Author: Cheri

Here Today, Gone Tomorrow – The Risk of No Conditions!

Cheri 0 Comments

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In this very hot market, we are seeing most deals without any conditions, and in particular, no financing condition.  However, this is not necessarily a blessing for the Seller. Sales not being completed because of the Buyer cannot get financing.  The Seller believes they have a firm Agreement of Purchase and Sale act upon that information to buy a new home. Unfortunately, the Seller finds out when they get close to the closing, that the Buyer cannot close because the price paid for the house is not justified by the bank’s appraisal.  The Seller is left in the inevitable position of not being able to complete their purchase.

To make matters worse, there was a multiple offer, and unfortunately the seller selected the perceived best offer, which turned out to be the wrong offer.  The offer had only the minimal deposit, so the seller does not have much to fall back on for their damages.

In order for Agents acting for the sellers to protect their clients, the Agents should be making sure that the accepted Agreement of Purchase and Sale have larger deposits.  If buyers can not come up with a larger deposit, they probably cannot make up any shortfall in the bank financing either.

If you sold your home in 2016, you will have to report it to the Canadian Revenue Agency in your tax form that deals with Capital Gains, even though any gains remain tax free if you have lived in the house as long as you owned it. The basic information related to the transaction must be filled out on the income tax form including the year of purchase, the proceeds of the sale, and the description of the property.  The penalty for not reporting the sale of a home and not having your tax return amended if necessary is up to $8000. This change in reporting will make it easier for the CRA to catch taxpayers who try to claim the principle residence exemption on more than one property for the same period.

Knowledge is Power, which results in more business!

If you have any questions or concerns, please feel free to contact us at your convenience.  If you have any suggestions for future topics please let us know.

Prepared by Don Travers, Solicitor with Paquette & Travers

Contact toll free: 1-877-744-2281    Online: www.paquettetravers.com

Watch for more Travers Tidbits to follow each month!

New Tarion Regulations For Home “Flippers”

Cheri 0 Comments

Few realtors realize, that a Buyer of a new home from a builder who wants to resell the home without ever moving into the home, must register with Tarion.

Realtors for both the Sellers and Buyers of new homes being flipped must be aware that Tarion has introduced a letter agreement that sellers must provide to the ultimate Buyer with a disclosure page. The Disclosure page requires Sellers to state that the sale is effectively a resale. The Seller must also state the original warranty start date; the status of the remaining warranty coverage; and, contact information to permit the Buyer to check on the status of any claims.

Realtors can obtain the agreement from Tarion and use it as a schedule to the Agreement of Purchase and Sale.

The Re-Seller/Flipper must file an application with Tarion. These applications will be processed in a “fast track” manner. The home will remain enrolled under the original Seller/Builder.

Even though Re-Sellers are responsible for making the application to Tarion, Seller’s Realtors need to ensure clients are made aware of these requirements to protect themselves from liability.

When I spoke recently at a real estate office, I was amazed to note that not many agents were aware of the Tarion requirements on a flip.  If you are interested in obtaining more information on these regulations, we would be happy to send you the Tarion document.  To request your copy, please email us at info@paquettetravers.com.

What You Need to Know About Common Element Condominiums

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We have experienced problems recently with agents not properly preparing Agreement of Purchase and Sales when it comes to Common Element Condominiums.  The Agreement does not mention the condominium corporation at all.  Some refer to monthly fees without stating what they are for, some agents do not think that they need to refer to the review of the Status Certificate and make the transaction conditional on lawyer review.  All of the above can prove fatal to the transactions and to the agent.

We have had purchasers refuse to close transactions because it was not disclosed that they were buying into a condominium corporation.  The monthly fee can be very small, as little as $15.00 a month, but if not disclosed as a condominium, the purchaser can walk because even though the fee is small, there is always the potential liability of Condo Corporation which is unknown.

We had a number of closings delayed because the purchaser refused to close unless the seller paid the condo fees for 5 years because of the failure to disclose there was a condo corporation fee. Therefore, it is imperative that there be full disclosure of the status of the property and any condo fees, to ensure that agents are not having to reach into their own pockets.  The deal only closed when the agents agreed to pay the condo fees for the next 5 years.

Purchaser’s agents must provide for the review of the status certificate on these condos as well.  Failure to do so could result in the purchaser being saddled with unpaid condo fees, pending special assessments, or possible lawsuit costs pending against the corporation.  The agent would be negligent for not making the offer conditional on review by the Purchaser’s lawyer – obviously a lawyer not obtaining the Status Certificate would also be negligent.

So be sure you get all the facts on the property you are selling and buying, because many properties are now being developed as these Common Element Condominiums (POTL) and sellers do not always appreciate what they are selling. The sellers naturally blame their agents when these problems arise.

Knowledge is Power, which results in more business!

If you have any questions or concerns, please feel free to contact us at your convenience.  If you have any suggestions for future topics please let us know.

Prepared by Don Travers, Solicitor with Paquette Travers & Deutschmann

Contact toll free: 1-877-744-2281                                                      Online: www.paquettetravers.com