The post Toronto City Council Considers Increased ‘Luxury Home’ Tax appeared first on GLG LLP Lawyers - Experienced Toronto-Based Lawyers Providing Client Centred Business, Real Estate and Litigation Services.
]]>The tax was introduced originally in 2008, as an additional tax to the province’s Land Transfer Tax on homes sold within Toronto city limits. The tax is payable at the time of registration of a transfer of ownership, and is calculated based on the value of the property as follows:
The provincial Land Transfer Tax (LTT) is calculated with the same rates. Based on the current rates, a person purchasing a home valued at $2 million in Toronto would pay $36,475.00 in MLTT as well as LTT, for a total of $72,950 in tax. As part of the final municipal budget approval meeting for 2021, the city sought input on what an increase of 1%, from 2.5% to 3.5%, on properties valued at over $2 million would mean in terms of revenue.
While most people have struggled to some degree over the past year given business closures and layoffs due to COVID-19, the financial impact will obviously be felt more by lower-income families, who have fewer funds and resources to help them cope with a dip in income. In a piece written for Now Magazine by the heads of the Daily Bread Food Bank and Social Planning Toronto, the authors point out that many families in Toronto are facing eviction from rental properties due to inability to pay, and Toronto shelters are at or near capacity. Conversely, the luxury home market has seen little impact, with a 30% increase in sales during the past year.
Reports by city staff showed a possible increase in revenue amounting from $18 million to $26 million annually if the luxury real estate tax were to be imposed. With those funds, the city could afford to build hundreds of affordable homes per year, helping to provide much-needed stable housing for lower-income families.
In contrast to the position above, the Toronto Region Real Estate Board (TRREB) expressed concerns over the potential fallout if the tax increase were to be implemented, not just on luxury homes but modest ones as well. The president of TRREB, Lisa Patel, listed two primary considerations to dissuade the new increase:
The City Council held the vote on Thursday, February 18th, and the budget passed without the increase in MLTT for high-end homes. Instead, the City has commissioned a further study into potential revenue streams to make up for shortfalls during COVID-19. Lisa Patel of TRREB applauded the move:
TRREB understands and appreciates the budgetary challenges faced by the City of Toronto, but addressing those challenges in a way that would have made housing even less affordable would have been the wrong path forward. In fact, it would have been a step backward. We applaud Mayor John Tory and City Council for not moving ahead with the proposed MLTT increase and instead focusing on a more comprehensive discussion on revenue options, which TRREB looks forward to participating in. We believe that City Council took the right approach by directing staff to study all revenue options, instead of narrowly focusing on the MLTT.
The real estate lawyers at GLG LLP in Toronto assist clients with a full range of residential real estate services, including purchases and sales, financing and even litigation if necessary. To learn more about how our team can help you with your real estate transaction, call 416-272-7557 or complete the online form to arrange a consultation.
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]]>The post Real Estate Transaction Fees Expected to Increase After Software Acquisition appeared first on GLG LLP Lawyers - Experienced Toronto-Based Lawyers Providing Client Centred Business, Real Estate and Litigation Services.
]]>In December, legal software giant Dye & Durham announced that it had acquired another legal software company, DoProcess for $530 million from Teranet. With this acquisition, Dye & Durham now faces less competition in the market and as such has announced it will be increasing fees to law firms who use a program called The Conveyancer, which is estimated to have over a 90% market share in the province, by over 400%. A transaction that once cost $25.00 will now cost $129.00. These fees form part of the disbursements pass on to clients, as part of their overall transaction costs, as mandated by the Law Society of Ontario.
Given the increase, consumers who complete real estate transactions can expect to see a jump in costs in a year where housing prices have steadily increased while employment has been on a decline. While there are other options for similar services, there are concerns with moving to a smaller provider. Some, for example, don’t have in-house IT departments to troubleshoot if there’s an issue, which can be an extreme detriment when dealing with a time-sensitive transaction.
Further lawyers who have invested in building their business suing one particular provider may have issues retaining the data they have stored in one product if they decide to move to another. In other cases, it can be a painstakingly slow process to port the necessary data over from one product to another.
A representative of Dye & Durham provided a response to the complaints to the Globe and Mail:
The company believes that its software is priced appropriately to reflect the significant value that it provides to its customers.
Dye & Durham has had success growing its business through acquisitions and consolidations. Since acquiring D&D in 2016, the owners have since purchased 14 other legal software entities. The company went public in July of 2020, with share prices nearly doubling on the first day of trading.
Given the fee increase, homebuyers can expect to see closing costs rise slightly at a time when housing prices are also at record highs. Perhaps owing to residual effects of the pandemic, home resales increased by 13% in 2020 over previous years and the average price of a property has increased by over 8%. Without the need to live close to the city, there has been a trend of families leaving heavily populated areas such as Toronto for more remote locations such as Oshawa, Barrie and Kitchener. Now that proximity to work is less of a concern, homebuyers, especially those looking to purchase their first home, are seeking out more affordable options.
At GLG LLP, we work with clients to ensure their residential real estate transactions run smoothly from start to finish, and as lawyers, we stay involved with a file all the way through rather than leaving the details to our admin staff. We work to ensure we provide top-level service to clients throughout Toronto and the surrounding areas including York, Markham, Mississauga, Etobicoke and beyond. We make use of simple-to-use technology to meet with clients ahead of closing and to sign all necessary paperwork, so our clients don’t have to make a trip downtown.
The real estate lawyers at GLG LLP in Toronto assist clients with a full range of residential real estate services, including purchases and sales, financing and even litigation if necessary. To learn more about how our team can help you with your real estate transaction, call 416-272-7557 or complete the online form to arrange a consultation.
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]]>The post Misrepresentation Prompts Court to Rescind Real Estate Agreement appeared first on GLG LLP Lawyers - Experienced Toronto-Based Lawyers Providing Client Centred Business, Real Estate and Litigation Services.
]]>Misrepresentation refers to an untrue statement made by one party, which in turn induces another party to enter into a contract with them. It is important to remember that misrepresentation is not always intentional. There are three types of misrepresentation recognized by Ontario courts:
The remedy for a finding of misrepresentation can vary depending on the circumstances and the type of misrepresentation. For the first two categories above, a claimant can seek damages, rescission of the contract, or both. For innocent misrepresentation, a court is more likely to award damages rather than recession.
In a recent decision before the Ontario Court of Appeal, a homebuyer had brought a claim seeking recession of an agreement of purchase and sale after discovering a significant discrepancy in the square footage of the home from what had been presented initially. The buyer was relatively young and inexperienced in real estate, and this was the first time he had purchased a property. He was looking for a specific amount of space in order to accommodate himself, along with several members of his family.
His real estate agent showed him a home and told the buyer it was approximately 2100 square feet in size. The real estate had relied upon information provided in a previous listing of the property as well as details provided by the homeowner, however, the agent did not conduct a property measurement exercise. The agent agreed he had been negligent in failing to do this.
The buyer visited the property himself twice and inspected each room. On the second visit, he was accompanied by members of his family as well. He signed an agreement of purchase and sale to purchase the house. However, his financial institution required that he have an appraisal done on the home as a condition of the approval of his mortgage. When the appraisal was completed, the size of the home was assessed at 1450 square feet. Given the significance of the difference, the buyer withdrew from the transaction and brought a claim seeking rescission of the agreement and a return of his $50,000 deposit.
The lower court found in favour of the homebuyer and rejected the argument that the buyer’s personal inspection of the home should have been a better determination of his expectations regarding the size of the home than the representations made. The court took the buyer’s age, inexperience with square footage and first-time homebuyer status into account in determining that it was reasonable he had relied on the representations even after seeing the home himself.
The defendant real estate agent appealed the decision, claiming again that once a buyer has inspected a property, the inspection should displace any representations made regarding the size of the home. The Court of Appeal dismissed the appeal, holding that this argument might apply in some cases, whereas in others, such as the case at hand, the constellation of facts would render this finding unfair. The following facts were at the core of the Court’s decision:
Contact GLG LLP in downtown Toronto for assistance with litigation relating to breach of contract, real estate or other civil disputes. The firm’s real estate and litigation lawyers provide efficient and skilled trial advocacy for a range of legal issues and will look to settle your matter quickly and efficiently. Call the firm at 416-272-7557 or contact them online to schedule a confidential consultation.
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]]>The post Ontario Court Holds Party to Buy/Sell Clause Despite Pandemic Challenges appeared first on GLG LLP Lawyers - Experienced Toronto-Based Lawyers Providing Client Centred Business, Real Estate and Litigation Services.
]]>Shotgun buy/sell clauses are commonly used in business contracts such as shareholder agreements and partnership agreements. When multiple parties will be working together, there is a risk of disagreement on how to proceed which can result in project/business stagnation. If two parties with equal power are unable to agree on how to proceed with a major project or decision, it can be catastrophic for the business itself. Shotgun buy/sell clauses are intended as a means to solve this problem and allow the business to move forward by having one party buy out the other.
The clauses typically operate as follows:
While the process is intended to create a fair deal for both parties, the financial positions of each party may create an imbalance, since one party may have considerably more means than the other.
The case at hand involved two companies that had entered into a limited partnership agreement to rezone a property in Toronto and redevelop it as a luxury condominium. The parties had difficulty working together, and eventually, one party (FSC) opted to invoke the buy/sell clause in the partnership agreement. FSC triggered the clause by proposing a purchase of the other entity (ADI) for a set price. Two weeks later, ADI agreed to purchase FSC’s interest for $12,733,289, with the deal set to close three months later on April 8, 2020.
A few weeks ahead of the scheduled closing, ADI informed FSC it would not be closing as planned, due to the ‘unforeseeable delay’ caused by the COVID-19 pandemic. In response, FSC brought an application seeking the remedy of specific performance, which would require ADI to go through with the agreed-upon purchase under the buy/sell clause.
ADI claimed it had not breached the buy/sell clause, as the contract to purchase FSC’s interest in the project had been frustrated due to the unforeseen problems created by the pandemic. ADI claimed that the market had taken a significant downturn and as a result, ADI was unable to secure the financing necessary to complete the purchase. However, the court rejected this claim.
The court found that while the pandemic was unprecedented, sharp economic declines are common. There are myriad issues that could affect the price of real property, and it is not unrealistic to expect extreme fluctuations in property values over even relatively short periods of time. Although in this case the uncertainty was largely tied to the pandemic, the cause could have been any number of reasons, which is a risk a developer takes when undertaking such projects.
Secondly, the court found that ADI had been lax in its pursuit of funding. The company had approached only a handful of lenders and had requested much more capital than what was required to complete the purchase from FSC. The court found that ADI could have opted to allow FSC to purchase ADI’s interest, and instead chose to buy out FSC. As a result, the court held ADI to its obligations and ordered specific performance of the contract.
Businesses should exercise due caution when presented with a buy/sell option and undertake due diligence to secure funding prior to agreeing to buy out a former parter’s share of a contract. As demonstrated by the case above, courts are unsympathetic to a business that fails to do so, even in the face of an extraordinary circumstance such as COVID-19.
Our business and commercial real estate lawyers can advise on how best to protect your business and mitigate risk in the challenging financial landscape created by the pandemic. Contact GLG LLP in downtown Toronto for efficient and skilled advice on the management of your business. Call the firm at 416-272-7557 or contact them online to schedule a confidential consultation.
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]]>The post Residential Real Estate Transactions During COVID-19: A New Experience appeared first on GLG LLP Lawyers - Experienced Toronto-Based Lawyers Providing Client Centred Business, Real Estate and Litigation Services.
]]>When one thinks of starting the search for a new home, the process often starts by looking online and then following up with a real estate agent to make plans to view the options in person. However, the province’s newly-implemented colour-coded restriction system bans open houses in any area designated as a red zone or a zone in lockdown. Currently, Toronto and Peel are in lockdown, while several surrounding regions, including York Region, Halton Region and Hamilton, are currently classified as “red zones”. This means that at the present time, nobody within these regions can host an open house.
However, realtors are still permitted to show homes in-person to potential buyers on an appointment-only basis. If both the buyer and the seller are comfortable with the idea, then a tour can be arranged, as long as all existing health protocols (such as social distancing and face coverings) are observed. As an alternative, many real estate agents are turning to technology to enable them to provide clients with in-depth property tours remotely. Some agents are hosting live-streamed home tours, allowing them to answer questions in real-time, or making professional-quality 360-degree videos to allow buyers to view properties in detail, remotely.
A poll conducted recently on behalf of the Ontario Real Estate Association (OREA) demonstrates that homeowners and potential buyers have changed their behaviours since the start of the pandemic. According to the poll, nearly half of all potential buyers are open to purchasing a home based solely on virtual tours of the property. This may come as good news to sellers, as nearly 40% of those who had planned on selling their home changed their minds once COVID-19 hit. With the news that many buyers are open to the idea of virtual tours, this might convince some sellers to move ahead with listing their properties. According to Sean Morrison, the President of OREA:
Consumers are adapting during this extraordinary time, and their willingness to embrace new tools tells us that the Canadian dream of home ownership remains strong, even during the COVID-19 pandemic.
While real estate closings have typically required clients to travel in person to meet with their lawyer, particularly when signatures are required on documents, this is no longer the case. The profession has adapted quickly to manage these transactions virtually over the past several months. At GLG LLP, we are able to offer clients meetings via telephone and video conference, all using user-friendly tools and technology. In addition, we can have documents signed remotely, meaning clients can avoid the need to travel downtown, pay for parking and take the health risks associated with meeting face-to-face. In addition to providing these added conveniences and safety measures for existing clients, this also enables us to serve clients in more far-reaching areas of the province. Whether you are located in the GTA or in cottage country, meeting with one of our lawyers has never been easier.
The real estate lawyers at GLG LLP in Toronto assist clients with a full range of residential real estate services, including purchases and sales, financing and even litigation if necessary. To learn more about how our team can help you with your real estate transaction, call 416-272-7557 or complete the online form to arrange a consultation.
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]]>The post Inter-Family Transfers of Recreational Properties: What You Should Know appeared first on GLG LLP Lawyers - Experienced Toronto-Based Lawyers Providing Client Centred Business, Real Estate and Litigation Services.
]]>By giving the property to a child during one’s lifetime, the parents have the benefit of seeing the property exchange hands, and the security of knowing the property has been dealt with. However, there are a number of things to keep in mind when gifting a property this way.
If a parent gives a recreational property to their child or children, there will be what is called a ‘deemed disposition’ of the property, for tax purposes. This means that, although no money was exchanged for the transfer of the property, the government will treat the transaction as if the property was sold, and tax the transferor on the capital gain realized on the increase in the property’s value from the time the transferor took possession to the date they disposed of the property. If the parent has owned the cottage for a long time or made significant improvements on the property while they owned it, this amount could be significant. The tax impact of the gift can be spread out over a number of years, if the parent were to gift the property in stages, transferring say, 20% of the ownership each year over a five-year period by adding the child to the title as a Tenant in Common, which allows for an unequal ownership share in real property.
Another tax consideration that may come into play is the possible impact on government subsidies for the transferor, such as Old Age Security. Some subsidies may be affected once a person’s annual income reaches a certain threshold, so it is important to review the transferor’s full financial situation before deciding whether this option is ideal.
Once all or part of the property is placed in another person’s name, this could open up their share of the property to third-party interests. For example, if the child were to become bankrupt, or divorce their spouse, their share of the cottage may be subject to transfer or sale.
Careful estate planning can ensure the property is passed on to the owner’s child(ren) in a way that lessens the tax burden and, in certain circumstances, can even retain a level of control over the property after death.
As with a gift, the transfer of the property through a Will will result in a deemed disposition for the transferor and a tax consequence on the capital gain realized. However, if the transfer occurs upon the owner’s death, then funds from the estate can be used to pay those consequences rather than being payable by the transferor during their lifetime.
It may be worth considering establishing a trust to oversee the ownership of the property, especially in cases where there are multiple children who will have an interest in the cottage. This enables the transferor to leave a portion of the trust to each child, protecting the property from vulnerability to third-party interests in the event one child divorces or enters bankruptcy.
Another option would be to simply sell the property during the owner’s lifetime, particularly if it appears their children have little interest in the cottage or would be unable to equally share the property. For example, if the ower’s children live in drastically different geographic areas, joint ownership of the property may really only benefit one of them. Selling the property during the parent’s lifetime will allow them to realize the proceeds from the sale, and leave additional funds to their children after their death, allowing the children to spend the money as they see fit.
The real estate lawyers at GLG LLP in Toronto assist clients with a full range of residential real estate services, including purchases and sales, financing and even litigation if necessary. The firm offers exceptional client service as well as a Bay St. experience with more reasonable rates. Call 416-272-7557 or complete the online form to arrange a consultation.
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]]>The post Assigning a New Condo Purchase: What You Need to Know appeared first on GLG LLP Lawyers - Experienced Toronto-Based Lawyers Providing Client Centred Business, Real Estate and Litigation Services.
]]>Given the difficulties in securing tenants, those who purchased new construction condos in the past couple of years for investment purposes, but have yet to take possession, may be wondering if they have options to get out of their obligations before construction is complete. While it will likely not be possible to simply cancel the transaction, buyers may have the option to assign their purchase to a new buyer, effectively having another party step in and replace them as the buyer in the transaction.
However, there are several things to consider, both for the assignor and the assignee, before starting the process to assign a condo purchase. First and foremost, it is vital to check the Agreement of Purchase and Sale to see if the builder will allow an assignment of interest; if not, the points below may be moot. Even in cases where the builder will permit an assignment, there may be hefty fees involved. A buyer looking to assign their purchase should be sure to have a skilled real estate lawyer review the Agreement before taking any further steps, to ensure they are aware of their rights and obligations.
If you are considering assigning your condo purchase or taking on another person’s condo as an assignee, it’s important to be aware of the potential legal and financial repercussions. Have the Agreement of Purchase and Sale carefully reviewed by a skilled real estate lawyer before you commit yourself to anything, to ensure you don’t run into costly surprises down the road.
The real estate lawyers at GLG LLP in Toronto assist clients with a full range of residential real estate services, including purchases and sales, financing and even litigation if necessary. The firm offers exceptional client service as well as a Bay St. experience with more reasonable rates. Call 416-272-7557 or complete the online form to arrange a consultation.
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]]>The post Real Estate Agents & Brokers Now Permitted to Incorporate in Ontario appeared first on GLG LLP Lawyers - Experienced Toronto-Based Lawyers Providing Client Centred Business, Real Estate and Litigation Services.
]]>This change opens up a host of new opportunities for agents and brokers, however, these changes also come with a number of financial implications. Before taking action, agents and brokers should seek the advice of experienced business incorporation and real estate lawyers. At GLG LLP, our lawyers will work with you to get your incorporation off the ground quickly in a way that maximizes your benefits, while ensuring you stay aware of your obligations under the law.
A PREC is a form of business incorporation that allows real estate professionals to obtain the same tax and income benefits that other entrepreneurs enjoy. This is a significant change for real estate agents and brokers, who have previously been denied the same tax-saving opportunities that entrepreneurs in other industries have enjoyed for years.
In a press release on October 1st, the Ontario Real Estate Association (OREA), celebrated the news by highlighting some of the anticipated benefits it will have for realtors in Ontario:
OREA estimates that PRECs in Ontario will create 300 jobs in the province and save Ontario Realtors $14 million annually in deferred taxes – money that agents can use to reinvest in their business to hire more employees, offer better services to clients and grow their operation.
While the financial obligations of incorporating any business can be onerous, they also come with a number of benefits. Since realtors and brokers will now be able to take advantage of those benefits for themselves, it is important they understand just how the PREC could help them maximize profitability and grow their business more quickly. Some of the key advantages of incorporating include:
Incorporating a business is always a significant undertaking, requiring a lot of work and strategic planning. There are higher up-front expenses with incorporation, and increased obligations such as the requirement to provide annual filings as well as more stringent legal regulations. However, with the guidance of a knowledgeable business lawyer, it is possible to maximize the benefits of incorporation while limiting risk and minimizing your tax burden.
This is no doubt a significant opportunity for real estate professionals across Ontario to reap the benefits of incorporation that they have previously been denied. At GLG LLP, our team is standing by to provide you with the guidance you need to establish your PREC in the most beneficial way possible. We will ensure you are aware of all compliance and tax obligations and provide strategic advice to minimize your personal risk.
The skilled business and real estate lawyers at GLG LLP in Toronto regularly assist corporate clients with a variety of issues, including the configuration and structure of a new or evolving business in a way that is most beneficial to those involved. Call 416-272-7557 or complete the online form to arrange a consultation with one of our lawyers today.
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]]>The post Title Not Easy to Use as a Means to Back out of a Purchase appeared first on GLG LLP Lawyers - Experienced Toronto-Based Lawyers Providing Client Centred Business, Real Estate and Litigation Services.
]]>In another recent Ontario decision, a purchase tried to void an APS on the basis of discovering municipal easements across the yard of a home they had purchased. Would this be sufficient to invalidate the contract?
The purchasers entered into an APS on February 1, 2020, to buy a residential property for the price of $1,755,000. They put down a deposit of $75,000. The purchase was scheduled to close at the end of June.
The APS contained a clause regarding the vendor’s obligation as to the property’s title, which stated:
Provided that title to the property is good and free from all registered restrictions, charges, liens, and encumbrances except as otherwise specifically provided in this Agreement and save and except for …
(d) any easements for drainage, storm or sanitary sewers, public utility lines, telecommunication lines, cable television lines, or other services which do not materially affect the use of the property.
If within the specified times referred to in paragraph 8 any valid objection to title … or to the fact that the said present use may not be lawfully continued … and which Buyer will not waive, the Agreement, notwithstanding any intermediate acts of negotiations in respect of such objections, shall be at an end and all monies paid shall be returned without interest or deduction and Seller, Listing Brokerage and Co-operating Brokerage shall not be liable for any costs or damages. Save as to any valid objection so made by such day and except for any objection going to the root of title, Buyer shall be conclusively deemed to have accepted Seller’s title to the property.
Approximately three months after signing the APS, the purchasers discovered the existence of two easements across the yard of the property in favour of the Town of Newmarket. Both easements are there to allow the municipality to maintain and tend to the sanitary and storm sewer systems. The easements require that the property owner refrain from trees, buildings, structures or other obstructions.
The purchasers brought an application to rescind the APS on the basis that they had not been informed of the easements prior to purchase, claiming they would not have gone ahead with the transaction had they been aware of the easements. They claimed the vendors were failing to provide good title in accordance with the above term of the contract. The purchasers claimed that the easements interfered with their planned use of the property, which had included:
One of the purchasers was a licensed real estate agent, who by trade, was familiar with terms used in real estate purchase contracts. The vendors did not attach a survey of the property to the APS, which would have clearly shown the two easements, however Schedule B of the APS did indicate that title was subject to two registered encumbrances. As a real estate agent, the purchaser should have known this indicated easements were present. Considering his assertion that his plans for the yard were a primary reason he purchased the property, the court found it odd that he did not make further enquiries into the registered easements. This led the court to surmise that the purchasers were attempting the use the existence of the easements as a reason to back out of the purchase.
The court found that the land affected by the easements accounted for 14% of the overall property, and that the Town of Newmarket had not accessed the easements in the previous nine years. Further, the proposed changes the purchasers wished to make were all still possible, despite the easements. While some changes may need to be scaled back in terms of size, the court found that there was still plenty of room to install a cabana, a fireplace, plant fruit trees and install a hot tub on the property. As a result, the application was denied.
The case shows that it will not be an easy task to convince a court to rescind an APS. Buyers need to be cautious when attempting to find a loophole to invalidate an agreement, or they may find themselves held to the contract in addition to paying costly legal fees associated with litigation.
The real estate lawyers at GLG LLP in Toronto assist clients with a full range of residential real estate services, including purchases and sales, financing and even litigation if necessary. The firm offers exceptional client service as well as a Bay St. experience with more reasonable rates. Call 416-272-7557 or complete the online form to arrange a consultation.
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]]>The post Bill 184 Causes Controversy for Ontario Landlords and Tenants appeared first on GLG LLP Lawyers - Experienced Toronto-Based Lawyers Providing Client Centred Business, Real Estate and Litigation Services.
]]>The recent passing of Bill 184, called the Protecting Tenants and Strengthening Community Housing Act, has sought in part to address the ongoing backlog faced by the Landlord and Tenant Board (LTB) throughout the province. As we have written previously, landlords seeking to evict tenants have had to make applications to the LTB to enforce the order, and many have faced long delays, from 30 days to three months, depending on location. For landlords with non-paying tenants or tenants who were causing damage to property, these delays caused a great deal of additional strain.
Previously, a landlord had to make an application for a hearing before the LTB to enforce payment of rent. If the tenant was then unable to meet their obligations, the landlord could obtain an eviction notice. Under Bill 194, tenants and landlords are empowered to design their own repayment plans in cases where a tenant is having difficulty paying the agreed-upon rent, without the need for a hearing first. If the tenant then defaults on the payment plan, a landlord is permitted to obtain an eviction notice without notice to the tenant and without a hearing before the LTB. Proponents of the Bill have said this was done to empower both tenants and landlords and to reduce the backlog at the LTB.
For landlords, the changes mean a streamlined process for creating a payment plan (which must still be endorsed by the LTB), allowing them to make a proposal directly to a defaulting tenant rather than waiting for a hearing. However, some worry that vulnerable tenants may feel pressure to accept unfavourable terms and sign unfair agreements. If they are later unable to fulfill their end of the bargain, the eviction rate could rise.
However, others are quick to point out that the Bill contains provisions or tenants to challenge an eviction notice, similar to how things worked prior to the passing of Bill 184. Further, there are protections built into the Bill to prevent or compensate tenants for ‘bad faith’ actions by landlords. For example, while there are permitted ‘no-fault’ reasons to evict a tenant, such as renovations or demolition, some landlords have been found to have used these as reasons to evict a tenant and bring in a new one at a higher rent. The new rules would see fines of $25,000-$50,000 for individual landlords and $100,000-$250,000 for corporate landlords in such cases. Others say that the increase in fines may not be sufficient to offset the increase in profit landlords seek to make through these bad faith practices, however.
Last week, the Toronto city council voted 22-2 to challenge the Bill, saying that the changes were “contrary to rules of procedural fairness and natural justice.” Tenants and tenant advocates have been loudly protesting the changes in recent weeks, with a protest gathering outside of Mayor John Tory’s home at the beginning of July. Following the vote, the City Solicitor will work to reinstate a tenant’s right to a hearing before a landlord is issued an eviction notice.
We will continue to follow the situation as it develops and provide updates on significant changes.
The real estate lawyers at GLG LLP in Toronto assist clients with a full range of real estate services, including purchases and sales, financing and litigation. If you are considering purchasing a property for investment purposes, we will advise on all aspects of your investment. The firm offers exceptional client service as well as a Bay St. experience with more reasonable rates. Call 416-272-7557 or complete the online form to arrange a consultation.
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