A Markham, Ont. woman says she has been struggling for months to evict a non-paying tenant who she previously used as her real estate agent — a fight with no clear end as landlord-tenant hearings remain at a standstill amid the COVID-19 pandemic.
When Natalie Wild’s husband, Stefan, was diagnosed with an aggressive cancer in January, the family decided to downsize to a nearby rental property they own better suited to his needs.
“(Our current home) has a lot of stairs. He was unable to walk comfortably,” she said.
Wild said her tenant, Stacey Kelenjian, who was a friend, had initially agreed to move out by the end of April, but Wild claims when she mentioned her current home was listed with another agent, her attitude changed.
“She refused to acknowledge the forms,” Wild said.
“She was verbally aggressive.”
Weeks later, Wild said Kelenjian — who is a real estate agent registered to Century 21 – Leading Edge Realty Inc. in Scarborough, Ont. — sent her an email saying she was “blind sided” by the decision to sell the home though a different agent, since she had tried selling the house for the family years earlier.
The March 5 email ended by stating she would only continue discussing their disagreement over the rental condo after she is “compensated” $1,500 for her past work.
When rent came due in April, Wild said her tenant told her she could no longer pay because of COVID-19 loss of income and wouldn’t be moving out anytime soon.
“It’s really disheartening that someone is taking pure advantage of a really terrible situation,” Wild alleged.
Stacey Kelenjian is a real estate agent registered to Century 21 – Leading Edge Realty Inc. in Scarborough, Ont. Source: HomeFinder.ca
In a conversation over the phone on Thursday, Kelenjian declined an interview. Despite her email to Wild, she denied she demanded payment as a condition to negotiating her eviction. She called Wild a bully and said she failed to find a solution.
In mid-March, the Ontario government suspended most in-person landlord and tenant hearings and enforcement of evictions as part of efforts to contain the spread of COVID-19.
Harry Fine, a Toronto paralegal who specializes in landlord-tenant issues, said the existing backlog of cases is quickly growing amid the pandemic, leaving the system in a “crisis state.”
“It’s beyond description,” he said, “the problem for landlords who are going to lose their properties and tenants who are going to lose their homes.”
Wild’s husband died from cancer in April. She is now seeking to evict for non-payment rather than to move into the unit.
Wild has filed a complaint to the Real Estate Council of Ontario (RECO) regarding Kelenjian.
In an email to Global News, the council said, “RECO is aware of the situation and is actively looking into the matter. Due to the active status of the file we cannot release any further details.”
Kelenjian’s brokerage, Century 21 – Leading Edge Realty, did not return a phone call or email by deadline.
Wild said she hopes to put this chapter behind her soon.
“I still have bills to pay,” she said.
“I have condo fees on the unit as well as the monthly mortgage fee and that’s completely now shouldered by myself.”
© 2020 Global News, a division of Corus Entertainment Inc.
RE/MAX | Investing in Vancouver Real Estate: Yay or Nay? – RE/MAX News
Despite having about one-fifth of Canada’s population, how did British Columbia avoid both a massive coronavirus outbreak and a provincewide lockdown? Since May, the province has been relaxing COVID-19 pandemic rules, but British Columbia had fewer than many other provinces to begin with as it maintained a lower hospitalization rate than Alberta, Ontario, and Quebec. Overall, the West Coast has maintained a steady steam of good news throughout this public health crisis.
Since the coronavirus was largely contained in B.C., does this mean the Vancouver real estate market was unaffected, too? It has been a bumpy ride, but it appears the worst could be over.
According to the Real Estate Board of Greater Vancouver (REBGV), sales activity in the Greater Vancouver Area in June surged 64.51 per cent, up from the 35.8 per cent gain in May. This is also up 17.62 per cent from the same time a month ago. Prices recorded a modest 3.5 per cent increase from the same time in 2019 as a drop in supply and demand attempted to balance the market. The current MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver is $1,025,300.
But with the economy – provincially and nationally – starting to reopen, can the Vancouver market return to pre-crisis levels?
Vancouver’s Housing Market
The Canada Mortgage and Housing Corporation (CMHC), the government’s mortgage insurer, forecasts a major drop in the nation’s biggest real estate markets. CMHC projects that Vancouver will face the biggest decline of all, with prices falling 12.35 per cent by 2022 from the 2019 average.
With the increase in sales activity over the last month, not everyone is convinced of a national slowdown. That said, local experts say that it is critical to monitor the data to pinpoint developing trends.
“REALTORS® continue to optimize new technology tools and practices to help their clients meet their housing needs in a safe and responsible way,” said REBGV Chair Colette Gerber in a statement. “Over the last three months, home buyers and sellers have become more comfortable operating within the physical distancing and other safety protocols in place.”
Greater Vancouver is reporting a bump in new listing activity. In June, there were 5,787 new listings, which is up 57.1 per cent from the same time a year ago. These dramatic trends have surprised analysts considering that the spike has occurred so soon after the outbreak. The number of active listings came in at 11,424, up 15.1 per cent from June 2019.
The sales-to-active-listings ratio for June was 21.4 per cent – anything below 12 percent suggests downward pressure on home prices.
Suffice it to say, if you have been waiting to dive into the Vancouver housing market, now could be the best time to dip your toe in real estate investment. The city’s fundamentals are still there:
- Vancouver is one of the cleanest cities in the world.
- The city offers moderate temperature seasons all year long.
- Close proximity to the United States border.
- Vancouver is a culturally diverse metropolis.
- Residents can enjoy the myriad of sea-to-sky activities.
And then there are the dollars and cents.
One of the most important factors for any investor right now is how low borrowing costs are. In March, the Bank of Canada (BoC) slashed interest rates by 150 basis points to 0.25%. The new head of the central bank, Tiff Macklem, left rates unchanged at the June monetary policy meeting, suggesting that low rates are here to stay to support the economic recovery. Whether you want to purchase a rental property or you want to take out a loan to renovate a house, financing these endeavours has never been cheaper.
Housing Affordability to Attract More Buyers?
One of Canada’s biggest banks released its housing affordability data for the first quarter of 2020. The Royal Bank of Canada (RBC) noted that Canadian affordability is still getting worse, but Vancouver has seen the largest affordability improvement in the Great White North.
According to RBC, the median Vancouver household now needs 79 per cent, down 4.2 per cent from last year. This is the steepest drop in the country. Although prices are still 30.57 per cent higher than the long-term average, affordability is improving.
This is a positive development for both homebuyers and investors, particularly for millennials. In recent years, this demographic has been driving new trends in the Vancouver housing and condo market.
Vancouver Adapting to COVID-19
Industry insiders say that an essential trend in Vancouver real estate has been homebuyers and sellers adapting to this new COVID-19 society. Whether it is practicing social distancing or embracing more stringent hygiene routines, everyone is doing their part – and this is benefiting the real estate market.
Like other key markets, Vancouver REALTORS® have installed physical distancing mechanisms to abide by the government’s health and safety recommendations. And more people are becoming more comfortable with this new normal for real estate transactions.
In addition to wearing masks, gloves, and limiting contact, agents are taking advantage of digital tools, from business documents to virtual tours. This makes buying and selling real estate in Vancouver still doable, despite a public health crisis still gripping Canada.
A Pre-Pandemic Housing Market
British Columbia is transitioning into the third phase of its reopening plan. Phase three will permit residents to travel across the province as hotels, motels, resorts, and RV parks restart operations. More people will return to work, local economies will be stimulated, and anybody who had suspended plans to buy or sell a home will reconsider their options. Amid low interest rates and pent-up demand, Vancouver real estate is primed to pick up where it left off before the coronavirus pandemic.
Snowbirds beware: The CRA is hunting for bulk U.S. real estate data to keep tabs on transactions by Canadians – The Province
Failure to file a T1135 can result in harsh penalties, even when the income from the foreign property has been reported
If you own U.S. real estate, whether for personal use or for investment purposes, now may be a good time to ensure that you’re fully compliant with your Canadian tax filing obligations, as it appears that the Canada Revenue Agency may soon be doing some mass sleuthing of publicly-available U.S. property records.
In a Request for Information (RFI) posted online on June 25 entitled “Bulk United States (U.S.) Real Property Data (re Canadian residents),” the CRA announced that it is looking for a provider to supply the Agency with U.S. real property data. In the RFI, the government stated that it is specifically looking for “U.S. real estate and real property data where a Canadian resident is the owner or party to the purchase, sale, or transfer. Real estate and property data is required in bulk form in order to identify current and historical records, mortgage transactions, property taxes, real property records, and deeds.”
The RFI goes on to say that the requested information “will enhance the CRA’s ability to administer tax programs, to enforce the various Tax Acts in order to protect Canada’s revenue base, and to support the CRA’s business and research processes.”
While I try to keep on top of Canadian tax developments, I confess that I do not regularly follow new postings on Buy and Sell, the online Public Works and Government Services procurement site. Rather, I was tipped off to the CRA’s novel request by a recent article by Toronto tax lawyer David Rotfleisch.
Rotfleisch, a certified specialist in taxation, told me in an interview that he was “fascinated by the out-of-the-box thinking by CRA…. There’s obviously some very clever people there on a strategic basis.” Rotfleisch acknowledged that the CRA has, in the past, launched a variety of real estate audit projects, such as going to condo developers and to registry offices to seek out information. “But to expand it to the U.S. is brilliant and really innovative,” Rotfleisch told me. “I am really impressed by whoever at CRA came up with this…. Really, hats off to them.”
In the RFI, it was stated that the CRA would be carrying out a tax review of six years of U.S. real estate transactions in order to find any tax non-compliance by Canadian taxpayers.
In his article, Rotfleisch warns that Canadians who are non-compliant could potentially be reassessed by the CRA as a result of the info it seeks to obtain, and be hit with substantial tax, penalties and interest, as well as face professional and legal fees required to respond and object to such a tax audit. He also warns of the possibility of prosecution for tax fraud or tax evasion.
Let’s review a few areas that may be on the CRA’s radar for review, should it be successful in obtaining bulk U.S. property records.
Unreported foreign property
Regular readers of this column will no doubt be well aware of the requirement to file CRA Form T1135 to report foreign property with a cost of more than $100,000 at any point in the year. While foreign property for this purpose does not include personal use property, meaning that you don’t have to report your Florida condo if it’s solely used as a vacation home and isn’t rented out, if you own foreign commercial property or a rental property, then the details of that property must be reported on the form.
Failure to file the T1135 can result in harsh penalties that can be assessed by the CRA, even when all the income from the foreign property has been reported. The penalty is $25 for each day the form is late, up to a maximum of $2,500 per tax year, plus non-deductible arrears interest.
You may recall a 2018 T1135 case involving a taxpayer who moved to Canada with her husband and three children. She and her husband jointly own a rental property in Michigan, which was their former family home prior to the move. Because of the value of their co-owned home, they were both required to file T1135s. Her husband was aware of this and filed his T1135 with his tax returns for the years in question. He included the rental income from the property on his tax returns.
The taxpayer, however, had no taxable income in 2011 and 2012 and she was therefore not obligated to file tax returns. The taxpayer, therefore, logically, but incorrectly, believed the T1135 filing requirement did not apply to her. In 2014, the taxpayer decided to file tax returns for 2011, 2012 and 2013 to claim child benefits for her kids. Along with her returns, she filed the T1135 form for each year.
CRA confirmed no tax was owing but assessed late-filing penalties of $2,500 for each late T1135, plus arrears interest, for a total of $5,541.
The taxpayer twice applied for relief, but was denied by the CRA and took the matter to Federal Court, where a judge concluded that the CRA’s decision not to grant full relief for the 2011 tax year was “unreasonable,” sending the matter back to the CRA for reconsideration by a different officer.
Unreported U.S. rental income
Canadian resident taxpayers are required to report, and pay tax on, their worldwide income, which includes foreign rental income. Generally speaking, a foreign tax credit is available to ensure that such rental income, which may also be taxable in the other jurisdiction, is not taxed twice.
If you own a U.S. condo or vacation home and regularly rent it out, then you have an obligation to report that rental income on your Canadian tax return. Failure to do so means you could be reassessed, and subject to tax, penalties and interest levied by the CRA, even if you paid U.S. taxes on such income.
Unreported U.S. real estate sales
Finally, the CRA will likely be looking into sales of U.S. residential properties owned by Canadian taxpayers to ensure any capital gain is being reported on your Canadian return. Again, while a foreign tax credit is generally available for any U.S. capital gains tax paid, foreign exchange movements in recent years may mean some extra Canadian tax. For example, if you bought your Florida condo for US$100,000 in 2012 when the U.S. dollar was at par with the Canadian dollar, but you sold it in 2019 for the same amount when the foreign exchange rate was 1.33, you could have no gain for U.S. tax purposes, but a $33,000 gain to report in Canada, with no offsetting foreign tax credit.
Jamie Golombek, CPA, CA, CFP, CLU, TEP is the Managing Director, Tax & Estate Planning with CIBC Private Wealth Management in Toronto.
A certificate proves that your rep can legally trade in real estate: Ask Joe – ThePeterboroughExaminer.com
I recently went to see a condo, and the concierge asked to see my real estate salesperson’s “certificate” before we were permitted to access the building. Does this have something to do with new measures in place during the pandemic?
This is a common practice at condominiums. The Real Estate Council of Ontario (RECO) Certificate of Registration is issued to individuals registered to trade as a salesperson or broker. It has no association with COVID-19 or the current state of emergency in the province.
In Ontario, individuals trading in real estate must be registered with RECO, the provincial regulator of the real estate industry. RECO administers the laws in Ontario’s real estate sector, on behalf of the government and in the public interest. The certificate helps protect consumers by providing a means of identification for registered real estate professionals.
Salespersons and brokers are expected to carry a printed card or use the MyRECO Certificate app that allows them to show their certificate on a mobile device, when requested.
Property management often request to see a certificate before allowing a salesperson and buyers access to view a property. Many residential buildings use the certificate as a security measure to verify that visitors to the unit are who they claim to be.
The Certificate of Registration also means you can rest assured your real estate rep meets the established standards for being registered and the protections that come along with that, including education and insurance.
Every real estate professional in Ontario must complete a specific education before they can become registered to trade in real estate. They must also complete additional courses every two years to keep their knowledge up-to-date.
They are also required to uphold professional standards of conduct and ethics with an emphasis on fairness, honesty and integrity. They must follow rules and regulations under the Real Estate and Business Brokers Act, 2002 that protect Ontario home buyers and sellers.
Registered salespersons and brokers are also held accountable for their actions in real estate transactions. In the instance that something goes wrong, RECO offers a complaint and discipline process designed to protect consumers.
Finally, as a condition of registration, all salespersons and brokers are required to have insurance coverage that protects both consumers and industry professionals, with payments held in trust and insured against loss, insolvency or misappropriation by a brokerage. Errors and Omissions Insurance provides an added layer of protection where damages and legal costs arise from errors, omissions and negligent acts that may occur while trading in real estate.
Another way to confirm a real estate professional’s registration is by visiting www.reco.on.ca and clicking on the Real Estate Professional Search bar.
If you have a question about the home buying or selling process, please email firstname.lastname@example.org.
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