G20 bank closings ‘brutal’ for real estate industry
Tony Wong – Yourhome.ca
Forget about the fake lake. What if you can’t close on the sale of your property because your bank was shut down for the G20 Toronto summit?
While media attention might be on the uproar over the $1.9 million man-made lake and pavilion being built for the media at the meeting of world leaders, real estate and legal professionals are worried over a potential “disaster” in the making.
The last Friday in June is traditionally the busiest for house closings from buyers who have purchased in the spring market that saw record sales this year. If downtown banks close during that week thousands of closings could be affected creating major market turmoil, say industry professionals.
“It was already going to be brutal without the summit because we’ve been so busy. The timing couldn’t be worse,” says Andrew Zsolt, president of Coldwell Banker Terrequity Realty Brokerage.
Zsolt, who has 14 offices in the Greater Toronto Area, said he expects his agents to close about 500 sales at the end of this month alone.
“We usually tell buyers to try not to close in the last week of June because it’s so busy. It’s right after school and before full cottage season so they’re all in a rush. It could be a bit of a disaster,” says Zsolt.
On Tuesday the Law Society of Upper Canada issued an advisory to lawyers saying that they should make arrangements in case retail branches downtown are shuttered for security reasons.
“If you are a lawyer with a transaction that is pending, make sure you make alternative arrangements,” said Roy Thomas, spokesperson for the Law Society.
So far the policy has been in flux as banks monitor how they will be affected by the security perimeter.
“Recognizing the fact that employee and customer access will likely be impacted by summit related activity, we will be closing some branches in close proximity to the security zone,” says Ralph Marranca, spokesperson for Bank of Montreal. Marranca said no specific details on branch closings were available as yet, but some branches had been proactively reaching out to customers to advise them of any alternate arrangements.
Bank of Nova Scotia spokesperson Joe Konecny meanwhile says some branches in the downtown core would be open on Monday, Tuesday and Wednesday before the summit, but would be closed on Thursday and Friday.
“We are committed to taking all reasonable steps to provide for the continuity of business,” says Konecny. “We will adjust our business continuity plans as necessary.”
The Royal Bank of Canada, Canada’s largest bank said no closings were planned at the moment.
“There are continuity plans in place in case we have to make adjustments,” said spokesperson Don Blair.
Bob Aaron, a real estate lawyer and Toronto Star columnist, says he has written to his bank in frustration trying to figure out how the closings would have an impact on his business.
“My bank tells me I’m on my own to make arrangements for alternate banking on June 24 and June 25. That’s hardly the appropriate level of customer service,” Aaron complained to the TD Bank in a letter sent Tuesday.
Mohammed Nakhood, a spokesperson for the bank says TD was “evaluating potential bank closings” but had not made a final decision as yet. As for alternate arrangements, Nakhood says it would be “speculative” to guess what they would be at this point.
Aaron says that’s not acceptable, since lawyers would be left scrambling at the last minute to figure out how to close deals.
“There could be financial penalties and lawsuits because we have failed to close,” he says.
The summit of the top world leaders will take place in Toronto June 26 and 27, but a security zone will be in place before then. Some office towers surrounding the Metro Convention Centre will have severely restricted access as a result, with a security bill in the hundreds of millions of dollars.
Meanwhile realtor Zsolt says his wife, who works for TD Bank has been told to stay away from the office and work from home.
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