Toronto Condo and Real Estate Blog

New Law Requires Real Estate Agents to Collect and Verify ID of Buyers and Sellers

New federal laws and regulations designed to prevent money laundering and anti-terrorist financing went into effect June 23, 2008. Realtors must obtain proof of identity from all parties in any real estate transaction, even if one of the parties is not represented by a real estate agent. Realtors must also track the source of funds received during the course of a real estate transaction, such as the deposit. If the client is a corporation, corporate documentation and the names of the corporation directors must be provided and the corporation must disclose if a third party is involved in the transaction.

“Real estate agents have had legal obligations under the federal government’s push to prevent criminal activity and terrorism since 2001, when Canada’s first comprehensive laws to combat money laundering and terrorist financing were introduced,” says RAHB President, Ann Cosens. “Real estate agents were required to report only suspicious transactions or transactions involving more than $10,000 in cash.”

These new regulations are part of federal legislation (Bill C-25) passed in 2007 that requires a number of industries, including real estate, to do more to help stop money laundering and terrorist financing. The regulations are enforced by the federal agency known as the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC.

As part of the new rules, Realtors are required to keep all identification and the receipt of funds report on file for at least five years and provide it to FINTRAC. Realtors are also required to complete a report on the receipt of all funds received during a real estate transaction.

Also, under the new FINTRAC regulations, real estate agents dealing with clients they never meet must also verify identification. The broker office involved can do this with a service agreement with an agent or mandatary in the area where the client is located. The agent or mandatary must then meet the client, verify the identification of the client, and provide the information to the broker office handling the real estate transaction.

To comply with the new regulation, real estate agents will need to get more acquainted with their clients.

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Contact the Jeffrey Team for more information - 416-388-1960

Industrial graveyard now trendy loft central

By Derek Raymaker - Globe and Mail

It was thought to be beyond saving — a patch of industrial wasteland so grey and exhausted by a century-and-a-half of heavy industry that few could imagine anybody would want to live there by choice.

Up until the late 1980s, King Street West, between Crawford and Dufferin streets, was a mishmash of chemical, textile, food-processing and manufacturing sites; relics of the Victorian-era economy that had gone into a slow and grinding decline.

In their heyday, the industrial titans who owned and managed these companies built themselves mansions just to the west in Parkdale. After they were long gone, their noble brick domiciles were turned into rooming houses for the poor and drug-addicted. There were other thriving streets in the neighbourhood that embraced a rough-hewn working-class aesthetic, but many of those residents, too, would soon drift further west, toward Mimico and Etobicoke.

By the 1970s, most Torontonians didn’t want to go to the King West area, except to see a North American Soccer League game at rickety Lamport Stadium, or to visit the Canadian National Exhibition at summer’s end.

In a way, the real estate boom in the 1980s probably saved King West from permanent desolation. Artists, fashion designers, animators, filmmakers, musicians, photographers and members of the burgeoning computer arts found that the creaky industrial skeletons were cheap and had the space needed to satisfy their muse.

Much of the barren industrial area was rezoned for residential use in 1996. And then came the lofts.

It started with the 46-unit Massey Harris Lofts, a conversion of a factory office building completed in 2002 by Canderel-Stoneridge Equity Group. The success of the Massey Harris Lofts project spawned an upsurge in loft projects in the area, which notably includes the Toy Factory Lofts — Lanterra Developments’ 214-unit factory conversion on Liberty Street that the Greater Toronto Home Builders Association named the best high-rise community of 2005.

Along the way, the area has been rechristened Liberty Village, and has added several townhouse communities as low-rise components, especially on the western edge of the area adjacent to Parkdale. Closer to downtown, a commercial district anchored by a 24-hour Dominion supermarket is growing rapidly along Liberty Street.

As the revitalization of Liberty Village carries on, it continues to be fairly affordable by downtown standards, with many newly launched condos available for less than $200,000, and townhouses available for under $300,000. New developments are being launched regularly, though it appears that loft conversions have given way to new towers and townhouse tracts.

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Contact the Jeffrey Team for more information - 416-388-1960

High gas prices may have impact on suburban house prices

Garry Marr, Financial Post

The dream of a two-car garage in the suburbs may soon fade thanks to gasoline prices that have most people rethinking their driving habits.

That dream was never really mine. I’m living the urban nightmare of a one-car garage stuffed with junk and my car parked on a pad in front of my house.

But millions of others make that daily commute to the city from their 5,000-square-foot mini-mansions in the “slurbs,” deterred, at the moment, only by traffic and the time it takes to get home.

“I think prices are going to become a major issue,” says Benjamin Tal, senior economist with CIBC World Markets. “Gasoline prices are up and they continue to rise. This means transportation costs will start to rise.”

His bank is already researching how rising gas prices are impacting housing decisions in the United States, but Mr. Tal says the issue is just as relevant for Canada.

Almost overnight, North Americans have been spurning their gas-guzzling cars for compact vehicles. While nobody is suggesting people will start fleeing their surburban houses because of high fuel prices, Mr. Tal believes that when consumers are making their next home-buying decision, location - in relation to transit - will become even more important than it was before.

“In areas that are close to public transit, you will see house prices there outperforming areas that are not close to transportation,” says Mr. Tal. “People talk about the affordability of owning a house, but getting to work is also an issue of affordability.”

If you live in a rural area, where the only mode of transportation is the car, don’t plan on getting much capital growth on your home.

Mr. Tal says this is a Canada-wide issue.

He expects families will look to driving less. That might mean looking for a daycare near a subway stop or bus stop. “We call these transit-zone households,” says Mr. Tal.

Builders are already thirsting for development opportunities near public transit, says Brian Johnston, president of Monarch Corp.’s Canadian division.

“We are always on the lookout for infill housing projects,” Mr. Johnston says, adding developers will line up for infill opportunities in the city, which are usually near public transit.

“This is all self-evident. If there was a site for stacked townhouses near a Go station, I would be all over it,” says Mr. Johnston, referring to Ontario’s regional commuter train system.

He doesn’t see families shifting to condominiums because they are generally too small and the condo maintenance bills on larger units are too expensive. Condo fees are assessed on a per-square-foot basis. “I see for us, as a company, the future being stacked townhouses,” he says, talking about family housing in the city. “You get a concrete garage underneath and a four-storey wood frame construction. It’s efficient housing. You don’t get your own backyard, but a common area with other townhouse owners. Homeowners can expect to make some sacrifices.”

With transit to Canada’s suburbs spotty at best (especially when compared to Europe), the impact on prices has already been felt.

A study released this month found the average price of a standard two-storey home in urban areas across Canada had increased 129.2% over the past decade to $522,999. By comparison, a suburban home rose 110.1% during the same period, to $334,380.

“I think the gap will grow,” says Mr. Soper, president of Royal LePage. “As the price of gas rises, it will put a premium on an urban home.”

The shift back to the city has not yet happened in housing, according to Royal LePage. But their latest study was done prior to the latest spike in gas prices.

Still, he says, there is such a discrepancy between what a consumer can get for his money in the suburbs versus the city, that many would still prefer to hop into their gas-guzzling cars than give up their big backyards and garages.

“Some people will make the lifestyle choice to adjust other expenses in order to live in the style their family desires if they are the type of family that wants their space,” says Mr. Soper. “They are willing to pay the price.”

He should probably add that prices will continue to go up - not in the value of their home, but certainly in their gas bill.

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Contact the Jeffrey Team for more information - 416-388-1960