September 13, 2018

In the recent Court case of  Beatty v. Wei, 2017 ONSC 3478, the Buyer and the Seller had entered into an Agreement of Purchase and Sale in May, 2016. The Sellers had owned the Property since 2009. In the APS the Sellers Represented and Warranted that to the best of the Seller’s knowledge and belief, the use of the property and the buildings and structures thereon had never been for the growth or manufacture of illegal substances. Before Closing, the Buyer discovered, as verified by Police Reports, that the property had in fact been used as a marijuana grow-op in 2004.The Buyer took the position that there had been a material misrepresentation and claim...

April 1, 2018

Buyer beware...Residential New Build Agreements typically include an “HST” clause stating that the purchase price includes the net amount of the HST, but NOT the rebate portion of the HST. The clause also states that if the residential unit will be occupied by the original buyer as their principal residence then the builder will take an assignment of the rebate amount from the buyer on closing and the buyer will not be required to pay the rebate amount to the builder. Finally, the clause also states that if the builder has any reason to believe that the original buyer will not occupy the unit as their principal residence then the builder can decline an...

March 1, 2018

Estate Sales can be challenging and should be handled with diligence and sensitivity. If you are an agent who has been contacted by a family member to list a property on behalf of a deceased individual you should ask the appropriate questions.

First, does the deceased have a valid Will and are there any restrictions in the Will with respect to disposing of the real estate? Second, even if there is a Will, with no restrictions in it, the executor will be required, in most cases, to make an application to the Superior Court of Ontario, for a Certificate of Appointment of Estate Trustee ("Probate”). This is essentially a court order which confirms the exec...

December 1, 2017

We have seen an increase in the number of properties being sold under the Power of Sale (“POS”) provisions in a mortgage due to default. If you are considering putting in an Offer on a Property being sold under POS, please be extra vigilant.

Virtually all properties sold under POS include a Schedule “B” which makes it clear that the property is being sold “as is, where is”. This always means that the Buyer must assume all risks and beware of any and all physical defects as well as being saddled with unwanted Title problems such as easements, rights of way and encroachments.

Problems discovered prior to closing which might ordinarily give you a right to r...

October 1, 2017

With all of the talk about the new Tax on non-resident Buyers many people are overlooking the very serious problems that can be created by the long standing rules with respect to non-resident Sellers.

Paragraph 17 of the Standard Agreement of Purchase and Sale form provides that when dealing with the Sale of Real Estate by a Non-Resident Seller, the Buyer must withhold and remit Tax to CRA (or potential tax) arising from the Sale of the Real Estate in an amount equal to 25% or 50% of the Purchase Price depending on the nature of the Transaction. If the Buyer does not realize that he is dealing with a Non-Resident or, overlooks this requirement and...

September 1, 2017

The Ontario government introduced a 15% Non-Resident Speculation Tax (NRST) in early 2017 which was effective as of April 21st, 2017. This means that any binding Agreements of Purchase and Sale signed on April 21st, or after, will be subject to the NRST. For real estate agents, this increases the duty to find out as much information as possible about your Buyer-client. The question “Are you a Non-Resident?” should now be asked of every client.

A “Non-Resident” includes an individual who is not a citizen or a permanent resident of Canada and also includes a foreign Corporation or Entity and a taxable foreign trustee. The Tax applies to properties purchas...

May 1, 2017

When a Buyer offers to buy “in Trust” for a company or wants the ability to allow a third party to actually complete the purchase and take title on Closing, the Buyer is essentially trying to “assign” the Agreement. In such a situation the Seller is left unprotected if Buyer #2 (the “assignee” from Buyer # 1) fails to Close. In order to protect the Seller, and to some extent Buyer #1 and Buyer #2 as well, it is most prudent to use the pre-printed OREA Assignment Form 145 which covers off many of the issues that must be addressed in an assignment situation. At the very least, we must try to protect the Seller by inserting a provision that Buyer #1 will...

September 1, 2016

One of the most difficult issues when dealing with Assignments is the HST issue. The first issue is to determine if HST applies to the transaction. If you are working on an Assignment of an Agreement for a Used Residential Property then generally speaking HST does not apply. If you are dealing with the Assignment of an Agreement for a New Build property, a Substantially Renovated property or, a Commercial Property, then it is likely that HST does apply to the transaction.

Once you have determined that HST will apply then it will be necessary to negotiate between the Assignor and the Assignee whether the HST will be “included in” the Purchase Price...

April 1, 2016

The Forestry Act of Ontario provides that every tree whose “trunk” is on the “boundary” between adjoining lands is the “common property” of the owners of the adjoining lands...and...every person who injures or destroys a tree growing on the boundary between adjoining lands without the consent of the adjoining owner is guilty of an offence under the Act.

In a recent Toronto case, Owner "A" wanted to cut down a tree which was at the boundary line but appeared to be entirely on her property. Owner "B" did not want the tree cut down claiming that it was a boundary tree and therefore was common property. The Court ruled that the “trunk” of the tree incl...

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