears interest. For “gross negligence” a penalty of 50% of the tax avoided would be imposed.  A Financial Post article dated May 25-18, by Jamie Golombek, CPA, mentions a case that involved a real estate salesperson and her granddaughter. In 2006, the salesperson purchased Unit 6 and the granddaughter purchases Unit 5. The deals both closed in June 2010 and were resold by the next month. No income relating to the condos was reported with their individual 2010 tax returns. CRA reassessed and established that the buyers failed to report business gain of $103,206 on Unit 6 and $106,025 on Unit 5. They failed to further report their profits and so CRA charged both with gross negligence. 

In court, after hearing arguments, the salesperson grandmother was found guilty of gross negligence. The granddaughter a 21-year old was relieved of gross negligence as she relied on her grandmother and father, both real estate agents, to tell her if reporting her income was necessary.