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Virtual land registry now routine
The paperless world everyone has been yammering about is closer to reality — at least in one area of commerce that used an inordinate amount of paper.
It is in the area of land registration, something every new or existing homeowner is keenly aware of: the documents that say the house is now yours (and the bank's) and no longer the person's you bought it from.
For more than 200 years, land in Ontario was registered the old-fashioned way. The deed of a property was listed in the name of the owner and squirreled away in a big registry book in the county registrar's office.
From there, an individual could go to that local office, pull out the appropriate ledger and do a title search for the current owner of a piece of land.
That document would trace back to older documents on file that would provide a paper trail of ownership that went back to as old as the property was.
In the early 1990s the new NDP government decided the system needed an overhaul. It was unreliable. There was too much paper. It was expensive.
They created a company called Teranet Inc. in 1991, giving it the mandate of replacing forms, pens, signatures, rubber stamps and warm bodies with an electronic process.
It wasn't easy. First Teranet had to computerize the 4 million or so land registry records already on file at the 54 different county-based registrar offices across the province.
Then it had to create software to enable people, mainly real estate lawyers, to search the database without having to physically go to one of those 54 offices.
Then it had to allow people to register documents electronically — without paper or signatures but safely and securely.
With little fanfare, the first electronic land registration in the world took place in Ontario on January 25, 1999, where buyer changed over title of land to seller digitally.
I had the pleasure of experiencing this service first hand last week when me and my wife went to dot the I's and cross the T's on all the documents pertaining to our first home.
After signing our lives away in triplicate, our lawyer took the time to explain to us exactly how the new system works.
Electronic land registration documents rely on encrypted digital signatures, an imprint that can't be matched anywhere else and can't be scrambled — like a fingerprint. The encrypted digital signature identifies the party, in this case us, submitting the document for registration.
No paper changes hands, and no back-up hand-written "on-paper" signatures are required. An electronic audit trail is created identifying transaction activity leading right back to the user, in this case our lawyer.
In other words, there is no physical deed, or paper-drawn title to our newly purchased property — just a transaction on a computer system somewhere in the ether that says the house and land are ours.
Our lawyer reminisced with us about the old days when real estate lawyers would congregate at the Toronto registry office during busy home-sale periods and smile, wave and talk to each other in the flesh.
They would line up and file their paperwork with a registrar clerk, get the rubber stamp and then sit down and wait for the lawyer taking care of the other half of the transaction to do the same. Then the two would sit down for a quick, friendly chat, a swap of cheques and keys and a handshake.
"Now I don't even have to get off my you-know-what," our lawyer explained.
As of last month, there were 3.32 million electronic land registrations processed in Ontario and almost 47 million additional documents accessible for viewing. Automated records are now available in 27 of the province's 54 land registry offices.
As with any computerized system, some people are not sold.
They are weary of hackers, but Teranet insists its system can deter fraud because it tracks every user and because lawyers, the vast majority of users of the system, have to have an active Bar Association number and be licensed to access the system.
There is now something called the Land Title Insurance Fund, which covers you in the event the system accepts a document it shouldn't have and someone else shows up claiming they own your home.
Another issue is that most banks haven't caught up with the system — meaning the massive lump payment in the form of a cheque that goes to buy the house, pay the broker fees, property taxes and other disbursements still needs to be signed and physically delivered to the seller's attorney — by car, cab, donkey or any other un-technical method.
But there are benefits. Registration now takes seconds rather than hours or days. And it's a lot easier and more efficient to search an online database than to schlep down to a registrar office and pore through old books and files.
Of course, it's about money, too.
The government spent $680 million automating the system — more than double the $275 million it had budgeted.
On the flip side, half the province's land registry offices are now closed, with more to come, meaning untold millions of dollars in long-term savings. Plus it gets a cut of whatever Teranet makes from charging fees for searches and title registrations.
We would never have even known about the process if not for our lawyer's spiel about the whole thing — which came in advance of the documents we had to sign giving him authorization to do the electronic land registration on our behalf — in triplicate. I guess we're not a paperless society just yet.
August 31, 2004 in Agency Matters | Permalink | Comments (0)
SPIS May Hold Seller Accountable
The courts in Ontario ruled in the buyer's favour in a recent case... Do sellers have a legal obligation to disclose defects in a house?
According to the venerable but enduring doctrine of caveat emptor (buyer beware), not really. Defects fall into two categories, obvious (or "patent") and hidden (or "latent"). Under caveat emptor, sellers need not divulge patent defects. The same is true for latent defects, unless they are a health or safety hazard.
Sellers don't have to volunteer information about latent defects that merely devalue a property, provided they don't pose a risk to health or safety. (Of course, this presumes the seller has not concealed the latent defect, or lied when asked about it.)
Caveat Emptor obligates buyers to inquire, inspect and discover all patent defects, and the less severe latent defects. In recent years, "seller disclosure" has flourished in the United States, with sellers revealing known defects to prospective buyers.
Seller disclosure really hasn't gained acceptance in Canada, although the Ontario Real Estate Association has crafted a seller property information statement (SPIS) that is used sporadically.
A recent case that considered the legal impact of this statement could influence it's future use. The Buyer sued the Seller after closing for the cost of repairing a leaky basement. Before listing the property, the Seller completed what was then called a vendor property information statement (VPIS), and answered "No" to this question: "Are you aware of any moisture and/or water problems in the basement?" The Buyer reviewed the statement before signing the offer.
During a pre-contract inspection, The Seller assured The Buyer he never had any water problems during his three years of ownership. The Buyer never inspected the basement further.
Most of the judgement analyzed the competing "black versus white" evidence in reaching the following conclusions: Water leakage problems existed in the basement long before the day of closing; The Seller was aware of the problems before signing the agreement of purchase and sale; and The Seller had concealed the evidence of water stains by hiding them with furniture and boxes.
But The Seller contended that The Buyer should have satisfied himself that there were no water problems. The court disagreed. It stated that the Seller took no fresh steps to conceal the defects, but allowed boxes and other items to remain in place, thereby hiding the problems, which constituted fraudulent misrepresentation.
That, "coupled with the intentional concealment of the evidence of water stains.....absolved the Buyer from inspecting the basement for patent evidence of moisture problems." The contract contained a standard disclaimer clause: "There is no representation, warranty, collateral agreement or condition, which affects this agreement, other than as expressed herein." The Seller could not rely on it, as his misrepresentation nullified its use.
Then the court had to considered the VPIS. The purpose was clear: The questions posed to the vendor.... are those which a knowledgeable, diligent and serious purchaser would normally ask. It appears to have reduced to writing those questions which have been found to traditionally be asked orally." What was the legal impact of the VPIS? Was it a mere representation which, if made innocently, gave the buyer no right to sue for damages after closing? Or was it a warranty, the breach of which allows the buyer to claim damages post closing?
The court rejected the argument that the VPIS was a mere representation. Rather, and despite the standard disclaimer clause in the offer, the VPIS was held to be a warranty that survived closing.
To sidestep this ruling, can sellers simply ignore the SPIS? Not likely. According to the new code of ethics for all real estate agents being launched Jan.1, 2000, agents acting for sellers of residential properties should consider requesting that the seller complete and sign an SPIS.
If a seller refuses or is unable to complete the SPIS, that fact should be disclosed to the buyer in writing (generating, of course, the following questions: Why won't the seller sign the SPIS? Is there something to hide?)
Undoubtedly, this isn't the final word on sellers providing property information statements.
August 30, 2004 in Selling a Home | Permalink | Comments (0)
The Annex: The Neighbourhood
Very few people will associate Toronto's Annex with cult-like therapeutic communities or the killing of Vincent Massey's cousin by a servant girl.
Yet Jack Batten's The Annex: The Story of a Toronto Neighbourhood is full of such unexpected trivia, and it will likely deepen a reader's appreciation of the popular neighbourhood. The book not only explains the architectural inspiration for the community's lean brick homes, but the happenings that have made it a hot spot for everyone from emerging literati and blue-collar workers to elite families such as the Eaton's over the past 117 years.
The neighbourhood's name was coined when the developer Simeon Janes successfully bid to have the area annexed to the City of Toronto in 1887, so his subdivisions would lie within city boundaries. From his vantage point, Mr. Janes couldn't entirely anticipate that the Annex would become one of the most lucrative real estate areas in the city. The author explains why the community has been so compelling.
Architecture enthusiasts will savour the descriptions and pictures of the Richardsonian Romanesque designs that give the hood its distinctive feel -- houses the author describes as having a "grand and chunky form, squared stone, plenty of high arches, roofs that ran likewise to lofty peaks, windows set deep, and lots of surprising delicate ornamentation."
Urban-history buffs will eat up tales of violence that feature some of Canada's most notorious cases, such as the 1994 Just Desserts' shooting of Vivi Leimonis or the abduction and murder of nine-year-old Sharin' Morningstar Keenan in 1983.
Another crime story involves an 18-year-old servant named Carrie Davies who, in 1915, shot and killed her upper-class master, Bert Massey, in a Walmer Road manor. Miss Davies was acquitted by a jury after she explained how she had to fight off the lascivious advances of her boss, a relative of Canada's first native-born governor-general.
The book also highlights the numerous skirmishes that community activists have engaged in to stop projects they thought compromised their quality of life.
Some are stranger than others. Although the activist community has been known for its tolerance, neighbours cried foul in the 1970s when hundreds of members of a spiritual group called Therafields moved into 20 Annex houses clustered in the Brunswick and Kendal Avenue area.
Therafields eventually folded, but not because of residents' vigorous protests; the group was done in by its highly mortgaged properties and a lack of cash flow.
Mr. Batten also inspires Annex enthusiasts to reconsider a big "what-if" -- if the unfathomable had occurred and the Spadina Expressway had been built to Bloor Street instead of Eglinton Avenue. He chronicles the battle between planners and area residents, which culminated in 1971 and brought fame to such urban dissenters as Jane Jacobs.
While most of the historical detailing is strong, the book's failure to feature some of the popular symbols of Annex life today -- the Bloor Street social hub, Future Bakery, and the revered word merchant, Book City, for instance -- may surprise some.
Yet Mr. Batten's book provides a fresh take on a place where every corner has a history.
The book has maps, anecdotes and quotable quotes galore, the latter including a treasure from Robert Fulford: "The impression that writers sometimes outnumber houses is not always false."
Besides, buying the book is relatively cheap for a piece of the Annex -- since for most people owning a house on Brunswick Avenue may be as likely as winning the lottery.
August 29, 2004 in Location, Location ... | Permalink | Comments (0)
There's no street like this street
From Parkdale through to the Beach, Queen is one world-class route
There exists a place in Toronto where the residents are so crazy about dogs, they support a canine bakery. It's called The Beach, and it blissfully confirms its own stereotypes.
Meanwhile, in another part of town, Ferrari drivers and blasé hipsters on vintage bikes jockey for cruising space outside the Ultra Supper Club, just one of many pleasing juxtapositions to be discovered near Peter St.
To the west, if you listen closely, you can still hear the grumblings about how once-rugged Parkdale has been gentrified (as if that were a bad word). But on weekends, wobbly-kneed scamps still howl at the moon, or at their dealers, or at nothing in particular.
What these three regions share, other than vibrant street-life and a slew of delightful incongruities, is Queen St. Add in the likes of Leslieville and the freshly coined Art + Design District, and you realize this slender urban trail spawns trendy districts by the decade.
Though we tend to think of Queen St.'s districts as separate entities, the lines between them are beginning to blur. The dead zones that once separated the hot spots are shrinking. Queen St., in effect, is becoming one vast, accidental urban success story. In richness and scale, there may be no better street in the world than our very own Queen.
"I can't think of another street that has the vitality, the variety, and has the length and depth that Queen St. has from one end to the other," says Dr. Mitchell Kosny of Ryerson University's School Of Regional And Urban Planning. "It's starting to fill in."
It might seem bold to pit Queen St. against the world's top strips but, in its own way, it stacks up against the best of the best. Broadway in New York City starts out hot, then cools as it wends its way to Albany. Champs-Elysées in Paris is one of the world's most famous streets, but it's also major traffic thoroughfare. Highbrow visitors can enjoy the expensive restaurants and boutiques, but the average Parisian would head somewhere more accessible.
Admittedly, our humble Queen might have a tough time out-classing La Ramblas in Barcelona, which, with its stunning architecture and endless culinary offerings, is one the greatest streets in the world. But could it match Queen's understated, New World charm?
Certainly, Queen St. reigns over Yonge St., which is often considered our flagship route. "I don't see Yonge St. as having all that much continuity at all," says Kosny. "It doesn't have anywhere near the life and vitality that Queen St has." And while Yonge St. downtown has been busy evolving into a mini Times Square (as if that were something worth emulating), Queen St. has quietly grown out of its awkward years.
Until recently, Queen's dead patches — between Church St. and Coxwell Ave., or near Ossington Ave. — were so long, so commercially and culturally anemic, that the street couldn't be thought of as anything exceptional despite pockets of coolness. But in both areas, the current bold generation of businesspeople has launched galleries, coffee houses and antique shops to cater to the whims of a new breed of residents, keen to make something out of what had been nothing for so very long.
As does any good short story, Queen St. still has its metaphorical peaks and valleys. But a ride on the 501 streetcar, which cruises Queen almost end-to-end 24 hours a day, tells the story of a street that takes turns being both pretty and gritty. It's an hour-long trip when the traffic's heavy — you can also make it in a three-hour stroll — but the exposure to Queen's richness makes it time well-spent.
In the west end, the trip starts in Parkdale at Roncesvalles Ave., where you roll past an impressive cluster of antique and vintage furniture stores. Moving east, Lansdowne Ave. is a cultural crossroads; with small ethnic shops and colourful pedestrian traffic, both the diversity and working-class grit are palpable.
Doris Harasinski, named Toronto's Best Waitress by What's On magazine a few years back, has worked at the Skyline Restaurant (1426 Queen St. W.) for 33 years. "I wouldn't live anywhere else in the city," she says. "I used to live on the Danforth, and people are friendlier here."
"People are real here," adds Don Wackley, who's dropped by the Skyline to dine for the past couple decades.
After ducking under the train tracks at Dufferin Ave., you emerge in the "is it Parkdale or isn't it?" district (nobody seems to know for sure). Here, the Gladstone Hotel (1214 Queen St. W.) uses its grass-roots cool to attract customers away from the mighty art house/hotel/concert complex at the Drake Hotel (1150 Queen St. W.). Interspersed between rows of decrepit appliance outlets and printing shops on the stretch that follows to the east sits a stirring roster of independent art galleries. These cramped, crooked spaces are as pure an expression of the love of art as you can find; many gallery directors live in cramped spaces behind their exhibition spaces. Black Dog Video (964 Queen St. W.) and Studio Brillantine (1018 1/2 Queen St. W.) are now parked across the street from the once-avoided Centre For Addiction and Mental Health; not long ago, the sidewalks here were about as busy as Korea's Demilitarized Zone. Now, on weekends, the area is buzzing.
Making your way to the heart of the Art + Design District just past the gothic gates of Trinity Bellwoods Park, you find yourself in the domain of the Queen West hipsters. You'll spot them lining up for thin-crust pizza at Terroni (720 Queen St. W.), sipping coffee at Dufflet Pastries (787 Queen St. W.) and lounging waifishly outside Coupe Bizarre (704 Queen St. W.). But despite the ever-increasing number of trendy offerings, the corner of Bathurst St. and Queen St. W. remains a rowdy gathering point for connoisseurs of fine cooking wine. This, they say, is where runaways come for orientation.
Nicely integrated into the district are several nightclubs, including the Velvet Underground (508 Queen St. W.), The Bovine Sex Club (542 Queen St. W.), Zen Lounge (526 Queen St. W.) and so-called "model hangout" Habitat (735 Queen St. W.).
With Chinatown and Kensington Market to the north, the intersection of Spadina Ave. and Queen St. W. is a major junction for drivers and pedestrians alike. It's also the gateway to Queen's power-shopping district. Though it's rife with big-name chains such as the Gap and HMV, there are still enough indie boutiques (not to mention legendary watering holes such as The Horseshoe Tavern — 368 Queen St. W. — and the Cameron House — 408 Queen St. W.) to keep things fresh.
Members of Toronto's intelligentsia glean conversation material from obscure culture mags at Pages Books (256 Queen St. W.). Across the corner, adolescent females with a proclivity for shrieking gravitate to the CHUM-City Building, home of MuchMusic.
Past sprawling University Ave., you're greeted by the familiar smell of grease and diesel fumes spewing from the snack trucks outside City Hall. Next door, outside Old City Hall — now a courthouse — judges, lawyers and juvenile delinquents share cigarette turf on the front steps.
Then on past the Eaton Centre and, aside of camera stores and pawnshops, there isn't much brewing on Queen between Yonge St. and Parliament St. There's the reputation for drugs, of course, but Vancouver's East Hastings makes this place look like candyland.
A hop across the Don Valley Parkway and you're at Broadview Ave. and Queen St. E., one of the most eclectic intersections on the street. With quirky favourites such as Dangerous Dan's (714 Queen St. E.) — home of the world-famous Coronary Burger — the strippers of Jilly's (704 Queen St. E.) and the Caribbean flavours of The Real Jerk (709 Queen St. E.), there's plenty of colour. This southern section of Riverdale has yet to blossom, though trendy brunch spot Bonjour Brioche (812 Queen St. E.) is a sign of revitalization.
Moving past the railway tracks and into Leslieville, you find that Tango Palace (1156 Queen St. E.) isn't the solitary outpost of cool it was when it opened 10 years ago. What was once a no-man's land now houses a slew of antique shops and restaurants.
Past the legendary Tulip steakhouse at Coxwell Ave., traffic speeds up in anticipation of the perpetual gridlock in The Beach. On the way, you might notice the French-inspired façade of Bambino's Baby Photography Studio (1481 1/2 Queen St. E.). Graphic designer Jamie Guillen teamed up with photographer Julie Saggers to open the studio, which they call the anti-Sears, just two months ago.
This is a quiet stretch of Queen St., though it's close to parks, the waterfront and the gardens of the Ashbridge Estate, which welcomes visitors as long as they "leave the flowers for others to enjoy."
"We wanted to find a space on Queen St. because it's synonymous with cool," says Guillen. "Whenever I have relatives come to visit me, I take them from the Beaches to Queen St. W. There's nothing like it."
First-time visitors to The Beach are always surprised to find that you can't actually see the beach from the street. But locals, ice cream cone in one hand, dog leash in the other, don't seem to mind one bit. Everyone is enjoying themselves, and there's life on the sidewalks and in Kew Gardens that embellishes the south side of the street.
When Bolton resident Michelle Jones decided to open a pizzeria in Toronto, she knew she wanted a Queen St. address. She found a spot in The Beach. "There's lots of walking traffic and families coming in the area," says Jones, owner of Beaches Gourmet Pizza and Sandwiches (2128 Queen St. E.). "I'm happy to come to work here every day. I love this street and I love the people."
The strip finally comes to a gentle, green end at the foot of Fallingbrook Rd., just footsteps into Scarborough.
For all of these attractions, though, it wasn't so long ago that Queen St. wasn't really exceptional. Certainly, it was a major east-west artery during Toronto's infancy, but most of it experienced an exodus of wealth when established Torontonians spread their wings in the clean, spacious suburbs. (Queen in The Beach was an exception — it was in a cottage community that felt far from the rest of the city.)
By the 1950s, low housing and commercial prices opened the door for European immigrants to take the homes and traditional storefronts — hardware stores, textile shops and so on — along much of the street.
That affordability would eventually attract the city's arts community to central Queen St. in the '70s and '80s; with the hip cache established, big businesses and urban housing developments followed. And, as it did, the galleries, antique shops and record stores spread west and east.
But why did Queen St. experience this boom, whereas King St. to the south and College St. and Gerrard St. to the north remain largely awkward and un-cohesive? For one thing, neither of those latter routes share Queen's lengthy span — more than 14 kilometres — or it's optimal building stock — largely small, affordable retail spaces with two or three floors of modest residential space above. In essence, Queen St. was built, end to end, to be a place where people live, work and shop.
With two lanes of streetcar traffic in the middle of the road, and parking on both sides, traffic moves slowly. And unlike nearby streets such as Richmond St. and Adelaide St., which are used at major traffic thoroughfares, Queen is relatively friendly to cyclists and pedestrians.
Ryerson's Kosny also argues that Queen St.'s lack of a subway route — planners once intended to build one here — also facilitated the street's emergence. He says Yonge St., with an evolution wrapped up in the subway that runs beneath it, is more spread out, and its cavernous stores suck the life out of the street. "The fact that there's no subway on Queen means the action's happening on the street, not under it," Kosny says.
But if Queen St. truly is Toronto's greatest street, it has done a remarkable job of eluding the culture-sucking clutch of big chain stores. Sure, a handful of Starbucks and McDonald's has taken root, but even at its most gentrified, Queen St.'s independent spirit has flourished.
Stores such as the Gap, Club Monaco and HMV are tucked into the pocket of Queen St. between Spadina and University, while their bigger, larger versions of these chains have parked themselves in the Bay and Bloor Sts. shopping district — a one-dimensional space that serves a very specific purpose for a limited audience.
We thought it high time to take a closer look at everything Queen St. has to offer, and to make the case that Queen is the greatest street in the city and, perhaps, the world.
August 29, 2004 in Location, Location ... | Permalink | Comments (0)
Real estate can be taxing
Many people consider real estate as one of the most level-headed places to put your money these days. What is crazy, is the number of Canadians who think they can sell these properties tax free.
By now you're probably aware that residents of Canada are able to shelter the sale of a principal residence from tax by using the family's principal residence exemption (PRE). But in order to claim the PRE, you've got to "ordinarily inhabit" the residence.
I've met a growing number of people who have chosen to buy a residence, move in and "ordinarily inhabit" it for a short time, then flip the property for a profit. These folks plan, of course, to use their PREs to shelter the sale from tax.
The fact is, our tax law doesn't define what it means to "ordinarily inhabit" a place. Even Canada Revenue's Interpretation Bulletin IT-120R6 on the subject doesn't help much. What I can tell you, from the court decision in Ennist et al v. MNR (1985), is that 24 hours isn't long enough. Normally, however, it's not necessary to spend significant time in a place to be entitled to the PRE. Your intentions at the time you buy matter more than the length of time you live there.
The problem, though, is that the taxman might assume your intention all along was to flip the property for a profit. If that was your intention, then the transaction is generally considered to be an "adventure in the nature of trade" (AINT). And if the transaction is considered an AINT, you "ain't" claiming the PRE.
To claim the PRE, the property must be capital property. Where there's an AINT, the property is not considered capital property, but business inventory. The result is that any profit on the sale will be taxed as business profits, not capital gains. Sorry, no PRE and no tax-free sale. A couple of recent court decision support this notion: Doody et al v. The Queen (2000), and Isaaks v. The Queen (2001).
In each of these cases, the court determined whether the transactions were an AINT by looking at each taxpayer's intention and whole course of conduct. The taxman and the courts will try to determine your intention by your actions, not by what you tell them.
The bottom line? You need to stack the evidence in your favour, when selling a property you've owned for a short time, if you hope to claim the PRE and make it a tax-free sale. Visit a tax professional for this type of planning.
August 28, 2004 in Buying a Home | Permalink | Comments (0)
Public MLS Site Under Fire
Canada's public MLS site, mls.ca, has been hailed as a powerful marketing tool for Realtors, giving consumers what they want: free and easy access to information about homes for sale in their neighbourhood. You don't have to register to use it, there are no ads, and it's supported by all the real estate boards and provincial associations in the country. The public loves it -- the site attracts more than 1.5 million visits every month.
But not all Realtors love it, and on Sept. 14, members of the Fraser Valley Real Estate Board (FVREB) in B.C. are holding a special meeting to vote on a proposal that would delay placing MLS listings on the national website.
Jerry Heed, a member of FVREB since 1987, says his board's 2,000 members pay about $4 million per year to maintain its MLS. "At issue with FVREB is whether it is sensible to pay this huge amount of money each year to create something, and then give it away to the general public for free," he wrote in a guest column in REM, a Canadian real estate industry publication.
"We believe that the ease with which the public is able to access this high-quality data at one location is training the public to work 'Realtor free' by reducing contact with all Realtors, and particularly buyer agents."
Buyer agents, who work for those looking for a home, say their clients are finding new listings on mls.ca as fast as the Realtors are able to gather them from the MLS database. "They raised an obvious concern," says Heed. "Why were they having to compete with mls.ca to be on top of the market and look professional?"
The FVREB vote is part of a national debate among Realtors about mls.ca. Realtor Brent Defoe of Ottawa says mls.ca should be shut down, and the information should only be made available to "professional real estate agents who are licenced by their respective provinces to trade in real estate." In a letter to REM, he says that to be consistent with Canada's new Privacy Act, photos and other information about a seller's home should not be readily made available to the public.
Other Realtors believe that it's time the site switched to a user-pay system, to weed out "tire-kickers," attract only serious buyers, and help pay for the maintenance of the site.
As reported at Realty Times recently by Blanche Evans, a public MLS site in Chicago was recently shut down, and Evans says there may be dozens more public MLS sites that are under pressure.
The Canadian Real Estate Association (CREA) says it is addressing Realtors' concerns with a series of research projects. Ken Mackenzie, the executive officer of the FVREB, is also the chair of CREA's MLS and Technology Council. He says the council is asking what buyer agents want from mls.ca, and looking at ways it can promote the benefits and services of all Realtors on mls.ca.
"Explaining the difference between mls.ca and MLS is also on our priority list," says Mackenzie in an article published by CREA. "Consumers need to know only a Realtor has access to all the information in an MLS system, and that the website is an advertising medium for properties."
Mackenzie says that in a survey of Canadian Realtors last year, more than half said they sold a property because the buyer saw it first on mls.ca. But Heed isn't convinced that the current system is working.
"When you provide the entire MLS database to the public for free, we believe it diminishes the perceived value of service that Realtors provide. And the public will pay us according to their perceived value," Heed says.
"We believe the current format of mls.ca is tantamount to a free MLS system. We believe it will be detrimental to our industry over the long term by reducing economic viability."
Written by Jim Adair
August 26, 2004
August 26, 2004 in Agency Matters | Permalink | Comments (2)
Fired Nortel CEO builds mansion
Frank Dunn, recently fired chief executive of scandal—plagued Nortel Networks Corp., is in the midst of building a multimillion-dollar lakeside dream home in the heart of Oakville, the Star has learned.
According to land registry documents, the tree-lined waterfront property was bought for $4.3 million cash in August, 2002. The purchase came 10 months after Dunn, former chief financial officer of Nortel, replaced John Roth as CEO of the struggling telecom-equipment giant.
Oakville-based architecture firm Hicks-Pettes Architects Inc. and Coulson Fine Homes of Mississauga are designing and constructing Dunn's new abode, which sources say will likely have a market value between $12 million and $15 million when finished.
"I can't comment, we have to keep our client confidentiality," said Janet Coulson of Coulson Fine Homes when contacted by the Star. "It's a beautiful property," said William Hicks of Hicks-Pettes, who also declined further comment.
Dunn, who already resides in Oakville, did not return calls, nor did his attorney Thomas Heintzman of Toronto-based McCarthy Tetrault LLP.
Brampton-based Nortel announced last week it is cutting another 3,500 employees, bringing to 30,000 a workforce that swelled above 95,000 four years ago. The company, which under Dunn pledged in 2002 to become profitable again, is under criminal investigation by the Royal Canadian Mounted Police and federal authorities in Texas for accounting irregularities stretching back to 2001.
Dunn and two high-ranking financial officials were fired "for cause" in April, followed last week by the termination of another seven executives.
Nortel has said it is also conducting an internal review of its accounting practices, which analysts suspect is focused on bonuses paid to certain senior executives in 2003.
Williams Owens, Nortel's current CEO, said last Thursday the company will demand repayment of 2003 bonuses worth about $10 million (U.S.) that were paid to the 10 dismissed executives, including Dunn. It's estimated that Dunn's 2003 bonuses exceeded $4.5 million.
"It's surprising that Mr. Dunn is apparently undertaking such a large discretionary project at this time," said Charles Smedmor, a forensic accountant with experience in real estate at Toronto-based Smedmor & Associates.
"A concern is whether putting these funds into such a real-estate project may reduce the potential recoveries for Nortel and its shareholders."
The Star visited the property, partly fenced in along a wealthy stretch of Lakeshore Rd. East, and was met with a polite yet determined construction worker, who escorted us off site.
Photographs from the air show a grandiose, partially complete mansion with a built-in custom swimming pool. A boathouse is located at the edge of the water, where a break wall leads to a large boat slip.
Dunn appears to have paid cash for the property, but land registry documents show the ex-CEO took out a mortgage May 10 — 12 days after being fired from Nortel — for $3 million. The mortgage was through Royal Bank of Canada at prime rate less 0.5 per cent. His monthly payments, which began in June, are about $15,000.
Ramy Elitzur, an associate professor of accounting at the Joseph L. Rotman School of Management, said taking a mortgage out on the property makes sense given Dunn's current situation.
"I don't see him being employed by anybody in the industry for some time," said Elitzur. "He probably did it because he wanted to have cash on hand."
In addition to paying for construction of his new home, Dunn faces the prospect of having to pay back his 2003 bonus, or pay huge legal fees trying to keep it. He also faces legal fees related to a number of class-action lawsuits, which allege Dunn and other executives knowing and recklessly misrepresented Nortel's financial situation in 2003 and parts of 2004.
None of these claims have been proven in court.
"He's now in a whole new ballgame in terms of what's going to happen," said Elitzur. "Just to be on the safe side he took the mortgage, I suspect."
August 26, 2004 in Home of Dreams | Permalink | Comments (0)
Canadian Wildland Fire Threat
Canadians will suffer loss of life and property to forest fires as residential developments continue to encroach on forested areas unless builders and municipalities adopt FireSmart designs. Interface fires, which occur in places where forests and wild areas meet urban development, were at an all-time record high in British Columbia last year and the threat continues.
Fire is nature's way of rejuvenating forest areas, but when human settlement is in the path of the flames, fires are catastrophic. B.C.'s Firestorm of 2003 destroyed over 344 homes and many businesses, and forced the evacuation of almost 50,000 people when 2,500 wildfires raged through B.C.'s interior. Firestorm 2003 carried a price tag of $700 million. The greatest cost of all was the loss of three pilots who died in the line of duty.
Although Firestorm 2003 drew a loudly-applauded fire fighting response of over 10,000 people from emergency agencies across B.C. and significant support from other provinces and the federal government, there was wide-spread consensus that many aspects of planning, preparation, response and recovery could be improved.
Former Manitoba premier Gary Filmon, commissioned by the province to conduct an independent assessment, produced the Firestorm 2003 Provincial Review in time to support fire fighting efforts in 2004. Among the report's conclusions were these real-estate-related recommendations:
"There was also a firm recognition that many subdivisions in the interface were not designed to mitigate wildfire risks, nor were the dwellings constructed to reduce wildfire hazards. We believe that local governments and individual homeowners have recognized the risks and are now prepared to follow the best information available to correct for past inaction."
"The topic of fuel load reduction through prescribed burns is perhaps the best example of a strong consensus on what formerly had been a very controversial and divisive debate. Simply put, almost everyone who gave advice to the Review Team agreed that it was better to accept short-term inconvenience and irritation in favour of long-term reduction in hazard and cost."
The insurance industry should encourage and reward, through its rate-setting process, dwellings and communities built to acceptable standards.
The province should review and amend Land Use Plans to incorporate fire management considerations. Fire experts must be available to influence and participate in land management planning.
Recommendations also include the formal adoption of the FireSmart standard for new and existing private and public property, developed by Partners in Protection, an Alberta-based coalition of professionals representing national, provincial, and municipal associations and government agencies responsible for emergency services, land-use planning, and forest/park management and research. Its interactive interface planner, entitled FireSmart: Protecting Your Community From Wildfire, provides individuals with the necessary tools in planning and mitigating the risk of fire in interface areas. The manual's many practical suggestions include:
When fires hit an area, they may have an impact on community services. Always be prepared to live for days, perhaps longer, without electricity, running water or outside help. Prepare-ahead protection remedies include solid plywood shutters for every opening and vent when fire is near.
Remove the greatest cause of fire loss by replacing untreated wooden shake roofs and wooden decks with fire-resistant materials such as metal, slate, tile, or asphalt shingles and using only non-combustible siding.
Landscape designs should include a defensible space -- at least a 10-metre zone around your buildings and a lessened fire risk for at least another 20 meters. This is achieved by planting only fairly fire-resistant plants (e.g., broad-leaf deciduous trees, low shrubs, ferns, annuals), spacing them moderately far apart and keeping the area clear of debris.
Lightening accounts for at least 35 per cent of all fires which, because of remoteness, may cause a high percentage of the damage on average, but this still leaves human activity on the hook for the balance of the damage.
Building departments have the use of both local building codes and bylaws to control building in areas at risk to interface fires, but property owners benefit from taking the initiative themselves.
Is your property at risk? Complete the FireSmart assessment of your home or contact your local fire agency for help evaluating your property. If you are building, incorporate FireSmart design for a safe future and, perhaps, a better insurance rate.
August 24, 2004 in Location, Location ... | Permalink | Comments (0)
Bank says housing less affordable
Vancouver remains most expensive market
The latest Royal Bank Housing Affordability report says higher interest rates and rising house prices are likely to erode housing affordability for the rest of this year and into 2005.
The report found that in the second quarter, the affordability of housing hit its worst level in two years in every region of the country as long-term mortgage rates moved up from historic lows. The Royal Bank report says continuation of that trend will result in higher ownership costs, although increases in the actual price of homes will ease.
"The best days of affordability are behind us," bank economist Carl Gomez said.
Still, Mr. Gomez said on a historical basis, housing costs remain quite low in most parts of the country outside the hot B.C. market.
The Royal Bank Affordability Index report says during the second quarter of the year, the proportion of pretax household income needed to service the costs of owning a home rose to 31.7 per cent from 30.1 per cent in the previous quarter. To put that in perspective, the index hit 50 per cent during the real estate boom of the 1990s. It bottomed out at 29.4 per cent in the fourth quarter of 2001, following the Sept. 11 terrorist attacks when interest rates fell but housing prices had not yet begun to climb.
Since then, Mr. Gomez said the measure has remained around the 30 per cent mark nationally.
While affordability remains high in most of the country, that is not the case in Vancouver where low mortgage rates have brought more buyers into the market and pushed prices up dramatically. By the bank's measure, the city is the most expensive in Canada for homeowners, with the cost of owning and servicing a detached bungalow now accounting for 47.3 per cent of pretax income. That compares with 37.2 per cent for Toronto, the country's second-most-expensive city for home ownership.
While rates are rising, there also are indications that more houses are being put on the market. Mr. Gomez said the moderation of price increases and income growth in some areas will temper the effect of higher mortgage rates on housing affordability. But he also predicted that housing sales in the third quarter could fall as much as 10 per cent.
The Canadian Real Estate Association reported that in July the average price increase in the resale market dipped into single digits for only the second time in the past 12 months. The major market residential average price rose 7.7 per cent last month compared to July 2003, and now stands at $242,261.
August 23, 2004 in Buying a Home | Permalink | Comments (0)
2005 Rent Increase Guidelines
The Ministry of Municipal Affairs and Housing has released the province's rent increase guideline for 2005. The 2005 guideline will be 1.5 per cent.
The new rent increase guideline becomes effective January 1, 2005 and establishes the maximum amount that a landlord can increase a tenant's rent without making an application to the Ontario Rental Housing Tribunal.
Normally, the rent increase guideline includes a base increase of two per cent, plus an amount for increases to landlord operating costs. Earlier this year, the provincial government announced that the 2005 increase guideline would include only an amount for operating cost increases.
For more information on rent increases, please contact the Ontario Rental Housing Tribunal at 416-645-8080 or 1-888-332-3234.
August 23, 2004 in Watching the Market | Permalink | Comments (0)
