By Brian Madigan LL.B.
Overall there does not appear to be any difference in the markets over the week. Basically, the TSX is up 1%. If you were away on vacation and had no access to the news, you would say "no big deal".
So, we better look at the daily numbers
-515.55 Monday
-27.04 Tuesday
-349.30 Wednesday
+186.88 Thursday
+848.42 Friday
The markets worldwide exhibited a similar pattern, some more than others.
What changed? On Thursday there was a rumour than the US federal government would bailout the banking industry "bigtime", not just one bank here and there, but largely the entire industry. By Friday, came the confirmation. The rumour was true!
The gain on the TSX on Friday was the biggest gain 7.03% in one day, since the recovery following the stock market crash in October 1987.
The bailout will cost the government dearly. This will run in the range of something in excess of a trillion dollars. And, this follows the previous week's bailout of Fannie Mae and Freddie Mac at a cost of about one half trillion dollars. All in all, this financial crisis is costing a lot of money. In addition, there are large insurance companies including AIG which required funds. Within one month's time the US Treasury will have undertaken about $4 trillion dollars in additional expense.
The good news: it appears the the world financial crisis is over. The market has bottomed out, That now means no where but up from here, or at least that's the theory. The important matter is the the world knows the the US government will provide a stop-gap measure to bolster the market. The spillover effect will be the real estate market. It will take some time to work off excess supply in the US, but when we turn to the GTA:
1) there is no excess supply
2) there is no mortgage crisis
3) mortgage rates are attractive
4) financial institutions are well regulated and are financially strong
5) no bailouts are needed
As a result, we should experience growth from here. Present economic indicators would suggest that the GTA real estate market should be moving up from here not down.
Brian Madigan LL.B. Realtor
www.OntarioRealEstateSource.com
By Brian Madigan LL.B.
This isn't just a kids' expression, it's the law. But, there certainly are some rules when it comes to real estate.
The current controversy involves the "finding" of cartoons penned by the late Ben Wicks. Ben was a prolific editorial cartoonist and political satirist. While he was a great creative mind and spirit, he was not good at looking after his things. After a lifetime of producing humorous cartoons in volume, he really never cleaned up after himself. He never had a moment to properly organize his life's work.
So, he stored it just about everywhere, including his three children's homes. His son Vincent had about 3,000 of the cartoons. He sold his house to Mr. Harnett in 1992. Shortly thereafter, the new owner's brother Richard Harnett found the cartoons in a plastic garbage bag in the garage.
So, the legal question is "who owns the cartoons"?
Basically, Harnett kept the cartoons "under wrap" until after Ben Wicks passed away. Harnett then surfaced in 2001 and wished to make some money by printing them in a book. Now, if there is one law that book publishers know very well it is the law of copyright. And, they said that the Wicks family must agree, since they inherited the copyright from Ben when he died in 2000.
The Wicks family thought that Harnett should simply return the cartoons and perhaps be paid a small fee for "storage". But, Harnett says he owns them! Now, the Wicks family had to sue for their return. The cartoons would have a value of perhaps $75.000 to $100,000.
The trial Judge Thomas Lederer cautioned Harnett that "the onus is very high here to prove specific intent" to abandon the drawings, either expressly or by inference. This comment followed evidence that Ben stored his works in green plastic bags, ordinarily used for refuse.
The legal principles that apply in a case like this are rather straightforward:· A finder gets to keep the property against everyone other than the true owner
· The finder must have a legal right to be in the location where the find is made
· The true owner only loses his property if it can be clearly demonstrated that he intended to part with it, abandon it or give it away
So, hence the discussions about green plastic bags left in a garage at the time of moving.
There have been numerous Court rulings with respect to such cases. A finder who picked up some cash on the floor in a bank was allowed to keep it. The customer who lost it could not be located and it was found in the public part of the bank. In another case, a finder was obligated to turn the money over to the bank when it was found in the private office section of the bank where the public was ordinarily excluded, and he was present there, only upon invitation.
A finder who came across some $100,000 hidden in the ceiling of a house that he purchased was obligated to turn the money over to the Crown. It was determined that the former owner, a member of the Hell's Angels was the true owner, but that the money was in fact "proceeds of crime", so it could not be retained.
There are several cases that simply deal with money or assets overlooked and left behind by former owners. In most cases, the property is hidden, so it's not really "abandoned" in a legal sense.
What do you think about the Ben Wicks cartoons? Should they be returned to his estate?
Here are the reasons why they should:· The property was valuable
· The cartoons were stored
· They were not abandoned
· They were left behind by mistake
· Ben Wicks is the rightful owner
· Ben Wicks holds the copyright to their reproduction
And, if you must argue the "other side", here is the argument:· The property had limited to no value
· The cartoons were not stored
· They were placed in garbage bags
· They should have been thrown out
· The new owner of the house had the legal right to dispose of them
· The brother having identified them was able to retain them
It seems actually like a clever legal argument, however, there is a very significant issue in this particular case. These were original works in which Ben Wicks retained ownership of the copyright. That right cannot simply be left behind in a plastic bag, even if it is opaque green and many people use it for garbage. And, if you don't take it out to the curb, it's probably not abandoned.
The common law of "finders keepers" was never intended to deprive the true owner of his property. It was simply there to sort out who has the highest rights to the property if the true owner cannot be found or identified. Not much of an argument for Mr. Harnett, unless he can prove that Ben Wicks himself simply thought it was all garbage in the first place.
The trial Judge has reserved his decision and we should all know the fate of Ben's cartoons in a few weeks.
Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Coldwell Banker Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com
By Brian Madigan LL.B.
The TSX has magically plunged through the 20% drop which officially makes it a bear market.
In roughly the same time period, the real estate market in the GTA is off by 8.5%. So, by all accounts there ought to be deeper discounts in the stock market.
Right now, many real estate companies that are traded are available at substantial discounts to their book value. The TSX has lost 2 years of value. Interestingly enough, the same is true about the real estate market. By comparison, both are back to 2006 valuations.
The wildly volatile stock markets around the world suggest panic selling, and the corollary, of course, is excited buying. You need both sellers and buyers to form market. The buyers are not panicked but are happy to do business today at 2006 price levels.
There are two immediate matters on the horizon: a federal Canadian election in October. It won't make much difference, and a US Presidential election in November. It will be of great significance. It will have a calming effect on the US markets and the US economy will be poised for progress. It doesn't matter who wins. The United States will be the winner, and so will Canada.
Basically, there is progress from here. The stock market currently offers attractive returns if you are a real estate investor. Buy NOW! Or, at the very least over the next few weeks. You should be quite pleased with the results.
Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Coldwell Banker Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com
By Brian Madigan LL.B.
It was recently discovered that it is raining marble at the single best location for real estate in Canada, the intersection of King and Bay Streets in Toronto.
Canada's tallest and certainly one of its most prestigious office buildings is First Canadian Place. It is owned by Brookfield Properties and was named after its prime tenant, the Bank of Montreal.
The office tower was completed in 1974 by the developer Olympia and York. At that time O&Y was one of the largest developers in the world. It held massive real estate holdings in Toronto, New York and London. But, like some other big names at the time it bought a little too much property on credit. A worldwide recession was basically enough to turn most of its empire over to the banks and other financial institutions.
First Canadian Place was to be its flagship venture. It occupied the northwest corner of Toronto's financial district's best location King and Bay. The Toronto Dominion Bank was the first to redevelop its properties at the southwest corner. The Canadian Imperial Bank of Commerce followed suit at the southeast corner. Most recently, The Bank of Nova Scotia built its two new twin towers at the northeast corner. So, this intersection hosts billions and billions of dollars worth of real estate. And, the fringe area isn't too bad either, there's real gold in the windows of the Royal Bank Plaza located one block to the south.
All in all, this is truly what is meant by the expression "location, location, location".
1974 was a major year for building in Toronto. There was a building boom underway in all types of real estate. The Reichmans who owned O&Y wanted something really different for their best office tower. It was to be clad in marble. And, who knew more about marble than O&Y. The full original name of the company was Olympia and York Tile Company. This name was retained for the tile company but thought too cumbersome and too pedestrian for a world renown real estate developer.
In any event the Reichmans decided that their new tower was to be clad in the finest marble that one could obtain, the same soft Carrara marble that Michaelangelo used to sculpt his famous figures. This was good for sculptures and lasted for centuries but maybe its not quite so good as exterior cladding. It now seems shot after 33 years.
In 1974-1975 little seemed to be known about the use of this type of marble for exterior cladding. Nevertheless, for 33 years the marble certainly looked nice. Albeit, the 15th of May, 2007 was rather windy, so maybe it was no surprise that a 250 pound piece of marble flew off the 51st floor and plunged to the ground below (actually a rooftop, so maybe that doesn't count).
This great real estate location in Toronto is no longer pedestrian friendly, nor car friendly either. Right now, the area is closed off to traffic while inspectors thoroughly examine the entire building for flaws.
So, what about the liability here? Whose fault is it? Who is responsible? And, ultimately, who has to pay? Just finding the records related to a construction project that took place over 33 years ago is going to be hard enough.
However, let me speculate. The original parties probably no longer exist, from architects to engineering firms to the various contractors and their sub-trades. But, their respective insurers may still be around, and their policies did not have time limits in most cases. There were two types of polices "claims made" and "occurrence". If there were an old claims made policy in effect during construction it would respond to the claim within the policy period. So, by perhaps the end of 1975, if there were no claims, it would expire. But, an "occurrence" policy would respond at any time in the future. You just have to prove that the negligent act took place during construction.
Now, if you were the property manager for Brookfield Properties, wouldn't it be nice to have a copy of that old policy? And, they tell you to throw things out after 7 years!
Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Coldwell Banker Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com
Commercial and Residential Experience, specializing in complex transactions and real estate litigation
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