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 In light of recent articles in The Vancouver Sun regarding the issue of title and mortgage fraud in B.C., the B.C. Land Title and Survey Authority (LTSA) emphasizes that such cases are extremely rare because strong protections are in place in this province.

      The LTSA reports that over the past 18 years, the land title system processed 15 million transactions. During this time, two claims related to land ownership fraud were successfully resolved and only 14 claims related to mortgage fraud had been filed.

      The LTSA is not only legally obligated to confirm ownership every time a property is sold, mortgaged, leased or statutory rights of way are created, additional protection is provided through an assurance fund. That fund compensates owners deprived of their title either because of an LTSA administration error or identity theft/fraud.

      The LTSA adds that if a property owner feels their land holdings are at risk, there are simple steps to provide additional protection such as an automatic email service to your notary or lawyer when activity shows on your title.

      Alternatively, homeowners could also order a duplicate certificate of title for their own records, at a cost of approximately $50. Title could not be transferred without that document. While this provides protection, it also causes problems when such documents are lost or misplaced.

      LTSA is unaware of any cases in B.C. that required an innocent owner to pay off a fraudulently obtained mortgage on their property. Typically, when a bank asks a homeowner to pay for title insurance on a mortgage, that insurance protects the lending institution, not the home owner. However, separate insurance may be purchased that protects the owner’s equity in the property.

Potential oversupply looms in province, CMHC warns

Derrick Penner
Sun

British Columbia’s recreational property markets, mirroring primary-residence markets, are experiencing moderation with fewer sales, more listings and slower price growth, realty firm Royal LePage found in its latest analysis of leisure real estate.

“Recreational real estate is obviously a luxury purchase versus a basic necessity,” Phil Soper, CEO of Royal LePage Real Estate Services, said in an interview.

“As such, when people’s … confidence in their ability to continue purchasing things like luxury properties wanes somewhat, they tend to put off [those] purchases.”

At the same time, Soper noted that Canadian recreational markets have been “the most supply-constrained” of any market sub-components, which makes this year’s rise in listings welcome compared to previous years.

However, in B.C., particularly the Okanagan, developers are approaching potential oversupply, according to a Canada Mortgage and Housing Corp. analyst in the region.

“I don’t think we’re quite there yet,” Paul Fabri of CMHC said in an interview.

Demand for property in the region is still strong, Fabri added, though it has been drained somewhat by greater competition from the U.S., where builders in the grips of a housing recession are unloading properties at significant discounts.

Also, fewer Alberta buyers are coming into the Okanagan because some of them in Edmonton and Calgary have witnessed the equity in their primary homes shrink as their markets cool, leaving them with less leverage to take on second homes.

“And a lot of pent-up demand [for recreational property] has been satisfied,” Fabri added, “because [developers have] brought so much on stream.”

However, Fabri said that to date, he hasn’t seen any price reductions on Okanagan leisure real estate.

Riley Twyford, broker-owner of Royal LePage Downtown Realty in Vernon, said overall sales in his area are down about 29 per cent from the previous year.

“Prices aren’t going backward,” Twyford said in an interview, “but it’s a lot different market for sure.”

Twyford added that the recreational market is “a spinoff from the other marketplaces.”

“When markets are active in Vancouver, Calgary, we get the spinoff. When it’s less active [in those cities] it’s going to be less active for our marketplace as well.”

The Royal LePage report was based on analyses of two sets of data — a survey of Royal LePage offices in 53 individual markets across Canada to gauge market activity, and a national poll of 3,000 individuals to measure the intentions of Canadians around buying recreational real estate.

In B.C., the survey included assessments of Cranbrook, Vernon, Kelowna and 100 Mile House, where Royal LePage offices were asked to gauge a range of typical property values based on early-spring 2008 sales compared with the previous year.

In Kelowna, the most popular properties are resort-style condominiums, said Royal LePage broker-owner Wade Webb.

Philip Jones of Royal LePage East Kootenay said sales of recreational properties have slowed around his area in Cranbrook, but the frenzied pace of recent years was unsustainable.

“Having said that, we recently had a sale at one of our lakes and [the sale price] was $1.3 million. It seems like prices are remaining strong, but the level of activity is more reasonable.”

A lot of the buyers, he added, are young families with fathers and mothers who have done well in the Calgary-based oil industry.

In 100 Mile House, Royal LePage realtor Melvyn Grahn said standard waterfront cottages are trading at lower prices in 2008 with an average price of $364,500, compared with $380,000 in 2007.

Prices for water-access cottages averaged $249,900, compared with $237,000 in 2007.

On the survey side of the Royal LePage report, the poll found young professionals made up the largest group considering a recreational-property purchase. A majority of them felt a cottage was a better long-term investment than stocks or bonds.

The rising price of gasoline was a factor in a growing minority of decisions about purchasing or cutting back on summer trips to the cottage.

Some 19 per cent of cottage-owning respondents said they would consider selling their properties if gas prices rise any higher. About one-third said high fuel costs will cause them to reduce trips they make to their summer retreats.

© The Vancouver Sun 2008

Suzanne Anton
Sun

Many people, not enough homes, and one of the best pieces of real estate in the world — that combination in the West End of Vancouver has led to significant price pressures on renters.

What can the city do? What can citizens do?

– Zoning: Prevent outright demolition and loss of rental housing by requiring a one-for-one replacement of rental units in the apartment districts. This policy has been implemented by council. We are reviewing the zoning bylaws to see how we can strengthen and improve the stock of rental housing.

– Conversion of rentals to condos: Not a big issue in Vancouver. Council must approve all applications to change existing buildings from rental to condos. They are not particularly well-received and are very costly to property owners so there are very few of them.

– Speculator tax: A tax on vacant properties may have some initial appeal, but would require an army of bureaucrats peeking through keyholes to see who’s in and who isn’t. It is the kind of big government intervention that I don’t favour. The city could not implement a tax of this nature as property tax is a provincial responsibility.

– Federal tax treatment of rental property: Federal tax laws discourage rental housing so essentially none has been built for 30 years by the marketplace. Here’s a “to do” for everyone — talk to your federal representatives and let them know that some very straightforward changes to federal tax laws will open the market up again for new rental construction.

– Condo rentals: Allow all condo owners to rent. Many condos are empty because strata councils prohibit rentals when owners aren’t using their units. City council has asked the province to make this kind of prohibition illegal. This would free up many empty units for rental and requires virtually no government intervention.

– Right of first refusal: Renters need to be given the option of returning to their suites after renovations. We have asked the province to address this issue.

– EcoDensity: This city-wide initiative is attempting to answer the issue above — many people, not enough housing.

Mayor Sam Sullivan on behalf of Vancouver council has written to the provincial government to ask for its consideration of these many issues.

Suzanne Anton is a Vancouver city councillor.

© The Vancouver Sun 2008

Sales and prices are on the slide nationwide

Mario Toneguzzi
Province

CALGARY — Canada‘s housing boom has come to an end and that is no more evident than in Alberta — with prices continuing to fall this year by eight to 10 per cent from their peak, says a national real-estate report.

The report released yesterday by TD Economics says “the long-awaited end of the Canadian housing boom has occurred, reflecting more moderate demand and increased supply of properties for sale” and it is a trend that is broadly based “but it has been particularly sharp in some of the markets that had experienced the most dramatic price growth.”

Evidence of the national downturn is evident in year-over-year price growth for existing homes in Canada’s major markets, which fell to only 1.1 per cent in May, down from 8.6 per cent just four months earlier, the report said.

“The combination of significantly higher listings . . . and weaker demand, due to the past erosion in affordability, are leading to declining sales and softer price performance across the country, particularly in the West,” said the report written by Craig Alexander, vice-president and deputy chief economist, and Pascal Gauthier, economist, of the TD Bank Financial Group.

Home prices in the formerly red-hot markets in Calgary and Edmonton performed worse than the slowing national average, falling below levels reached one year ago in April and May.

“Alberta will have further weakness in the near term, as Calgary and Edmonton will likely see prices continue to fall for another three or four quarters, dropping eight per cent to 10 per cent from their peak, after which prices should stabilize and start rising at a low single-digit pace,” the report said.

National sales are likely to continue to decline in the coming quarters and price growth will slip to two per cent on a countrywide average basis in 2008 and rise only to 3.5 per cent in 2009.

Most markets will see low to mid single-digit gains, but Saskatchewan and Manitoba will continue to post double-digit gains in the near term followed by a significant cooling in 2009, “with the risk of a mild price correction in the major cities that have recently experienced extraordinary price growth.”

And while year-to-date sales have fallen by 12.5 per cent, sales are only returning to levels typically experienced in the three years (2004-2006) prior to the 2007 sales boom, the report said.

Nevertheless, “sales are also weaker in other parts of the country, with British Columbia and Ontario sales down by more than 10 per cent.”

© The Vancouver Province 2008

Businessman wonders if seller even saw his offer

Joey Thompson
Province

Langley businessman Kip Webster couldn’t believe his eyes when he spotted a “Just Listed” sign on an ideal piece of property not far from where he lived.

He had been searching years for a home like the one on 200th Street in the Brookswood area of town for his personal and business needs.

He called his Re/Max realtor and said he wanted to submit a bid of $11,000 over the $469,000 listed price to clinch the deal.

Webster, owner of a restaurant equipment repair and cleaning service, checked out the house, property and storage shed, signed the contract of purchase and plunked down a $20,000 deposit, confident his prompt bid would be a go.

He even removed the subjects, except for a brief spell to set up financing.

But after hemming and hawing a few days, his realtor called to say another buyer had snapped it up.

Selling price: $466,000.

Yuh? What gives?

Not only did it sell for $14,000 less than his bid, it went for $3,000 less than the home owner’s asking price.

Webster was told the seller accepted the lower deal because the realtor waived the sales commission. Still vexed, he dug a little deeper and discovered his successful opponent was a realtor who worked alongside his own Re/Max agent.

The intrepid entrepreneur called the Fraser Valley Real Estate Board, one of 12 member boards of the B.C. Real Estate Association representing 18,000 realtors.

An official assured him “everything was above board.”

He was willing to admit defeat when, to his surprise, his realtor called a week or so later to say the house was back on the market. The realtor/new owner’s price: $495,000. Did he want to make offer?

“Something felt funny to me,” the self-employed operator said.

“They knew I was willing to pay top dollar, that I wanted it a lot.”

I got in touch with the Fraser Valley realtor who grabbed the sale from under Webster’s nose and told her even if the transaction was legal, the optics sure didn’t look good.

After all, the potential for B.C. realtors to benefit from inside info not yet released to the public is huge, especially when some Lower Mainland properties are drawing multiple offers, forcing wannabe buyers to pay well above asking.

B.C. realtors, considering they closed an estimated $37.8 billion in sales in 2006, must take measures to ensure every transaction is squeaky clean.

The Langley agent said she didn’t pocket much after shelling out B.C.’s property transfer tax, realtor’s commission and closing costs.

“I didn’t even want to sell,” she said.

“I was planning on renting it out, but [Webster’s] realtor kept bugging me and bugging me. He said his client really wanted it.

“I’m nothing like the guys who flip for hundreds of thousands, scooping up houses from old ladies.”

Real Estate Council of B.C. director Larry Buttress said realtors can snap up as many properties as they want but they must disclose their occupation to the seller.

But it still leaves Webster questioning who the realtors were really working for: “If anyone deserves to make more, it was the owner. I can’t help but wonder if he even saw my offer.”

© The Vancouver Province 2008

Keith Fraser
Province

Susan Aldred, song Michael and daughter Sarah stand outside the West Vancouver home where Aldred paid $160,000 to clean up damage from an old oil tank. Ric Ernst – The Province

A North Shore woman is suing the former owners of a home in West Vancouver after she shelled out more than $160,000 to remove 5,000 litres of contaminated fuel from a leaky home-heating oil tank buried in her backyard.

Susan Aldred says she discovered the tank when she decided to sell her home on Mathers Avenue in February. She wonders how many other homeowners are similarly unaware of such a problem.

The tank had not been used for about 25 years and was buried up against the house on a steep slope with flowing underground water.

The mother of two says that when she bought the property in 2000, the vendors told her they had removed the tank.

“I had no idea there was a tank because there was no piping or anything like that. So there was no way I would have known that there was an oil tank on my property.”

When the tank was opened there was an overpowering smell of oil.

It was full of sand, oil and water, says a statement of claim filed in B.C. Supreme Court.

The clean-up job took 2 1/2 months and Aldred says though she sold the house, the completion of the contract has not yet gone through.

She says in the statement of claim that her young daughter did not eat anything for nine days while the oil smell was strongest and lost a considerable amount of weight.

Her young son also suffered from a loss of appetite and nausea and she had violent headaches and nausea.

She is suing for damages, including punitive damages as well as costs to remove the tank and contamination.

Richard Lambert of Digger Dick’s Contracting did the clean-up.

“I’ve been doing this for a long time and this was the worst remediation site I’ve ever seen,” he said. “It was literally astonishing how much damage had been done.”

He said his crews had to remove 456 tons of contaminated material.

And Aldred is not alone, he added.

“This is as bad as the leaky condo crisis. I see it on a daily basis.”

Martin Ernst, division fire chief at the West Vancouver Fire Department, said the department launched a program in 1989 to eliminate the tanks installed in the 1940s and 1950s.

Since then the department has been able to cut the numbers down by 1,000 but about 4,000 still remain, he said.

Ernst said it was rare to get a bill as high as Aldred’s; they are generally in the $30,000 to $40,000 range.

“Susan’s case, I hope it’s not a harbinger of things to come because people have left their tanks and not dealt with them,” Ernst said.

“I have to give homeowners a bit of a break here because a lot of them don’t even know they have a tank. I would say 50 per cent of them don’t know they have a tank.”

Tank contractors find that 75 per cent of the jobs have contamination problems, said Ernst.

“That’s very worrying. You can imagine if you are a purchaser and you buy a property and hidden under the ground is potentially 300 to 900 gallons of oil that may have leaked into the soil. With ground water pushing up, at some point that oil reaches the surface. That’s a lot of oily product that is believed to be carcinogenic and environmentally damaging.”

Jim Sullivan, a lawyer for Alexander and Lynda Colbeck, the previous owners, said: “With regard to homes that have underground oil tanks, these matters do arise and are difficult for everyone who has been involved in ownership of the home. Is the action going to be contested? Right now it is. Do the Colbecks think they are legally responsible for this? No, they don’t.”

What to do

There could be an underground nightmare lurking in your backyard.

And if it’s in the form of an oil storage tank, or RUST, then you’d better deal with it now, rather than later.

The tanks were installed in the 1940s to the ’60s to store heating oil. Now they may be leaking carcinogenic substances into ground water — and that could cost you big time when it comes to removing them.

The B.C. Fire Code demands the tanks be removed and have an environmental engineer assess any damage.

Cost can range from $2,000 to $5,000 as long as there are no problems.

The sky seems to be the limit if there is environmental damage. There are no government programs to help with the cost.

Check with your municipality on what needs to be done.

© The Vancouver Province 2008