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It is not uncommon that buyers or sellers look for ways of
getting out of real estate deals. In fact, many mediations involve
just that, more often than not, buyers who want to avoid their
obligations to close a real estate deal. Often, they cannot get the
financing they need or have not been able to sell an existing home
or the market has dropped. They then submit requisitions or object
to the seller’s formal compliance with tender obligations to
justify their refusal to close. The pleadings in defence to the
seller’s claim to damages and forfeiture of deposits are
typically technical and creative.
The courts however tend to favour good faith and reasonable
conduct and as a result, testing the defence in court is fraught
with challenges, especially when the issues raised suggest that
they were not critical to the purchaser’s decision not to
close. For that reason alone, the uncertainty of a successful
decision as well as the costs repercussions warrant a careful
consideration of mediating an expeditious resolution of the
A recent case that offers a good lesson involved a purchaser
that claimed that an underground sewer easement affected the
material use of a property which constituted a valid requisition
and a basis for refusing to close. In Haghollahi v. Butt
(2020 ONSC 4082), the buyer wanted out of a deal and their deposit
back when the search of title disclosed two sewer easements running
across their property. The agreement of purchase and sale was the
standard OREA form that makes title subject to such easements
provided that they do not “materially affect the use of the
property”. The agreement of purchase and sale included
the legal description that said it was “S/T LT605802”
(i.e. subject to the easement in that instrument number). The
easement agreement itself contained the usual clauses about keeping
the easement lands free of trees, buildings and not to be paved.
These are typical sewer easement restrictions.
It was a big house on a large lot and it had an inground pool
and hot tub that were not on the easement lands. But the buyer
claimed that they wanted to expand the pool, and maybe even put an
addition on the house. The court noted that the buyers had not
walked the back of the house when they bought it, or met with the
town about their “plans” or investigated their plans with
contractors, etc. However, they wanted out of the deal based on the
easements materially affecting their use of the land. (Interesting
that the court did not address whether a future use of the property
is even covered by the right to object.)
The court reviewed the cases dealing with considerations of what
makes such easements materially affect the use of the land. But
more importantly, the court inferred that “the existence of
the easements is not the real motive behind seeking rescission of
In earlier days, our courts tended to accept technical
objections to title and procedural issues on real estate
transactions. More recently, the courts tend not to accept
technical excuses for finding ways to get out of a deal when there
are other motives for refusing to close. I advise real estate
transaction lawyers that if they are advising clients on the
likelihood of success of such a strategy, they ensure that they are
very clear with their clients about the chances and the trend in
the cases and that they protect themselves accordingly. In this
case, the issue was determined on a Vendor and Purchaser
Act application. More often, the buyer takes the technical
position on closing, gets sued by the seller and often, the lawyer
for the buyer is brought into the action because of advice given
about whether he or she had the right not to close. The
seller’s lawyer may also be added to the mix based on likely
allegations that the buyer’s refusal to close was due to the
seller’s lawyer’s procedural error such as not tendering,
faulty tendering or poor advice on the seller’s rights.
For litigators, the advice is not that much different. There is
no guarantee of judicial success and the costs can far outweigh the
practical result. By the time the matter goes to trial, the only
real thing being fought over is the deposit and the costs of
success may dilute the amount that the seller will actually
recover. Litigators too should be forthright with their clients
about the practical result of pushing ahead with expensive
litigation, given that they are relying on technicalities. Settling
early, while not particularly satisfactory on a principled basis,
may prove the best financial result.
Technical objections may well have merit and as a result, a
mediator with a good grasp of real estate law, and real estate
practice and procedure may facilitate a speedy and fair result.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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From what I have read, the demand for cottage properties has soared during COVID. City folk are eager to get out of the city for a change of scenery, especially since many people are still working from home.
Cleveland Clinic Canada to provide all Fitzrovia properties with on-demand virtual care for its residents through its Express Care ®Online service
TORONTO, Sept. 29, 2020 /CNW/ – Fitzrovia Real Estate Inc. (“Fitzrovia”) announced today that Cleveland Clinic, a global healthcare leader, will provide all residents virtual access to world-class healthcare through its Express Care Online® service. Express Care Online is a virtual appointment service that allows individuals to access a Cleveland Clinic Canada clinician for non-emergency medical issues.
Each Fitzrovia property will provide residents access to a designated space in their building where they can receive a private and confidential virtual medical exam using Express Care Online® and TytoClinic™ remote diagnostic tools. All residents over the age of two will be able to be assessed for a variety of medical concerns includes screening for COVID-19.
Fitzrovia Real Estate strives to be a leader in lifestyle programming for residents with healthcare forming a key pillar. With the enhanced requirements surrounding COVID-19, access to virtual care will provide an added layer of comfort to Fitzrovia residents.
“Our strategic collaborations continue to be an important part of our company. At a time when convenient access to quality healthcare is critical to our well-being, we are proud to work with Cleveland Clinic Canada to provide world-class care for our residents. We care deeply about our residents and this complimentary offering illustrates our commitment to their safety and well-being.” said Adrian Rocca, CEO, Fitzrovia Real Estate.
The Waverley, Fitzrovia’s first purpose-built rental building (located at the northwest corner of Spadina Avenue and College Street to Fitzrovia residents in Toronto), will debut the virtual clinic amenity for residents. The building will be complete in late 2020 and will include 166 upscale suites with 1, 2 and 3-bedroom options.
Fitzrovia’s partnership with Cleveland Clinic Canada is the latest in several corporate partnerships where the company is committed to enhancing its resident living experience.
About Fitzrovia Real Estate
Fitzrovia Real Estate Inc. is a vertically integrated developer and asset manager of class-A apartment buildings across select neighborhoods in the Greater Toronto Area. Fitzrovia partners with public institutions, pension plans and high net worth investors who have an investment bias towards long term cash flow generating assets. In addition to focusing on traditional asset management, Fitzrovia focuses on driving income through active lifestyle management and exceptional customer service offering residents unique lifestyle choices that redefine urban living. Our customer-first approach means all design and construction decisions are deeply rooted in consumer insights to ensure our resident needs are not only met but exceeded. We differentiate ourselves through high quality design and innovative amenity programming combined with a strong desire to reimagine the resident experience. This is our competitive advantage. At Fitzrovia we think differently and build differently.
For more information, please visit: fitzroviarealestate.ca, follow @FitzroviaRealEstate on Instagram
The strength of the Canadian real estate market has continued to prove itself time and time again during the pandemic. While we’re not out of the woods yet, we are expecting continued growth for the duration of 2020, with an active market for the foreseeable future and balanced conditions at the national level into 2021. This is great news for Canadians.
The Canada Mortgage and Housing Corporation’s Chief Economist Bob Dugan, told reporters at a press conference recently that the agency stands by its previous forecast in May that warned of a decline in Canadian house prices between nine and 18%.
“I’m not convinced that we have a sustainable basis for housing demand in the economic disturbance that’s going on related to COVID-19,” Dugan said. “That’s why I say I stand by the forecasts.”
While I can appreciate some of the reasoning that went into CMHC’s prediction, especially in the spring when so much was still unknown, . The market data doesn’t support such a steep price decline, especially with the two largest real estate markets of Toronto and Vancouver continuing their upward momentum. The Prairies are facing different circumstances and challenges due to the resources sector, however Ontario and BC are expected to offset slower activity in Saskatchewan and Alberta.
Canadian Real Estate Prices Have Remained Resilient
Nobody could have predicted the success of the Canadian real estate market in the wake of COVID-19. At the height of the pandemic, March and April 2020 experienced dramatic declines in activity, but transactions quickly resumed across the country as real estate professionals and consumers alike adapted to social distancing measures and embraced technology to continue transacting, despite disruptions to the economy and every facet of daily life.
Last month we at RE/MAX Canada revised our forecast for national average house price in 2020, increasing it to +4.6% from our original expectation of +3.6% at the end of last year.
In terms of declining prices, “the impact was on rent as opposed to home ownership,” said Benjamin Tal, Chief Economist at CIBC World Markets. His optimism in the Canadian housing market was due to continued low interest rates and strong pent-up demand. “Eighty per cent of jobs lost were in the service sector. Many of them were low-income and many of them were renters. So, the impact was on rent as opposed to home ownership,” he noted.
Economists Aligned in Strength of Housing Market
RBC Economics recently reported that a large-scale decline was unlikely. “The pandemic completely disrupted normal seasonal patterns by shifting activity from the spring to summer. With pent-up demand now largely exhausted, we see activity cooling later this fall. This should let some of the steam out of prices though not to the point of causing outright declines on a large scale.”
TD’s Beata Caranci also commented on Canada’s “swoosh” economic recovery and the housing market. The level of unemployment suggests the housing market should not be as active as it is. However, when you look at income levels, it all makes sense. Incomes today aren’t behaving like we’re in a recession, Caranci explained, and incomes are being supported at the same or at higher levels than in previous recessions. So, there’s a complete disconnect between the employment rate and income levels, which is adding fuel to the housing market.
So, if the real estate industry disagrees and economists disagree, just where is the CMHC getting its insight to support such a steep decrease?
Recently the Ontario Real Estate Association surveyed Ontarians, finding a strong majority think housing is an important (60%) or somewhat important (32%) contributor to the provincial economy recovery. They are now pushing on governments to help stimulate the market with incentives like a “Land Transfer Tax Holiday” to help get more homes on the market and address some of the supply issues the province in currently facing.
I do think we may see a “hangover” from the busy market we’re experiencing right now, but overall as we head into 2021, I think a prediction of more balanced conditions across the Canadian housing market is warranted. But an 18% decline in prices is highly unlikely.
When Donald Trump announced he was running for president in 2015, Elie Hirschfeld switched parties.
The Manhattan developer known for building the Crowne Plaza Hotel and residential towers Grand Sutton and Park Avenue Court had given sporadically to candidates in both parties in the past, including New Jersey Sen. Cory Booker and members of the Bush clan, and considered himself a Democrat.
But Hirschfeld has known Trump personally for decades. When Hirschfeld had an opportunity to develop the site that would become Riverside South on Manhattan’s Far West Side, he brought Trump into the deal. And he once rented office space in one of Trump Tower’s lower floors in the early 1980s.
“We became one of his first tenants in his office portion,” Hirschfeld told CO. “He built offices because he didn’t want to be alone. The apartments sold well, but the offices were slow.”
Trump behaved more like a real estate mogul than a political power broker back then, writing checks for politicians in both parties who could loosen regulations and advance zoning applications. He has sprinkled approximately $1.5 million in contributions to national candidates and party committees since 1979, according to federal election records. Many were Democratic officeholders in New York and New Jersey.
“I’ve given to everybody because that was my job,” Trump explained while campaigning in Iowa in 2016. “I’ve got to give to them because when I want something, I get it. When I call, they kiss my ass.”
But Trump’s own thirst for the White House grew after Barack Obama’s victory in 2008, and an array of political consultants he met with, including David Bossie, head of the conservative advocacy group Citizens United, suggested Trump shower Republican officeholders with his cash to boost his profile.
Trump began tilting the majority of his spending toward Republicans in 2010, before he cut off Democrats entirely in 2011. By the following year, he had become a reliable Republican contributor, giving $325,000 to national candidates and party committees.
Trump always expected something in return. He had targeted his spending to lay the groundwork for a future presidential run. Yet when Republican leaders solicited him in late 2012, after Mitt Romney’s loss, Trump chastised them over Romney’s campaign strategies and refusal to deploy him as a surrogate in the final weeks of the race.
Trump’s experiences demanding favors and dispensing advice led him to eschew sizable contributions when he launched his bid in June 2015, claiming other candidates were “puppets” of their benefactors. Yet his allies quickly registered a super PAC named “Make America Great Again.” And Trump publicly revised his views, telling CBS’ John Dickerson in August 2015, “I would even take big contributors, as long as they don’t expect anything.”
One of his first significant donations was from the family of a New York-area developer. Seryl Kushner, executive administrator and spouse of the founder of Kushner Companies, who also happened to be the mother of Trump’s son-in-law, gave $100,000 to Trump’s Make America Great Again PAC in July 2015. (Disclosure: Seryl Kushner is also the mother-in-law of Observer Media chairman, Joseph Meyer.)
Elie Hirschfeld wrote a $2,700 check in February 2016, but the campaign’s fundraising arm was so disorganized he had to call Trump’s secretary Rhona Graff for instructions about how to send Trump the money.
“I did it because he was a friend,” said Hirschfeld, who is not currently working with the Trump Organization. “I didn’t think he had a chance to win at the time. The sense I had was it was a promotional effort, but it took awhile for me to realize it was his intent to win. When Donald puts his mind toward something, he usually gets it done.”
The Latest Round
Trump has hauled in a massive sum for his re-election this cycle, including from New York’s real estate community, after Hillary Clinton outraised him nearly 2 to 1 in 2016.
Eager to avoid being an underdog as a sitting president, Trump filed for re-election hours after his inauguration. And, after campaigning as a political outsider against the Republican Party establishment in 2016, his campaign merged with the Republican National Committee to form a joint fundraising committee. The move allows Trump to share office space and staff with the party, coordinate events, and control which candidates receive money from the party.
That early planning was critical, and the Trump campaign collected $572 million through the first half of 2020, 32 percent higher than the $433 million it brought in four years ago, according to a Center for Responsive Politics analysis of federal campaign records.
Commercial real estate poured $15.9 million into Trump’s campaign coffers so far this cycle, the second-most of any business sector. That mark so far is 42 percent higher than the $11.2 million Trump coaxed from developers in 2016. Only finance has given more, though neither has had anything on what the Center for Responsive Politics describes as “retirees,” who have raised $89 million, and Republican officials, who have brought in $65 million.
But Trump once again trails a formidable Democrat despite having an early fundraising advantage. After prevailing in a 29-candidate field, former Vice President Joe Biden has led Trump in polls with a boost of support from suburban whites, the elderly and college-educated voters. Biden’s fundraising exploded once the primary finished, with the candidate raking in $702 million so far.
It hasn’t been difficult for Biden to raise money from developers either this year. In fact, he’s brought in $17 million from the real estate industry nationally — roughly $1 million more than Trump.
This Biden motherlode includes treasure from some of the biggest names in or connected to New York real estate. Four M Investments’ Dennis Mehiel forked over $202,815 to pro-Biden groups (with his firm kicking in $5,000 more), followed by executives at BCG Partners, who distributed $100,000 to pro-Biden groups and $85,310 directly to the candidate, and at the Blackstone Group, who gave $100,000 to pro-Biden committees, according to the Center for Responsive Politics. Other top real estate-related donors this election cycle include executives and principals at Fisher Brothers ($50,000 to outside groups and $6,705 to Biden), Cushman & Wakefield ($20,763 to Biden), Royal Realty, which is part of the Durst Organization ($20,000 to outside pro-Biden groups), and GFP Real Estate ($16,800 to Biden), whose chairman, Jeff Gural, co-hosted a $2,800-ticket party for Biden with Newmark Knight Frank CEO Barry Gosin in January.
Biden might not enjoy the same ties with real estate developers and investors as Hillary Clinton, a former senator from New York and currently a Westchester County resident. But Gural is a longtime Biden friend who held fundraisers for his Delaware Senate campaigns. The people in Gural’s social circle are mostly Biden supporters too.
“It’s hard to be friendly with Trump supporters to tell you the truth,” Gural told CO. “Biden’s a decent guy, and maybe that’s what the country needs right now.”
Property owners, investors and brokers are exactly the kind of professionals with whom Trump should be succeeding, though. The industry remains predominantly white and male and the president’s base in 2016 largely consisted of white males over the age of 50, according to a Pew Research Center analysis. Trump also received more support than Clinton from whites who earned more than $50,000, a Data for Progress analysis showed.
There is enthusiasm for Trump in the industry — stemming in large part from his tax policy, his approach to Israel and the stock markets’ performance during his presidency — and that energy has translated into larger donations from it than in 2016. Trump’s top real estate donors so far this year have been Greystone & Co. managing director Abraham Spria, who donated $100,000 to a pro-Trump group and $5,600 to the Trump campaign, and Landmark Abstract Agency president Jacob Rekant, who gave $37,000 to a pro-Trump group. Other top donors include individuals at Compass and Walker & Dunlop, who each gave about $25,000 to pro-Trump groups, while executives at Meridian Properties ($19,966), the Witkoff Group ($17,200), Hirschfeld Properties ($16,800), and the Lefrak Organization ($16,200) all gave directly to the Trump campaign. Four years ago, H.J. Kalikow & Co. president Peter Kalikow was the only developer who gave Trump more than $10,000.
“Trump brings out both extremes, but he has a lot who support him in the middle,” Hirschfeld, who serves as finance chair of the state Republican Party, said. “On financial issues, people in the real estate world believe Donald Trump is doing better than would be the case if we had a progressive-leaning president.”
But the president’s immigration policies, refusal to fund New York infrastructure projects, the cap he supported on state and local tax deductions, and abject mismanagement of the pandemic galvanized others to thwart him.
“I’ve never seen a level of disgust and anger on Donald Trump’s weakness on so many issues,” Jennifer Bayer Michaels, a longtime fundraiser for Sen. Charles Schumer and Gov. Andrew Cuomo who leads theNew York office of the pro-Biden super PAC Unite the Country, told CO. “People are frankly disgusted. I’ve had a lot to work with. New Yorkers in particular are distrustful of Donald Trump. They don’t like what they see.”
Why They Give
Real estate leaders from both parties see a connection between Trump’s surprise win in 2016 and the leftward reaction in New York politics that followed. Dozens of progressives won seats in the City Council and state Legislature beginning in 2017. Democrats, in fact, took complete control of the state government for the first time since 2010. Lawmakers then passed tenant-friendly rent regulations, while developers seethed, and are pushing for higher taxes on the wealthy to close city and state budget deficits.
“The best thing that could happen to the real estate industry in New York is for Trump to lose,” one real estate executive who is backing Biden but preferred to stay anonymous told CO. “Other than a tax cut that has benefited some real estate owners personally, the last three and a half years have been a disaster politically for real estate and in a lot of people’s minds the first step to recovery is Trump getting out.”
Trump’s policies and personality have cleaved the real estate industry in unexpected ways too. One Trump fundraiser has found a bevy of support from individual property owners who own a handful of buildings and from smaller family-owned real estate firms in the New York area. Those at larger real estate investment trusts, however, favor Biden but have been open to a Trump-friendly pitch, the fundraiser said.
“I am more willing to cold call somebody in real estate who has given money to both sides but to less progressive-type Democrats like Gov. Cuomo,” the Trump fundraiser said. “I’d be more willing to call them than an attorney. The real estate industry’s been demonized a bit in New York, and I think is open to at least listening, especially over the last few years.”
But a Biden supporter noted that it may all come down to a donor’s ideology, culture, and whether they live in New York City or the suburbs.
“The higher-level guys who in a good year make $1.5 million and live in Greenwich, that’s the Trump folks,” the Biden supporter said. “It’s not really cool to be a Republican in the city. How do you be a Trump Republican and not like gay people and be bigoted in New York City? That’s not the way we operate here. Do you think they’re going to let you on the board of the Museum of Natural History if you don’t believe in science or the board of MoMA if you want to deport people?”
Some real estate firms have deep divisions within their own ranks, with senior executives raising gobs of cash for both parties while managing to keep politics out of their Slack channels. Executives at Blackstone, for instance, a major player in real estate financing and investing, have raised $100,000 for Biden, while its CEO, Steve Schwarzman, has doled out $27.3 million to Republican candidates and PACs over the past two years, records show.
And Stephen Ross, chairman and CEO of the Related Cos., one of New York’s busiest developers and owners, hosted a swanky Hamptons fete for Trump last summer while its employees largely gave to Democratic congressional candidates. Ross in a later New York Times interview expressed regret for hosting the Trump event, but he wouldn’t tell the paper for whom he planned to vote.
With fewer than six weeks to go before the end of the race, the money will continue to flow and donors will vie for the ear of their candidate much like Trump did in 2012. Elie Hirschfeld hopes Trump provides aid for the Metropolitan Transportation Authority and other public facilities in New York and tax relief by reinstating the SALT deduction. Jeff Gural wants Biden to continue condemning violence and outside agitators causing confrontations at protests.
“I think deep down people would like to see the country united,” Gural said. “I don’t think they’re happy the country is so divided. I can’t wait for the election to see what people really think behind closed doors.”
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