Nice 4 bdrm condo in Orillia…
Really well-kept building in Barrie…..
Archive for September, 2012
Story courtesy of the Star:
It took the better part of a year, but nightmare tenant Nina Willis has been forced to pack her possessions and give landlord Darius Vakili his house back.
“The one good thing they did for me was they took their stuff,” said Vakili on Sunday afternoon, inside the empty dirt and trash covered Don Mills home he had rented to Willis since July 2011.
Willis was evicted Wednesday after a lengthy battle against an April ruling by the Landlord and Tenant Board that she must move out after failing to pay rent.
She had to return within 72 hours to pack and move, which she did on Friday and Saturday.
Willis has been ordered out of six homes since 2005, including the property owned by Vakili, according to tenant board and court documents obtained by the Star, as well as interviews with landlords, lawyers and paralegals.
The Star has been following her case, which shows how easily tenants can manipulate the provincially funded Landlord and Tenant Board, using protections designed to avoid unfair evictions to stay in properties rent-free.
After Willis left, the wood floors and walls of the house were covered in dust and filth. Vakili said he had cleaned up during an earlier trip to the house and was almost too disgusted to describe the mess to the Star.
Witnessed by the Star were floors mostly cleared of debris, but corners filled with swept piles of crumpled newspapers, plastic bags, soda cans, detergent bottles, coat hangers, diapers and children’s toys. A futon frame remained in one of the three upstairs bedrooms.
The basement carpet was streaked with stains, strewn with broken glass and contained piles of cardboard and trash. The house smelled of smoke and mildew.
“This was a white, clean carpet. God,” said Vakili, taking pictures.
At some point during her tenancy, Willis had barred the front door.
On Sunday morning, Vakili was able to use the entrance for the first time in months. He said that once inside he found a pile of excrement, positioned exactly on the middle of the top stair in the front hall.
The move was a two-day affair. On Friday, Willis, her sister and two men came in a U-Haul truck, and spent five hours picking up a bike and items outside the house, said Vakili.
They returned on Saturday morning shortly after 9.
The vehicle was backed up to the garage, then across the lawn to the front door.
Vakili said they stayed well into the night, making multiple trips, until he was forced to call police so he could lock up the house at 11 p.m.
He said Willis asked to stay on the porch to guard her possessions and was still outside when he walked by the house at 12:30 a.m.
By Sunday afternoon, all that was left for Vakili to show the Star was two black leather couches overturned outside and the frame of a brass bed, an elaborately carved wood table and several stacked chairs inside a side garage.
He plans to dispose of the furniture but is afraid Willis might come back.
Inside the house he showed how the windows of one upstairs bedroom, accessible to anyone who could climb onto the top of the garage, had been removed and lay on the floor.
Vakili said he plans to spend about two weeks cleaning and fixing up the house and then try to sell.
Willis may already have a place to live.
On Saturday morning, her sister shouted their plans to her former landlord and a Star reporter.
“We have a new house.”
In most newspapers and magazines, this was a common theme this week after some stats came out about lowered sales and prices of homes in most major centres in Canada. The opinions range from prices dropping by another 5% in the next year to more than 25%…depends on who you listen to, and obviously no one has a crystal ball, but for those investors that specialize in single-unit dwellings, this just might be welcome news.
Here’s a good article from CBC’s Neil Macdonald:
An expatriate always thinks about going home. The longer the time abroad, the stranger the prospect of re-entry feels.
But if you’re a Canadian living abroad these days, the idea of returning home has become downright frightening. Stories are now routinely surfacing in the Canadian media suggesting collective madness when it comes to affordable living.
Our biggest real estate markets — Toronto and Vancouver — seem to have decided they’re really London and Manhattan. Several of our smaller cities are wildly optimistic, too, with year after year after year of six-, seven-, even 10-per-cent increases in property values.
Friends and colleagues who own homes in Canada are the very pictures of smug. They seem convinced the markets in which they happily reside will keep rising forever. Or at the very least, never drop.
And any discussion of the subject usually involves condescending lectures about how Americans, who are only beginning to recover from a six-year nightmare of foreclosures, could have used a dose of Canadian common sense and prudence.
Well, I watched America’s nightmare unfold, and it appears pretty evident to me that a sequel of some sort is coming to Canada.
So I ran that thesis past Robert Shiller, of Yale University, probably the foremost authority on real estate in America. He co-founded the Case-Shiller Home Price Index and predicted the American collapse in 2005, a year before it happened.
“I worry,” he told me, “that what is happening in Canada is kind of a slow-motion version of what happened in the U.S.”
Nosebleed levels of debt
What Shiller was getting at — and what is most alarming to economists and to the Bank of Canada — is the debt Canadians are carrying.
As was the case in America when I arrived here nine years ago, Canadians have for years been so desperate to avoid being left behind by a surging housing market that they’ve been stretching themselves beyond reasonable financial limits to jump in, thus of course ensuring continued surges.
In the process, household debt has doubled, going from a manageable 75 per cent of household income in the early 1990s to 150 per cent today.
That’s just about exactly the nosebleed level Americans were at when everything imploded here in 2006.
Worse, as the Bank of Canada has been pointing out, Canadian debt is disproportionately concentrated in the most vulnerable households, defined as those devoting 40 per cent or more of household income to paying interest charges.
That means those households are extremely sensitive to any sort of shock — be it a rise in interest rates, a drop in home prices, or, worst of all, job loss.
The central bank’s analysis suggests that if interest rates rise to 4.25 by mid-2015, fully one fifth of all Canadian debt would be held by those households least able to finance it.
“That is rather scary,” says Don Drummond, a former federal mandarin who also spent many years as the chief economist of the TD Bank.
Drummond says an interest rate of 4.25 by 2015 would not be out of the question, given the levels of economic stimulus in recent years. He also says the bubble in Canada is bursting right now.
“My base case expectation would be that most markets in Canada over the next two years would see a pullback of housing prices of 10 to 15 per cent.”
A similar delusion
Now, both Shiller and Drummond are quick to say Canadians are not likely to experience the near-total meltdown Americans experienced.
For one thing, Canadian banks never joined in the subprime-lending lunacy that inflated the American bubble to such extremes.
For another, Canadian mortgages are insured by the federal government through Canadian Mortgage and Housing Corp.
But Shiller says Canadians do seem to be suffering from the same delusion that afflicted Americans: the notion that housing prices always rise.
He has studied data going back a century, and says that when you factor in inflation, and depreciation of the home’s physical structure, “historically home prices haven’t gone up. Real home prices were essentially unchanged over that interval.”
There are bursts of growth, as in the past 10 years in Canada, but historically they are offset by retreats.
Shiller says real estate bubbles are nothing more than groupthink, and that they “always have their end built into them.”
“People are investing in real estate that is tough for their budgets because they think it will make them rich, and that can continue only as long as [prices] keep increasing.
“When they stop increasing,” he says, people back off, and the bubble then collapses. “So it has its own internal dynamic.”
Exactly when this groupthink changes course, says Shiller, is hard to pinpoint, but one sign is a flurry of media stories. Such as this one, I suppose. Not to mention the attention we are giving this subject on The National.
Even though many of us in the media own homes ourselves — and have a self-interest in the market continuing to rise — there clearly comes a point when the subject begins to dominate public discussion.
Shiller also points out that it was not the financial crisis that burst the American housing bubble. Rather, when the groupthink that caused the bubble turned, the market collapsed, and that in turn triggered the financial meltdown and the crisis among lenders.
“The same sort of thing might well happen in Canada,” Shiller told me.
Canadians seem to think that stricter government regulation in Canada protects them. But they are in some ways more vulnerable than Americans.
Americans at least have the option of lifetime payment stability. The gold standard here is the 25- or 30-year fixed mortgage. The interest rate can be locked in for the life of the loan.
In Canada, most mortgages “renew” every few months, or years, and payments can spike by hundreds of dollars a month if rates rise even slightly.
Americans also deduct interest payments from their taxable income. So many people get a big annual refund, which provides a financial cushion.
If you take that tax refund into consideration, prices in Ottawa are now approaching or equal to prices in Washington, DC., a city steeped in wealth and power.
Seen from this distance, by a longtime expat, that is just unmoored from reality.
When looking for a property to invest in, there is obviously lots of research to do – you need to understand the area, economic climate, the population trend, whether there’s adequate means of transportation, upcoming changes to demographics, etc. etc..
Then, of course, there’s lots of number crunching and sitting with your team to draft the offer and work through the acquisition process.
One thing to also consider are the rules and laws governing the kind of property that you are interested in purchasing. There are different rules that apply to multi-unit properties, commercial properties, hotels, mobile homes, rooming houses, etc.
A case in point……….
I have a customer that invests primarily in commercial properties, and overall, does fairly well. Commercial is certainly riskier than residential, but can certainly be more rewarding, and while the last few years have been a little hard, he has seen a turning point, and we have secured some good solid tenants.
He recently strayed into the residential arena by inheriting a mix-use property (commercial and residential combined) in Toronto.
This month, the existing residential tenants refused to pay (bitter about the sale or something), and without further adieu, he changed the locks on the door, and exclaimed that it was his right! They didn’t pay, they no longer have access to their property, and he will look into selling or disposing their property at his leisure. Ahhh, if it was only that simple.
He called me after he received a call from the Investigations and Enforcement Unit of the Ministry of Housing. It took me a while to explain, and convince him, that the laws were different, and we now have a plan in place to ensure that the tenants pay, or they will be evicted…legally.
So, back to my original point, investment properties have different guidelines and laws….get to know them, or make sure your management company knows them. If not, you could be in for a rude awakening, or at the very least…a phone call.
Orillia seems to be the place to be !!! Large university, stable employment, good investment value, and a city that encourages business development.
Very nice single unit….
Another single unit on a nice street…..
Duplex, great income stream….
…it’s a good sign hopefully. This one, from the Star…
Case Highlights flaws in landlord, tenant rules
A decision of Justice Ted Matlow in the Ontario Superior Court last month contains valuable lessons for residential landlords and tenants, along with a strong message for the Ontario government, the Landlord and Tenant Board and the officials charged with making rules for Ontario courts.
Melissa D’Amico owns a small building in the Kensington Market area of Toronto. Last October, she rented an apartment in the building to Rony Hitti and his spouse Anastassia Adani for a monthly rent of $3,600. The couple moved in immediately but refused to pay any rent at all.
A month later, D’Amico started an eviction action at the Landlord and Tenant Board, but discontinued it when the tenants offered a cheque for all of the arrears. When the cheque bounced in December, the landlord’s agent started another eviction action. At the hearing in late January, the landlord and tenant agreed to an order which provided for an automatic eviction if the tenants did not pay their $12,000 rent arrears within 11 days.
Hitti gave D’Amico an uncertified cheque for the outstanding amount. He then swore an affidavit stating that the rent had been paid in order to cancel the landlord’s eviction order, which was in the hands of the sheriff.
This cheque also bounced, allowing D’Amico to obtain an order from the board reinstating the eviction. Instead of moving out or paying the arrears, the tenants appealed that order, and the effect of the appeal was to stay the eviction.
When the appeal came before Matlow for a hearing in July, the tenants were still in possession and had not paid the landlord any rent. By then, the arrears exceeded $25,000.
At the hearing, Matlow ordered the tenants to be evicted and to pay rent arrears, plus the landlord’s full costs of $13,072.12. The judge concluded that the tenants’ appeal “raised no bona fide question of law, (and) that it was totally devoid of merit, vexatious and an abuse of (court) process.”
Hitti apparently had a similar experience with a previous landlord in 2009, in which he initiated “frivolous appeals to obtain rent-free housing,” according to D’Amico.
In his written judgment last month, Matlow wrote: “My recent experience sitting as a single judge of this court to hear motions has convinced me that there is a growing practice by unscrupulous residential tenants to manipulate the law improperly, and often dishonestly, to enable them to remain in their rented premises for long periods of time without having to pay rent to their landlords. It is practice that imposes an unfair hardship on landlords and reflects badly on the civil justice system in Ontario. It calls for the government, the Landlord and Tenant Board and this court to respond.
“I have chosen this case, which is one of many similar cases that came before me during a five-day period hearing motions, as an example of the problem that I describe. I could easily have chosen many others.”
A few personal observations may be in order at this point:
• Deadbeat tenants should be aware that Ontario’s courts are becoming more vigilant to abuses of the system. If Matlow’s decision is any indication, the courts will not hesitate to award heavy costs penalties in cases like this.
• Landlords should never hand over keys without a certified cheque or cash for the first and last months’ rent.
• Landlords should always check tenant references and credit history.
• Past decisions of the Landlord and Tenant Board should be made public so that stakeholders can check out prospective landlords and tenants.
• The impossible situation in which D’Amico found herself could be remedied with a minor change in the Residential Tenancies Act. Matlow concluded his reasons with these words: “It is my hope that those in a position to amend the rules of this court will consider this judgment and see fit to restrict the right of appeal in residential landlord and tenant cases and, perhaps, require that leave to appeal be obtained before appeals can be brought.”
agsecure 