Condominium Disputes Condominium Law Reforms The tools for resolving disputes under the Condominium Act, 1998 (the “Condo Act”) were mandatory private mediation-arbitration and the courts. The mechanisms provided for under the Condo Act were time consuming and costly. A review of the Condo Act also revealed a power imbalance during disputes as between condo boards and owners. Bill 106, the Protective Condominium Owners Act, 2015, was passed in 2015. It amended the Condo Act to address dispute resolution and enabled the establishment of a condominium authority that would provide more expedient and cost efficient dispute resolution mechanisms. As we stated in a previous blog, the government introduced the new authority, the Condominium Authority of Ontario (“CAO”), in Toronto to oversee and assist with issues or complaints regarding condominiums. The goal of the authority is to provide a faster and more cost efficient dispute mechanism process. New Online Tribunal The CAO launched its first online tribunal service last week in order to “help resolve the complaints that arise in 10,000 condo corporations” more efficiently. Its mandate is to help settle and decide condo related disputes in Ontario. The Tribunal is known as the Condominium Authority Tribunal (“CAT”) and provides access to mediators and adjudicators, with an initial fee of $25 for the first step in its process. As of November 1, CAT will only be addressing condo record access issues, but will expand as the months go on. Currently they have two disputes that have been sent to the online tribunal. The online tribunal will work in three phases: Negotiation – this will cost $25 and will give users the opportunity to try to resolve the dispute as amongst themselves; Mediation – this will cost $50 and a tribunal mediator will get involved to help resolve the matter; and Adjudication – this will cost $125 and a tribunal member, different from the mediator, will decide how to resolve the dispute. As mentioned in our previous blogs, the CAO will be providing training and education to condo board members and managers and will require that all condo corporations be registered with the CAO by December 31st of this year. Currently, they only have 2,700 condo corporations registered to date. By: Marly Peikes, Student-at-Law “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Real EstateNovember 15, 2017June 17, 2020
The Paradise Papers: The Risks of Offshore Tax Havens On November 5, 2017, another leak of offshore tax haven information, dubbed the “Paradise Papers”, was disclosed by the International Consortium of Investigative Journalists (ICIJ). As a result of the leak of confidential records comprising the Paradise Papers, a number of the world’s elite have been identified as having offshore accounts and connections including, Queen Elizabeth II, Stephen Bronfman, (Prime Minister Justin Trudeau’s chief fundraiser), Wilbur Ross (U.S. President Donald Trump’s Commerce Secretary), Russian oligarchs and former Canadian Prime Ministers Brian Mulroney, Paul Martin, and Jean Chretien. Last year, the ICIJ released the Panama Papers, for which they won the Pulitzer Prize. The Panama Papers was a leak of more than 11.5 million records and for many, was the first indication of the extent and scope of offshore tax sheltering activity. In a previous blog, we identified some aspects of the Canadian connection to the Panama Papers. The Paradise Papers reveal the names of more than 3,000 Canadian companies, trusts, foundations and individuals who use offshore accounts in tax haven jurisdictions. In the 2017 Federal Budget, the Canada Revenue Agency (CRA) was allocated an additional billion dollars in funding to assist with its tax compliance and enforcement activities. The release of the Paradise Papers will only add to the 990 ongoing CRA audits and 42 criminal investigations that are underway and will likely result in an intensification of CRA’s enforcement efforts. Offshore activities in and of themselves are not illegal. When assets are held offshore, whether in bank or investment accounts, partnerships, trusts or corporations, and income from those assets is not declared in Canada or is underreported, this can constitute tax evasion. The consequences of tax evasion can include the following: Assessed penalties and interest on unpaid amounts Interest on the penalties incurred Administrative penalty of 50% of the income tax avoided Criminal penalties (an additional penalty of up to 200% of the taxes evaded and possible jail time) Third party civil penalties can also apply to any persons, including tax advisers and tax promoters, found to have intentionally engaged in or counselled tax evasion The CRA has a number of measures to crack down on international tax evasion and avoidance, including domestic and international partnerships with entities such as the Organisation for Economic Co-operation and Development and the Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC), a collaboration of 37 tax administrations which exchange information for the purpose of developing more effective and efficient ways to deal with tax avoidance. As a consequence of the CRA’s enforcement activities, approximately $25 billion in tax revenue representing unpaid taxes, interest, and penalties have been recovered to date. Notwithstanding the CRA’s enforcement efforts, the CBC reports that the CRA does not have a mechanism to track the billions in potentially lost tax revenues. In reply to a request submitted by Parliamentary Budget Officer Kevin Page for an estimate of uncollected tax revenue, CRA Commissioner Andrew Treusch sent a letter admitting that the CRA “does not generate information or data on the tax gap”. What does this mean for the future of tax in Canada? The Canadian tax system has recently been at the forefront of the news. From the proposed tax measures targeting privately held corporations released on July 18, 2017, which were the subject of intense public debate and resulted in subsequent announcements from the Minister of Finance, to the ethics controversy surrounding the Minister of Finance’s conflict of interest in his failure to divest himself of his personally held assets, to the release of the Panama Papers and the Paradise Papers, there appears to be the perception that the tax system is designed to benefit the most wealthy members of society. Given the Liberal Government’s stated plan to grow and strengthen the middle class, and given the tone of the discourse surrounding the proposed tax changes released earlier this year, the Paradise Papers will likely only strengthen the resolve of the Minister of Finance to increase scrutiny on the tax system with the aim of closing loopholes and tightening tax compliance measures. The full effect of these measures will likely not be known until the Federal Government releases its Budget in the spring. It is a well-established principle of tax law that taxpayers are entitled to arrange their affairs to minimize tax. There are many valid and legal strategies which can be implemented by Canadian taxpayers through effective tax planning. If you have a tax or estate planning question, please contact a tax lawyer to arrange a consultation. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, TaxNovember 13, 2017June 17, 2020
CRA Investigating “Shadow Flipping” of Toronto Condos Due to the booming real estate market in Canada over the past year, the Canada Revenue Agency (“CRA”) is scrutinizing the practice of “shadow flipping” or “assignment sales”. This is a sales technique which involves the purchase of pre-built condos from a developer and subsequent sale to other buyers at higher prices before possession of the condo has been taken. By relying on an “assignment clause” in the agreement of purchase and sale, the potential purchaser can transfer or sell his interest in the property to another purchaser before the closing date at a profit. This practice is very controversial and has drastically affected the housing market, contributing to the increase in home prices, particularly in Toronto and Vancouver, with the original sellers receiving less for their property, and the final purchaser potentially paying an inflated price for the same property. Transactions in both Toronto and Vancouver have seen the greatest incidence of these types of transactions, and are under the most scrutiny by the CRA. Vancouver also seeing another form of shadow flipping, which involves realtors finding multiple investors to be involved in the sale of a property in order for multiple buyers to profit while the realtor takes advantage of commission on each of the sales. The CRA has gained interest in tax avoidance in real estate and is analyzing approximately 3,000 cases of shadow flipping transactions in Toronto to determine whether profits from such sales should be taxed as business income or as a capital gain. Generally speaking, any gain arising on the sale of real property are taxed as capital gains, with an effective tax rate of approximately 25%, significantly lower than the tax rate for business income. We can help. Tax planning opportunities are available to assist Canadian taxpayers in optimizing their affairs to obtain a favourable tax outcome. Contact DSF’s Tax Planning Group for advice and assistance. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, TaxNovember 6, 2017June 17, 2020
Winter Driving Warning! From Personal Injury Lawyer Marc Spivak Winter is around the corner. Make sure your vehicle is prepared for possible winter driving disasters. Winter brings low visibility and treacherous roads. Combine that with young and inexperienced drivers, “road ragers” and careless drivers and you have a Canadian recipe for disaster! As a personal injury lawyer, I can tell you that the number of car accident claims leaps during the inclement weather seasons, often due to drivers being unable to slow down in time or losing control due to inadequate anticipation/preparation for poor road conditions. Research proves that winter tires in winter conditions prevent accidents. In 2005, Germany had 12,539 personal-injury collisions. In 2008 German drivers were required to have winter tires on during the winter. Collisions in that year dropped by about 50% to 6,033. Quebec also made winter tires mandatory in 2008 (although 96% of drivers used winter tires prior to this change). Once the law was enforceable, Quebec driver winter tire use increased 2% to 98% with a corresponding larger 5% drop in collisions that year. To understand why winter tires work in Ontario (during the winter) keep the following in mind: All-season tires harden at -10 C; Winter tires harden at -40 C. Stopping distance is 30% shorter with winter tires compared to all seasons. Winter tires offer up to 50% or more traction than all season tires. Tires are designed to grab on to microscopic irregularities in pavement and when they harden, it makes it extremely hard for the tires to grip the road resulting in decreased stopping ability. Your insurance company provides a discount of 2-5% to you for using winter tires. This is based on the reduced risk to the insurer of you having an accident if you are driving with winter tires. Although winter tires are not yet mandatory, it won’t be long before that becomes the law. As a father of three sons, I insist on my children driving or being driven in cars with winter tires in Ontario winters. Keep in mind that accidents cause injuries and loss of property, but also result in increased insurance premiums, sometimes for years after an at fault accident. An at fault accident may push a driver into high risk insurance which might double or triple an insurance premium for years. This might end up costing well over $10,000.00 in additional premiums over time! Having a set of winter tires will also prolong the life span of your tires as the other set is being used and will help keep our roads safer. It is time to get your winter tires installed! Other safety measures that should be taken when preparing for winter driving should include: Bringing your car in for a full checkup and insist on winter wiper blades; Keep your gas tank as full as possible to keep the car heavy and help reduce moisture in the gas line; Clear snow from your car before driving; Always have an ice-scraper and extra washer fluid in the trunk; Keep a booster pack or jumper cables in the car; and Make a survival kit for the car with water non-perishable food flashlight batteries clothing blanket shovel sand or cat litter lighter candles phone charger or charged phone Devry Smith Frank LLP is a full service law firm with experienced lawyers in all practice areas. If you require a personal injury lawyer, please contact Personal Injury Lawyer Marc Spivak today. If you have any other questions, or would like more information please call our office directly at 416-449-1400. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Personal InjuryNovember 2, 2017June 17, 2020
Increase in Self-represented Litigants Increases Issues Recent news stories have been buzzing about the implications of Dellen Millard, the person accused of murdering Laura Babcock some years ago, foregoing counsel and choosing to act as a self-represented defendant. Much of the concern over this interesting strategy regards the court process for examining witnesses. In Criminal Court proceedings, an accused is entitled by law to cross-examine any of the witnesses called by the prosecution. For the Laura Babcock case this means the accused has the right to personally question persons such as the victim’s father. While this may cause unease to some for moral reasons, there is a bigger issue at play when self-represented litigants proceed to trials. The proposed advantages of self-representation, namely the decreased cost to the litigant, are at odds with the judicial system as a whole. Costs are actually increased when one party is self-represented. This is due to that person being unaware of the strict procedures that must be followed in litigation. The strict procedures come from legislation, meaning departures from them are rare and require alternative rules to override them. The savings that a self-represented litigant may appreciate in not having to pay for a lawyer to represent themselves are not actually costs eliminated in whole, but rather costs that are avoided by one party only to be borne by the opposing party and the court system. A trial where one party is self-represented will be lengthier and therefore costlier. A self-represented litigant is not going to understand the law and its procedures well enough to understand which material needs to be pleaded and which do not. This results in that litigant over-filing, which forces the opposing counsel and the court to spend more time sifting through materials that no value to the lawsuit. These litigants continue to cause more delays throughout the actual trial. Not only will a judge have to take time to provide instructions to the litigant throughout the trial, but the litigant themselves will be slower to examine and cross-examine because they will not understand things such as how to phrase questions, how to establish facts, and generally what they need to achieve. They are unable to perform efficiently at trials because they do not have the legal training and experience necessary. Not only does a longer trial increase the lawyer’s fees for the opposing party, but it decreases the amount of cases that a judge can hear. Beyond financial implications of litigation involving a self-represented party, the self-represented litigant is ultimately at a disadvantage when they go to advocate their interests and rights. Not understanding the law and the strict procedures, such litigants are at an exponentially high risk for getting their cases dismissed on summary judgment. Litigants who fail to properly plead materials are at risk for having their cases dismissed given the increase in the availability and the court’s determinations on summary judgment. Further, for cases which are not dismissed on summary judgment, the self-represented litigant is vulnerable because decision-making does depend on whether evidence was adduced and organized alongside arguments on the law. While self-represented litigants, such as Dellen Millard, may appreciate being in control of their trials and advocating their own interests, they have a significant effect on legal proceedings which are not in line with justice. They cause increased expense for the opposing party, take up an increased amount of time and resources of the court which limits the volume of cases the court can hear, and, ultimately, they place the self-represented litigant at risk of having their cases adjudicated without the court having received a well-informed, appropriate legal argument and all its accouterments. By: Samantha Hamilton, Student-at-Law “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Criminal LawOctober 25, 2017June 17, 2020
UPDATE – Tax Measures Targeting Privately Held Corporations On July 18, 2017, the Department of Finance released a set of proposals to amend the Income Tax Act (the “July 18 Proposals”). The position taken by the Department of Finance and the rhetoric surrounding the July 18 Proposals were that the proposed tax measures were designed to “improve the fairness of Canada’s tax system by closing tax loopholes and amending existing rules to ensure that the richest Canadians pay their fair share of taxes and that people in similar circumstances pay similar amounts of tax”. The July 18 Proposals were roundly criticized by the tax and business communities, with town hall meetings, conferences and consultations held across the country. In addition, over 21,000 written submissions were made to the Federal Government during the consultation period, which ended October 2, 2017. The key elements of the July 18 Proposals were based on changes to the following 4 key areas: Lifetime Capital Gains Exemption (“LCGE”) The LCGE exempts holders of qualified small business corporation shares and holders of qualified farm or fishing property from tax on capital gains of up to million arising from a sale or disposition. The Federal Government was concerned that methods to multiply the LCGE, using family trusts, for example, unfairly permit more than one taxpayer to claim the LCGE and thereby reduce the tax payable on the disposition of private company shares, or qualified farm or fishing property. The July 19 proposals sought to significantly restrict the availability of the LCGE. Income Splitting Income splitting refers to the practice through which income earned through a corporation is “sprinkled” among family members, rather then all paid to one individual. This practice allows a taxpayer to reduce his family’s overall tax bill by shifting income from higher-income taxpayers to lower-income taxpayers. Passive Investment Income Active business income earned in a corporation is taxed at a much lower rate than employment income earned by an individual. Because of the tax deferral available when retained earnings are kept in a corporation, there is more after-tax income available to invest in a corporation than if that same amount of income was earned personally. As such, Finance perceives this to be an inherent unfair “advantage” to private company shareholders. Converting Income into Capital Gains The Government’s proposals seek to address certain transactions that they consider to be abusive, specifically certain post-mortem transactions, which convert income which would otherwise be taxable at higher corporate tax rates to capital gains, which are taxed at significantly lower rates. On October 3, 2017, the Department of Finance issued a Press Release, in which Finance Minister Bill Morneau acknowledged the concerns regarding the July 18 Proposals raised by the public, the tax community, and business owners, and suggesting that the Government may take steps to make amendments to the proposed legislation based on feedback Finance had received. On October 16, 2017, the Department of Finance issued an announcement of changes to the July 18 Proposals in light of the consultations and further to its October 3rd announcement. The highlights of the proposed changes are: 1. Reduction in the federal small business tax rate from 11% to 10% effective January 1, 2018 and to 9% effective January 1, 2019. 2. No changes to the LCGE. Finance stated that “the Government will not be moving forward with the measures that would limit access to the Lifetime Capital Gains Exemption”. 3. Income Shifting. Finance confirmed that it will continue with its proposals to terminate income shifting to lower-income family members who do not contribute to the business. However, Finance stated that it will introduce “reasonableness tests” for adult family members who will be asked to demonstrate their contribution to the business. On October 18, 2017, the Department of Finance issued a further announcement targeting passive income earned within private corporations. In this Press Release, the Government stated that it will continue with its intended measures to limit the tax-deferral opportunities related to passive investments; however, it will provide some relief by allowing business owners to build savings for business purposes or for retirement. The Government has announced that businesses can continue to save for contingencies or future investments based on a threshold of $50,000 of passive income per year. Any income above this threshold will presumably be subject to higher rate of taxation as set out in the July 18 Proposals. Draft legislation implementing these proposed changes will be released as later this fall or as part of Budget 2018. We can help. Tax planning opportunities are available to assist Canadian taxpayers in optimizing their affairs to obtain a favourable tax outcome. Contact DSF’s Tax Planning Group for advice and assistance. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, TaxOctober 19, 2017July 5, 2023
Provisional Application of CETA For Canadian businesses that are growing insecure about the potential consequences resulting from the re-negotiation of NAFTA, CETA may be an opportunity to diversify ties to the international market. Any changes to NAFTA could have significant consequences to Canadian industries, as the United States is Canada’s largest trading partner. Trump’s America First/Buy American domestic policies are evident in the recent release of the American agenda driving the renegotiations. Trump’s immigration policies have also created uncertainty with respect to issuing work permits and their recognition by border officers. However the growing uncertainty about the future of NAFTA and what it means for Canadian businesses may be mitigated by a different Agreement. Just two days prior to commencement of the third round of NAFTA renegotiations, Canada entered into a comprehensive trade agreement with the world’s second largest economy, and Canada’s second largest trading partner: the EU. CETA, the Canadian-European Union Comprehensive Economic Trade Agreement, is a progressive trade deal that aims to reduce or eliminate tariffs by a substantial amount. Presently, only 25% of Canadian goods enter the EU as duty-free. Once the Agreement is in full force, 99% of Canadian goods will be imported as duty-free goods to the EU. Bilateral trade is expected to increase by 20%. What might be most exciting about CETA is how it will facilitate labour mobility as the Agreement streamlines the process for work permits between the two signatories. CETA has enhanced the ability of temporary workers to enter Canada. For four categories of workers a LMIA will no longer be necessary: Key Personnel: including business visitor for investment purposes, investors and intra-corporate transferees Contractual Service Providers Independent Professionals: including self-employed workers Short-Term Business Visitors Eliminating the requirement for an LMIA will mean that employers are no longer required to advertise their positions in the domestic market for a prolonged period of time. Further, CETA’s elimination of the requirement of a LMIA for these key categories creates certainty for employers that they will be able to hire workers who meet the requirements. There is no limit to the workers that can come to Canada without an LMIA in these categories. The different categories a employee or professional falls under determines how the long work permit will be granted for, whether it can be extended, and if there is a limit to how many times per year an individual can be a recipient. Once CETA is fully established Canadian employers will be able to recruit European workers with certainty, and less costs and expedited processes. It is important to note that while CETA has come into force, the national parliaments of all EU member states must still ratify the Agreement in accordance with their domestic requirements. By: Samantha Hamilton, Student-at-Law “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Corporate LawOctober 19, 2017June 18, 2020
Bill to increase Minimum Wage hotly debated in Ontario Legislature Bill 148, Fair Workplaces, Better Jobs Act, 2017, is in the midst of being debated by members of the Ontario Legislature. The Bill proposes changes to Ontario’s Employment Standards Act, which include an increase of the minimum wage to $14 per hour by January 1st, 2018 and again to $15 per hour by January 1st, 2019. Political parties are split over the effect the changes will have on businesses and workers. One of the Bill’s sponsors, Hon. Peter Milczyn, said: “the reality is that one out of 10 workers in our province earns the current minimum wage of $11.40. Meanwhile, three out of 10 workers earn less than $15 an hour. This includes millions of people, many of whom are supporting a family, making car payments, trying to save for an education and paying their daily bills. They work very hard every day to try to get ahead, but they feel they’ve been left behind. Increasing the minimum wage will make a real difference in their lives”. Opposition MPP Bill Walker, spoke to the Bill, saying: “the business community is certainly not suggesting, and we’re not supporting, that people don’t need a good living wage. Certainly, at the end of the day, we support a $15 minimum wage. But it has to be done in a timely manner. It has to give people the ability to adjust their business. At the end of the day, the fiscal accountability officer has just come out with a report suggesting that there could be 50,000 jobs lost because of the speed at which they’re going to implement this. So this isn’t just us, Mr. Speaker. This is a third-party resource of this Legislature that is suggesting that.” In any case, the effects of the new rules, if passed, on both employers and employees will be profound. Until then, we will have to wait to see how the changes take shape in their final form. If you are in need of a labour or employment lawyer, please visit our employment page and contact one of our lawyers today. For any other legal services or inquiries, please contact Devry Smith Frank LLP directly at 416-449-1400 or visit our website for more information. By: Stuart Clark, Student-at-Law “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Employment LawOctober 18, 2017June 18, 2020
September Home Prices and The National Index There has been a lot of discussion lately around the recent slow downs to the real estate markets in Toronto and surrounding areas. A number of factors can be said to be contributing to the changes in these previously hot markets, including a number of measures introduced by the Ontario government earlier in the year intended to have just such an effect. These include the new foreign buyers tax – under the Non-Resident Speculation Tax (NRST) there is now a 15% tax on the purchase or acquisition of an interest in residential property located in the Greater Golden Horseshoe Region by individuals who are not citizens or permanent residents of Canada or by foreign corporations and taxable trustees. Changes to the mortgage market introduced last year have also affected the market by increasing the qualification requirements for buyers with a down payment of less than 20%, effectively reducing the size of mortgage that these buyers are able to qualify for. Changes to the financing market have also hindered the ability of many non-bank lenders to compete in the mortgage market, thus stifling overall competition in the financing sphere. We have also seen increases to interest rates offered by lenders in conjunction with the recent Bank of Canada rate increases. The icing on the cake appears to have come today with OSFI releasing its revised final guidelines setting out new mortgage qualification requirements which are set to take effect January 1, 2018 and will affect all borrowers. Details can be found here. With so many recent changes factoring into the market in a relatively short period of time, it is difficult to predict how the market will react in the longer term. There has not been enough time to adjust to one change before the next one is being implemented, making it impossible to gauge how significant the cumulative effect will be. For now however, the market in Toronto (and surrounding areas) has clearly cooled off and the national composite house price index has suffered due to the falling home prices in Toronto. According to the Toronto Star, the national index fell 0.8% compared with the previous month – the largest month over month drop since September 2010. In the month of September the price indexes of the 11 cities included within the national index moved as follows: Toronto (fell 2.7%) Quebec City (fell 2.3%) Hamilton (fell 1.9%) Halifax (fell 0.4%) Ottawa-Gatineau (up 0.3%) Calgary (up 0.7%) Montreal (up 0.3%) Winnipeg (down 0.3%) Victoria (flat) Vancouver (up 1.3%) Edmonton (up 0.2%) Devry Smith Frank LLP has experienced Real Estate lawyers in Barrie. If you require a real estate lawyer or have any questions, call us directly at 705-812-2100. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Real EstateOctober 17, 2017June 18, 2020
Ontario Legislature moves to regulate Life Leases in bid to protect Seniors Bill 155, introduced in the Ontario Legislature on September 20, 2017, proposes a new law to regulate, so-called, ‘life leases’, a type of lease arrangement that lasts for no less than 50 years. Life leases are a form of leasing arrangement that has become increasingly popular in Ontario thanks to a rapidly growing seniors population. A life lease is similar in concept to condominium ownership, whereby a group of people own units in a community or building and pay fees for the use of common areas and maintenance. Unlike a condominium however, a life lease does not confer an ownership stake in the property; rather, the lessee owns an ‘interest’ in the property that allows them the right to live in the unit. A prospective lessee typically enters into a life-lease by paying a lump-sum up front followed by monthly fees for amenities and maintenance. This is an attractive arrangement for seniors, who can still live independently but are not able to maintain a single family home. The Bill proposes certain payments in respect of life leases and requires the disclosure of information relating to life leases. Under the proposed rules, the landlord is required to disclose to a prospective tenant the estimated entrance fee, the projected completion date, information regarding governance and management of the residential complex, the estimated amount of other fees, including monthly occupancy fees, and the estimated refund that a tenant would receive upon termination of the lease. Landlords are also required to maintain a reserve fund to pay for any unforeseen major repair to or replacement of assets of the complex, and to hold adequate insurance for such. It is unclear what effect the rules this will have on the life lease market, but new regulations could well increase costs that are ultimately passed on to seniors. The Bill’s sponsor, MPP Ann Hoggarth, said: “This bill provides that life leases be given protection, similar to renters and condo owners, by providing clear disclosure to leaseholders and improving communication with their sponsors”. Are you thinking of purchasing or selling a life lease? We can help. If you are in need of a real estate lawyer, please visit our real estate page and contact one of our lawyers today. For any other legal services or inquiries, please contact Devry Smith Frank LLP directly at 416-449-1400 or visit our website for more information. By: Stuart Clark, Student-at-Law “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Real EstateOctober 16, 2017June 18, 2020