Tax Fairness for Real Estate Professionals

oreadoclogo

Dear Board Leaders,

Today, MPP Bob Bailey will bring forward his Private Members Bill for Second Reading debate – Bill 38, the Tax Fairness for Real Estate Professionals Act, 2018.

If passed, this Bill would permit personal real estate corporations (PRECs) in Ontario.

I’m proud to say that we will have over 60 REALTORS® in the gallery today at Queen’s Park supporting this Bill. Thank you to everyone who took time out of their busy schedules to support your fellow REALTORS®.

A similar Bill to Bill 38 has been tabled in the Ontario Legislature before. MPP Todd Smith was the original champion of this issue in the 40th and 41st Parliaments.

With support of MPPs from all three Parties, Bill 104 passed Second Reading unanimously. Unfortunately, the Bill did not get to Third Reading before the election.

If Bill 38 passes today, we will be one step closer to PRECs in Ontario. It will still need to go through Committee and then back into the Legislature for Third Reading before it can become law.

We need your help to make that happen. Here’s two things you can do right now:

  1. Go to RealtorTaxFairness.ca and share one of the social media posts at the bottom of the page acknowledging MPP Bob Bailey and MPP Todd Smith.

 

  1. Attend our Ontario REALTOR® Party Conference. We are going to be asking MPPs for their support on Bill 38. If you haven’t already register for the conference here – https://rebportal.orea.com/

 

Thank you and email me with any questions.

Matthew Thornton

Vice President, Public Relations & Communications
Ontario Real Estate Association

Ask the Registrar: Legalization of Cannabis

download

Ask the Registrar: Legalization of Cannabis

 

Soon it will be legal to grow up to four marijuana plants in Ontario residences. How do I handle trades involving a home that has had this number of plants grown within it?

 

On October 17, 2018, it will become legal to purchase and grow small quantities of marijuana in Ontario. Nonetheless, the prospect of purchasing a home that has been used to grow marijuana may continue to provoke an emotional response from some buyers. As such, it’s important to understand whether this is a concern for your client and to take appropriate steps to protect their interests.

 

When representing sellers, you must understand what information must be disclosed versus what information may be disclosed, at the seller’s discretion. As their representative, your role is to understand and explain the issue to assist your clients in making an informed decision.

 

Please keep in mind, cannabis legalization does not impact the laws that dictate when disclosure is required. The information below outlines the existing requirements. On the eve of legalization of cannabis in Canada, it is fundamental that registrants understand these concepts.

 

Stigmas vs. defects

 

To understand the disclosure requirements, it’s important to remember the distinction between stigmas that relate to a home’s past and physical defects in the property.

 

Stigmas

 

A stigma is a non-physical attribute of a property that may trigger a negative emotional or psychological response in a potential buyer. However, the events or circumstances that prompt the response do not necessarily have any bearing on the function or appearance of the property. Examples include a home that was previously occupied by a notorious criminal, or, a home where a suicide occurred.

 

What facts may constitute a stigma will vary from buyer to buyer, depending on their sensitivity regarding certain issues. For example, one buyer may believe a home where a single marijuana plant was legally grown is stigmatized, while another buyer may have no concern whatsoever. In Ontario, there is no requirement on sellers to disclose the existence of facts that may elicit stigmas in buyers. However, the buyer’s representative can make specific inquiries about issues that are important to their client.

 

For more information about stigma, see this Registrar’s Bulletin.

 

Defects

 

A defect, on the other hand, is a physical attribute of the property. Physical defects fall into two broad categories:

  • Patent defects are readily visible or can be identified during a home inspection that does not involve making holes in the structure or removing access panels. For example, damage or visible stains may suggest a water leak from the roof or a bathroom overhead. There is no requirement for the seller to disclose patent defects.
  • Latent defects are not apparent and may not be easily discoverable, even by a home inspector or other expert. If the latent defect poses a serious risk to the health and safety for those who live in the home, it must be disclosed by the seller. Examples of latent defects that must be disclosed include structural problems that render the residence dangerous to occupy or, wear or damage to utility systems that places occupants at risk.

Marijuana and property damage

 

It’s important to understand the difference between patent and latent defects as it applies to cannabis cultivation.  Growing marijuana inside a dwelling may not necessarily cause physical damage to a property. If there is no physical damage or if the damage has been fully remediated, and therefore free of any defect, the home’s history is still a potential cause for stigma if it is a concern for the buyer.

 

Working with sellers

 

Before listing a property, it’s important to discuss with the seller any issues with the property that may be relevant to the sale.

 

If growing marijuana has damaged the property to the point that the home is unsafe to live in, and the defect is not obvious to the naked eye, it’s a latent defect that must be disclosed.

 

The issue is less clear-cut if the property was previously used to grow marijuana but is not damaged in any way. Ontario’s Courts have determined that sellers don’t have to proactively disclose the history of their home during their ownership of it, even if the property carries a stigma. However, there’s nothing to stop a buyer from trying to sue the seller for failing to disclose the stigma. Even if the lawsuit is unlikely to succeed, the seller could still face a long, costly legal proceeding.

 

As a listing sales representative you should talk to your seller client about the trade-offs of proactively disclosing the home’s history to potential buyers. Keep in mind that a seller may not know what happened in their home before they owned it.

 

A buyer’s sales representative may also specifically ask whether the home has ever been used to grow marijuana. In this case, there are two options: you may either answer truthfully, or decline to answer the question and direct the buyer to conduct their own research. The choice of these options lies exclusively with the seller.

 

Even if you, as a sales representative, are not comfortable with the seller’s disclosure strategy you must respect and follow their direction. In this event, your options are to comply with the seller’s wishes, or, to decline to continue working with the seller and step away from the trade. Under no circumstances can you disclose a stigma without the seller’s consent.

 

Working with buyers

 

When you’re representing a buyer, it’s your responsibility to work with your client to ensure the property is suited to their needs. A key component of that is a clear understanding of what they want and need in a property, and what they absolutely do not want.

 

During these conversations, if the buyer has made it clear that they do not want to purchase a home where marijuana has been grown, there are several actions you should take to ensure their wishes are met.

 

First, when the buyer is interested in a property, you can make direct inquiries to the seller’s representative. As discussed in the “working with sellers” section, the seller’s representative may opt to answer the inquiry, or, direct you to conduct your own research.

 

Second, no matter what response the seller provides, it’s advisable to conduct independent research into the property’s past. This could include a simple online search of the address, or obtaining other public records regarding the property. Many municipalities or police services maintain registries of residences that have been used to grow marijuana illegally. However, it is likely this research will uncover only major grow-ops, not the small-scale growing of a few marijuana plants.

 

Third, you may try to include in your offer a seller’s warranty that the home was not used to grow marijuana. Typically, and for obvious reasons, these types of warranties should only cover the period of the seller’s ownership and occupancy. Depending on the language of the contract provision, if the seller refuses to agree with the warranty, it may indicate that the property was used as a marijuana grow-op, or, it may simply mean that the seller doesn’t know what went on in the property before they bought it.  In either case, you will need to have further discussions with your buyer client.

 

Conclusion

 

Although the legalization of cannabis does not significantly alter the existing disclosure requirements, many buyers and sellers will have questions about what this means for them. All registrants should understand the new legislation, as well as the existing rules around defects and stigmas, and be prepared to discuss the matter with their clients.
For more information about marijuana legalization in Ontario, please refer to this page from the Ontario government.

 

 

 

 

Learn about the future of RECO: Strategic Plan & Town Hall Invitation

77

 

Check out RECO’s Strategic Plan for the next five years & have your say at a Town Hall event

 

With a real estate industry that is changing faster than ever, RECO is launching its five-year Strategic Plan for 2019-2023: Modern Regulation for a Dynamic Marketplace. It’s a roadmap for modernizing the strong real estate regulation regime that already exists in Ontario.

 

What does the Strategic Plan mean for the industry?

Creating a well-informed marketplace is one of RECO’s most important functions because we cannot oversee every transaction. The key to accomplishing this goal is enhancing our outreach efforts to both consumers and the industry. RECO will enhance its engagement with the industry to raise the bar for professionalism and consumer protection, while informing buyers and sellers about their rights and responsibilities in a transaction.

 

Click here to check out RECO’s 2019-2023 Strategic Plan: Modern Regulation for a Dynamic Marketplace.

 

The commitments made within the Strategic Plan will form part of the discussion at the upcoming Town Hall event series. We hope you’ll join us at an event near you.

 

Invitation to attend RECO’s Town Hall events

 

RECO will be touring the province this fall for a series of interactive and lively Town Hall events with Ontario’s real estate leaders and we hope you will attend.

 

Topics will include:

  • Improving education for new and existing registrants;
  • Modernizing the rules for real estate regulation; and
  • Finding ways RECO and the industry can work together to raise the bar for professionalism.

RECO’s CEO and Registrar will provide brief introductions to topics, but the bulk of the time will be devoted to you; we want to hear what you have to say, and answer your questions.

 

Each local board or association is invited to send four members, representing both the board and staff. If you are a Broker of Record, you are welcome bring three additional members of your staff.

 

If you haven’t registered already, please review the meeting locations below and RSVP for the one you’d like to attend.

 

 

 

THUNDER BAY

Victoria Inn Thunder Bay

October 23, 2018 from 9:00 – 12:00 p.m.

Registration closes on October 12, 2018

Click here to register for Thunder Bay

 

——-

 

OTTAWA

Ottawa Conference and Event Centre

October 30, 2018 from 9:00 – 12:00 p.m.

Registration closes on October 19, 2018

Click here to register for Ottawa

 

——-

ORILLIA

The Mariposa Inn & Conference Centre

November 8, 2018 from 9:00 – 12:00 p.m.

Registration closes on October 26, 2018

Click here to register for Orillia

 

——-

 

WINDSOR

St. Clair College Centre for the Arts

November 21, 2018 from 9:00 – 12:00 p.m.

Registration closes on November 9, 2018

Click here to register for Windsor

 

——-

AJAX

Ajax Convention Centre

November 29, 2018 from 9:00 – 12:00 p.m.

 Registration closes on November 19, 2017

Click here to register for Ajax

 

——-

VAUGHAN

Toscana Banquet & Conference Centre

December 5, 2018 from 9:00 – 12:00 p.m.

Registration closes on November 26, 2018

Click here to register for Vaughan

 

 

 

 

 

 

Bill 39, Tax Fairness for Real Estate Professionals Act – 2nd Reading

fdf

 

Hi Everyone:

 

I’m excited to inform you that MPP Bob Bailey (Sarnia-Lambton) has reintroduced Todd Smith’s Private Members Bill the Tax Fairness for Real Estate Professionals Act, 2018. If passed, this bill would permit personal real estate corporations in Ontario.

 

Mr. Bailey is brining the bill forward for 2nd reading debate on Thursday October 18th at roughly 1:30pm.

 

OREA is inviting REALTORS® to attend the 2nd reading debate and sit in the public galleries to show our support for this important bill.

 

We need Boards who can to send representatives to Toronto to attend the debate.

 

OREA will host/and pay for lunch for all attendees at the Legislature. Boards would just have to cover the costs of travel to and from Toronto.

 

If you are able to send some representatives, please RSVP to Kris@orea.com  Kris Fortamaris. Include their names and contact info so we can organize the day.

 

It should be a great afternoon – one more step towards permitting PRECs for all REALTORS®!, I hope your team can attend!

BREAKING: Sold data coming to Realtor.ca

Sold-Sign-1254-1074x483

CREA’s Board of Directors has voted to add sold and historical data to the property listings on Realtor.ca without the need for a login.

In a message to real estate boards across the country, CREA says the move comes “in order to meet consumer demand and at the request of Realtors and boards.”

It says, “In addition to responding to requests from members, this will ensure we continue to offer leading edge services on the best real estate website in Canada.”

A Competition Tribunal decision in July 2016 found that by not including sold and other data in its VOW feed to members, TREB had engaged in anti-competitive acts. An appeal court upheld the decision and on Aug. 23 of this year, the Supreme Court of Canada announced that it would not hear TREB’s appeal. CREA supported TREB at the tribunal and had intervenor status in the proceedings.

TREB is now supplying the disputed data to its member VOWs.

CREA media relations officer Pierre Leduc says that before the sold data can be displayed on Realtor.ca, each real estate board must request that the information be added. CREA will then work with the boards, the provincial associations and the regulators to ensure that it complies with all laws and regulations.

“We’ll have to check with the boards to see what historic sold data they have access to, and how far back that data will go,” says Leduc.

Only historic sold prices will be posted and not pending solds, he says. Pending solds were part of the Competition Tribunal order for VOWs, but consumers and Realtors are concerned about privacy issues on deals that have yet to close.

Leduc says CREA hopes to have the sold data rolled out on Realtor.ca as soon as possible.

 

https://www.remonline.com/breaking-sold-data-coming-to-realtor-ca/?utm_source=REM+Inbox+Update&utm_campaign=8d2a24c7af-EMAIL_CAMPAIGN_2018_10_03_08_21&utm_medium=email&utm_term=0_3f4c7c7b65-8d2a24c7af-62545625