news – Ricky Lau

Condominium Act will offer new protections

2017-07-252017-08-11 Ricky Lau

Ontario

The Minister of Government and Consumer Services, Tracy MacCharles, announced new protections for condominium communities that will take effect during the fall of this year. Changes include:
• mandatory periodic updates pertaining to the condominium corporation to improve the communication between the board and owners;
• improving condominium corporation governance and addressing conflicts of interest via the introduction of new disclosure requirements pertaining to directors, including whether the director is an owner or occupier of a unit in the condominium, or whether he has interests in contracts involving the corporation;
• mandatory training for a condominium director to improve the management and operation of a condominium;
• clearer rules to ease an owner’s access to the records of condominium corporation;
• new notices, quorum, and voting rules to ease an owner’s participation in meetings; and
• mandatory education requirements for a condominium manager who applies for a general licence.

The government will also designate two new administrative authorities:
• When designated on September 1, 2017, the Condominium Authority of Ontario (CAO) will educate and promote awareness of condominium owner rights and responsibilities, as well as provide information pertaining to condominium corporations. On November 1, 2017, CAO will also be responsible for managing the Condominium Authority Tribunal, which will resolve disputes pertaining to the access to condominium records. Going forward, Ontario will consult the public to identify other disputes that the Tribunal could resolve; and
• When designated on November 1, 2017, the Condominium Management Regulatory Authority of Ontario (CMRAO) will regulate and license condominium managers and providers.

HK ad promotes inclusion of foreign buyers tax

2017-05-162017-08-11 Ricky Lau

BNN

Fleur Condos advertisement in Hong Kong.

A print advertisement by a third-party real estate brokerage seen in a Hong Kong MTR (Mass Transit Railway) station, while promoting Fleur Condos by Menkes Developments Ltd. by illustrating features including the future condominium apartment’s neighbouring universities, financial district, and metro system, also claims that the first 30 buyers would have included in the purchase price the rent pertaining to the initial year as well as the foreign buyers tax.

While the identity of the third-party remains undisclosed, Menkes Developments Ltd. clarifies that the print advertisement was not produced nor authorized by Menkes. Menkes spokesperson says that the developer “did not instruct the brokerage to make any offers regarding the ‘foreign buyers tax’ recently introduced by the Ontario government, nor authorize any incentives to avoid or obfuscate measures meant to govern the purchase of real estate in the province by non-residents”.

According to Toronto Real Estate Board (TREB), in April 2017, the Ontario government introduced the 15% non-resident speculation tax (NRST) and 15 measures aimed at cooling Toronto’s hot real estate market. In the same month, overall sales in the Greater Toronto Area (GTA) declined, but condominium sales increased, with an 8% increase in the 416 region. Prices and the number of new listings increased significantly.

“Offering this kind of incentive to prospective buyers is permitted but developers are still better off to selling to Canadian citizens and permanent residents rather than paying the NRST for a foreign buyer,” says the Ontario Ministry of Finance. “We’ve seen throughout many industries that businesses use promotions including ‘pay no tax’ to encourage sales of their product. Regardless of these promotions, the tax is still paid to the government. If it isn’t, violators are subject to fines, penalties or imprisonment.”

Menkes noted that a third-party brokerage is essential in the successful sale of a condominium suite in today’s market. However, the brokerage’s marketing activities are not directed nor approved by the developer. “We are continuing to investigate the actions taken by the Hong Kong-based brokerage, and will remind them that any unauthorized claims or misrepresentations on behalf of the developer will not be tolerated,” Menkes said.

Fair Housing Plan

2017-04-202017-08-11 Ricky Lau

Ontario

Ontario’s Fair Housing Plan is an attempt to promote the affordability of homes, supply, protection for buyers and renters, as well as stability of the real estate market.

If the legislation passes, a Non-Resident Speculation Tax (NRST) of 15% will apply onto the price of a home in the Greater Golden Horseshoe (GGH) purchased by an individual who is not a Canadian citizen, permanent resident, nor corporation. The NRST helps address the unsustainable demand via promoting the availability and affordability of housing, while welcoming new residents. The proposed tax will apply to the transfer of land that contain one to a maximum of six single family residences, including the detached, semi-detached, condominium and townhouse. The NRST will not apply to the transfer of other types of land, including the multi-residential rental agricultural land, apartment building, or commercial/industrial land. The NRST will be effective as of April 21, 2017, upon the enactment of the amending legislation.

Rent control is also expanded to all private rental units in Ontario, including those built after 1991. This will ensure that increases in rental costs can only increase at the rate posted in the annual provincial rent increase guideline. In the past decade, the annual rent increase guideline has averaged 2%. The increase is capped at a maximum of 2.5%. Under these changes, a landlord will still be able to apply vacancy decontrol and seek above guideline increases where permitted. If passed, the legislation will enact this change, effective April 20.‎

Ontario passes home inspection legislation

2017-04-102017-08-11 Ricky Lau

Ontario

Ontario passes Bill 59, Putting Consumers First Act, thereby strengthening consumer protection via new rules pertaining to home inspection, door-to-door sale, and payday loan.

The Putting Consumers First Act:
• Allows the banning of unsolicited and door-to-door sale on prescribed household appliances including the air conditioner, furnace, as well as water filter and heater;
• Reinforces consumer financial protection via alternative financial services, including expanded rules against unfair debt collection practices, extended repayment periods and time between loans, and payday loans;
• Regulates the home inspection industry through mandatory licensing and qualifications for home inspectors, as well as minimum standards for contracts, home inspection reports, disclosures, and the performance of home inspections.

Municipal Land Transfer Tax

2017-02-162017-08-11 Ricky Lau

Toronto Real Estate Board

The following changes to Toronto’s Municipal Land Transfer Tax (MLTT) were considered and approved by the Toronto City Council on February 15, 2017. The changes are effective as of March 1, 2017 and apply towards real estate transactions closing on or after March 1, 2017:
• Added an additional LTT of 0.5% of the value of a residential or non-residential property from $250,000 to $400,000 (an additional $750);
• Added an additional LTT of 0.5% of the value of a residential property above $2,000,000;
• Added an additional LTT of 0.5% of the value above $400,000 of a non-residential property;
• Increasing the maximum allowed First-Time Home Buyer Rebate to $4,475, up from $3,725;
• Amended the first-time home buyer rebate program eligibility rules to restrict rebate eligibility to Canadian citizens or permanent residents of Canada.