Before we go any further, I have a project for you. Log onto Google or your favourite search engine and find out who regulates new homes sales people in Ontario. Specifically, new homes sales people who are not licensed under the Real Estate and Business Brokers Act.
Okay, I know you didn't bother even though I've just spent over an hour doing just that. The answer is: nobody. Of course there is consumer protection legislation that prohibits anyone from providing misleading or false information but, there is no regulation of unlicensed sales people working for a new home builder or developer.
Although there was a heavy lobby proposing licensing and regulation of these folks, the latest Real Estate and Business Brokers Act of 2002, specifically exempted " full-time salaried employees of new home builder or developer who act for or on behalf of his or her employer in respect of property situated in Ontario" from the legislative requirements. Incidentally, there are others exempt such as:
Now don't get me wrong. Here in the Collingwood area, I have generally found that the in-house developers sales people are very nice people who are hardworking, capable and honest. What bothers me though is that the consumer doesn't always realize or think about who that person is representing. Of course, it's the developer. The other thing that bugs me is that the legislation specifically says the exemption applies only to salaried employees yet I know for a fact that many in our area are paid on commission.
Under current legislation, or should I say the absence of it, there are no requirements for new homes or condos to be sold by licensed salespeople, and, there are no rules governing their conduct comparable to those in place governing licensed real estate salespeople. Licensed sales people are subject to strict regulatory requirements and specific Codes of Ethics that govern things like duty and loyalty to clients, disclosure requirements, insurance, ongoing education and so on. The penalties for non-compliance are severe.
Builder's in-house salespeople who are not licensed sell millions of dollars worth of new homes in Ontario each year with no mandatory education, training, insurance, regulations or supervision of a Broker. If there is no legislation, is there recourse?
People who are licensed in Ontario are referred to as Registrants and regulation is administered and enforced by the Real Estate Council of Ontario (RECO). Under the Act, registrants who work at new home sales sites MUST COMPLY with all of the requirements of the REBBA 2002 just as they would in the course of any other work they do in real estate. In this case, registrants working in new homes sales must:
Next time you visit a new home sales office, find out if the sales person is licensed or not. Find out your rights and obligations. Find out if you can bring in a REALTOR® to represent you. If not, be sure to do your own careful research about area property values, reputation, the builder's TARION warranty track record, neighbourhood issues, proposed neighbouring developments and hidden costs or fees. And please, please, please... don't sign anything until you have had a lawyer review the agreement first.
Real estate buyers have somehow been conditioned to think that buying a property listed under a power of sale arrangement represents an opportunity for a real deal.
I've noticed some REALTORS® capitalizing on this belief by advertising special websites to find out about these listings and, I've seen REALTORS® advertising the power of sale status right in their property ads for a listing. The truth is, it does make the phone ring. But should it?
While there are different remedies a lender can access when there is default on a mortgage loan, the most common one by far in Canada is where lenders exercise their right - that is their power, to sell a property when default has occurred. After following a strict prescribed set of rules about notice to the home owner and other interested parties, lenders can use their power to sell the property. Note, they do not take ownership.
What many buyers don't know is that the homeowner who defaulted is still responsible for any shortfall in the balance of the debt owing. That's right: A lender who sells a property for less than the outstanding debt, may sue the owner of the property for the shortfall.
And here's the rub: The owner of the property may sue the lender if they can prove that the sale was made for less than the value of the property.
So, the lender has an obligation to sell the property for fair market value or, they risk being sued by the homeowner. Unlike the homeowner, the lender does not have emotional discretion or motivation. The lender will have had property appraisals done and this will become the guideline for them as it is justifiable in a court of law. If a property is not then sold for that amount or more in a reasonable period of time, they may begin to slowly reduce the price in small increments until a sale occurs.
For a buyer, this means that while they may feel they got a "deal," chances of this are about the same, or sometimes worse than with an owner sold property.
Beyond price, there are other potential risks or downsides buyers should be aware of. Almost all lenders have their own schedules of terms that must be included in any Agreement of Purchase and Sale. For instance, in no cases will they give any warranties with respect to the condition of the property. Heck, they have usually not even seen it! They can also not include any chattels such as appliances or window coverings that may be present in the property as they have no claim on the ownership of those. They may be there on the closing date or maybe not. The schedule usually also includes something a bit scary for buyers and that is, a right of redemption by the owner. This means that at any time, the owner can bring the mortgage back into good standing in which case the sale is called off. In reality, this very rarely happens as the home owner would have mounting legal costs associated with the power of sale proceedings that they would also need to pay.
In any case, I would always recommend that potential buyers of these properties should speak with their lawyer about the contract. No one else, including a REALTOR®, is qualified to give you legal advice.
There are things that you can do to reduce your risk including have a home inspection, making enquiries with the municipality about outstanding work orders, zoning or pending special assessments, checking health unit records for information about wells and septic systems if it is a rural property, performing a search of title for surveys or other pertinent documents and so on. Your REALTOR® and lawyer should be your partner in this fact-finding mission.
When I meet new people who are considering a move to Collingwood and area, I like to give them what I call my "cook's tour." What people see driving through or visiting on vacation merely scratches the surface and never meets the core of what a town is really all about.
On just such a tour last week, I drove my clients past our water treatment plant. They thought this was a rather odd thing for me to show off and then, when I told them that Collingwood had one of the safest and best water supplies in the world, I saw them snicker to one another. I'm sure they were thinking that I was in full sales pitch mode. But then I explained.
Collingwood's Water Works was established way back in 1889 and later became a public utility in 1912. With our water supply coming from Georgian Bay, our old water treatment plants was basically comprised of a settlement process and chemical disinfection prior to pumping in to our water distribution system. That system worked for a very long time and likely because Georgian Bay is known to contain some of the purest water in the world.
Nonetheless, water borne parasites are endemic and in 1996, the town was gripped by an illness called cryptosporidium believed to potentially originate in water. The leaders of the day didn't want to take any chances and so a decision was made to build a state-of-the-art water treatment facility which was completed in 1998.
This plant uses ZeeWeed® membrane technology from a company called Zenon which utilizes ultra filtration methods to process the raw water without the use of chemicals for coagulation. Today, our Water Treatment Plant is the International training centre for Zenon Membrane water treatment facilities. To date, over 1500 people from cities around the world have visited our plant to look at the ZeeWeed® technology.
In the most recent Ministry of Environment inspection that examined every aspect o the water filtration plant and system, Collingwood scored a perfect 100 per cent. While I would hope every system in Ontario would need to meet a 100% score, the reality is that only about 200 of 710 water systems in Ontario receive a perfect score. That's only about 28% and that scares the heck out of me!
So, now you might understand why I like to show off our water treatment plant. And yes, we do have one of the best and safest water supplies in the world. Yet another reason to move to Collingwood!
Nothing fires up debate in our fair town of Collingwood better than a plan to tear down a heritage building. Every time the issue arises, entrenched camps form with flaring tempers, passionate appeals and political hand wringing. There have often been lines drawn in the sand: tear it down or, fix it and leave it. Neither seems right to me.
In the last few years, the issue has come up over and over again as the town struggles with the impact of enormous growth pressures. Many of the properties are public assets such as old schools and the question of maintenance, restoration falls to municipal shoulders.
Some people look at an old building and see an unsafe, derelict and ugly structure that is better torn down and replaced by something more modern and functional. Others see a piece of our cultural heritage that tells the story of our people and our town. Both sides can agree that when it's gone, it's gone forever.
One such property under threat at present is the old Connaught school on Napier Street which is also known as the Contact Centre or Collingwood Fitness Centre. This town owned structure is one of the last turn-of-the-century institutional buildings left and it features architecture that is never duplicated today. But it's more than that. If the walls could talk, it would peal with the laughter of children who arrived by horse and buggy rather than by bus. It would speak of foreboding teachers who comforted and protected 
children during two world wars and the great depression.
As a town owned fitness centre, this building has deteriorated due to a lack of maintenance and likely from the effects of humidity related to the indoor therapeutic pool. It has not been remotely self-sufficient and is heavily subsidized by tax dollars for the relatively few people who make use of the facility. On the other hand, it is an important public asset and there is a plan under foot to replace it with a more modern facility in a different location. Bu then what happens to the building?
The Collingwood heritage committee is looking at developing a statement of cultural heritage value for the property; potentially a first step in having it designated as a heritage site. I can see the battle lines being drawn already.
I am firmly on the side of protecting our heritage assets and believe that there are ways to satisfy all parties. Creative adaptive re-uses can be found for our heritage buildings that preserve and renew the structures at the same time giving them new life and new use. Let's hope everyone is starting to think about options for this building; not drawing firm lines in the sand.
This is one of those uncomfortable topics that most people prefer not to talk about but the reality is that it happens. Job loss, illness or other life events can suddenly interfere with the ability to pay a mortgage and it happens to the nicest people.
If times are tough at the moment and you are struggling to pay the bills because of a change in your life circumstances, there are things you can do and try that you may not be aware of.
First, consider talking over the situation with a trusted friend, family member or advisor to get some perspective. Sometimes they have an idea or an insight you may not have considered. Maybe a part-time job would help or cutting back on expenses or selling an asset other than your home.
Secondly, look into credit and budget counselling.
This type of service is offered by community agencies at low or no charge and is totally confidential. (Beware that there are businesses you might NOT want to deal with and I'd recommend you look at this site to find a reputable service.) Do this at the first sign of trouble so they can help you deal with the monetary issues before they get totally out of control. Often counsellors are able to assist you to consolidate your debts and, they may be able to negotiate with creditors for special or reduced payment terms.
When it comes to your mortgage, believe it when I say that the bank does not want to own your house nor do they want to sell it. They want to recover their investment plain and simple. So, make an appointment with your lender to discuss what options you might have such as restructuring the mortgage to reduce your monthly payments or even defer some at a critical time. This is also the time to learn about the banks options. For example, they could require that the property be sold through a process commonly known as "Power of Sale" but again, this is not what they want to do and it is an option of last resort.
If your mortgage is ensured with either Canada Mortgage and Housing or with Genworth, you might be surprised to know that they too are able to assist in this area. The Genworth website has a "Homeowner Assistance Evaluator" where you can go and complete a brief and anonymous questionnaire. At the end, they will suggest some solutions that may be available to you such as moving your arrears onto your principal owing, increasing your amortization thereby reducing your monthly payment, deferring payments in temporary situations or even arranging partial payments to get over a hump. CMHC offers much of the same according to their site so, if you have an insured mortgage (meaning you put down less than 20-25% of the purchase price when you purchased the home), then these are options to explore.
If you have tried everything else possible, then you have two options of last resort. One is to make a consumer proposal to your creditors surrounding repayment terms of your debts and the second, is to declare bankruptcy. In either case, you need to visit with a bankruptcy trustee who will assist you through the process.
When money worries start to pile up, they become all consuming and overwhelming. Know that you are not alone and help is available. No matter what, you will survive and the sun will rise again tomorrow. What you need now is to reach out and get help in arranging a plan that will deal with the issues at hand. All you need to do is make that first call.
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Passionate, driven, a bit zany and successful Broker in Ontario's favourite playground: South Georgian Bay. Serving buyers and sellers in Collingwood, Blue Mountain, Wasaga, Meaford and Clearview.
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