Realtysellers vs. TREB

An insightful and balanced analysis of the dispute between Realtysellers and the Toronto Real Estate Board appears in an article on the Realosophy website. It is refreshing to see that there are some people in the real estate brokerage business who "get it"!

See the full article »

December 27, 2007 in Legal Considerations | Permalink | Comments (0) | TrackBack

Protect yourself from title fraud

Title fraud is a daunting problem for all stakeholders in real estate, and it’s not just an Ontario problem; it affects the industry across Canada and the United States. Investigators at a conference in crime and prevention in Toronto in December called mortgage fraud an epidemic in the developed countries. The Ontario government has responded to increased concern and, in December, passed legislation that will strengthen protections against real estate fraud, with fines increased for $1,000 to a possible $50,000.

In the US, in the fall of 2004 the FBI warned that their open mortgage fraud investigations had increased five times in three years. They reported 533 open files and a single one of those files could be dealing with losses of over $100 Million. In 2005 the FBI reported 170 convictions with losses of over $1 billion.

These are big numbers, yes, but real estate transactions always involve huge sums, so why is this crime such a problem now? Kathleen Waters, LL.B., Vice-President of TitlePLUS, suggested real estate has become a commoditized business. "In the 1950s and 1960s it was quite common to know the client," she said. Clients lived in your community, or you knew of them or their family members. But with more transactions happening with clients that you don’t know "that leads to the possibility that they may not be who they say they are," she said.

There is no absolute way property owners can protect themselves from title fraud, but there are some measures they can take to minimize the chances of a fraudster stealing the rug, and their home, out from under them. Here are some suggestions:

January 11, 2007 in Legal Considerations | Permalink | Comments (1) | TrackBack

Protection Against Title Theft

The media is filled these days with reports of title theft and fraud surrounding peoples’ ownership of homes and condominiums. For example, the Toronto Star reported in October that one of Canada’s largest banks is locked in a legal battle with a North York couple who lost their condo to identity thieves. The Owners owners are faced with a $247,860.00 mortgage which was put on their home. The court has ordered the mortgage cancelled, but the bank is considering an appeal.

This latest case of property fraud comes to light as Ontario courts and legislatures scramble to protect homeowners from the consequences of identity theft. In title theft, the fraudster uses stolen or forged identity to change the title, sell the property or re-mortgage it without the true owners knowing. The fraudsters then take off with their ill-gotten gains leaving owners and lenders to bear the loss. The Ontario government has proposed that title would be restored to the owner who lost it, however, critics of the proposal believe that this would be punishing an innocent buyer at the expense of owners.

One critic stated: "The flip side to a law which would restore title to an innocent owner who has been defrauded is that virtually no one will be able to say with certainty they own their home. It does not matter how many years you have lived there and how much money you may have put into it, one day someone could knock on your door and tell you to leave".

Until the government and courts decide upon an equitable solution to the problem of title theft and fraud, the best thing for existing homeowners is to make sure that they get title insurance.

What is Title Insurance?

Title insurance is a policy of insurance that provides coverage for the title related risks associated with real estate transactions. It is designed to cover the unpredictable or undetectable issues such as forgery, fraud, missing heirs or creditors that can affect rights of ownership.

Because it is insurance, the policy moves the risk associated with title from the home buyer, the lending institution or the lawyer, to the title insurer.

If there is a problem with title that only becomes known after closing, the title insurer may rectify the problem or compensate the policy holder, provided the type of problem that surfaces is covered by the title insurance policy.

Should a policy holder suffer a loss of title through title/identity theft, the insurance will provide funds to discharge the mortgage or compensate for the loss of the property. Without title insurance the home owner is forced to make a claim to the government’s Assurance Fund – a long and expensive process which is not always successful.

December 29, 2006 in Legal Considerations | Permalink | Comments (1) | TrackBack

Mortgage Fraud Legislation Passed

In response to growing concerns about real estate fraud, the provincial government has passed Bill 152, the Consumer Protection and Service Modernization Act, which provides various new safeguards for property owners.

Under Bill 152, the Land Titles Act is amended to ensure that ownership of a property cannot be lost as a result of the registration of a falsified mortgage, fraudulent sale, or a counterfeit power of attorney. The proposed legislation will also,

What is real estate fraud?

Real estate fraud has recently received attention from the real estate, legal, and financial communities due to its increasing prevalence. Real estate fraud can take various forms, but one of the most serious is title theft, whereby title to a property is transferred fraudulently without the true property owner’s knowledge. The home can then be sold without the true property owner’s knowledge or a mortgage can be placed on the property, which could become the responsibility of the unsuspecting rightful property owner.

December 17, 2006 in Legal Considerations | Permalink | Comments (1) | TrackBack

Real estate fraud protection

New law protects homeowners

The Ontario government has passed legislation to strengthen protection for homeowners against real estate fraud, but denies the problem is a growing "epidemic" as experts claimed this week. Under Bill 152, the Land Titles Act will be amended to declare any land titles obtained by fraudulent means — such as falsified mortgages, fraudulent sale or a counterfeit power of attorney — null and void.

The changes will also speed up financial assistance for victims of fraud, ensuring the title is returned and a decision on compensation is made within 90 days.

It also raises the maximum penalty for real estate fraud to $50,000 from $1,000.

Even as the government passed the bill through final reading, it sought to counter public perception about the extent of the problem.

At an international fraud investigators conference in Toronto earlier this week, a former RCMP investigator Chris Mathers called real estate fraud "an absolute epidemic, a huge problem in the developed countries, especially here in Canada."

"I think that's probably too strong a language," argued Government Services Minister Gerry Phillips. "I mean it's important and we have to deal with it. I wouldn't call it an epidemic by any means."

An average of 10 cases of title fraud are reported annually in the province, Phillips said, adding the number of cases has remained steady over the past few years.

Title fraud, one of two main types of real estate fraud, commonly involves criminals using stolen identities or forged documents to illegally obtain a registered owner's title. The fraud artist then gets a mortgage on the property and disappears with the money.

Mortgage fraud, which usually harms financial institutions, involves a crook acquiring property and then artificially increasing its value through a series of sales and resales involving the fraud artist and a conspirator. A mortgage is then obtained based on the artificially inflated price.

December 13, 2006 in Legal Considerations | Permalink | Comments (1) | TrackBack

Be Aware of Identity Theft

Thieves can steal your personal identity information and commit crimes such as fraud or theft.

Protect Your Personal Information:

The foregoing is an example of the consumer protection information on 2007 FRAUD FREE CALENDAR avaiable from the Ontario Government website.

November 29, 2006 in Legal Considerations | Permalink | Comments (0) | TrackBack

Grow-ops moving to apartments

Toronto police say that because that city’s vacancy rate is near an all-time high, apartment buildings have become a preferred location for marijuana growers. On November 24th, police raided one 13 storey apartment building at 2600 Jane Street that had 22 units on nine floors filled with marijuana and the equipment used to grow it. On the same day they raided a second apartment block around the corner and seized marijuana in another unit.

"The trend we are seeing is they are using apartment buildings because of the extremely high vacancy rate — and availability," says Det. Sgt. Dave Malcolm of the Toronto Police Service drug squad. The average vacancy rate in 2005 was 3.7 per cent in Toronto, according to CMHC.

Police said the superintendent of the Jane St. building was one of three people arrested so far, though officers continue to probe how such a complex drug enterprise could exist under the noses of 700 residents.

Toronto police also released a video showing the lengths the producers went to in hiding the grow ops. One advantage for growers is that many apartment buildings have a single hydro meter for the entire building, enabling extraordinary electricity use without ready detection. After a grow-operation is discovered in an apartment, Toronto Public Health must inspect it and give the okay before it can be rented again.

In 2005, Toronto police busted 250 grow-ops and are on track to do the same this year. Grow-ops have also been discovered in private condominiums in Toronto.

November 28, 2006 in Legal Considerations | Permalink | Comments (3) | TrackBack

Toronto Real Estate Forms

The Toronto Real Estate Board has published some of its most commonly-used real estate forms including clause-by-clause plain language explanations of the legal terminology used throughout the documents.

Understanding what you are signing is essential to having a successful real estate transaction.

Here is a link to each form:

Please leave comments or questions at the 'comments' link below.

October 27, 2006 in Legal Considerations | Permalink | Comments (0) | TrackBack

Teranet launches new service

Closure(TM) service provides electronic funds management system
for real estate closings in Ontario
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eranet today announced the launch of a province-wide pilot for its Closure service, which enables lawyers to securely control the transfer of real estate closing funds online. Following successful beta testing that began in March 2006, Teranet is inviting a select group of real estate law firms in Ontario to pilot the service.

"Closure is an essential complement to our core electronic land registration product. Our focus group research clearly demonstrates a very strong demand for this service," said Aris Kaplanis, President and CEO of Teranet Inc. "It will provide a safe electronic environment in which funds can be exchanged and allow for complete end-to-end electronic closings of real estate deals. The entire system has been designed to replicate the best practices in trust accounting that are imposed on law firms. The Closure service is evidence of what Teranet does best - leveraging our existing electronic infrastructure and strong customer relationships to offer services that make our customers' lives easier."

The Closure service is built to work seamlessly with regular commercial online banking and wire systems offered by the banks. Teranet's new service uses the Large Value Transfer System (LVTS), which was developed and is operated by the Canadian Payments Association, with transactions guaranteed by the Bank of Canada. LVTS allows for rapid, irrevocable and certain funds clearing and cash settlement. Scotiabank worked with Teranet to provide the automated banking services used by the Closure service. TD Canada Trust, RBC Royal Bank and Scotiabank are participating in the pilot and are launching joint marketing programs to promote the new service. Participating pilot law firms banking at the Bank of Montreal can also wire funds to Closure.

"There is tremendous potential in the Closure service to combat mortgage and title fraud," said Susan Elliott, President of Teranet subsidiary BAR-eX Communications Inc. The BAR-eX website will offer the Closure service to lawyers following the pilot. "Closure will enable all parties to a real estate transaction, for the first time, to pay money online directly to its rightful and final destination. By removing the extra handling of funds present in today's manual process, we are reducing the opportunity for various types of fraud."

October 19, 2006 in Legal Considerations | Permalink | Comments (0) | TrackBack

New Ontario law to fight grow-ops

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new Ontario law gives police, municipalities and electricity companies the power to crack down on marijuana grow houses. The Law Enforcement and Forfeited Property Management Statute Law Amendment Act, 2005, "requires a local municipality to ensure that a building is inspected if it is notified by a police force that the building contained a marijuana grow operation."

City officials will be responsible for inspecting a property that police have identified as a grow house and order repairs if the property is deemed unsafe. Homeowners or landlords will not be allowed to sell or rent out the property until the work is completed.

The law also gives local hydro utilities the authorization to cut hydro to homes where safety and security are deemed an issue, and law enforcement officials have been empowered to seize the proceeds of grow operations for crime prevention and victim compensation. Maximum penalties have also been doubled for fire hazards caused by faulty wiring.

REALTOR® concerns
Identifying or being informed that a home had been used as a marijuana grow operation is a concern for REALTORS® who want to protect their buyers, and themselves. Some communities already make the information available to the public, but there is no coordination across the province. For example, police forces in London and Durham post the addresses of homes formerly used as grow operations on their Web sites. Some Toronto police divisions, such as 42 division, also post grow op information, but only for their jurisdiction.

Central registry
Currently, there is no statutory requirement for property owners to reveal what a home was used for in the past, making it difficult for homebuyers and REALTORS® to protect themselves. But, the McGuinty government also announced it is considering the creation of a province-wide registry for homes that have been implicated in the production of marijuana. A ten-member expert panel including representatives from the real estate industry, police, the insurance industry, building officials and government met at OREA in August to discuss the proposed registry and how it will work. Further meetings will take place over the next few months.

With a central registry in place, REALTORS® will be able to double-check that a property has never been used as a grow op. In the meantime, be proactive in protecting your buyer and yourself by:

Know the signs
A buyer agent should be aware that there may be no obligation on the part of sellers to voluntarily disclose that a property has been used as a grow op.

Marijuana grow houses are typically filled with mould and have faulty electrical wiring because circuits are tampered with as growers bypass metres measuring power consumption. However, it can be difficult for REALTORS® to identify a former grow op if tell-tale signs have been covered up. Depending on how new the operation is, mould may not appear for months or years.

While grow ops often require extensive cleanup and repair, it is possible that these repairs were never made and the real damage is hidden. Noticeable signs that you may be dealing with a former grow op include:

October 8, 2006 in Legal Considerations | Permalink | Comments (3) | TrackBack

Real Estate and Competition Law

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he real estate industry is a highly competitive industry. Brokers/agents and salespeople compete to secure listings, and compete to find successful buyers for transactions. At the same time, brokers/agents and salespeople co-operate on a regular basis to successfully sell real estate. The tug-of-war between co-operation and competition can create opportunities for anti-competitive activity. Sensitivity to competition law issues is a business necessity.

The competition "cure" for real estate is in the measures Brokers, agents, salespeople and Boards can take to make sure there is compliance with competition laws in their daily business. This involves a compliance program implemented in day-to-day practice by the individuals it governs.

Ignorance of the law is no excuse. Brokers and agents should institute an office compliance program, because they may be held responsible for the actions of their salespeople. They should also ensure there is monitoring of the implementation of the compliance program.

With knowledge and understanding of the laws comes the freedom to actively pursue legitimate business opportunities. There are many valuable services a REALTOR® or real estate company provides, and promotion and marketing of those services can translate into listing and selling advantages. They can also enhance the professional aspects for consumers in dealing with a REALTOR®.

October 2, 2006 in Legal Considerations | Permalink | Comments (1) | TrackBack

Licensing Duplication Averted

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he lobbying efforts of the real estate industry have succeeded in amending a provincial proposal, Bill 14, Access to Justice Act, 2005, that could have had the effect of requiring REALTORS® to be licensed by the Law Society of Upper Canada, the body responsible for regulating lawyers. Without the amendment, REALTORS® may have been considered to be providing "legal services" and would, therefore, have been subject to additional licensing requirements.

Definition of Legal Services

Bill 14 was introduced by the provincial government in October 2005, but has not yet been passed. The proposed legislation makes various changes to administrative issues regarding the justice system and the legal profession. One important change is to allow the Law Society of Upper Canada to regulate anyone providing “legal services”. Under Bill 14, a person is considered to be providing “legal services” if they select, draft, complete, or revise a document that affects a person’s interests in real property. As such, it is possible that without clarification, using this definition, REALTORS® could be considered to be providing “legal services” and therefore be subject to the requirements of Bill 14.

REALTORS® Exempted from Bill 14

Consultations were held with interested parties, including the real estate industry. The Ontario Real Estate Association represented REALTORS®, and informed the provincial government that REALTORS® are already adequately licensed and regulated. As a result of these efforts, Bill 14 will be amended to clarify that REALTORS® will not be regulated by the Law Society of Upper Canada.

September 27, 2006 in Legal Considerations | Permalink | Comments (0) | TrackBack

CRTC Clarifies Telemarketing Rights

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he Canadian Radio-Television and Telecommunications Commission has issued a Telecom Bill of Rights to help consumers better understand their existing rights with respect to local home phone services. There are no new rules in the Telecom Bill of Rights and therefore no new impact on REALTORS® telemarketing activities; however, because this initiative is expected to improve the public’s understanding of existing rules, it is important for REALTORS® to understand existing restrictions on telemarketing.

Do Not Call Registry Not Yet Implemented

The new Bill of Rights is intended as a way to communicate to consumers, in plain understandable language, what their current rights are for phone service. This is separate from the federal Do Not Call Registry, which has not yet been implemented. The CRTC is currently consulting on how to establish the Do Not Call Registry, but once it is implemented, consumers that do not want to be contacted by telemarketers would be able to list their phone number on the registry, which telemarketers, including REALTORS® would be required to adhere to or face penalties and fines.

Existing Restrictions on Telemarketing

For your information, below is a verbatim copy of the explanation of EXISTING telemarketing rules appearing in the Telecom Bill of Rights that will be provided to consumers by telephone companies.

Telemarketing rules

Subscribing to an unlisted number service or requesting that your information be removed from the lists given out by publishers of telephone directories may not be enough to stop unsolicited telephone calls. Other rules do exist to protect you from unwanted telemarketing received by means of automated calls, live calls, and faxes.

You have the right to complain to your phone company, or the CRTC, if a telemarketer does not comply with any of the following telemarketing rules. The telemarketing rules listed below are under review by the CRTC and may be subject to change. Contact the CRTC directly for up-to-date information on the telemarketing rules.

Automated calls

Automated calls make use of equipment that stores and dials telephone numbers automatically and can include a pre-recorded message that is played when the phone is answered. Automated calls cannot be used for the purpose of solicitation. This includes automated calls made on behalf of a charity, calls requesting that you hold until an operator is available, or calls referring you to a 900 or 976 number.

Automated calls are only allowed when there is no attempt to solicit, for example if you are called for public service reasons, for emergency purposes, to collect on an overdue account, or to participate in research. Such calls are only permitted from 9:30 a.m. to 8:00 p.m. on weekdays, 10:30 a.m. to 5:00 p.m. on Saturdays, and noon to 5:00 p.m. on Sundays. There are no hour restrictions, however, if the automated call is made for public service reasons.

Automated calls must start with a clear message telling you who is calling, including a mailing address and a local or toll-free telephone number. Automated calls must display the number where the call is coming from or an alternate contact number.

Live calls

When live telemarketers contact you, they must identify the person or organization that they represent. The telemarketer must, if you request it, provide the name, address and telephone number of a person whom you can contact. Telemarketers are required to display the number where the call is coming from or an alternate contact number.

There are no hour restrictions on live telemarketing calls.

If you do not wish a telemarketer to contact you again, you have the right to request that the telemarketer place you on its "Do not call" list. Your name and number must be removed from that telemarketer's calling list within 30 days of your request. Telemarketers are required to maintain your name on their "Do not call" lists for 3 years.

Faxes

A fax from a telemarketer must identify the person or organization on behalf of whom the fax is sent, including the name, address, telephone number and fax number of a person whom you can contact. The fax must display the number where the call is coming from or an alternate contact number. Telemarketing faxes can only be sent on weekdays between 9:00 a.m. and 9:30 p.m. and on weekends from 10:00 a.m. to 6:00 p.m.

If you do not wish to receive a telemarketer's faxes again, you have the right to request that the telemarketer place you on its "Do not call" list. Your name and number must be removed from that telemarketer's calling list within 7 days of your request. Telemarketers are required to maintain your name on their "Do not call" lists for 3 years.

More Information

If you would like more information on the CRTC’s Telecom Bill of Rights, visit their web site at www.crtc.gc.ca or call 1-877-249-2782.

September 25, 2006 in Legal Considerations | Permalink | Comments (0) | TrackBack

Planning changes seen as problem

Development in Ontario will get bogged down in legislation: panel
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he new and proposed amendments to the Planning Act will make development in Ontario a complicated, expensive and time-intensive process, with the onus on the developer to make the process efficient and transparent. That was one of the messages from a panel of planners, developers and lawyers at a session on the implications of new and proposed legislation at the Land Conference in Toronto.

The pending Bill 51 – Planning and Conservation Land Statute Law Amendment Act and recently enacted Bill 26 – Strong Communities (Planning Amendment Act) seek to increase municipal autonomy and authority in the planning process by increasing time lines for reviewing, limiting rights to appeal expansions to municipal boundaries, restricting rights to convert employment land to other uses, and requiring a comprehensive "front end" submission process, as well as other changes.

"The one thing we know is that it is not going to get simpler, cheaper or faster to develop land in Ontario because of this legislation," said Andrew Madden, President, Diral Development Corporation. "As a developer what you will have to do is put together your consulting team and your lawyers right from the beginning. You are going to have to be very strategic."

Panelists said that the legislation suggests that developers have been putting skimpy evidence before city councils, waiting the time limit and then presenting the full case to the Ontario Municipal Board (OMB), with municipalities not having seen much of the material. The Planning Act amendments, said Stephen Diamond, McCarthy Tetreault LLP, place a greater obligation on the industry to provide the detailed information from the beginning.

"There are two parts of the act that I think are important; one is that the act now says that a municipality can make it mandatory that there is a pre-consultation process…. The second part is that it says that the municipality can, by the official plan amendment, make requirements for what constitutes a complete application." If all of the amendments are passed, said Diamond, it will mean "a lot of front end work that has to be done when you file an application. It likely will be more expensive, and more cumbersome, and all your reports – your traffic report, your planning reports, your architectural renderings, your soils and servicing reports – everything will likely have to be done from the day that you file your application."

More municipal control

With Bill 51, municipalities would gain the ability to impose architectural control through the site plan process, a critical component to the application process, and these proposed changes cause some of the greatest concern.

The language in Bill 51 suggests that the matters relating to exterior design may include, without limitation, the character, scale, appearance and design features of the building and their sustainable design. "That’s a loaded gun of issues and I think the problem that I see is the political influence on this process. I think developers, architects, planners (can have) a reasonable and rational discussion (on these issues). When you begin to insert the political influence it is anybody’s guess how that will end up," said Neil Rodgers, President, Urban Development Institute.

Madden added: "If sustainable development does not mean economical sustainability, then this site plan process may become a very dangerous one for all of us."

With greater regard to the decisions of the municipalities, Bill 51 tries to reduce the role of the OMB in the planning process, if not eliminate it. The “no new evidence” rule essentially says that information or material that was not available at the municipal council may not be presented as evidence at the OMB unless it can be proved that it was not available at that time. Public bodies such as the municipality and conservation authorities, however, can present new evidence to the OMB, an unfair bias, the panel criticized, against the private sector.

More information about the legislation can be found at http://www.e-laws.gov.on.ca/.

September 11, 2006 in Legal Considerations | Permalink | Comments (1) | TrackBack

Selecting legal representation

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hether thinking about buying or selling, sooner or later consumers hire a lawyer to complete the transaction. During the process you expect a lawyer to advise and protect you. Unfortunately, this is often later rather than sooner - after the offer to purchase or mortgage commitment had been concluded. This is too late for the lawyer to completely protect you.

An agreement of Purchase and Sale is a binding agreement between two parties (the Buyer and the Seller). Once signed and delivered it commits the consumer to its terms, even if the consumer later learns that these terms are not what he fully expected.

Selecting a lawyer is a sometimes a difficult decision. As cost is always an important factor, ask perspective lawyers for a quote on closing costs. Ask them “what does your fee include”? Be sure to determine of any quotes/fees include the labour components.

Equally important to consider is the lawyer’s skill, trust, availability and convenience. Although all Ontario lawyers are trained in real estate transactions, not all practice extensively in this area of the law. Trust is a matter of reputation – feel free to ask for references. Keep in mind that many real estate transactions occur in the evenings and on weekends - outside of the normal business hours. You want to have a lawyer who will be available to you when you need them.

September 11, 2006 in Legal Considerations | Permalink | Comments (1) | TrackBack

Action on Real Estate Fraud

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n response to growing concerns about real estate fraud, the provincial government has announced that it will introduce legislation this fall to provide additional safeguards for property owners. The government’s forthcoming actions are expected to ensure that property owners do not lose their homes as a result of real estate fraud or become responsible for fraudulent mortgages.

Government Actions

If passed, the proposed legislation would ensure that ownership of a property cannot be lost as a result of the registration of a falsified mortgage, fraudulent sale, or a counterfeit power of attorney. Instead, an innocent homeowner’s title would be restored to them and the fraudulent document would be nullified. The proposed legislation will also,

What is real estate fraud?

Real estate fraud has recently received attention from the real estate, legal, and financial communities due to its increasing prevalence. Real estate fraud can take various forms, but one of the most serious is title theft, whereby title to a property is transferred fraudulently without the true property owner’s knowledge. The home can then be sold without the true property owner’s knowledge or a mortgage can be placed on the property, which could become the responsibility of the unsuspecting rightful property owner.

September 9, 2006 in Legal Considerations | Permalink | Comments (0) | TrackBack

Ontario attacks real-estate fraud

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nnocent homeowners who discover fraudsters have illegally taken out a mortgage against their property and vanished with the cash will no longer be responsible for paying off the debt under new legislation the Ontario government plans to introduce later this fall.

"If this bill is passed, innocent homeowners who are the victims of real-estate fraud will not be out of their homes simply because someone registered a fraudulent document," Government Services Minister Gerry Phillips said. "(It) will ensure that mortgages, transfers, powers of attorney and other instruments obtained falsely will be nullified."

The proposed changes come in the wake of several highly publicized recent cases where fraudsters have impersonated homeowners to obtain title to a property and then either sold the property or taken out additional mortgages.

An Ontario Court of Appeal decision last fall caused a sensation in real-estate circles when it ruled that a forged power of attorney could be used to create a valid mortgage. In that case, the appeal court ruled the mortgage was enforceable even though the wife used a forged power of attorney to apply, sign and obtain the mortgage. The court ruled that once the mortgage was registered, it was binding on the innocent husband even though he had no knowledge of the matter.

Susan Lawrence of Toronto is being held responsible for repaying a $300,000 mortgage she never sought or received.

In her case, an identity thief stole the title to her home, obtained the mortgage and disappeared with the cash.

"I think it's a good start," Lawrence said Friday following the minister's announcement. She also called upon banks, lawyers, real estate agents and the land title registry officials to exert more due diligence when it comes to land transactions. Greater attention to detail, she noted, might have prevented the fraud in her case.

"He (the fraudster) said he worked in a car wash and his statements of earnings said he earned $73,500 a year. I'd like to work in that carwash."

The proposed legislation will also increase the fines for fraud under the Land Titles Act to a maximum of $50,000 from $1,000 and deny access to the land titles registry to known fraudsters.

Phillips said the government also plans to apply for intervener status in Lawrence's appeal to have the court absolve her of responsibility for the falsely obtained mortgage. He noted, however, that the new rules on forged documents will not be applied to crimes committed before the legislation goes into effect.

Conservative leader John Tory said the Liberals should also ensure there are tougher penalties for the lawyers that are often involved with facilitating the fraud.

NDP MPP Peter Kormos said the Grits should also tighten up the operations of the province's electronic land registry system.

"There needs to be more integrity in the system so there is less likelihood of a forged or otherwise fraudulent document being registered," he said.

He noted the new rules also will not help innocent people who purchase a house from a fraudster, turn over the purchase price and then discover they have given the money to a thief who disappears.

September 9, 2006 in Legal Considerations | Permalink | Comments (0) | TrackBack

Ontario ups real estate fraud fines

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he Ontario government is planning to increase penalties and a calling for an amendment to the federal criminal code to protect homeowners from real estate fraud. Government Services Minister Gerry Phillips announced the province's plans to increase the maximum penalty for those convicted from $1,000 to $50,000.

Phillips also is calling on the federal government to consider amending the criminal code to recognize real estate fraud as a separate offence, and establish a national database of cases.

Phillips says the government's previous steps, such as moving to create more secure driver's licences and the land title insurance fund, are also helping combat the problem.

He admits there are only 10 claims a year against that fund out of two million real estate transactions in Ontario, but says homeowners and authorities alike tell him title and mortgage fraud is a growing problem.

Today's steps follow consultation with a government task force made up of legal, financial and real estate experts, as well as police.

September 8, 2006 in Legal Considerations | Permalink | Comments (1) | TrackBack

2007 Ontario Rental Guidelines

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he Ministry of Municipal Affairs and Housing has released the province’s rent increase guideline for 2007. The 2007 guideline will be 2.6 per cent. The new rent increase guideline becomes effective January 1, 2007 and establishes the maximum amount that a landlord can increase a tenant’s rent without making an application to the Ontario Rental Housing Tribunal.

This guideline does not apply when renting a vacant unit. Under the Tenant Protection Act, 1997, when a unit becomes vacant, a landlord is free to charge whatever rent he/she chooses. Once the unit is rented, however, the guideline increase applies for subsequent increases to that tenant.

The guideline applies to most private residential rental accomodation covered by the Tenant Protection Act, 1997. The guideline does not apply to residential dwellings first occupied (by any owner or tenant) on or after November 1, 1991.

For more information on rent increases, please contact the Ontario Rental Housing Tribunal at 416-645-8080 or 1-888-332-3234.

August 29, 2006 in Legal Considerations | Permalink | Comments (1) | TrackBack

Senior victim of mortgage fraud

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n 89-year-old resident of Brockville, Ontario says he is heartbroken and feeling betrayed after his rental property was stolen through apparent title title fraud. Paul Reviczky, who fled Hungary in 1957 to escape Communist persecution, is one of the latest homeowners to discover that Ontario law favours banks, mortgage companies and purchasers over innocent victims of fraud.

"I was shocked to learn that this could be the law in Canada," Reviczky said. "I fled Hungary to escape lawlessness like this and now my sense of security in Canada is gone." Gerry Phillips, Ontario's minister of government services, has vowed to change the land-registry system to protect homeowners like Reviczky from title fraud.

Reviczky purchased the bungalow in Brockville in 1980 for $67,500 to generate a rental income that would help pay for the education of relatives back in Hungary. Since his wife's death in February 2005, he has lived alone in his home a few kilometres from the rental property.

Reviczky said he could not believe his ears on June 26 when his neighbour, a REALTOR®, told him she had noticed that he had sold his rental property in May. "So I went back to my office, got the record from the computer and showed it to him," Vivian Ho said. "His face turned red and I was worried that he was going to have a heart attack."

Police suspect Reviczky's most recent "tenants" forged his name on a power of attorney that purported to give a fictitious grandson authority to sell the home on his behalf. "I don't have any grandsons" Reviczky said. On May 15, the property was sold on his behalf for $450,000 to a purchaser who took out a mortgage of $337,500.

"I did not get the proceeds," Reviczky said. Reviczky's lawyer, Tonu Toome, said it was "very painful" to have to break the news to Reviczky that he may lose his house forever - even though he was a totally innocent victim of the fraud - because Ontario law, as it stands now, recognizes the transaction as valid where the purchaser is unaware of the scam.

"I had to tell him that although he would ultimately receive financial compensation for the loss of his home, this would entail legal fees and an application to Ontario's Land Titles Assurance Fund, which could take several years," Toome says.

See the full story in the Toronto Star:

August 28, 2006 in Legal Considerations | Permalink | Comments (1) | TrackBack

Ontario considers grow op registry

Comments made by community safety minister

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s a new law took effect on August 1st to give police, municipalities and electricity companies more power to crackdown on marijuana grow houses, Ontario's community safety minister said he's considering a central database of homes once used to make drugs.

Monte Kwinter – the province’s minister of community safety –said he's looking into creating a province-wide registry of residences that have been grow ops or meth labs so potential buyers can have inspectors look for mould and electrical or structural damage.

"We want to make sure that nobody unsuspectingly buys a house that's had the structure compromised because of a grow op," said Kwinter. Currently, homes that were used to grow marijuana can be sold without anyone being told about their history.

Marijuana grow houses are typically filled with mould and have faulty electrical wiring because circuits are tampered with as growers bypass metres measuring power consumption. Meth labs, usually based in kitchens, can leave homes with chemical contamination.

The registry would let buyers double check that "the property is suitable for habitation," said Kwinter, speaking from Ottawa where he marked the start of new provisions against grow ops at a training camp for emergency personnel.

As of August 1st, city officials will be responsible for inspecting properties that police have identified as grow houses and order repairs if the property is deemed unsafe. A landlord or owner won't be able to sell the house or occupy it unless the work is done.

August 11, 2006 in Legal Considerations | Permalink | Comments (0) | TrackBack

Black's apartment sale in quagmire

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hen Conrad Black sold his New York apartment for $10.5-million (U.S.), it looked like a straightforward real estate deal. But the sale has been far from ordinary, having been caught up in a series of legal battles that have become ever more complicated.

The co-op apartment is not only enmeshed in the criminal proceedings involving Lord Black and several other former executives of Hollinger International Inc., but Lord Black is also involved in a lawsuit with the agents who sold the property, Sotheby's International Realty Inc.

Sotheby's is demanding immediate payment of its $557,500 commission on the sale. But Lord Black is fighting back, alleging the company conspired with the FBI to have his proceeds seized. The money is now being held by prosecutors to help cover Lord Black's bail in the criminal case. He and the others have pleaded not guilty, and a trial is expected to start next March.

In a court filing two weeks ago, Lord Black said Sotheby's created its own problems and he accused the firm of oversimplifying the case.

See full article:

August 2, 2006 in Legal Considerations | Permalink | Comments (2) | TrackBack

Property tax changes await election

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ntario homeowners upset over their property tax assessments will have to wait at least until the end of the year end before they can expect any relief. Provincial Finance Minister Greg Sobara told reporters the Ontario government will not introduce any changes before the municipal elections in November.

"The system is not perfect and we're looking at a process to see how we can make improvements," he said.

Mr. Sorbara also said he is not taking any position on capping annual property assessments at five per cent for the province's more than four million property taxpayers, because the government would have to recoup the lost revenue elsewhere. The Municipal Property Assessment Corp. (MPAC), which does the property value assessments, is looking into whether there should be a cap on how much values can change from year to year.

Mr. Sorbara said no one has come up with the solution or answer to the question of who should be paying more to make up for the lost property tax revenues.

June 30, 2006 in Legal Considerations | Permalink | Comments (0)

Tarion doubles warranty protection

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otal warranty coverage for new homes in Ontario will increase to $300,000 from $150,000 for all purchasers who take possession of a new home on or after July 1, 2006 regardless of when the purchase was made.

The increased coverage "is a significant benefit to new home buyers and builders in Ontario that reflects the robust housing market and the increasing price of new homes," said Greg Gee, president and CEO of Tarion, adding that while most buyers will never need this amount of coverage, the boost gives buyers more confidence that there will be funds available if a major repair is required. Warranty enrolment fees will not change from their current rates.

For more information, visit tarion.com.

June 29, 2006 in Legal Considerations | Permalink | Comments (0)

Teranet files notice of IPO

Ontario government expects $400M windfall
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he private company that operates Ontario's electronic land registry system has filed notice that it wants to go public. Teranet has filed a preliminary prospectus with regulators, saying it wants to convert the company into a publicly held income trust.

Lawyers, real estate Brokers, agents and financial institutions in Ontario use Teranet to carry out property registrations and title and writ searches in Ontario. It operates under an exclusive contract with the province until 2017.

While the Teranet land registry system is privately owned, the data in the system is owned by the province of Ontario, which operates the land registry offices.

In 2003, Ontario sold its 50 per cent stake in Teranet but held onto the right to share in the value of any future sale.

Ontario taxpayers can expect a windfall of at least $400 million from the initial public offering of Teranet Inc., the electronic land registration business controlled by the province, according to provincial Finance Minister Dwight Duncan says. The money will go into general revenues, which will give Duncan more spending room in next spring's budget – the government's last before an election next year.

The amount Ontario alone is expecting from the pending sale of income trust units in the business has prompted Bay St. observers to speculate the share sale could be one of the biggest IPOs in the country. "It sounds like the total company could be worth a couple of billion dollars," Leslie Lundquist, a portfolio manager with Bissett Investment Management in Calgary.

May 12, 2006 in Legal Considerations | Permalink | Comments (0)

Ontario releases tax guidelines

Will impact land transfer tax paid on new homes
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he Province of Ontario quietly released tax guidelines at the end of March that could significantly increase the amount of land transfer tax buyers pay for a newly constructed home.

Purchasers of new homes often agree to a base price and then advise the builder of any extras and upgrades they would like to add. The tax bulletin says the value of these extras and upgrades are to be included in determining the amount to be declared in the land transfer tax statements, called the “value of the consideration”.

The bulletin says this includes items that are part of the permanent structure, such as architectural changes, extra doors and entrances, whirlpool baths, finished basements, roughed in washrooms and fireplaces. It also includes upgrades to flooring, cupboards, doors, windows and counters, as well as exterior upgrades like lot premiums, tree plantings, driveway paving, sodding and grading.

The guidelines also appear to introduce a form of double taxation. The bulletin states that the value of the consideration is to include the value of any liability assumed and miscellaneous costs incurred by the builder as part of the arrangement relating to the conveyance that are passed to the new homebuyer. These include lot levies, development charges, school levies, architect fees, and the Ontario New Home Warranty Plan Fee.

These are the first guidelines released for the determining the value of the consideration for new homes transfers. Critics have blasted the Liberal government for failing to consult with industry stakeholders before quietly introducing the new guidelines. A Toronto lawyer has suggested the provincial government could make the new tax grab retroactive to March 31st, which would create an administrative nightmare.

Homebuyers in Ontario pay a land transfer tax of $5 for every $1,000 in value up to $55,000; $10 from $55,000 to $250,000; $15 from $150,000 to $400,000, and $20 for over $400,000. First-time buyers of new homes and new condos can get up $2,000 in rebates.

To view the complete bulletin, click here.

April 28, 2006 in Legal Considerations | Permalink | Comments (0)

'This is not a cat case'

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Toronto woman's right to keep her elderly cat in her condominium has been upheld in a court case that the losing lawyer says has implications for countless condos.

The building's condominium board, which developed a belated interest in enforcing a no-pets provision in 2004, dragged the case through two courts and tried to take it to the Supreme Court of Canada.

Casey, 13, can stay in his Toronto home. On Thursday, the Supreme Court of Canada declined to hear the board's appeal and ordered it to pay Nancy Staib's legal costs.

That means the fight is over and Staib's cat, Casey, can stay in her Queen's Quay apartment on Toronto's waterfront.

The board's lawyer, Mark Arnold, said the case was pursued to defend a basic condition written into the condominium corporation's charter. "This is not a cat case," he told the CBC. "Sane people do not go to the Supreme Court of Canada to evict a cat."

Arnold stressed that the no-animals rule was not enacted by the board but was built into the legal structure of the condominium. It was meant to assure buyers who were allergic to cats, for example, that there would be none in the building, he said.

He said the outcome of the case means condo boards across Ontario will have to police all conditions of their charters energetically or lose the right to do so. Now the board must abide by decisions that went against it in 2005 in Ontario Superior Court and the Ontario Court of Appeal.

In a summary, Supreme Court officials laid out these facts: "Staib moved into her condominium in March of 1994. At the time, she had her cat. She was aware of the 'no pets' provision when she moved in. "However, she was never asked to remove her cat until 2004. By this time, her cat was almost 12 years old and essentially unadoptable.

The condo board claimed that they first learned of the existence of the cat when their maintenance people went in to Staib's unit in 2004, yet the [Ontario Superior Court] judge found uncontradicted evidence that the maintenance people had been in her unit throughout the 10-year period. The board was ready to bear the expense of an appeal to the highest court in the land after its case was dismissed by that judge and by a three-judge Ontario appeal panel.

April 6, 2006 in Legal Considerations | Permalink | Comments (5)

Reforms needed for MPAC

Assessment corporation spanked by Ombudsman

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oncerns that a highly-critical ombudsman's report on the corporation that oversees assessment in Ontario could provoke an onslaught of last-minute tax appeals by property owners has moved the province to extend the deadline for such appeals by 90 days.

Ombudsman Andre Marin said in his report, titled "Getting it Right" and released yesterday, that the Municipal Property Assessment Corporation (MPAC) has a "superiority complex," and has often ignored successful appeals against its decisions.

His report went on to say the assessment corporation withholds information from property owners. And when homeowners appeal their taxes, the onus or burden of proof falls on them to prove the assessment is wrong, he added.

That, he said, is "a David and Goliath battle".

"This is not a matchup, this is a slaughter. And it's happening in tens-of-thousands of cases every year."

Reacting to the report, Finance Minister Dwight Duncan announced that Friday's deadline for appeal would be extended by 90 days. He will introduce legislation to that effect on Wednesday.

The property assessment corporation was formed in the late 1990s to prepare assessment rolls for all Ontario municipalities, plus supplementary assessment lists used to work out taxes on new construction.

Those who disagree with their assessment can appeal to the separate Assessment Review Board. But Marin said even that process works against citizens because MPAC ignored the subsequent rulings.

Marin did say that MPAC has agreed to accept or study most of his recommendations, especially when it comes to giving homeowners more information on what their assessments say – such as whether it incorrectly states there is a three-car garage rather than none at all – in order to prevent errors.

Source: Canadian Press

March 29, 2006 in Legal Considerations | Permalink | Comments (0)

Toronto Public Safety Alert

The Toronto Police Service has issued a Public Safety Alert regarding a number of thefts that have occurred at open houses. See details.

March 28, 2006 in Legal Considerations | Permalink | Comments (0)

New Ontario Real Estate Law

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eal estate agents in Ontario will face closer public scrutiny and tighter regulation in April when an act aimed at improving consumer protections finally becomes law more than three years after being passed by the Legislature.

Proclamation of REBBA 2002, a revision of the Real Estate and Business Brokers Act, is slated for March 31 after a lengthy consultation process on the regulations attached to the act.

"The actual legislation passed in December, 2002, and at the time we were quite excited about having something new in a short period of time," said Tom Wright, president of the Real Estate Council of Ontario, which administers the act on behalf of the government. "But it took a little longer."

Under the revised law, RECO will have the power to suspend a real estate agent's licence pending the outcome of a disciplinary or court hearing, and to stop brokerages making false advertising claims.

The council would even be able to prescreen brokerages' future advertising if claims (to being No. 1, for example) can't be substantiated.

The council will publish licence suspensions and revocations, charges and convictions against agents, as well as the status of their insurance, on its website, Mr. Wright said in an interview. It will add these details to its lists of registered agents' names, addresses and brokerage affiliation.

"It provides more transparency to the public," Mr. Wright said. "It takes away some of the mystery. It's not that there are that many charges that go ahead each year, but it lets people do independent searches around a person they're working with."

The legislation also requires brokerages to disclose and repay any interest accrued on money held in trust for clients' closing costs, and compels agents to obtain written consents from both buyers and sellers when taking on "dual agency" - a situation in which he or she facilitates both sides of a deal and there is potential for a conflict of interest.

As well, the new law changes the rules for ownership of a real estate brokerage, removing the requirement that a registered broker must own 51 per cent.

It also attacks the issue of mortgage fraud by establishing penalties for falsification of documents relating to a real estate transaction.

Individual agents who falsify records -- for example, creating separate sales agreements showing different prices in order to get extra cash from a lender -- or counsel anyone else to do so will face fines of up to $50,000.

Brokerages will face fines up to $200,000.

Associations representing real estate agents say they support the changes -- in fact, have lobbied for them for a quarter century. "The immediate suspensions [provision] gives the registrar more clout, and that's good for principled registrants," Tim Lee, president of the Ontario Real Estate Association, said in an interview.

"It's more protection for consumers, and we're in favour of that."

"We feel the punishment should fit the crime, and lobbied to have the information pulled off after two years, but in the end I think it was decided it would be five years," he said.

But he added that the industry is content with that.

"It's a good deterrent for everyone to have it published."

Dorothy Mason, incoming president of the Toronto Real Estate Board, said that "for the most part, agents welcome the changes."

Anything that instills greater confidence in consumers will be advantageous to the industry, Ms. Mason said.

March 25, 2006 in Legal Considerations | Permalink | Comments (0)

This man can’t contact agents

On probation for harassing phone calls

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resident of St. John's, Newfoundland has been released on probation on condition that he stops making harassing phone calls to real estate agents. (Now that's a switch.)

Evelio Pages was charged after real estate agents complained to police about harassing phone calls at all hours of the day and night.

According to police the man called numerous REALTORS® day and night, but seemed to focus on those at one specific franchise office. Broker Anne Squires said the man called as many as 30 times a week.

"The calls were pretty explicit," said Squires. "He was looking for a real estate agent, he was going to have himself an agent and, even more overpowering, was, 'I know where you live, I know where you are.'"

Pages received a suspended sentence and was given probation on condition that he not contact the franchise office for one year and stay away from other REALTORS® except for specific business purposes.

The President of the Newfoundland and Labrador Association of REALTORS®, Bruce Mullett, said the association will have a REALTOR® safety training program for new members, and reminds current members of things they can do to protect themselves.

“REALTORS® need to have their faces and phone numbers in the public eye because of the nature of their jobs. It's something that we don't take lightly in the industry," said Mullett. "You have to act responsibly. We don't take it lightly and it can be very creepy for somebody phoning and harassing realtors like that."

Source: RealtorLink®

March 22, 2006 in Legal Considerations | Permalink | Comments (1)

Ajax house sold secretly

Owner discovers new family living in 'his house'

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Toronto man got a shock when he tried to return his children to his estranged wife at their matrimonial home in Ajax after a weekend visit and found another family living there.

Durham Region police allege that the man's wife sold the home on Delaney Dr. without his knowledge and bought a larger home in Ajax with the $200,000 proceeds from the sale — a situation known as title fraud. "I've never heard of a case quite like it," said Det. Jack Haze. Since their separation, the man usually returned the children to his wife at a specified location.

However, on one day in January 2005, the man missed the appointment with his wife and decided to take the children back to what he thought was their home in Ajax. "He got the shock of his life when another woman answered the door and said it was her house," Haze said in an interview.

The Toronto man contacted police, who found that the home had been sold in the spring of 2004 without his permission.

Police allege his estranged wife forged her husband's name on an agreement of purchase and sale, and then had her brother-in-law impersonate her husband at the lawyer's office.

False Canadian citizenship papers, which are "a dime a dozen" on the street, Haze said, were used as identification for the transaction.

There has recently been a great deal of publicity about title fraud, which involves stealing a person's identity and then selling their home out from under them. In some cases, the houses are sold several times to unwitting buyers, police say. Police say the couple is now involved in litigation to straighten out the "financial and custodial mess."

The new owners of the Delaney Dr. home, Don and Linda Nasato, said they spent a year of "stress and uncertainty" after a man showed up at their door with two children on Jan. 2, 2005, demanding to know what they were doing in "his" house.

"Get out of my house!" were the words that Harry Ogieva used after the Nasatos' daughter Lindsey, 20, answered the door. "I was shocked, I didn't know what he was talking about," she recalled.

Linda said Ogieva told her he was going to call the police, and agitatedly walked up and down the street talking on a cellphone before police arrived. Police say the children, aged 10 and 12, had not told their father that their house had been sold and that they had moved with their mother to another home in Ajax.

"They obviously kept the secret," Haze said. Don Nasato said he paid more than $400,000 for the two-storey home in April 2004, and assumed he had clear title to the eight-year-old grey brick residence. He was so sure, he had not even taken out title insurance at the time of purchase. "I have title insurance now," Nasato said.

What followed after the man's visit were legal papers, and a lawsuit against the Nasatos, their lawyer, real estate agent and Ogieva's wife, who was a licensed mortgage broker. The Nasatos had to hire a lawyer and went through a year of legal wrangling before Ogieva finally relinquished all claim to the property in November of last year.

"We are happy that someone has finally been charged," Nasato said. Haze said it took police more than a year to investigate the allegations, which led to charges this week.

March 22, 2006 in Legal Considerations | Permalink | Comments (0)