Archive | May, 2013

A road to nowhere

May 29, 2013

0 Comments

In 1985, Veikko Kivikangas subdivided a parcel of waterfront land he owned in Sudbury into three lots. One had direct road access; the others were given a right-of-way over each of the other pieces in order to access their lands. There had long been a gravel road over the properties, and Kivikangas instructed his surveyor to show the right-of-way in the same place as the gravel road. Unfortunately, the surveyor made an error and put the right-of-way over a rock outcrop; where it actually would have been on the ground would be unusable, making the two back pieces landlocked.

When this all came to light, naturally because of a neighbour dispute, the owners of the two back lots sued to have the right-of-way description legally changed to match what was on the ground. After a long court case, and an appeal, the court released its decision in February of this year and corrected the survey.

The decision was the right one to make, but the court made an unusual statement in coming to it: there is no guarantee of boundaries under the Land Titles System. When you buy a property, you buy something, but there is no guarantee that what is on the ground is actually what you thought you were buying. The lesson to take away is that surveys are once again very valuable; whether they come back into favour before the closing remains to be seen, but a new survey showing what is actually there to compare with what is on paper is the only way to be sure you are buying what you think you are.

Cesia

Cesia is a real estate lawyer at Wall-Armstrong and Green, a boutique law firm in Barrie focusing on real estate and estates. When she’s not online, she can usually be found in her garden.

More Posts - Website

Continue reading...

May 2013 Changes in the Canadian Mortgage Market

May 27, 2013

0 Comments

Last week, CAAMP released its spring consumer report, Change in the Canadian Mortgage Market. A copy of the full report is available to download here, but for those that don’t feel like reading that whole report, here are some of the significant stats from the report:

  • Overall housing starts are projected to decline from 205,000 in 2011 to 150,000 by 2014. In total, the housing starts downturn will reduce related employment by 80,000 jobs.
  • For mortgages repaid during the past two decades, actual repayment has been two-thirds of the contracted period.
  • 8% of home owners took out equity on their home last year. The average equity takeout was $48,000, with the primary purpose being for renovations/home repairs.
  • 83% of home owners in Canada have at least 25% equity in their home.
  • Overall, 69% of mortgage holders have fixed rate mortgages. For those taken out in the last 12 months, the figure rises to 85%.
  • The average mortgage rate is 3.52%. For those renewed in the past 12 months the average rate is 3.15%.
  • For the past 12 months the actual average rate for a 5-year fixed-rate mortgage has been 2.20% below the posted rate.
  • 60% of Canadians have two or more credit cards, including 30% who have three or more. The average outstanding balance is $3,500.
  • Mortgage credit growth is slowing dramatically. For 2014, it is forecasted to be 2.5% to 3%, or roughly half the current rate.
  • Mortgage brokers continue to account for 25% of all mortgages. For new mortgages in the last 12 months, that total rises to 31%.
  • 18% of mortgage holders, or about 1.1 million, voluntarily increased their mortgage payments, while a further 16%, or about 975,000, made a lump sum payment during the last year.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

More Posts - Website

Continue reading...

When is a house a matrimonial home?

May 22, 2013

0 Comments

I wrote a little while ago on matrimonial homes. Given the many questions I have had from clients lately, I wanted to expand on that post a little bit.

In Ontario, the Family Law Act rules state exactly when a home becomes a matrimonial home: the day you get married, if you are living there. In order to be a matrimonial home, it must be your ordinary residence. Your house could be a matrimonial home; so can your ski chalet or your cottage, as well as your winter home in Florida. Which one is at any given time will depend on what you consider it to be….as well as what your spouse thinks.

There are a whole host of family law issues that come into play if you separate, but what I am writing about today is whether you need spousal consent to sell or mortgage your house. Even if you are the only one on title, if you have spent any time living there in the past year with your legally married spouse (this rule does not count for common law couples), your spouse may need to agree to anything happening with the house. So get that agreement in place before you list it.

Cesia

Cesia is a real estate lawyer at Wall-Armstrong and Green, a boutique law firm in Barrie focusing on real estate and estates. When she’s not online, she can usually be found in her garden.

More Posts - Website

Continue reading...

Pay your taxes

May 15, 2013

0 Comments

Most people aren’t aware of this, but if you don’t pay your municipal property taxes, the city or town has the right to sell your house out from under you.

Keep in mind that just because they can, doesn’t mean they necessarily will. First, the municipality cannot start the process until the third year after the taxes are due (the second year in the case of vacant land). Second, after the process is started, you have a full year to repay the taxes owing, after which it is cleared and they cannot sell your home. The municipality can also extend that year, so you can effectively have a grace period before they start enforcement. However, if you don’t pay, they can put your house up in a tax sale, and accept an offer from the highest bidder. And this is final – all you are entitled to is any profit above what is owed on taxes, your mortgage or any other amount owing against the land, and the municipality is not required to accept the highest or best price or inquire into property values.

You can check out the Municipal Tax Sales Act here.

Cesia

Cesia is a real estate lawyer at Wall-Armstrong and Green, a boutique law firm in Barrie focusing on real estate and estates. When she’s not online, she can usually be found in her garden.

More Posts - Website

Continue reading...

More Mortgage Changes Coming?

May 13, 2013

0 Comments

The OFSI (Office of the Superintendent of Financial Institutions – crazy-long name, eh?) is thinking about continuing to tighten the mortgage rules in this country. Last year the reduced the maximum amortization of insured mortgages from 30 to 25 years (which had previously been reduced from 40 to 35, then from 35 to 30). Now they’re considering lowering amortizations on uninsured (or “conventional”) mortgages (mortgage insurance is mandatory for mortgages with less than 20% down). Canada’s Finance Minster, Jim Flaherty, has been taking steps to curb the growth of consumer debt and inflated housing prices, and he’s using the mortgage-insurance rules as his tool of choice.

But should the OFSI really be intervening when it comes to conventional mortgages in which only the lenders (not the mortgage insurers) are taking the risk? There are many legitimate reasons for conventional mortgages to have extended amortizations (up to 35 years is common) – the oft-used reason being cash flow. With a longer amortization, payments are lower allowing those with more than 20% equity in their homes to spend or invest money elsewhere.

What do you think? Is the OFSI and Finance Minister Jim Flaherty being prudent, or have they already gone to far?  Let me know what you think in the comments below.

Tim

Tim is a mortgage agent in Barrie who specializes in helping first-time home buyers. He works with a variety of lenders and can help customize a mortgage with the best rates & options that fit the needs of each customer.

More Posts - Website

Continue reading...