Toronto Real Estate and Neighbourhoods Blog | Move Smartly

Road Access Critical When Buying Cottage in Ontario

Bob Aaron in Legal, Home Buying

The most important question for anyone buying a cottage property is always, "How do I get there from here?" After all, there's no point spending hundreds of thousands of dollars on a recreational home if the only way to get to it is by helicopter.

Access to cottages was the issue in a case heard by the Ontario Court of Appeal last year. A group of cottagers live year-round on the shores of Lake St. John in Ramara township. The cottage sites are on reserve lands of the Mnjikaning First Nation, and the cottagers pay the Crown an annual rent of $1,400 to $1,500 each.

The only existing motor vehicle access to the cottages is over a road located on an adjacent lot, purchased in 2003 by a numbered company owned by the Mnjikaning First Nation.

The previous owner of the adjacent lot charged the cottagers a $500 annual fee for the use and maintenance of the access road. When the numbered company bought the lot, it advised the cottagers that they would each be required to pay $2,000 annually, but only for seasonal access between May and November.

It wasn't long before the corporation owned by the First Nation band sued two of the cottagers for trespass by snowmobile, and a group of cottagers sued the First Nation corporation for an injunction restraining them from interfering with road access to and from their cottages.

The case involves the interpretation of Ontario's Road Access Act, originally passed in 1978 to resolve disputes that occur when the property of one neighbour is landlocked, and the only vehicle access to it is over a road on property owned by another neighbour.

Ontario Home Buyer Pays Price for Jilting Agent

Bob Aaron in Home Buying Tips, Legal

Earlier this month, the Ontario Superior Court of Justice released a decision which highlights the obligations of parties signing a buyer-agency agreement.

In the fall of 2005, Helen Clubine was looking at properties in the Orangeville area with her real estate agent Zoi Boussoulas.

By early January, 2006, Clubine had inspected a property known as Willow Hall several times, and was finally ready to put in an offer to purchase it.

At the time the offer was being prepared and signed, Boussoulas presented Clubine with a standard form buyer-agency agreement (now known as a buyer representation agreement), which gave the broker exclusive authority to act as the buyer's agent until June 30, 2006.

This form, which is commonly used in the real estate industry, provides that the broker is entitled to be paid commission if the buyer enters into an agreement to purchase any property, during the running of the agreement. If the seller does not pay the commission, or all of it, the buyer is required to pay it.

Is a 40-Year Mortgage Hazardous for your Financial Health?

John Pasalis in Money, Home Buying Tips

Last week, the Toronto Star’s Ellen Roseman wrote an article titled 40-year Mortgage Comes with Hidden Hazards. On Move Smartly, we often try to pick up where the main stream media left off.  Instead of just telling readers the 40-year mortgage is bad for their pocket books, we try to give practical advice that addresses the needs of today's home buyers.

Let me start off by saying that a 40-year mortgage is not for everyone. Anyone who qualifies to buy a home with a 25-year mortgage but opts for a 40-year mortgage instead because it leaves them with a little more spending money in their wallets is downright foolish. If you want more spending money in your pocket, spend less on your home - don’t get a 40-year mortgage and pay more interest over the life of that mortgage.

Having said that, does this mean that a 40-year mortgage is wrong for all home buyers? Is a 40-year mortgage like long term renting? Not quite.

Unlike Roseman, many of today's first time buyers are not buying their first home with their partners and therefore don’t have the luxury of counting on a second income to help pay their mortgage. Last year, the Toronto Star reported that single women account for 20 per cent of Toronto's real estate market. Many of the home buyers who are turning to 40-year mortgages are single income buyers who can’t afford to buy a home with a 25-year amortization.

So what is a single (or similarly positioned) first time home buyer to do? Should they eschew buying a home today out of fear that they’ll be paying their mortgage well after they’ve retired, as Roseman suggests. This is definitely one option.

But if the single home buyer shouldn’t buy today, when should they buy? Should they wait another 5-10 years for their salary to increase enough for them to afford a home with a 25-year amortization? This strategy is also risky, since renting and delaying your purchase for 5-10 years also pushes your mortgage payments further into your retirement years.

For the home buyer who doesn’t want to wait another ten years to be able to afford a home with a 25-year mortgage, here are a couple of tips to help you beat the risks and costs of the 40-year mortgage.

As Seen on TV: Beware of Guaranteed Real Estate Sales Programs

Carl in Home Buying, Home Selling Tips, Real Estate Trends

Ladies and gentlemen, I’m going to show you the greatest Real Estate brokerage offer ever made…all your investment and cashflow worries chopped to extinction without ever shedding a tear."

You have to hand it to the Real Estate brokerage industry for coming up with new, innovative and creative marketing gimmicks ideas.  There is simply no shortage of them.  If the trend continues, it won’t be long before we start seeing the debut of some local Realtors on late night television sharing valuable infomercial space with the likes of Ron Popeil and company.

One of my favourite gadgets to hit the real estate airwaves is the Guaranteed Real Estate Sales Program (GRESP), not to be confused with the Showtime Rotisserie or Pocket Fisherman.

The usual tagline reads something like this:

We will sell your house, or XYZ Realty will buy it! We Guarantee a Sale, Guarantee a Closing Date and best of all we Guarantee Market Value!

If you are worried about the sale of your home, don't be!  XYZ Realty has a program to relieve a seller's concerns about the sale and closing of their home. Think of it as an insurance policy or safety net against unforeseeable market changes that could effect how much and when you must sell your home. When you accept an offer from XYZ Realty, you are guaranteed that your house is sold and a closing date set in place. You are also given plenty of time to market your home and accept higher offers before closing with XYZ Realty, assuring you receive fair market value.

But wait, there’s more...

Do It Yourself Renovations

Rachel in  Lifestyle, HomeBuying, Legal

With spring in the air and my tulips breaking the surface in my garden, my thoughts naturally turn to home renovations.  I enjoy taking on small ‘upgrade’ projects around the house and thus far have managed not to cause more harm than good.  If you are also experiencing the need to visit a big box store for the perfect solution to your design/ structural/aesthetic issues at home, good luck but remember that you could be exposing yourself to risk.

Another Reason Why People Don’t Trust Real Estate Agents

John in Home Buying, Home Selling Tips

Multiple Representation (also referred to as Dual Agency) can occur when one agent represents both the buyer and the seller in a real estate transaction. Wondering how one person can effectively protect the rights of two people with such opposite interests? You’re not alone. It’s an obvious conflict of interest that the real estate industry has been able to keep legal.

Ethical issues aside, the other problem with multiple representation has to do with the “double-dip”, or as one real estate agent calls it the “2-1-0”: Getting paid Twice, for One transaction, and serving Zero parties. When the listing agent represents both the buyer and the seller in a transaction they typically “double-end” the deal receiving double the commission.

A home buyer I met recently told me about an experience she had with a Toronto real estate agent double-ending a deal.

Review Your Agreement Before You Are Bound

Rachel in Legal, Home Buying

In Ontario, your contract, the actual Agreement of Purchase and Sale, is very likely an Ontario Real Estate Association standard form contract.  This standard form of contract will typically be modified to include the particular conditions that you and your agent have negotiated, but the bulk of this document is pre-formulated.  Before you sign an agreement, you read it, and if you have any questions, you should ask your agent to explain what the clauses mean.

I would recommend that you have your lawyer review the agreement before you sign it.  It can be very difficult to extract yourself from an agreement once it has been signed, so it is important that you can actually perform what is expected of you in the contract - you will not know what those things are unless you are familiar with your agreement. 

As an example, one little thing that I have noticed is that contracts will typically state that the time for the closing of the transaction is 6:00 p.m. on the date of closing.  Unfortunately, the electronic registration system will only allow registrations until 5:00 p.m. This may seem silly, but it could cause problems.  What this indicates to me is that the people who are giving these documents to home buyers and sellers are not explaining what they really mean, or that they are just not paying attention. 

As a home buyer, if you are reluctant to have your lawyer review your agreement before you sign it, you may at least want to consider adding a condition that makes the deal subject to the approval of your solicitor within a certain amount of time of accepting the offer. 

Rachel Loizos is an associate lawyer at Sotos LLP in Toronto. She practices in the area of real estate law.  Email Rachel

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Basement Rentals: Make Sure You Want To Be A Landlord

Rachel in Legal, HomeBuying

I have heard many people say that they want to rent out their basement or that they want to buy a property that can accommodate a tenant.  Whether this is prompted by changes in life circumstance, cash flow, or it is the condition on which you can afford to buy the property you are looking at, it is important to consider that there are rules and regulations that govern the ‘second suite’ in Toronto.

Don't Let Closing Costs Catch You Off Guard

Rachel in Home Buying, Money, Legal

Home buyers, especially first time home buyers, are often surprised by their closing costs.  Although the standard legal fees and land transfer taxes have typically been accounted for, there are the additional ‘little’ expenses that very often throw people,  even people who have bought and sold multiple properties, off course.

In the Realosophy HomeBuyers Guide, we recommend budgeting 2% to 3% of the purchase price for your closing costs. At the time of writing, the Realosophy HomeBuyers Guide did not have to take into account the new Toronto Land Transfer Tax, so if you are purchasing in the Toronto area, you will need to account for this additional amount.

Key RRSP Strategies and Mortgage Financing

Heather in HomeBuying, Money

RRSP season is here and at this time of year, Canadians grapple with issues about finding money to contribute, deciding what to invest in, and determining whether to forfeit the RRSP contribution in lieu of the ‘saving for a house fund’. I am offering the following suggestions:

1. Short on money? Consider your home equity to maximize your RRSP contribution.

Higher real estate values may offer a chance for many to maximize their RRSP contributions by tapping into existing home equity. Of the almost $526 billion in RRSP room available to Canadians in 2006, only $74 billion was actually used, according to Statistics Canada. With a home equity line of credit, a homeowner can withdraw funds at relatively low interest rates on an as needed basis for the purpose of increasing RRSP contributions, including unused contributions from previous years.