Real estate law column by Bob Aaron
Independent legal advice crucial in title insurance purchase
Submitted by Bob Aaron on Mon, 2012-01-09 20:47Should Ontario consumers always have the benefit of independent legal advice when they obtain title insurance for their real estate purchases?
That topic became the subject of intense debate among industry stakeholders earlier this month when Stewart Title Guaranty Company sent a letter to thousands of real estate lawyers advising them of its opposition to the lobbying activities of the Title Insurance Industry Association of Canada (TIIAC).
In October, TIIAC had asked the Ontario government to review the need for regulation 69/07 under the Insurance Act.
That regulation, dating back to 1956, protects homebuyers by ensuring that they receive independent legal advice.
The regulation states that title insurance cannot be sold to a homebuyer in Ontario unless the title insurance company receives a certificate of title from a lawyer who is not employed by the insurer. This means that an independent lawyer will always be involved in a title insured purchase transaction.
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Submitted by Bob Aaron on Fri, 2011-12-30 18:12When you’re selling a house known as a link-semi, is it wrong to advertise it as a detached home?
The link house style was popular in Toronto in the 1970s and 1980s. The only physical attachment that joins two adjacent houses typically consists of one or two short rows of underground concrete block footings, at right angles to the foundation walls. They are entirely unnecessary for structural reasons.
Looking at the houses from the street, they are clearly detached, with a few feet separating them. It is impossible to tell that the houses are linked because the only physical attachment is the concrete blocks that are invisible above ground level. In fact, the only purpose of the attaching footings was to allow builders to construct what looked like detached houses on lots which were designated for semi-detached models.
One Toronto real estate agent found out the hard way that the Real Estate Council of Ontario (RECO), the industry regulator, takes a dim view of agents who advertise link houses as detached.
Revised purchase agreement could ease "sticker shock"
Submitted by Bob Aaron on Mon, 2011-11-28 22:14In a landmark consumer protection initiative, the Tarion Warranty Corp. has proposed a requirement that builder purchase agreements set out in one place all the extras that can be added to the price of a new home. (Tarion regulates the home-building industry in Ontario and administers the warranty program for new homes.)
If enacted, this initiative would mark a significant departure from the current practice whereby extras (euphemistically called “adjustments” by developers’ lawyers) are scattered through purchase agreements. It often requires the skills of a legal Sherlock Holmes to ferret them all out and calculate the total cost implications.
The proposed changes arose out of concerns expressed to Tarion about inadequate disclosure of the myriad of different items that are often charged on closing, resulting in “sticker shock” to buyers — and worse, an inability to raise the necessary funds.
When the regulations become law, a new Schedule B will be attached to the Tarion addendum in each builder purchase agreement. The schedule will be divided into two parts.
Manitoba simplifies seller disclosure form
Submitted by Bob Aaron on Tue, 2011-11-22 19:28The seller property disclosure statement remains a hot topic in the real estate community as Manitoba has now made them compulsory, while Britain has gone in the other direction to repeal the law requiring them in every transaction.
Effective Aug. 1, 2011, the Manitoba Securities Commission has mandated that its own version of the Property Disclosure Statement must be used by real estate agents when they prepare agreements of purchase and sale.
The major difference between the disclosure form created by the Manitoba Real Estate Association and the Ontario Real Estate Association version is their length and complexity. The Manitoba form has 19 questions, the basic Ontario form has 48.
I am a devout opponent of these forms, but given a choice, I would take the Manitoba form any day.
Turf war over who names the neighbourhoods
Submitted by Bob Aaron on Wed, 2011-11-09 20:42Toronto residents who are proud to live in areas such as Harbourfront, Davisville Village, Leslieville, Chaplin Estates, Hogg’s Hollow and Corktown are bound to be disappointed to learn that their neighbourhood names have been wiped off the map by the City of Toronto and the Toronto Real Estate Board.
This also applies to the neighbourhoods of Baby Point, Rathnelly, Brockton, Seaton Village, the Distillery District, Christie Pits and others.
The confusion arises in the wake of a decision by the Board in July to replace its old district map to simplify searching for properties on the Multiple Listing Toronto Real Estate Service (MLS) and its public site, www.realtor.ca.
As a result, there are now at least four different authoritative sources for naming and defining Toronto neighbourhoods and none of them completely agrees with any of the others.
Whoever forms next government must protect property rights
Submitted by Bob Aaron on Sun, 2011-10-02 15:21As I see it, the real issue in this provincial election should be whether the Ontario government is able and willing to act decisively and promptly to maintain the rule of law and protect the citizens of the province and their homes from lawbreakers.
On any scale of measurement, upholding the right of Ontario residents to be safe and secure in our own homes must rank at the top of government priorities, even ahead of health care, the economy, job subsidies and power plants. Sadly, over the last five years, that has not always been the case.
I’m referring, of course, to the events in and around Caledonia which gave rise to a class action against the Ontario government and the Ontario Provincial Police. The plaintiffs sued for damages resulting from the alleged failure to provide policing to the town during a First Nations land dispute in 2006.
Is construction crane 'trespassing?'
Submitted by Bob Aaron on Mon, 2011-09-19 19:54I received an interesting call earlier this month. A reader lives next to a construction site and the builder’s crane is continually passing through the air space above her home. She wanted to know if she was entitled to any compensation.
I discovered the answer in a research paper about crane swing agreements entitled “Can You Swing It?” by Leor Margulies of Robins Appleby & Taub in Toronto. The paper is published on the firm’s website at http://www.robinsapplebyandtaub.com/admin/publications/pdf/68.pdf.
According to Margulies, an analysis of the neighbour’s question begins with a legal maxim attributed to Accursius of Bologna (1182-1260). Known by its Latin short form, cujus est solum, it is usually translated to mean, “Whoever has the land itself also owns everything up to the vaults of Heaven and down to the floor of Hell.”
The importance of reviewing condo floor plans
Submitted by Bob Aaron on Mon, 2011-09-19 19:52A Superior Court decision released last month (Orr v. Metropolitan Toronto Condominium Corp. No. 1056, 2011 ONSC 4876) underscores the importance of reviewing condominium floor plans before completing the purchase of a unit.
The trial of the action took 42 court days and involved nine lawyers representing the parties. I was one of the many expert witnesses called to testify about some of the legal issues in the dispute.
Back in September 1997, Kelly Jean Rainville signed an agreement of purchase and sale to buy one of 39 condominium townhouses in the Grand Harbour complex on Lake Shore Blvd. W. in Toronto.
It's difficult to sell pre-registration condo units
Submitted by Bob Aaron on Mon, 2011-08-29 19:07With thousands of new Toronto condominiums being completed each year, investor purchasers are putting many of them on the market, anxious to cash in on their profits. Unfortunately, the paperwork involved in selling them, either during construction or after completion and registration, is complex and problematic.
Adding to the difficulties, the Ontario Real Estate Association (OREA) has not published a template agreement for these flips, and as a result real estate agents and lawyers involved in these resale transactions are forced to “reinvent the wheel” for each new sale.
The flipping of condo units can take place at different times during the lengthy construction process.
During construction, with the written consent of the builder, the agreements themselves can be transferred to new purchasers. Some builders refuse consent under any circumstances. Others will ask for a fee of $2,000 to $5,000 (plus HST), effectively becoming a partner in any profits garnered by the investor.
When the condo is flipped and the purchase agreement is transferred before the building is finished, the parties need to prepare an assignment agreement which will determine whether the investor gets his profit immediately or only when the building is completed and registered.
Title insurance? Check. Land survey? Double check.
Submitted by Bob Aaron on Mon, 2011-08-08 16:08One of the lesser known benefits of title insurance is that the insurer is obligated to provide and pay for the legal costs of defending the insured’s title if a third party sues claiming an interest in the land.
That was the issue in the case of Knapman v. Deweerd released last month by the Ontario Superior Court of Justice.
Emily Knapman’s cottage property on Whitestone Lake in Parry Sound is next door to one owned by the Deweerd family. Knapman bought her property in 1969 and the Deweerds acquired theirs in 2003.
