Polygon?s Cedar Walk at Lelem launches a new 22-acre community

Barbara Gunn
The Province

Cedar Walk at Lelem

What: 140 concrete one- and two-bedroom apartments and four-bedroom townhomes

Where: 5410 Shortcut Road, Vancouver (off University Blvd. and Toronto Road)

Residence size and prices: 568 — 1,513 sq. ft. (apartments); 1,917 — 2,077 sq. ft. (townhomes); one-beds from $768,800, two-beds from $928,800

Developer: Polygon Cedar Walk Homes Ltd.

Sales centre: 2620 Acadia Road

Hours: noon — 6 p.m., Sat — Thurs

Telephone: 604-434-2205

Website: polyhomes.com

Lelem is a word that means ‘home’ in the language of the Musqueam, but as Doug Avis explains it, it can convey so much more.

Davis is vice-president, real estate, for the Musqueam Capital Corporation, the economic development arm of the Musqueam Indian Band, which is now developing the first phase of its 22-acre Lelem community adjacent to Pacific Spirit Park at UBC.

“The whole idea of what Lelem means — home — is of Musqueam welcoming the rest of the world to this site, to enjoy it and also to experience a bit of Musqueam culture,” he says.

To experience that culture, Avis says, is to appreciate the strong bonds of the Musqueam people.

“I can’t think of a community that’s closer than the Musqueam are,” he says. “They even call their friends cousins. So we want, in a subtle way, to encourage more social interaction than you would normally see in a development.”

Lelem, which will comprise some 1,250 homes when complete in some 10 years, will provide opportunities for residents to interact courtesy of a new 15,000-square-foot community centre, day care and adventure playground. Also on site, and being developed as part of the community’s first phase, will be a mixed-use village area with a plaza, grocery store, restaurants, shops and subsidized and rental units.

But residents of Lelem may also find occasions to strike up conversation when strolling the extensive trail system or enjoying the beauty of what Avis calls “the real jewel” of Lelem: a three-acre park of towering cedars and Douglas fir.

It’s steps from this park — so far unnamed — where the first residential component of Lelem will rise: an 18-storey concrete highrise from Polygon called Cedar Walk at Lelem.

As one of what Avis calls the Musqueam’s “preferred developers,” Polygon has erected a one-bedroom display home on the site with floor-to-ceiling windows that take in the stunning views of the enormous trees.

“That’s really the huge thing about Cedar Walk,” says Goldie Alam, Polygon’s senior vice-president of marketing. “You’re basically living in a park, but surrounded by new amenities, close to the west side, and close to UBC.”

Avis notes that Lelem is taking shape on traditional Musqueam territory included in the 2008 reconciliation, settlement and benefits agreement with the province, and takes very seriously the notion that they’re “stewards of the land”.

To that end, any trees that have come down have been — and will be — be harvested and reused, in the construction of the community centre, for instance, or in benches dotting the site.

The Cedar Walk homes will have exteriors that reflect their natural setting, both in colours and materials.

Inside, occupants will find engineered wood flooring in the main living areas and wool carpeting in the bedrooms.

Kitchens will be fitted with natural wood or high-gloss white cabinets, engineered stone countertops and full-height marble tile backsplashes.

Ensuites, meantime, will have imported marble tile floors, rain showerheads, vanities with accent lighting and square undermount basins.

© 2019 Postmedia Network Inc.

Real estate agent for both parties withheld information from owner about rezoning potential of property now worth $86 million

Cornelia Naylor
Western Investor

Big deal

The 4.28-acre property at 5502 Lougheed Hwy., currently the site of REVS Bowling Centre, sits right beside the Holdom SkyTrain station and is worth about $86.6 million, according to the latest assessment.

In October 2011, however, its owners, Brentwood Lanes Canada Ltd., signed an agreement to sell it for just $28.8 million.

The buyer was a company called Pacific Success Management & Consultants Inc., owned by Xiao Dong Liu, a.k.a. Allen Liu – a businessman who owns two strip malls in Richmond and has been involved in various business enterprises in China, including as president of a real estate company that built a large mixed residential and commercial multi-tower development in Dalian in 2009, according to court documents.

The Brentwood sales contract was eventually made over to another of Liu’s companies, Youyi Group Holdings (Canada) Ltd.

Just before the deal was scheduled to close, however, it fell apart.

Brentwood Lanes announced it wasn’t going to go through with it.

The company argued the contract wasn’t enforceable because of wrongdoing by Liu and a real estate agent, Kevin Hien, who was supposed to have been acting for both parties but who had withheld information from Brentwood Lanes about the development potential of its property.

Liu and Hien said Brentwood Lanes was backing out because of seller’s remorse and launched a lawsuit to force the sale or get damages for breach of contract.

‘Festival of deceitfulness’

After six-and-a-half years of legal wrangling, culminating in a 77-day trial in 2017 and 2018, B.C. Supreme Court Justice Andrew Mayer ruled on the case this month – and found few involved in the case were free from the taint of dishonesty and wrongdoing.

“Various judgments have, with undisguised scorn, referred to repeated witness untruthfulness during trials as a ‘festival of mendacity,’ that is, a festival of deceitfulness,” Mayer wrote in his May 10 ruling. “I find that this description is appropriate in this case.”

He singled out Liu and Hien, whose testimonies he described as not credible and inconsistent.

Mayer concluded the two had worked to deceive potential buyers, appraisers, mortgage brokers, lenders and potential joint-venture development partners during the course of the Brentwood Lanes negotiations.

‘Fraudulent document’

On Sept. 6, 2011, for example, Liu and Hien convinced Jeong Lee, president of Brentwood Lanes, to sign a phony $38.8-million purchase agreement for the Brentwood property and then another fake document on Oct. 5, 2011 purporting to terminate it, according to Mayer.

The bogus agreement was for $10 million more than the price actually agreed on and stated the buyers had paid a $10-million deposit, which they had not.

Mayer said the fake agreement was likely designed to induce a potential Chinese investor at the time to contribute more to the purchase of the property by exaggerating the price and the deposit paid by Liu’s company.

“It was not an agreement at all,” Mayer said. “It was a fraudulent document designed to deceive a number of parties, including appraisers, mortgage brokers and potential lenders and joint venture partners and assignees.”

False-deposit scheme

At Liu’s direction, Hien had also urged Lee to enter into a false-deposit scheme designed to make it look like Liu had contributed $8 million more in equity to the deal than he actually had and “mask” from lenders a plan to place second mortgages on other properties owned by Liu and his companies.  

Hien outlined the scheme in a November 2012 email presented in court.

Brentwood Lanes would provide a $4 million payment to Youyi Canada; Youyi would provide a “receipt” for $4 million and then return the $4 million to Brentwood. Using the funds they had just gotten back, Brentwood would pay Youyi another $4 million in exchange for another $4-million receipt, and Youyi would again return the $4 million to Brentwood. Then, after Youyi secured financing to buy the Brentwood property (partly relying on the fictitious extra $8 million in equity), Brentwood Lanes would get $8 million in mortgage security over other properties owned by Allen Liu or his companies.   

Lease-back rates

Mayer further concluded Hien and Liu schemed to mislead lenders into believing the rents on the Brentwood Lanes property would be more lucrative than they really would be.

Brentwood Lanes wanted to lease back the Brentwood property for three years after the sale, and rent reductions negotiated over the course of the deal totalled in the millions of dollars, but they were documented as separately numbered addenda and schedules even when they could easily have been included in the bodies of the purchase and lease agreements.

The lease agreement, for example, was signed on the same day as a schedule amending it.

Mayer concluded the agreements were prepared that way so documents showing lower rents could easily be removed from materials sent to lenders.

“There is evidence that Allen Liu, his employees or agents used the lease documents in this manner,” Mayer said.    

Unlawful purposes

After detailing Liu’s and Hien’s deceptive machinations, Mayer ruled the Brentwood deal was “part of a transaction intended to be used for unlawful purposes or otherwise tainted by illegality.”

He said enforcing the agreement would be “harmful to the integrity of the legal system.”  

 

Mayer said Lee “may not have been a completely innocent participant” in the intended fraud – given that he signed  the phony $38.8-million purchase agreement – but his participation didn’t legally prevent Brentwood Lanes from using the unlawful-purposes defence to void the deal.

In its counterclaim, Brentwood Lanes also called for damages against Liu for conspiring with Hien to keep Brentwood Lanes in the dark about the value of its property in exchange for Hien getting a bigger share of the commissions and referral fees.

Mayer dismissed that claim, however, saying Brentwood Lanes had failed to prove the conspiracy. 

Double agent

But Mayer did find Hien – who was supposed to be representing both parties – had breached his fiduciary duty and contractual obligation as a real estate agent when he gave information about the high-density zoning potential of Brentwood Property to Liu but not to Lee and Brentwood Lanes.

Until 2010, the Brentwood property was eligible for RM5 rezoning, which would have allowed for high-density, multi-family development.

In December 2010, however, the city created a new RM5s designation and further increased the allowable density in multi-family zones at its four town centres.

The change nearly doubled the total potential density of the Brentwood property.

Hien was aware of the RM5s potential before the purchase agreement was signed.

He said he discussed it with Lee during their first meeting, but Lee said he was not made aware of it until well after the agreement was signed.  

Mayer concluded Lee’s testimony was the more reliable.

For breaching his fiduciary duty and contractual obligations, Mayer ordered Hien to pay $1 and legal costs.

Mayer stopped short of finding Hien guilty of negligent misrepresentation or of slapping him with aggravating and punitive damages.

“I expect that Kevin Hien’s reputation as a realtor is likely already in tatters as a result of the events leading up to and during this litigation,” Mayer said.

He noted Hien and his associates would be getting no fees or commissions from the sale of the property.

“In my view, that is punishment enough,” Mayer said.

Copyright © Western Investor

Ontario’s Fair Housing Plan: home Prices Two Years Later

Penelope Graham
other

In April 2017, the former provincial Liberal government introduced a 16-part set of measures designed to balance the Ontario housing market by cooling rampant price growth and speculative demand, and boosting rental supply.

Dubbed the Fair Housing Plan, the most notable of the new regulations included a 15% Non-Resident Speculation Tax for foreign purchasers as well as sweeping rent controls that limited annual rent increases to the provincial limit, regardless of when the unit was built. 

The changes had an immediate psychological impact on the market. Local real estate boards noted a large influx of listings in the following months, as skittish sellers looked to cash in before the market went soft. As a result, a number of housing markets within the province experienced double-digit per-cent price and sales declines, especially among higher-priced single-family home types.

Since then, a change in provincial leadership has led to a partial repeal of the regulations, as the current Conservative government dialed rent controls back to apply only to units created before November 15, 2018, and increased focus on housing creation via its Housing Supply Action Plan. It’s also important to note the federal mortgage stress test which was implemented on January 1, 2018; requiring borrowers to qualify at a rate roughly 2% higher than their actual mortgage, it effectively reduced purchasing power for home buyers and contributed to chilling sales at all levels of the market. Now, two years after the introduction of the FHP, how has the dust settled across various Ontario markets? To find out, Zoocasa sourced sold home prices and sales-to-new-listings ratios (SNLR) from various local boards across the province for April 2019 and compared it to 2017 data from the same month. The SNLR is calculated by dividing the number of sales by new listings over the month; a ratio between 40 – 60% is defined as balanced by the Canadian Real Estate Association, with below and above that range indicating buyers’ and sellers’ markets, respectively.

York Region Home Prices Hardest Hit

The numbers reveal some municipalities – especially those in higher-priced York Region – have sustained steep declines in prices and considerable change in buying conditions over the two-year period.

According to the data, Newmarket has absorbed the greatest declines in sale price from April 2017, declining -30% to $725,710 – a dramatic dip below the $1-million mark that used to be the norm in that market. However, while sales have fallen -31%, market conditions have actually tightened over the two-year time frame due to a deeper contraction in listings, which are down -42%. That’s led to an SNLR of 45% – a balanced market, and an improvement from 37% in 2017, which indicated buyers’ conditions.

The city of Aurora experienced the second-largest price decline of -30%, also dipping below $1 million to an average of $888,387. Sales fell -35%, on par with a -34% decline in new listings, leaving the SNLR and buyer conditions unchanged at 42%. Richmond Hill rounds out the markets with the steepest drops, as the average price fell -27% to $1,016,216. A -25% decrease in sales has outpaced a -21% contraction in new listings, pulling the market into buyers’ territory with an SNLR of 38%, from 40% two years ago.

Southern Ontario and Ottawa Markets Continue to Grow

Several Ontario markets, however, have weathered the new regulations with greater success, especially comparatively affordable secondary markets that are supported by strong employment; the markets with the greatest price increases over the last 24 months all have average home prices below $500,000.

While sales in the Windsor-Essex region have remained flat and new supply surged by 16%, the market remains in steep sellers’ territory with an SNLR of 67%. That’s continued to put upward pressure on prices, which have increased by 25% to $343,956. It’s a similar scenario for London homes for sale, which have experienced hot price growth with average home values up 19% to $429,058 despite a -16% drop in sales and -3% dip in listings; an SNLR of 72% has kept the market steeply competitive for buyers, as little supply prompts bidding wars. 

The Ottawa real estate market, which has been one of the top performing regions in recent months, remains untouched by any correction with prices and sales both up by a robust 10%, and listings tightening by -6%. That’s led to an SNLR of 73% – a sizzling sellers’ market – and a rapidly rising average home price of $450,295.

Check out how prices and market conditions have changed across Ontario between April 2017 and 2019 in the infographic below:

Top 3 Markets with Largest Price Decreases

1 – Newmarket

April 2019 Average Price: $725,710 (-30%)

April 2019 Sales: 135 (-31%)

April 2019 New Listings: 302 (-42%)

April 2019 SNLR: 45% (Balanced)

2 – Aurora

April 2019 Average Price: $888,387 (-30%)

April 2019 Sales: 99 (-35%)

April 2019 New Listings: 237 (-34%)

April 2019 SNLR: 42% (Balanced)

3 – Richmond Hill

April 2019 Average Price: $1,016,216 (-27%)

April 2019 Sales: 252 (-25%)

April 2019 New Listings: 664 (-21%)

April 2019 SNLR: 38% (Buyers’)

Top 3 Markets with largest Price Increases

1 – Windsor-Essex

April 2019 Average Price: $343,956 (+25%)

April 2019 Sales: 694 (0%)

April 2019 New Listings: 1,032 (+16%)

April 2019 SNLR: 67% (Sellers’)

2 – London

April 2019 Average Price: $429,058 (+19%)

April 2019 Sales: 709 (-16%)

April 2019 New Listings: 983 (-3%)

April 2019 SNLR: 72% (Sellers’)

3 – Ottawa Region

April 2019 Average Price: $450,295 (+10%)

April 2019 Sales: 2,052 (+10%)

April 2019 New Listings: 2,803 (-7%)

April 2019 SNLR: 73% (Sellers’)

© 2015-2017 Zoocasa Realty Inc.,

Only developers know who is purchasing preconstruction units

Neil Sharma
Mortgage Broker News

Could the government forcing real estate developers to divulge buyer information become a key cog in the fight against money laundering?

“Where they need to start first, if they’re going to get information on this, is with developers because this problem isn’t as pronounced in the resale market as it is in preconstruction,” said Tom Storey, team leader with Royal LePage Signature Realty. “Nobody knows who’s buying these preconstruction units other than the builders, but without the government going to them and asking for information they’re not going to openly give it up.”

However, as real estate lawyer Bob Aaron previously told MortgageBrokerNews.ca, the provincial government seems to have a very close relationship with the developer community.

“How many developers purchase tables at Conservative Party fundraisers? I was at one years ago when John Tory was the head and it seemed to me half the tables in the room had placards with developer names, so these people are big contributors,” said Aaron.

Whether or not the Ontario government decides to enlist the help of the developer community in the fight against money laundering—although the government, having recently stated it is merely monitoring the situation, seems aloof—the CEO of the Ontario Real Estate Association—himself an erstwhile leader of the Progressive Conservative Party of Ontario who’s known Premier Doug Ford for a couple of decades—has a suggestion he believes will curtail the proliferation of dirty money in the province’s real estate market.

“We’ve called for a searchable public database to find out who the beneficial owners are of the numbered companies or numbered trusts,” said Tim Hudak. “If money is coming from a corrupt politician in China and they need to get the money out because a corrupt politician higher up the chain might take it from them, they layer it through numbered companies and eventually purchase property in Western jurisdictions like Canada, the U.S. or England, and they never attach their name to it—it’s usually a son or daughter, brother, sister or someone higher up in organized crime.”

Hudak added that a beneficial ownership registry would help authorities tackle transnational crime, too.

“Police overseas can also identify that the politician’s daughter, let’s say, owns this property in Toronto, Vancouver or Montreal and will notify the RCMP,” said Hudak. “Similarly, the RCMP can connect a person, who has little income but is buying up many properties, to the original crime in, say, South America or an Asian jurisdiction.”

Copyright © 2019 Key Media

Forecast calls for higher home prices

Daniel Tencer
other

The latest Canadian house price forecast from Moody’s Analytics really has no good news for anyone.

If you’re a homeowner hoping to make big equity gains, forget it. And if you’re an aspiring homebuyer hoping for a reprieve from astronomical urban house prices, forget that too.

The forecast calls for house prices nationwide to grow by an average of 2.2 per cent per year over the next five years. Given that the Bank of Canada is predicting inflation at 2 per cent in the coming years, this means that inflation-adjusted house prices will likely see no net growth.

With Canada’s economy bouncing back from a slowdown at the start of the year, Moody’s expects mortgage rates to rise by a full percentage point over the next two years. That increase in monthly housing costs, combined with high prices and high debt levels, will keep prices in check, the research firm predicts.

“House price appreciation will slow down in 2020, turn briefly negative in 2021, and only recover in the following years,” wrote Andres Carbacho-Burgos, a director and head housing economist at Moody’s Analytics.

The upshot is that this will improve affordability by giving people’s incomes a chance to catch up to house prices. But given that wages are growing only a little faster than inflation, improvements in affordability are likely to be minor.

Toronto should avoid any further house price declines, thanks to heavy demand for housing, but future price growth will be limited to an average of 3.3 per cent in the coming years, the forecast said.

And Vancouver “will be lucky to maintain level prices through 2024 given how overvalued house and apartment prices are currently,” Carbacho-Burgos wrote.

He sees house prices falling in the metro area by 0.8 per cent  over the next year, which would mark a considerable improvement from the 7.3-per-cent price decline Vancouver has seen in the past year.

Some of the weakest housing markets in the coming years will be in the west, where overvaluation in Vancouver and a struggling oil industry on the Prairies will keep real estate markets weak, the Moody’s report predicted.

Vancouver’s 0.9-per-cent annual price growth is practically a rounding error, while Saskatchewan’s two largest cities ― Regina and Saskatoon ― will see outright price declines over the next five years. Regina’s prices are forecast to fall 3.1 per cent per year, implying a more than 15-per-cent decline by 2024.

“Over the coming year, only Montréal will have moderate house price appreciation compared with the other large metro areas, but in subsequent years there will be a partial recovery, with Toronto doing somewhat better,” Carbacho-Burgos predicted.

Like many other analysts, Carbacho-Burgos points the finger at tougher housing market regulations for the slowdown. But he says it would be a mistake to think the rules hobbled what was once a strong market. Rather, they prevented an even worse correction down the road “if affordability had become unsustainable and mortgage debt (costs) had climbed even higher,” he wrote.

“The current cooling of the housing market is therefore not really bad news, but should be seen more as a necessary consequence.”

©huffpost

New home sales fell seven per cent last year, on top of a 31 per cent decline in 2017, causing developers to abandon projects

Joannah Connolly
Western Investor

With new home sales dropping in tandem with resale residential units, Vancouver developers have been rapidly shelving projects, according to a new report by Altus Group.

Of the 5,600 new housing units proposed to the City of Vancouver in 2016, about half have now been approved. However, approximately 20 per cent are in projects that have since been abandoned, said the report.

That’s much higher than in the City of Toronto, where only two per cent of 2016-proposed housing units have been shelved since then.

The high abandonment rate of new housing units in Vancouver can be attributed to the region’s slowdown in new home sales. Sales of new condo units fell in by seven per cent year over year in 2018. That’s following a 31 per cent decline in 2017, when sales fell sharply after the boom of 2016.

Across Canada, new condo sales totalled just over 48,500 units in 2018, down 21 per cent from the almost 62,000 sales in 2017. The Greater Toronto Area accounted for nearly half of all 2018’s new condo sales in the major cities covered by Altus Group’s survey.

Copyright © Western Investor

BMO says Canadian housing activity stabilizing

Ephraim Vecina
Canadian Real Estate Wealth

Recent sales activity might indicate that the national market has already acclimated to the largest impacts of B-20, according to Bank of Montreal chief economist Doug Porter.

“Canadian housing activity appears to be broadly stabilizing, as there are signs that the market has largely digested the many policy changes,” Porter wrote in a report, as quoted by The Canadian Press.

“And while the regional divide is wide, fundamentals look to be a bit more supportive in the year ahead, with the policy tightening likely having run its course, job growth surprisingly solid and borrowing costs ebbing.”

This is despite the policy regime’s dampening effect, which was most visible in the country’s most in-demand markets. Earlier this month, Toronto-Dominion economists estimated that B-20 led to around 40,000 fewer transactions nationwide (on a year-over-year basis) during Q4 2018.

The BMO analysis came in the wake of the latest numbers from the Canadian Real Estate Association, which indicated that overall sales activity increased by 3.6% month-over-month in April.

Canada’s residential sales volume also enjoyed its first annual increase (at 4.2%) since December 2017. During the same time last year, activity declined to a seven-year low for the month.

The CREA report added that Toronto and Montreal numbers compensated for somewhat lacklustre activity in B.C. last month.

Supply also grew by 2.7% in April, following the 3.4% increase seen during the month before that. The national sales-to-new listings ratio was at 54.8%, from the 54.3% in March.

As for sale prices, the nationwide average crawled up by 0.3% year-over-year to reach $494,978. Excluding Toronto and Vancouver, the figure was just slightly over $391,000.

Copyright © 2019 Key Media Pty Ltd

Report reveals average amount lost per household in individual municipalities, and percentage of equity lost

Joannah Connolly
Western Investor

While falling home prices may be good news for those trying to get into the real estate market, they’re certainly not welcomed by the 63.7 per cent of Metro Vancouver adults who own their home.

A study released May 21 found that in the past year, from April 2018 to April 2019, $89.2 billion has been wiped off the total value of residential real estate across the Lower Mainland.

The study also analyzed individual municipalities to look at the average dollar amount of equity lost per household in each area, and the median percentage of equity lost.

Vancouver, which has the highest number of dwellings, saw a nearly 13 per cent decrease, for a total of $43.6 billion.

West Vancouver saw the highest percentage decrease, at 14.68 per cent, and the highest average dollar amount lost per household, at $451,385.

However, almost half of the nearly $90 billion in losses are outside Vancouver and West Vancouver.

The analysis was carried out by Paul Sullivan, senior partner at Burgess, Cawley, Sullivan & Associates Ltd., a commercial real estate and property tax appraisal firm. It was carried out on behalf of STEPUP, a group that advocates for the end of what it considers to be unfair and politically motivated taxation policy.

“While the government’s goal may indeed be to bottom out the housing market in an attempt to somehow address the complex issue of affordability, they are simply removing billions of dollars from the B.C. economy, to everyone’s detriment,” said Sullivan.

STEPUP is laying the blame for the lost equity at the provincial government’s door, saying that real estate taxes such as the school tax on $3m-plus homes and the speculation tax have caused the reduction in home values. It argued that this could have a devastating impact on those homeowners who relied on that equity for future retirement income. 

The group said in a news release, “Homeowners rely on the equity in their homes, usually their biggest investment, to fund things like home renovations, post-secondary education, senior care costs, and retirement. While MLAs, academics, and public sector workers rely on secure, taxpayer-funded pension plans, many British Columbians rely on the equity in their home to get them through retirement, and to leave something for their children. This equity loss leaves many seniors, who have tried to plan carefully, in jeopardy.”

It added, “The impact on the economy and jobs will likewise be devastating. A recent BC Real Estate Association analysis confirms that a 10 per cent equity loss translates to 26,000 jobs lost, $1.8B in lost retail sales, plus lost tax revenues to government.”

Many homeowners, especially those affected by the school tax on $3 million-plus homes, have protested against the recent slew of real estate taxation.

“We have been taxed out of our home,” said Point Grey resident Ric Pow. “My wife and I are lifelong residents of Vancouver, and have owned and lived in Point Grey for 33 years. We have been careful with our retirement funds, and own our home mortgage-free, which has been a cornerstone of our retirement plan. Our home, along with most others in David Eby’s riding, has lost 25 per cent of its value since the NDP took power.”

However, not everybody agrees that homeowners are necessarily entitled to the equity they have gained from the real estate price rises over the past few years – not even some realtors. Vancouver agent Barry Magee said, “For someone who thinks they are entitled to 20 per cent year over year equity increases, reality will soon set in that they are not real estate geniuses, they were accidental millionaires. If you didn’t cash in your lottery ticket at the right time, or bought your ticket at the wrong time, you’ve got no one to blame but yourself.”

Check out the home equity lost in your area in the infographic.

© Copyright 2019 Western Investor

Rental stress hits landlords and tenants

Charla Huber M?akola Group of Societies
Western Investor

Whether you are the one looking for a rental home or a landlord seeking a tenant for your rental home, it’s a stressful time, Charla Huber writes.

There is no denying that we are in a housing crisis and that is tough enough, but the fact that people are using this to their advantage to scam others out of their rent money is awful.

Whether you are the one looking for a rental home or a landlord seeking a tenant for your rental home, it’s a stressful time.

Landlords own rental properties as investments, and I can understand how welcoming a stranger into the basement suite in your home could feel like a gamble. Even if a rental investment is separate from your home, it would be stressful to ensure the tenants selected are respectful, take care of the home, pay rent on time and are good neighbours. For many homeowners, renting out suites is a necessity to help cover mortgage payments and allow someone to take the step into homeownership.

As a tenant, it’s also stressful in this market. With a low vacancy rate, even finding a place is a challenge, and then it can be a crapshoot finding a good landlord who is fair and respectful.

We’ve all heard horror stories of landlords and we’ve also heard horror stories of bad tenants. It’s these stories that perpetuate the fears of finding a new landlord or a new tenant.

Landlords who have had bad experiences and landlords who want to avoid them have been moving to short-term vacation rentals through sites such as Airbnb to avoid long-term tenants and the problems that can come along with them.

This switch has removed long-term rental homes and suites from the rental market and added to the housing shortage. Over the past couple of weeks, I’ve learned of people in our region who are renting short-term vacation rentals and then posting ads online for the same units as long-term rentals. They pose as potential landlords to garner a damage deposit and first month’s rent from an unsuspecting victim.

I am not sure how people can do this and live with themselves.

The victims of this fraud find out they’ve been scammed on the first day of the month when they show up to move in. It’s awful.

This scam is worrisome because someone can welcome you into the suite and show you around. It’s not as if you haven’t even seen the inside of the suite or are speaking with a landlord who is abroad. That was a common scam a few years ago.

Every situation has an exception to the rules, we’ve been told. That’s also what makes it hard to navigate these waters. We have all been told not to send money to people we don’t know or haven’t met, but I’ve spoken to a landlord who has had tenants pay a damage deposit and rent before moving to the province. It’s just so hard to tell who you can trust and who you can’t.

The media and law enforcement are always releasing information on new scams to help protect the public. I like to think I am up-to-date on these, but this scam made me stop and think that if I were in that position, they could have got me, too.

The current scam has the prospective tenant touring the home and meeting the “landlord” in person. Now, prospective tenants aren’t just worried if the landlord is a good one, they have to worry if the person is the real landlord.

I’ve been reading some tips that include asking to see a landlord’s driver’s licence and to see current hydro bills for the home in question. I know these aren’t foolproof, but it’s better than nothing. Also look on short-term vacation rental websites to see if the suite, condo or home is listed there.

Paying a damage deposit and first month’s rent is a lot of money for anyone, and to lose it to a fraudster would be damaging. It could set someone back significantly.

Scammers are always improving their techniques to keep scamming. The public is told what to do to protect themselves and this also informs the scammers on what they are going to face. Criminals are looking for a way to make a quick buck and, unfortunately, they are getting better and better at it.

Copyright © Western Investor

This invaluable checklist will make sure you don?t miss any red flags or opportunities

Mariko Baerg
REW

 If you’re in the market for a new home, there are a lot of things that you need to keep track of during your home searching journey. Purchasing a home is an endless checklist of questions that both you and your REALTOR® need the answers for so you can ensure you’ve done all your due diligence and are purchasing the right place for you. To make the process a little easier, here are eight essential questions that you and your agent should ask the listing agent at an open house before you can seriously consider buying. 

1. When was the roof/hot water tank/plumbing/electrical/etc. last done?

This is an important question to ask, because it will help to give you a good idea of the current condition of the property or building. By keeping a mental record of the maintenance and upgrades that have already been completed, it will allow you to estimate any future or immediate expenses upon ownership. While the listing agent may not know all these answers off the top of their head, it is at least good to ask the agent to follow up with the seller to get the answers. This information may also be obtained from an inspection, the depreciation report, or the property disclosure statement.

2. (If a strata unit) Is there a depreciation report for the building?

If the property that you’re interested is a strata unit such as a condo or townhouse, then you should ask if a recent depreciation report is available to review. It’s important to ask the seller’s agent this question, especially if you need to obtain a mortgage, because you may have more pushback from the lender without one. Furthermore, the depreciation report will provide you with information given by a third party about the state of the building and whether or not the contingency reserve fund (CRF) can keep up with the maintenance and upgrades required over time. It will show a variety of funding models, and estimate when special levies will be necessary and how much will be required of each owner.

3. (If strata) Are there any special levies coming up?

 

A special levy is an amount of money that needs to be paid by the owners to cover the cost of an upgrade or repair in the building or complex, such as the roof. If there’s a $5,000 bill coming up at the end of the year, you’ll definitely want to know about it. If you know that a special levy has already been approved, then your agent may be able to negotiate that the seller pays for it upon completion.

4. Is there a property disclosure statement available?

A property disclosure statement (PDS) provides a history of the property based on the seller’s knowledge. While not to be fully relied on, the PDS will provide you with a basic background of the history of the property. On this document, the seller will have answered a variety of yes or no questions such as “has there been any history of a leak?” or “has there ever been an insect infestation issue?” to the best of their knowledge. It is a common subject on a real estate contract; however, it is not required for all sellers to complete a property disclosure statement. For example, if a seller has never lived in the property because it is tenanted, then they most likely won’t want to put themselves on the line when it comes to answering questions that they’re not 100% sure about. If there is a PDS available, it typically means that the sellers have lived in the property and are therefore confident in their answers and being held liable for them.

5. Have the sellers bought a home already?

If the sellers have bought a property and need to be out in a week then the dates will be really important to them. You’ll also want to ask this because you’ll want to know whether the sellers are motivated to move or if they’re just testing out the market. This question will allow you to understand where the sellers are at in their own real estate process, and also assist you during the negotiation process to make your offer as attractive as possible so that the seller accepts. Note that while you can ask a listing agent this question, they may not be able to tell you without the consent of the seller. 

6. Do the sellers have fixed dates in mind?

Following on from #4, before you fall in love with a property, you’ll want to know whether or not it is possible for you to move in, based on your own time frame. For some sellers it is not always about the price, and if you can find out what the preferred dates are for the sellers, you may have an upper hand when it comes to offers. If you’re able to be flexible and accommodate those dates, there have been cases where a seller is willing to accept a lower price for more ideal dates. On the flip side, if your own dates are fixed and don’t work with the sellers’ dates, then you must be willing to make a higher bid to stand a chance of success. As with above, a listing agent may not be able to give you an answer without the consent of the seller

7. Have you received any offers on the property?

If you’re checking out a property and ask this question, the listing agent is going to tell you one of the following: we already have an accepted offer pending subject removal; we’re taking offers on a specific day; we’ve received offers and rejected them; or we’ve received no offers yet. If they have an accepted offer, they’re continuing to show the property with hopes for a backup offer in the case that the current offers collapses. If it’s a new listing, they are likely collecting offers on a specific day at a specific time in the hope of getting multiples offers. You’ll want to know whether you’re competing against no offers or five offers, because it’s likely that your offer will vary based on how many you’re competing against. If the listing has been on the market for a while, you may be lucky enough to be the only offer. However, in this case it’s important to ask if they’ve received any offers in the past and whether or not they’ve rejected them and why.

8. How long has the property been on the market?

A follow-up question to # 7, you’ll want to know how long the property has been on the market, for a couple of reasons. One is because if it’s a new listing, you may want to prepare yourself for a multiple-offer scenario. Alternatively, if the property has been on the market for a long time then you may be able to negotiate the price to your advantage. However, if it’s been on the market for a long time and you’re in a hot market then you may want to ask yourself why that is. Is there a stigma on the house? Is the property overpriced? Proceed with caution.

Buying a home is a lot of work, and it requires a lot of time spent searching for the right property and performing due diligence. For most people, purchasing a home is the largest investment you will ever make. It’s important that you ask the above questions to ensure that you know how to make your offer appealing to a seller. Furthermore, these questions will also make sure that you know exactly what you’re purchasing and are aware of additional costs for things like necessary upgrades that may come up in the near future. 

© 2019 REW. A Division of Glacier Media