General

20 Apr

Federal Budget Housing Programs 2022

General

Posted by: Cathy Falzetta

Housing A Major Theme Today’s Federal Budget.

Affordable Housing Is A Key Theme In Federal Budget 2022

Today’s budget announced a $10 billion package of proposals intended to reduce the cost of housing in Canada (see box below). The fundamental problem is insufficient supply to meet the demands of a rapidly growing population base. Thanks to the federal government’s policy to rapidly increase immigration since 2015, new household formation has risen far faster than housing completions, both for rent and purchase. This excess demand has markedly pushed home prices to levels beyond average-income Canadians’ means.

The measures announced in today’s budget to increase housing construction, though welcome, are underwhelming. The Feds can control the construction of lower-cost housing through CMHC. Still, most home building is under the auspices of the municipal governments, where the red tape, zoning restrictions and delays abound. The federal government increased funds to help local governments address these issues, but NIMBY thinking still prevents increased housing density in many neighbourhoods.

The headline policy announcement for a two-year ban on foreign residential property purchases may sound reasonable. Still, according to Phil Soper, chief executive of Royal LePage, “It will have a negligible impact on home prices. We know from the pandemic period, when home prices escalated with virtually no foreign money, that our problem is made-in-Canada.”

According to the Financial Post, Soper added that measures like the tax-free savings account for young Canadians would be encouraged to help them achieve their dreams of homeownership in a typical real estate market. However, in a low-supply environment with pandemic-fuelled price gains, these measures would only add more demand without addressing the supply issue. Only a few first-time buyers would be able to take advantage of it.

The Home Buyers’ Bill of Rights that would end blind bidding and assures the right to a home inspection and transparent historical sales prices on title searches is also long overdue.

The First-Time Home Buyer Incentive has been extended to March 2025. This program has been a bust. Buyers do not want to share the equity in their homes with CMHC. The Feds are taking another kick at the can, “exploring options to make the program more flexible and responsive to the needs of first-time homebuyers, including single-led households.” To date, the limits on the program have made them useless in high-priced markets such as the GTA and the GVA.

Budget 2022 Measures To Improve Housing Affordability
Tax-Free Home Savings Account
  • Introduce the Tax-Free First Home Savings Account that would give prospective first-time home buyers the ability to save up to $40,000. Like an RRSP, contributions would be tax-deductible, and withdrawals to purchase a first home—including investment income—would be non-taxable, like a TFSA.
New Housing Accelerator Fund
  • With the target of creating 100,000 net new housing units over five years, proposes to provide $4 billion over five years, starting in 2022-23, to launch a new Housing Accelerator Fund that is flexible to the needs and realities of cities and communities, while providing them support such as an annual per-door incentive or up-front funding for investments in municipal housing planning and delivery processes that will speed up housing development.
 New Affordable Housing
  • To ensure that more affordable housing can be built quickly, Budget 2022 proposes to provide $1.5 billion over two years, starting in 2022-23, to extend the Rapid Housing Initiative. This new funding is expected to create at least 6,000 new affordable housing units, with at least 25% of funding going towards women-focused housing projects.
An Extended and More Flexible First-Time Home Buyer Incentive
  • Extension of the First-Time Home Buyer Incentive–which allows eligible first-time homebuyers to lower their borrowing costs by sharing the cost of buying a home with the government–to March 31, 2025. Explore options to make the program more flexible and responsive to the needs of first-time homebuyers, including single-led households.
A Ban on Foreign Investment in Canadian Housing
  • Proposes restrictions that would prohibit foreign commercial enterprises and people who are not Canadian citizens or permanent residents from acquiring non-recreational, residential property in Canada for a two-year period.
Property Flippers Pay Their Fair Share
  • Introduce new rules so that any person who sells a property they have held for less than 12 months would be subject to full taxation on their profits as business income, applying to residential properties sold on or after January 1, 2023. Exemptions would apply to Canadians who sell their home due to certain life circumstances, such as a death, disability, the birth of a child, a new job, or a divorce.
Rent-to-Own Projects
  • Provide $200 million in dedicated support under the existing Affordable Housing Innovation Fund. This will include $100 million to support non-profits, co-ops, developers, and rent-to-own companies building new rent-to-own units.
Home Buyers’ Bill of Rights
  • Bring forward a national plan to end blind bidding. Among other things, the Home Buyers’ Bill of Rights could also include ensuring a legal right to a home inspection and ensuring transparency on the history of sales prices on title searches.
Multigenerational Home Renovation Tax Credit
  • Provide up to $7,500 in support for constructing a secondary suite for a senior or an adult with a disability, starting in 2023.
Doubling the First-Time Home Buyers’ Tax Credit 
  • Double the First-Time Home Buyers’ Tax Credit amount to $10,000, providing up to $1,500 in direct support to home buyers, applying to homes purchased on or after January 1, 2022.
Co-Operative Housing Development
  • Reallocate funding of $500 million to a new Co-Operative Housing Development Program to expand co-op housing in Canada. Provide an additional $1 billion in loans to be reallocated from the Rental Construction Financing Initiative to support co-op housing projects.

There is also a laundry list of other programs to create additional affordable housing for Indigenous Peoples, Northern Communities, and vulnerable Canadians. Enhanced tax credits for renovations to allow seniors or disabled family members to move in; and for seniors to improve accessibility in their homes. As well, money is provided for long-term efforts to end homelessness.

To combat money laundering, the government said it would extend anti-money laundering and anti-terrorist financing requirements to all mortgage-lending businesses within the next year.

For greener housing initiatives, the government is planning to provide $150 million over five years starting this year to drive building code reform to focus on building low-carbon construction projects and $200 million over the same timeline for building retrofits large development projects.

Bottom Line

Nothing the federal government has done in today’s budget will make much of a difference in the housing market. What does make a difference is the spike in interest rates that is already in train. Fixed mortgage rates are up to around 4%, and variable mortgage rates have begun their ascent. There is still a record gap between the two, but the Bank of Canada will likely hike the policy rate by 50 bps next week. The Bank will probably hike interest rates at every meeting for the remainder of the year and continue into the first half of next year.

It is also noteworthy what Budget 2022 did not do. It did not address REITs or investment activity by domestic non-flipping purchasers. Some were expecting a rise in minimum downpayment on investor purchases or restrictions on using HELOCs for their funding.

Budget 2022 did not raise the cap of $1 million on insurable mortgages. It did not reinstate 30-year amortization, a favourite of the NDP. And, it did not follow the BC provincial government in allowing a “cooling-off” period after a bid has been accepted, technically giving would-be buyers more time to secure financing.

Please Note: The source of this article is from SherryCooper.com/category/articles/
28 Mar

Investment Properties

General

Posted by: Cathy Falzetta

Published by DLC Marketing Team

March 8, 2022

Investment Properties.

So, you are looking to purchase a second property! Congratulations! This is a great opportunity for you to expand your financial portfolio and ensure stability for the future. However, before you launch into this purchase there are a few things you should know, depending on which type of second property you are looking to purchase.

SECOND PROPERTY WITH INTENTION TO RENT

Buying a property for the purpose of renting it out to someone else comes with different qualifying criteria and mortgage product options than traditional home purchases. Before you look at purchasing a rental property, there are a few things to consider:

  1. The minimum down payment required is 20% of the purchase price, and the funds must come from your own savings; you cannot use a gift from someone else.
  2. Only a portion of the rental income can be used to qualify and determine how much you can afford to borrow. Some lenders will only allow you to use 50% of the income added to yours, while other lenders may allow up to 80% of the rental income and subtract your expenses.
  3. Interest rates usually have a premium when the mortgage is for a rental property versus a mortgage for a home someone intends on living in. The premium can be anywhere from 0.10% to 0.20% on a regular 5-year fixed rate.

Rental income from the property can be used to debt service the mortgage application, but do bear in mind that some lenders will have a minimum liquid net worth requirement outside of the property. Also, if you do eventually want to sell this property it will be subject to capital gains tax. Your accountant will be able to help you with that aspect if you do decide to sell in the future.

VACATION PROPERTY

While vacation properties are not always the perfect investment, they are popular options for people who want to get away from it all and build memories in! If you’re motivated to head down that road, buying a vacation property is essentially like purchasing a second home.

If you are considering buying a unit within a hotel as a vacation spot (known as “fractional ownership”), it is important to note that if there is any mention of using your vacation home to provide rental income it will be treated like an investment property.

SECONDARY PROPERTY

Most people are trained to stay out of debt and don’t tend to consider using the equity in their home to buy an investment property, but they haven’t realized the art of leveraging. If you’re using equity from your primary residence to buy a secondary property, keep in mind that the interest you’re using is tax deductible. Consider that you’re buying an appreciating asset, and if you put a real estate portfolio and a stock portfolio side-by-side, they don’t compare.

WHO IS A GOOD CANDIDATE?

You might be surprised to learn that you don’t need to make six figures to get in the game. Essentially, you just have to be someone who wants to be a little smarter with their down payment. Before taking on a secondary property remember that the minimum down payment is 5% of the purchase price – unless you are intending to rent, in which case it is 20% down.

When it comes to purchasing a secondary property, whether for investment or rental or vacation, it can be a great opportunity! As your mortgage broker I can work with to find the best solution for your unique needs.

AIR BNB ON YOUR MIND?

More and More Canadians are hopping on the short-term rental train as Air bnb’s popularity has sky-rocketed over the last few years. It’s not a bad way to earn extra money, but don’t forget there are a few things to consider:

  • Check strata/city bylaws
  • Contact your insurance provider to get correct coverage
  • Talk to your mortgage broker to see if a short-term income property can affect your approval
  • Consider tax implications, and talk to an accountant.

The more services you provide as a host, the greater the chance that your rental operation will be considered a business.

10 Feb

Your Perfect Home

General

Posted by: Cathy Falzetta

Find Your Perfect Home Type.

When it comes to finding your perfect home, there are so many more options for potential homeowners! From a single-family dwelling to a townhouse to a modular home, the choices are seemingly endless. But, before you start widening your search, let’s take a look at what makes these home types different – and which one is perfect for you!

Not surprisingly, almost half (53.6%) of Canadian households occupy the classic single-family detached house. In a distant second are condominiums with over a quarter of homeowners (27.9%) opting for this type of home (especially in metropolitan areas such as Toronto and Vancouver). Next come duplexes at 5.6%. The remaining homeowner choices are other housing options, such as semi-detached houses, mobile or modular homes and other single-attached dwellings such as urban infill homes, which come in at 12.9%.

So, which of these options is right for you!? Let’s take a look starting with the most popular option.

single-family detached

This is a single-family, stand-alone house that sits on its own lot and is the most common type of home you will find. As these are detached dwellings, they provide more privacy with less noise from neighbors. They also tend to be larger dwellings (complete with a yard!) which gives you the space and freedom to really make it your own. Due to the popularity of these homes, there is often high demand in them which can drive up selling prices. In some cases, this can lead to bidding wars and houses that sell for well over the asking price.

single-family, semi-detached

These homes are suitable for a single family and are typically attached to another house on one side. When compared to single-family detached homes, their semi-detached cousins are often more affordable to both buy and maintain. With this affordability does come somewhat less privacy and protection from noise due to the shared walls on one side. However, these homes typically have separate entrances and retain most of the privacy of a fully detached home.

duplex

These are considered structures with two single-family units on separate levels. These are great options for individuals looking to reduce home purchase and carrying costs – live in one unit, rent the second! This type of home also provides unique flexibility for older families, giving you the option to move adult children or aging parents into the second unit as needed.

As expected, these units offer less privacy than a single-family detached home and can sometimes have increased noise through the floor or ceiling.

townhouse or row house

Another popular home option are townhouses or ‘row houses’ as these are a row of single-family homes, which are connected on both sides to the next home (excluding the end unit, which is only connected on one side). Townhouses typically have private yards but, in some cases, it may be freehold or condo-style with shared ownership rights and responsibilities.

Due to the nature of these homes, they are typically more affordable than detached or semi-detached homes and also easier to maintain. Similarly, to duplexes however, these home types have less privacy and may have noise from shared walls. There are also monthly maintenance or strata fees to consider for the unit.

condominium

These are low- or high-rise buildings containing multiple apartment units. These units are individually owned, with shared ownership rights and responsibilities over the building and the common area. Condos are excellent starter homes for single adults, or couples, as they are affordable and require minimal maintenance. Some buildings even have shared amenities, such as a fitness center or swimming pool or party room.

Always check for these amenities and if you would be interested in using them. If not, why pay for them? In this case, you might be better off finding a condo with less amenities and lower strata fees. Additional considerations for condos are that these are typically much smaller than detached or semi-detached homes and there is generally more noise (depending on your buildings structure and soundproofing) and less privacy due to common areas.

modular or mobile home

Growing in popularity are modular homes, which are prefabricated homes delivered to a home-site for installation. These homes are owned by the individual, while the land it sits on could be rented or owned outright. Similar to modular homes, are mobile homes such as campers and RVs.

These types of homes are highly affordable and extremely flexible; if you relocate, you can sell the mobile home with the property or keep the home and relocate it! As these are less common and somewhat newer home types, there is less resale demand than other housing types and they are much smaller than a detached or even a condominium. If renting land in a mobile home community, there are also those costs to consider.

carriage house or urban infill

A carriage house is located on the periphery of a single-family detached house. Similarly, are urban infill homes which are a modern solution to crowded cities whereby existing space in established residential or commercial areas has been repurposed to maximize density and reduce urban sprawl.

These homes are unique in that they are often located in interesting, urban environments and have their own character when compared to other homes. They are also generally less expensive than a single-family detached home and some of the other types on our list. That said, there is potential for noise pollution if you are in a busy location. Due to the size, there is also limited inventory and limited or non-existent yard space. But if you’re looking for something affordable and unique, these are perfect for you!

Finding the right home to suit your needs means considering your lifestyle and budget now, as well as where you’ll be a few years down the road. Want more information or need help deciding the best option for you? Contact a Dominion Lending Centres Mortgage Professional to learn more about your options when it comes to buying and owning a home.

16 Nov

What’s Next After A Seperation?

Mortgage Tips

Posted by: Cathy Falzetta

What’s Next for your Home After a Separation?.

Growing up, most people dream about living a fairytale with a wonderful partner and a life of bliss. Unfortunately, real life is not always a fairytale and not every relationship lasts forever. In fact, latest statistics show that 38 percent of all marriages in Canada end in divorce.

Separating, whether through divorce or ending a common law relationship, is never an easy step. Losing someone close to you (whether for the better or not) is hard – but it doesn’t have to mean losing your home too. Most individuals who are going through a separation feel as though they are forced to sell their home and split the equity depending on your agreement, but there is another way.

spousal buy-outs

Spousal buy-outs are one of the mortgage industries best kept secrets and we want to blow the lid on this great alternative! While not everyone will want to remain in their home, many individuals may opt to remain rooted – especially for those with children who are already enrolled in school and happy in their neighborhood. This is where the Spousal Buy-Out Program comes in.

Backed by all three of Canada’s mortgage insurance providers (Canada Mortgage and Housing Corporation, Sagen™ and Canada Guaranty), this program is designed to allow one party to refinance the shared home up to 95 percent of its appraised value. In order to qualify, both you and your ex-partner must currently be on the deed to the property. As a one-time opportunity, the Spousal Buy-Out Program can also be used to pay off other debts outside the separation agreement, further assisting with the transition.

Now you may be thinking “I wish I could, but I can’t afford it”. Well, don’t sell yourself short just yet! We understand the cost of purchasing a home, whether outright or from your partner, can be high. Fortunately, The Spousal Buy-Out Program was designed to help YOU and mitigates these costs by allowing individuals to bring on a cosigner, such an existing family member or even a new partner, to assist.

If you are separating from your spouse or partner and would really like to hold onto your shared home, there are a few things you will need including:

1. AN APPRAISAL

An appraisal report will likely have been obtained to determine Equalization of Assets. However, in some cases the appraisal may not be acceptable to a lender unless it was originally ordered by a third party. The appraisal must also have been produced within 90 days (less with some lenders) to ensure accuracy. If the original report was previous to 90 days, a new one must be obtained.

2. A SIGNED SEPARATION AGREEMENT

To qualify the lender must be provided a signed copy of the separation agreement. The details of asset allocation must be clearly outlined.

3. AN AGREEMENT OF PURCHASE AND SALE

A standard agreement of sale indicating the new ownership.

4. AN EMPLOYMENT LETTER OR RECENT PAY STUB

This is required so the lender can verify your ability to manage your mortgage payments.

5. DEBT PAYOUT LIST

This is an optional one-time option for paying off additional debts outside of the separation agreement. The proceeds can only be used to buy out the other owner’s share of equity and/or to pay off joint debt as explicitly noted in the signed separation agreement.

Moving on in life can often be difficult, but this program allows you to maintain some of your routine and security by ensuring you – and your children – can remain in the home you love.

21 May

Debt Free Faster

General

Posted by: Cathy Falzetta

29 Apr

Rental Suites In Ontario

General

Posted by: Cathy Falzetta

Legal Basement Apartments in Ontario

Basement Apartments are growing in popularity in Ontario. For the homeowner, a basement apartment represents the opportunity to make a little extra money, pay off the mortgage quicker, or perhaps more room for extended family. Those getting started in life typically prefer basement apartments for their lower entry cost and lack of maintenance. But is the basement apartment you have a legal basement apartment? In this guide, we’ll break down the core components of a legal basement apartment, provide examples, and hopefully provide guidance about the legalities of basement apartments.

The Basement apartment plays a significant role in the Toronto Real Estate Market. In the GTA in 2020, 1430 houses were sold that advertised some form of “basement apartment”. However, of those 1430, only 303 (or 21%) advertised the basement apartment as “legal”. (Source: Toronto Regional Real Estate Board)

The basement apartment plays a significant role in the Toronto Leasing Market, with 6440 basement apartments reported leased in 2020. (Source: Toronto Regional Real Estate Board)

It’s pretty clear that, even amongst real estate professionals, there’s significant confusion regarding what constitutes a legal basement apartment. There’s good reason for this: the rules concerning basement apartments are complex. Multiple codes and regulations across different levels of government make Basement Apartments an immensely confusing topic!

Download our FREE Legal Basement Apartment Checklist

What is a Legal Basement Apartment

A Legal basement apartment in Ontario is a form of second dwelling unit that meets the Ontario Building Code Requirements for Second Units, The Ontario Fire Code, and local municipal zoning by-laws.

There’s a lot to unpack there. The First, and likely most important point to note about Basement apartments is that they are actually referred to as a “Second Unit” in the Ontario Building code. By omitting the location identifier of “Basement”, the code is able to address the minimum requirements for an additional dwelling space, regardless of the location within the home.

The Ontario Requirements for Second Units only apply in existing houses that are older than 5 years. If your house is less than 5 years old, it may be considered “new” and should comply to the new Ontario Building Code. For this, we’d recommend contacting an architect, planning official, and other professionals in the building industry.

However, if your house (or the house in which your basement apartment is located) is older than 5 years, the following will apply to you.

There are four standards that Second Units in Ontario must meet:

A note about “Retrofit”

When browsing listings on the MLS, one might typically see the advertisement (or disclaimer) that the basement apartment does (or does not) meet Fire Retrofit Requirements.

The term Retrofit (or Fire Retrofit) applies only to the Ontario Fire Code for second units. A basement apartment can meet retrofit requirements, but fail to meet the other standards, and still be deemed illegal. See Ontario Fire Code Retrofit Requirements.

Second Units and Zoning

Local Municipalities have the authority to allow or prohibit basement apartments (Second Units) in their zoning Code. Before undergoing the process of converting the Legal Basement Apartment, it’s important to ensure your local municipality allows them. This will vary by Municipality.

Toronto Zoning Requirements

Legal Basement apartments in Toronto are regulated under chapter 150 of the Toronto Zoning By-Law 569-2013.

In General:

  • Secondary Suites are allowed in Detached Homes, Semi-Detached, and Townhouses
  • Townhouses are typically only allowed one Secondary Suite
  • There are additional Parking, Entrance, and Building Requirements that may be more restrictive than Ontario Codes. Its best to read the chapter of the By-Law for more information.

Some Example Locations of Second Suites. Source: Ministry of Municipal Affairs and Housing

Requirements of a Legal Basement Apartment

Assuming you meet the applicable Zoning Codes for your area, you’ll likely wonder how to make a legal basement apartment.
Below are the building requirements for a legal basement apartment (Building older than 5 years).

1. General Building Restrictions

The Minimum size of a basement apartment varies depending on the number of bedrooms contained. However, the minimum size for a bachelor second unit, where eating, living, and sleeping areas are combined, is 145 square feet.

Measurements for these areas are to be taken from finished surfaces, and shall not include closets.

Minimum Size Requirements of Second Units. Source: MMAH

The Minimum Ceiling height for a Legal Basement Apartment is 1.95M.

In situations where the ceiling of the Second Unit has a slope (in, for example, attic Second Units), 50% of the floor area must have a ceiling height of 2.03M. This area excludes the floor area where ceilings are less than 1.4M high.

2. Legal Basement Apartment Window Requirements

Typically, the larger the unit, the bigger the windows required. Generally the following guidelines apply when the window is NOT being used as an exit:

  • Window size must be 5% of the floor area for the living and dining room
  • Window size must be 2.5% of the floor area for bedrooms
  • Windows are not required in Laundry, Kitchen, or bathrooms

3. Plumbing Requirements

Legal basement apartments must have:

  • Hot/Cold water
  • Sink
  • Kitchen Sink
  • Access to laundry (can be shared)

Legal basement apartments must have separate water shut-off valves from the main unit, and may need a backwater preventer valve (depending on the situation).
Legal basement apartments can exist in homes with septic service, but the current septic system must be able to support the additional load.

4. Heating and Cooling

Legal Second Units can share the furnace and ducts with the main unit. However, they must possess special smoke detectors (comply with UL268A) in the ducts that shut off the furnace in the event of an emergency.

Ventilation is required for the bathroom and kitchen of the second unit. Bathroom ventilation may be in the form of a window or an exhaust fan

5. Electrical

Legal Second Units must have a light switch in every room. Legal Basement Apartments must have a switch at the top and bottom of the stairs, if applicable.

The most important Electrical requirement of Legal Second Units is that they must be inspected and approved by a licensed Electrical Safety Authority (ESA) Electrician. The electrician will either deliver a certificate or place a special sticker on the main breaker panel for the unit.

6. Fire Safety

Legal Second Units must have 30 minutes of fire separation between itself and the main unit. This fire separation can be in the ceiling or the walls, depending on the orientation of the Second Unit.

Examples of Fire Separation between units. Source: MMAH

If the whole house has interconnected smoke alarms, the minimum required fire separation is reduced to 15 minutes.

As with homes, smoke alarms are required:

  • On every level of the home or unit
  • In the common area outside sleeping areas
  • In each bedroom
  • In any other shared or Common areas (Laundry, for example)
  • In the Furnace Room, if it is separate for the Secondary Unit

Smoke Alarm Location Requirements in Second Units. Source: MMAH

7. Exits

Legal Basement Apartments may have a common exit with the main dwelling unit only if the smoke alarms are interconnected.

All Legal Second Units must have a second means of escape, if the primary entrance is through the main unit. This is the most common violation of basement apartments. The diagram below illustrates an acceptable window exit.

Secondary Exits in Second Units. Source: MMAH

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Enter your email below to download our Legal Basement Apartment & Second Unit Checklist and follow along with this guide!

How Do I know if my Basement Apartment is Legal?

Owners of Legal Basement Apartments should possess and be able to present, upon demand, the following proof that the Basement Apartment is Legal:

  • Fire Certificate from Local Fire Authority (or Fire Chief)
  • ESA Certificate, or ESA Sticker
  • Building Permit Completion or Certificate of Compliance from the Municipal Building Department – In some Municipalities this could also be proof of Registration

If you’re planning to rent a basement apartment, it’s prudent to ask the landlord for all 3 proofs. Failure to present could mean you are renting an illegal basement apartment.

Illegal Basement Apartment

There are unfortunate occasions in which you might end up unknowingly renting an illegal basement apartment. Your safety and wellbeing should always be your number one priority. While low rent might seem attractive, is the couple hundred dollars per month you save worth risking your life where you sleep?

The first step if you discover that your basement apartment might be legal should be to talk to The Landlord. Most issues with basement apartments are minor, since homes operating basement apartments typically historically complied with outdated codes. The requirements to adjust for the new regulations are typically minor in nature.

How to Report an Illegal Basement Apartment

If your landlord is unable or unwilling to produce proof the basement apartment is legal, contact your local municipality for further assistance and to report it. The City or Town is required to investigate the complaint and, if found to be illegal, remedy the situation.

There are strict penalties on the Landlord for operating an illegal basement apartment. The Municipality can:

  • Force the Landlord to fix the issues
  • Force the Landlord to evict the Tenant and pay for a portion of the Moving Costs and difference in rent
  • Force the Landlord to remove features that designate it as a Second Unit.
  • In cases where the Tenant is injured due to the illegal unit, the Landlord will receive criminal charges and face jail time.

Illegal Basement Apartment and Tenant Rights

Landlord-Tenant Relationships are governed by the Residential Tenancies Act, 2006, Ontario. (RTA). The RTA dictates that the tenant shall receive rights and protections under the RTA if the unit has its own Kitchen and Bathroom facilities.

Even if your basement apartment is deemed “illegal”, the lease and protections granted thereunder are not automatically deemed null and void. The Tenant would still receive the same rights owed to them as any other residential tenant in Ontario.

The Cost of A Legal Basement Apartment

Renovations to convert a basement into a Legal Basement apartment can be costly. The Average 1 bedroom basement apartment in the GTA leased for $1,110 in 2020 (Source: Toronto Regional Real Estate Board). It’s important to financially plan to ensure that you will receive sufficient return on your investment.

In addition to renovation costs, or if you’re planning to purchase a home with a basement apartment, you will likely be responsible for the costs of inspection, certification, and renovation of the Basement Apartment. If the seller does not have proof of the legal basement apartment, some certified home inspectors might be able to give you a good idea.
**However, remember that a Home inspection report is not an adequate substitute for the required certification documentation.**

Conclusion

Legal Basement Apartments in Ontario is a tricky topic. While this guide provides a detailed look at Basement Apartments and their legalities, it is not, by any means, all encompassing.
If you have additional Questions, Contact ReaLawState with your Legal Basement Apartment questions.

About the Author: 

Baron Alloway is the Executive Director of and Sales Representative at ReaLawState. As a trained engineer, Baron brings with him an extensive by-the-book amount of knowledge to the Real Estate World. Contact Baron today and have him help you buy or sell your next home.
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12 Apr

Thunder Bay Housing Market 2021

General

Posted by: Cathy Falzetta

Thunder Bay Housing Market Outlook (2021)

December 1st, 2020

Thunder Bay housing market to favour sellers in 2021, prices expected to rise 10%

The Thunder Bay housing market is primed for another seller’s market in 2021, with 2020’s inventory challenges expected to continue. Low housing supply isn’t restricted to this region, with many Ontario housing markets experiencing low supply and rising prices. In lockstep with low inventory and growing demand, the price of single-detached homes in Thunder Bay increased to $278,381 in 2020 (Jan. 1 – Oct. 31) compared to 2019’s average price of $259,553 (Jan. 1 – Dec. 31). Meanwhile, average condo price increased to $275,602 in 2020, up from $250,116 in 2019. RE/MAX expects seller’s market conditions to persist in 2021, with a 10% increase in Thunder Bay home prices, to an average of $273,308.

Thunder Bay currently has about two months of inventory, which should hold steady in 2021. Days on market are expected to decline next year.

Thunder Bay housing market outlook 2021

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Who’s driving the Thunder Bay housing market?

First-time homebuyers, typically young couples, are expected to continue driving Thunder Bay’s housing market forward in 2021, with single-detached homes remaining in highest demand. Young couples will also drive move-up buyer activity next year – a segment that has been highly challenged by low supply and rising prices.

Thunder Bay has experienced rising demand for semi-rural properties, which has been a common trend across many Canadian housing markets as well as regions abroad, as homebuyers seek more square footage and green space outside of urban areas in the wake of COVID-19. Factors impacting this broader trend include the rise in remote work, the desire for more space and less density, as well as lower housing prices.

Activity in Thunder Bay’s luxury homes segment held steady in 2020, thanks to stable supply and demand. These conditions are expected to continue in 2021.

Thunder Bay’s hottest neighbourhoods

The three neighbourhoods in highest demand are Thunder Bay’s Northwood, Grandview and Shuniah neighbourhood in the north end, registering the highest number of sales in 2020. Buyers can expect these areas to remain hot sellers in 2021, thanks to their attractive price point.

Thunder Bay new-home construction

On the new-construction front, housing starts are generally slow in Thunder Bay, with new-home inventory and construction falling short of current demand, as is the case with resale properties. Price of brand-new homes are generally higher than their resale counterparts, and like other property segments, is expected to rise in the future.

Canadian housing market in 2021

Canadians are on the move. RE/MAX isn’t calling this an “exodus,” but the re-location trend across the Canadian housing market is real, and it’s just one focus of the RE/MAX 2021 Housing Market Outlook Report. RE/MAX Canada anticipates healthy housing price growth at the national level, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing and widespread housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.

Due to these factors, the 2021 RE/MAX 2021 outlook for average residential prices is an estimate of +4% to +6% nation-wide. Here’s the regional break-down:

Canadian Housing Market Outlook REMAX 2021 Data Table

CLICK TO DOWNLOAD THE DATA TABLE

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Additional report findings include:

  • 35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
  • 45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
  • Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
  • 52% of Canadians believe real estate will remain one of the best investment options in 2021

“We’ve seen a lot of anecdotal evidence since the summer that households are considering significant lifestyle changes by relocating to less-dense cities and neighbourhoods,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “This has sparked unprecedented sales this year in suburban and rural parts of Canada and we expect this trend to continue in 2021.”

PR & Content Manager | RE/MAX Canada

Lydia McNutt is an award-winning editor, with more than two decades of experience specializing in Canadian real estate. At RE/MAX, Lydia is responsible for developing consumer-facing content while promoting the RE/MAX brand through housing market reports and market news, as featured on the RE/MAX Canada blog and social media channels. Lydia has been published nationally on topics ranging from real estate, architecture, decor and design, to finance, business, technology, entertainment and lifestyle. When she’s not head-down at her writing desk, Lydia is busy “momming” in Oakville, Ontario, where she lives with her husband, two kids and their chocolate lab, Betty. Email Lydia at lmcnutt@remaxintegra.com

30 Mar

What will the real estate industry look like in 2021?

General

Posted by: Cathy Falzetta

A question many people are wondering about when it come to the current sellers market. Will price tags continue to get over asking and how will Covid continue to impact inventory! A great article from our partners at FCT!

What will the real estate industry look like in 2021?

Published by FCT

January 22, 2021
What will the real estate industry look like in 2021?.
If there is one word that defines life in 2021, that word is change. How much and for how long is uncertain. And while some changes may be temporary, many may be here to stay.

How will all of this change impact the real estate industry? Some key trends have emerged that bear closer scrutiny.

RESIDENTIAL REAL ESTATE
With more and more people working from home and the potential of many continuing to do so in a post-pandemic world, there is an increased need for more space. Enter suburbanization. Residents living in major urban centers are steadily moving to suburbia. Will suburbs become 18-hour cities? Who knows? One thing is certain, living cheek to jowl with thousands of other people is no longer a viable option for many.

OFFICE SPACE
For a while now, open-concept office space was the trend. That trend is now dead. While it allowed companies to downsize to smaller properties since less space was needed, after COVID-19, once workers begin to return to the office, we may see a return to traditional working spaces and the need for larger office buildings to accommodate them.

RETAIL SPACE
Bricks and mortar businesses have been hit hard and have seen a sharp decline in sales. Many big-name brands that previously anchored large retail spaces have permanently shut their doors. What does this mean for shopping malls? Will they survive? Experts suggest that to do so, they will have to be creative and embrace change. Think more medical clinics and multi-family residential homes rather than clothing stores with multi-user fitting rooms.

PROPTECH (PROPERTY TECHNOLOGY)
The real estate industry was on the brink of widely embracing proptech before the pandemic hit. That acceptance has accelerated like a rocket. In order to stay engaged with customers, service their needs and remain in business, companies have been forced to innovate in order to survive. This embrace of innovation will help to stabilize many sectors once the pandemic is behind us.