6 Ways to Tell If Your Real Estate Agent Is Lying

6 Ways to Tell If Your Real Estate Agent Is Lying

RECO decision heralds new rules about basement apartments

Bob Aaron bob@aaron.ca
July 10, 2010


A discipline decision by the Real Estate Council of Ontario (RECO) earlier this year has established what may be a new disclosure standard for real estate agents dealing with basement apartments and land surveys.

Back in 2006, Richmond Hill real estate agent Sean Marandi listed a property for sale. In the published listing, it was described as a “magnificent house . . . elegant design with two apartments in the basement ($1,150 income) . . . three fridges, three stoves . . . Seller and agent do not warrant the retrofit status of basement apartment.”

Two days after the listing was published, Marandi drafted an offer on behalf of a buyer. He had advised the buyer that the property would be an excellent purchase for investment purposes because the previous owner had built a separate entrance to the basement.

The buyer signed a dual representation acknowledgement confirming that Marandi and his brokerage represented both buyer and seller.

In preparing the offer, Marandi did not insert a clause to ensure that the buyer was fully informed of the legality and suitability of the basement units for his intended use.

The offer did, however, contain a clause requiring the seller to provide an existing land survey of the property. That was never done.

Shortly after closing, the municipality informed the new owner that the basement entrance and basement apartment did not comply with the building code, and it issued a violation order against the property.

The cost of remedying the faulty construction of the basement door came to about $50,000. On top of that, the tenants took the buyer to what was then known as the Ontario Rental Housing Tribunal due to problems with the door.

Eventually the owner was forced into bankruptcy when the tenants stopped paying rent.

RECO filed discipline charges against Marandi for breach of its code of ethics. At a hearing in March, Marandi admitted to unprofessional conduct when he failed to verify the status of the basement apartment and failed to follow through with delivering a land survey to the purchaser.

The RECO discipline panel ruled that Marandi acted unprofessionally by not inserting a condition in the offer to ensure that the buyer received information or assurances about the legality of the basement apartment before the offer became binding. Marandi was ordered to pay a penalty of $7,500 and take a course in ethics and business practices.

Based on my reading of the case, it seems that in similar circumstances, potential purchasers have a right to expect very high disclosure standards from their real estate agents:

• Agents are now required to verify the legality and/or intended use of basement apartments with the municipality before offers are submitted.

• Agents can no longer insert clauses into offers stating that they and the seller “do not warrant the retrofit status” of basement apartments (a common practice at present).

• Agents are now required to “follow through” and ensure that buyers will promptly receive a land survey if the offer provides for it.

In a 2004 Ontario court decision in a civil case for damages, the judge ruled that agents have a positive duty to tell purchasers whether a basement living unit might not comply with the municipal bylaw. He wrote in his judgment that an agent must fully and fairly disclose to his clients all material information regarding the property.

The Marandi discipline decision echoes that high standard of full disclosure in offers to purchase. In future, disclosures should avoid words indicating that there is no verification of retrofit status, in favour of a blunt statement, such as “The purchaser acknowledges that the basement apartment is illegal.”

My colleague Merv Burgard, a London, Ont. lawyer who lectures extensively to real estate agents, tells me of a careful Brampton real estate agent whose advertisements often read “illegal in-law suite.” Hopefully, this degree of honesty and disclosure may soon become common practice in Toronto.

“When in doubt,” Burgard tells his students, “tell the whole truth, and warn (buyers) of the risks.”

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RECO DECISION http://www.reco.on.ca/publicdocs/20100315_30735.pdf

and

http://ww.aaron.ca/columns/marandi decision.pdf


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Bob Aaron is a Toronto real estate lawyer. He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818. Visit the column archives at http://aaron.ca/columns/toronto-star-index.htm for articles on this and other topics.

Tips For Getting The Most For Your Home When Selling.

In any real estate market, prepping your home so that potential buyers see it in its best light can mean that your home sells more quickly and possibly at a better price. Here are a few simple steps that can yield big dividends:

Check the curb appeal – make sure that the front yard and front porch / entrance way is clean and free of any messy looking items such as recycle boxes.

Get it fixed – repairs are important: make sure that bathroom tiles are not cracked, or the kitchen faucet doesn’t drip, to give two obvious examples.

Spruce things up in the kitchen – if this room is in need of a remodeling, you can update the space quickly and inexpensively with new curtains, new cabinet knobs, and a fresh coat of neutral paint.

Thoroughly clean – you may wish to hire a professional cleaning service to ensure that everything in your home from floor to ceiling has been carefully cleaned and/or dusted. Power-washing the exterior is also a good idea. Make sure rooms are free of extra clutter.

Brighten up your home – very clean windows and higher wattage bulbs do wonders for making a space seem airier and bigger.

Don’t get too personal – anything directly connected to you should be stashed from sight, such as toiletries in the bathroom or framed family photos, so that potential buyers can easily imagine themselves living in the home.

Always be sure to use a qualified Realtor when selling your home.

Toronto Area there are five active public real estate companies

Will the GTA be flooded by PPP opportunities?
In the Greater Toronto Area there are five active public real estate companies: Build Toronto, Toronto Lands Company, Waterfront Toronto, Ontario Realty Corporation and Canada Lands Company owner of Downsview Park. Each organization has been established to develop and manage public property in order to generate a sustainable revenue stream or enhance the value of its assets or both.

Build Toronto

The newest of these organizations Build Toronto announced that it is open for business today, May 12th at the Toronto Board of Trade. It was established in 2009 by the City of Toronto under the direction of Mayor David Miller.

Build Toronto has a portfolio of 31 properties representing hundreds of millions of dollars worth of real estate. The properties include underutilized transit land, parking facilities, libraries, police stations as well as the City’s residential properties.

Four large projects have been identified by Build Toronto as its first priority in the search for Canadian and International investors to partner in unlocking the market value of these sites. The properties include:

(1) A 54-acre location next to the Downsview subway station.

(2) 154 Front Street at the corner of Sherbourne and Front in the St. Lawrence neighbourhood in downtown Toronto.

(3) A 24 acre industrial property off the QEW highway near Islington Ave. and Lakeshore Blvd. in the city’s west end.

(4) 4050 Yonge St. an under underutilized 2 acre site projected for a 450,000 square foot development at the corner of York Mills Rd. and Yonge St.

All of these are Class A locations with extraordinary development potential. Under the direction of the Build Toronto Board, which includes leaders in Canadian real estate industry, Build Toronto seemed destined to find suitable partners that will see the properties developed.

In addition to Build Toronto there are four other public real estate companies. They are:

Toronto Lands Company

The Toronto Lands Corporation was created in September 2007 and incorporated in April 2008 as a wholly-owned subsidiary of the Toronto District School Board. The TLC’s mission is to maximize the Toronto District School Board’s real estate revenues in order to reinvest in TDSB schools and students.

Shirley Hoy, CEO of Toronto Lands Company said her organization is expected to generate a $30-million surplus annually for the Toronto School Board.

Waterfront Toronto

The Waterfront Toronto website says that it is building the largest urban revitalization project in North America. It is mandated by the three levels of Government each equally represented on its Board of Director to develop the publicly owned waterfront lands in downtown Toronto.

Ontario Realty Corporation

The Ontario Realty Corporation manages one of the largest real estate portfolios in Canada, consisting of approximately 6,000 buildings and structures and over 80,000 acres of land across the province. The portfolio includes a wide variety of properties ranging from detention centres to office space, courthouses and heritage buildings.

Its major projects in Toronto include 222 Jarvis St., the Keele-Wilson Provincial Campus Redevelopment and the West Don Lands Flood Protection Platform.

Canada Lands Company

Canada Lands Company Limited is an arms length, self-financing Crown Corporation reporting to the Canadian Parliament through the Minister of Transport, Infrastructure and Communities.

In Toronto CLC owns the CN Tower and several downtown office locations as well as other properties listed on its website.

Downsview Park in Toronto is a 572 acre property that was taken over by the Federal Government after the Canadian Forces Base on the property was closed in 1994. It is operated by PDP a crown corporation and subsidiary of the CLC established in 1999 that received full ownership of the Park in 2006.

While Build Toronto is well positioned to succeed with a strong Board of Directors and an exceptional portfolio of properties all five of these organizations are competing in the same jurisdiction for essentially the same partners and investment.

Does the presence of the five public development organizations work to their advantage or will the GTA becoming flooded with public private opportunities? Could flooding the market dilute the value of the opportunities to the development organizations and the public?

The Miracle is You - Kute Blackson (OFFICIAL Music Video)

Protecting Your Privacy While Your Home is on the Market

Numerous people are likely going to spend a considerable amount of time browsing through your home while it is on the market. If you are living in the home while it is for sale, your personal things will be on show too and potential buyers might look through drawers and other items that are inside your home. Your privacy and security may become an issue when showing your home, so it is important to consider all your options before you welcome someone into your home.

For many individuals, it is very important for them to protect their privacy, while others are simply concerned that buyers will make assumptions about them and judge them instead of simply judging their home. However, the importance of protecting your privacy is all the same and that goes for anything personal from financial information, such as cheque books to bank statements and personal letters.

Protect your documents
Keep in mind that a potential buyer may open cabinets or drawers—this is not considered snooping. Buyers can innocently tug on a drawer to inspect its construction or depth and find important documents that you might not intend for anyone to see.

Don't leave mail where anybody can find it
Many sellers make the mistake of leaving piles of opened mail neatly stacked on the kitchen counter or somewhere else in the home. By leaving your correspondence out on the table, a potential buyer can find out about your credit card debt, whether you have filed for bankruptcy and other private information that you probably don't want the seller to be aware of. Not only is this an invasion of your privacy, it can also change the offers that you receive from buyers. If you have a stack of mail from a collection agency, the buyer will know you are desperate to make a sale and will likely propose far under the list price.

Remove personal effects from your walls
From diplomas and religious artifacts to wedding certificates and personal photos, don't provide buyers with any personal information about yourself or your family. De-personalizing is also an important move to make when staging your home for sale anyway, so you can actually accomplish two things by removing the personal effects from your home.

Don't leave your computer up and running during showings
Gaining personal information from your computer takes only minutes for a professional hacker or thief, so be proactive and turn your computer off before potential buyers arrive.

Before you put your home on the market, empty out drawers, stage closets and pack up anything personal including medications. Disassociate yourself with your home—remind yourself that it is a house—a product to be sold on an open market that is bound to see plenty of new faces throughout the term of the selling process.

Consider renting a locker at your local bank and store away your jewelry and other valuable items. It is better to be safe than sorry.

Toronto real Estate Market 2010 - Report

The Canadian resale housing market is now moving towards a balanced market, rather than the seller’s market we have been in for most of the past year.

For the first time in almost a year, inventory increased in June/July. With more homes to choose from, many home buyers have been making less-aggressive offers. This has resulted in less upward pressure on the average selling price.

In a stabilizing market, consumers need to rely more on the expertise of a REALTOR® because prices are highly local and competitive.

Just back from Chicago - & if your going !

Peter Tarshis
Just back from Chicago & stayed at the Westin Ohare ~ the hotel was great, affordable & I was well looked after + also heard great reviews from the other 700 ppl who also stayed there while attending the Spiritual Awakening (SA) conference held at this hotel.

The amazing things about the city is how they have protected & developed their large waterfront for the people not greedy developers. The elevated 'clean' subway ride ($2.50) took us right downtown just a 2 blocks walk from the Westin Ohare.

One day I took advantage of the nearby forest preserve for a 'get away from it all' walk.

Great hotel, helpful staff, grateful all my requests were looked after including top floor with a view.

If your going to 'Sweet Home Chicago' I definitely recommend this Westin Hotel.

O'Hare Hotel - The Westin O'Hare
www.starwoodhotels.com
The Westin O'Hare is in the heart of Rosemont, Illinois conveniently located to Allstate Arena, Donald Stephens Convention Center, Harey Caray's Restaurant and Chicago O'Hare International Airport


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Peter Tarshis

Royal LePage Real Estate
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