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Panel upholds $21K fine, suspension for Edmonton real estate agent who admitted to fraud – CTV News

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EDMONTON —
A former Edmonton real estate agent who was fined $21,000 and suspended for one year by the Real Estate Council of Alberta has lost his efforts to stay those penalties. 

Mehboob Ali Merchant was seeking to stay the fine and suspension until his appeal date, tentatively set for March 17, 2020.

But in a Jan. 29 written decision, a three-person RECA hearing panel denied his application, noting Merchant had admitted to theft, fraud, identity fraud and withholding documents from investigators. 

“Allowing Mr. Merchant to continue to work as an industry member given these serious breaches that have already been committed will place the public at unnecessary risk and bring the industry into disrepute,” reads the decision. 

In seeking the stay, Merchant argued that being unable to work was causing him “irreparable harm” that outweighed any harm to the public should he be allowed to return to work. 

Merchant, an 11-year veteran of the real estate industry, did not respond to phone and text messages from CTV News. He declined to comment on multiple occasions over November and December of 2019 in reaction to RECA’s initial ruling.

As per its policy on individual cases, RECA declined further comment on the decision. 

LIFETIME BAN SOUGHT

Last October, a RECA hearing panel found Merchant leased a condo without permission, mishandled a commission, and withheld documents from investigators. 

Merchant appealed the discipline, seeking lighter penalties, arguing the wrong section of the Real Estate Act had been applied. RECA counter-appealed, and sought a lifetime ban against him.

“Had it not been for these errors, the Hearing Panel would have imposed the proper sanction of licence cancellation and lifetime licensing prohibition.”

Merchant worked under the name Ali Merchant in Edmonton with the Century 21 Platinum Realty company but is no longer listed on its website. 

‘THIS IS THEFT’

Merchant’s case stretches back to February of 2011, when he received $20,000 from his client to be paid as commission on the condo’s purchase contract. 

The RECA decision states that he instead deposited those trust funds into his own bank account. 

“This breach was a crime of knowing deception and proven dishonesty,” argued RECA’s case presenter. “He never gave it to his brokerage. This is theft.”

Merchant cited his industry inexperience at the time and called the deposit “a clerical oversight” which he said “can simply be dealt with administratively.”

“I did pay all applicable fees charged by my brokerage, and thereby, did not commit any theft,” Merchant argued as per the RECA decision.

LEASE DEAL CONFUSION

Four years later, the same condo (and owner) were at the centre of another incident involving Merchant in January of 2015.

According to the RECA decision, Merchant attempted to enter into a lease with the condo owner on the understanding he was acting on behalf of his brokerage.

In actuality, the tenant was a corporation Merchant had registered to appear to be his brokerage.

“He did this for the purpose of personally profiting and thereby committed identity fraud,” the decision reads.

While admitting his actions were reckless, Merchant argued the corporation was registered by his wife to handle her private real estate portfolio.

“It was not my corporation and I have never had any positions or rights to this corporation.”

RENTED WITHOUT PERMISSION

The next month, Merchant rented out the condo to a tenant, but did so without the owner’s permission and without telling that tenant he wasn’t authorized to lease the property, according to the RECA decision.

“This cost [the tenant] money because she had to move early and unexpectedly. This cost [the owner] money because she was deprived of the lawful use of her own property.”

The decision notes Merchant offered to pay the owner back but also that it was less than what he collected and the gesture came only after he was under investigation.

“[Merchant] unlawfully collected rent from [the tenant], which he kept for himself. This is fraud.”

Merchant argued he never told the tenant that he owned the condo but that he didn’t share with her the written agreement he had with the condo’s owner

“This was reckless on my part but not fraudulent.”

In April of 2015, the owner filed a formal complaint with RECA, sparking an investigation in which Merchant was accused of withholding evidence.

“RECA investigators asked Mr. Merchant multiple times to provide a copy of the lease with GC and copies of all correspondence in regard to that lease,” reads the decision.

“He intentionally withheld these documents.”

Merchant stated the documents were not in his possession when asked for them and that they were later recovered from the tenant by investigators.

Pending the outcome of the appeal, his suspension ends on Oct. 17, 2020.

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Real estate as a wealth creator – Ottawa Business Journal

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Who is the wealthiest person you know? Almost without a doubt they will tell you that they have substantial real estate holdings inside their portfolio.

If you’ve been toying with the idea of purchasing an income property, now is the perfect time to jump in. You might be asking yourself, “Why now?” Well, because there is an opportunity in the marketplace that I have never seen in my 20+ year career and will likely never see again.

Over the last two years, the value of your home has increased, on average, 40 per cent. The market has peaked and we are having a bit of a soft landing thanks in large part to the Bank of Canada raising the overnight rate four times already this year.

How is this an opportunity?

First, we have a cohort of first-time buyers with solid incomes and the best of intentions that simply cannot break into this market. They are your new tenants. The average home in Ottawa purchased today would require a household income of $137,050, assuming you had 20 per cent down. A six-figure income is now needed to buy the average home in Ottawa!

Secondly, the new found equity in your current home could be your ticket to getting into investment real estate. You may be eligible for an up to 80 per cent loan on the current market value of your home; equaling the down payment for your first investment property.

There are so many reasons why real estate is a wealth creator, but let’s start with this: Say you buy a $1 million property with 20 per cent down—in other words you invest $200,000 to buy a $1 million investment—but which number do you earn your return on? You earn a rate of return on the value of the building, not on the value of your down payment. Your tenants pay the mortgage and expenses, and you reap the rewards!

Ottawa has an average 5.6 per cent rate of return over the past 50 years. With 20 per cent down, you have a 5x multiplier on the market rate of return on your initial investment. Your down payment has earned a 28 per cent rate of return over the last 50 years! Do you know anyone in the stock market that can say the same?

Now, this is an oversimplification. To determine your actual rate of return you have to subtract the interest cost on the mortgage you are carrying and utilities, taxes, and maintenance. Individual results will vary, but real estate is a solid winner in any case.

Reason number two that real estate is a winner: Real estate values in Ottawa rarely go down on a year-over-year basis, and when they do the losses are quite small. In fact, Ottawa has recorded a contraction in average sale price only three times in the last 50 years.* The biggest one-year drop was 2.9 per cent. The second biggest was 1.9 per cent, and the third was 0.4 per cent.

American business magnate, investor, and philanthropist, Warren Buffet has famously said, “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.” Why is this so important? It’s important because it is very difficult to recover from losses.

If we return to the $1 million purchase example above: Imagine you had $1 million worth of stock and the market crashed… You probably owned Nortel stock around the 2000’s or bought Shopify at its peak recently. Your million dollars becomes $500,000 overnight. But what happens when there is a corresponding increase of 50 per cent in the marketplace? Are you back to $1 million? Unfortunately, you are not… Your $1 million crashed to 50 per cent, and when the market rebounds by 50 per cent you are left with $750,000 and a $250,000 loss. Ouch…. Now do you see the wisdom in Warren’s words?

This is merely the tip of the iceberg here, and a deeper dive into your particulars would be recommended. Reach out to a professional to help guide you through the process of starting your real estate empire one door at a time.

*According to Ottawa Real Estate Board historical trends stats.

About Sean McCann

It’s not about me. It’s about you and how your home tells your story. Far too often real estate can feel transactional. I’m not interested in transacting. My singular interest is in guiding you and your family to your best possible outcome. It’s about building meaningful connections, in an increasingly disposable world, and understanding how your home is the epicentre of your world. Let’s be honest, my family’s well-being and future success lies in the experiences I create and the advocacy that I earn with you today. I appreciate you and I intend to honour the trust that you place in our relationship. Let’s have some fun and do something special together!

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Real estate: Canada home prices and sales fall again – CTV News

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TORONTO –

The Canadian Real Estate Association says home sales fell for the fifth consecutive month between June and July, but the latest drop was the smallest of the five.

On a seasonally adjusted basis, the association says sales in July fell 5.3 per cent compared with June. The actual number of sales last month was 37,975, down 29 per cent compared with July last year.

“That leaves activity back in the pre-COVID range, or roughly 40 per cent below the peak of the demand-side blowout seen last year,” said Robert Kavcic, BMO Capital Markets senior economist, in a note to analysts.

“Unadjusted, it was the quietest July for sales since the financial crisis in 2020.”

July’s drop in month-over-month sales was the smallest of the past five months. Market watchers said it’s too soon to say whether that trend will continue.

Still, economists and CREA chair Jill Oudil said it is a continuation of the market cooling from the torrid pace seen last year and early this year, when bidding wars were the norm.

Much of the cooldown has been attributed to the Bank of Canada increasing its key interest rate by one percentage point to 2.5 per cent in July in the largest hike the country has seen in 24 years.

Mortgage rate changes tend to mirror such hikes, impacting buying power.

As the rates have risen and sales plummeted, many buyers have sat on sidelines, predicting better deals will come in the fall and frustrating sellers, who have had to come to terms with the fact that they likely won’t fetch as much as neighbours who sold in the winter.

“There’s definitely a lot more people who are waiting until September before they list properties and they’re trying not to list in August, if they don’t have to,” said Davelle Morrison, a Toronto broker with Bosley Real Estate Ltd.

As a result, new listings in July totalled 73,436, down six per cent from last July and on a seasonally adjusted basis, down five per cent from June.

When homes were flying off the market earlier this year, people could buy before they sold their own place and have little risk of their property not selling.

Now, Morrison is telling people to sell their place first because of how long properties are sitting.

She’s also telling her clients to “buckle up” if prices fall more and interest rates continue to rise.

The average sales price was $629,971, down five per cent from $662,924 last July and on a seasonally adjusted basis amounted to $650,760, a three per cent drop from June, CREA said.

Excluding the typically heated Greater Vancouver and Toronto Areas from the calculation cuts $104,000 from the national average price.

Kavcic feels the drops constitute a market correction that is playing out “almost everywhere, but to varying degrees.”

“Southwestern Ontario is feeling it hardest, with markets like Kitchener-Waterloo and London down roughly 15 per cent from their high already,” he said.

He’s noticed Vancouver prices have now fallen over four consecutive months and Montreal has been more immune to but is not escaping the downturn with drops in the last two months.

“We view Alberta as the market most able to weather this storm because it had already stagnated for a number of years before the pandemic, never saw the same froth as Ontario, and is now supported by near-$100 oil and population inflows from other regions,” Kavcic wrote.

“But, in a demonstration of the power of higher interest rates, even Edmonton and Calgary have been subject to a flattening (Calgary) or decline (Edmonton) in prices despite still-solid sales activity.”

This report by The Canadian Press was first published Aug. 15, 2022.

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BC's Home Buyer Rescission Period: Your Questions Answered – British Columbia Real Estate Association – BCREA

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The Home Buyer Rescission Period (HBPP), previously known as “Homebuyer Protection Period” and “cooling-off period,” is expected to be implemented province-wide in January 2023. With many details yet to be determined by the BC Government, we have been hearing from REALTORS® with questions. In this post we answer some of those questions.  

Bookmark this page since we’ll be updating this post as we learn more details from the BC Government. In addition, if you are interested in subscribing to BCREA’s regular advocacy newsletter, please email [email protected].  

What is the Home Buyer Rescission Period (HBRP)? 

The HBRP, commonly known as a “rescission period,” gives buyers the right to withdraw from a purchase agreement within a specified period of time after an offer is accepted. Without a rescission period, if a buyer wishes to terminate a contract, they would need to negotiate with the seller and would typically face significant financial penalties or legal ramifications.  

What properties will be subject to the HBRP? 

The policy will apply to the following types of structures: 

  • detached homes, 
  • semi-detached homes, 
  • townhouses, 
  • apartments in a duplex or other multi-unit dwelling, 
  • residential strata lots, 
  • manufactured homes that are affixed to land, and 
  • cooperative interests that include a right of use or occupation of a dwelling. 

What are REALTORS®’ requirements to inform their clients? 

All real estate licensees must provide general information on the HBRP to all consumers through a form approved by the Superintendent. Licensees must also provide an additional mandatory disclosure at the time of preparing an offer on behalf of a buyer and presenting an offer to a client, containing all of the following notices: 

  • the HBRP cannot be waived, 
  • the rescission period time length, 
  • the dollar amount of the rescission fee, 
  • the deposit handling, and  
  • HBRP exemptions.  

Are brokerages required to retain a copy of a rescission notice? 

Yes, brokerages must retain a copy of rescission notices that it prepares and is served to the seller or that the brokerage receives.  

How are sellers supposed to receive rescission notice? 

Buyers must serve rescission notice on the seller through one of the following methods: registered mail, fax, email with read receipt, and personal service. Rescission notices must contain: 

  • address, PID or description of the property, 
  • names and signature of the buyers, 
  • name of the seller(s), and 
  • date of notice. 

What is meant by “three business days?” 

For the HBRP, “business day” means a day other than a Saturday, Sunday or a statutory holiday. The rescission period is three business days, beginning the day after a contract is signed. 

How much is the rescission fee? 

Buyers who use their right to rescind will have to pay a fee of 0.25% of the purchase price. For a $1,000,000 home, this would result in a $2,500 fee paid to the seller.  

How does a HBRP impact other subjects in my contract? 

Other subjects are unaffected by the HBRP.  

What about For Sale by Owner (FSBO) properties? 

The HBRP applies to all residential real estate sales, which includes FSBO. 

Can the HBRP be waived? 

The HBRP cannot be waived. 

Are there any exemptions?  

. There are narrow exemptions, including: 

  • sales of residential real property located on leased land, 
  • sales of leasehold interest in residential real estate, 
  • sales at auction, 
  • sales by way of an Assignment of Contract,  
  • pre-construction sales of multi-unit development properties, which are already subject to a seven-day rescission period, and  
  • sales under a court order or supervision of a court. 

Will the termination fee be taken from the deposit? 

If a deposit is held in trust, brokerages must release the rescission fee to the seller upon rescission. The balance, if any, is returned to the buyer, despite what may be provided in the contract.  

Who will receive the termination fee? 

The rescission fee amount is provided to the seller. 

How can I learn more about the HBRP’s details when they are available? 

This blog post will be updated as we learn more about the HBRP from BCFSA and the Ministry of Finance. In addition, you can follow BCREA’s advocacy news, which will include updates on the HPRP, by subscribing to our Advocacy Update. To do so, please email [email protected].  

What are the next steps for BCREA?  

BCREA staff are updating and creating new Standard Forms and updating professional development courses to ensure REALTORS® are equipped with the tools needed to serve effectively clients. Staff are also meeting regularly with BCFSA to try and answer outstanding questions.  

Will the Ministry of Finance implement additional consumer protection measures? 

In May, BC’s real estate regulator, the BC Financial Services Authority, published an independent report, “Enhancing Consumer Protection in BC’s Real Estate Market,” which offered advice and recommendations to the Ministry of Finance to improve consumer protection. There was significant overlap between BCFSA’s advice and BCREA’s “A Better Way Home” paper. 

The Ministry of Finance has not indicated whether they will implement additional consumer protection measures within the coming months.  

What policies do BCREA recommend to improve consumer protection? 

Earlier this year, BCREA has published a white paper, “A Better Way Home,” which included more than thirty recommendations to improve consumer protection. BCREA does not support a HBRP, because it is not likely to have a meaningful impact on consumer protection and may have unintended consequences on affordability. 

If you have any additional questions, we encourage you reach out and share them at [email protected].  

Below are a list of other resources on the HBRP: 

To subscribe to receive BCREA publications such as this one, or to update your email address or current subscriptions, click here.

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