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Vancouver real estate: Court rules agreement not binding | CTV News – CTV News Vancouver

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A Vancouver man who sued the would-be buyer of his home for $600,000, claiming he was owed a deposit for that amount despite the deal falling through, has had his claims dismissed by the B.C. Supreme Court.

In a decision issued Tuesday and published online Wednesday, Justice Andrew P. A. Mayer found that an agreement signed by homeowner Mark Angus and prospective buyer John Williams is not an enforceable contract. 

Mayer’s decision details several months of negotiations in 2019 and 2020 between Angus, Williams and CDRW Holdings Ltd. – a property holding company owned by Williams’ wife – for the sale of a home on East 5th Avenue in Vancouver.

The court decision does not share the exact address of the property, which was first listed for sale in early 2019 for $7.7 million. In June of that year, Williams’ wife Donna made an offer on the property, which was rejected.

Angus and Williams continued to discuss the property after that time, eventually meeting on July 22, 2020, to discuss moving forward with the sale in two transactions totalling $6.8 million, according to Mayer.

At that meeting, the decision indicates, Williams drafted the agreement and both men signed it. The agreement laid out plans for the sale of the property for $6.4 million, as well as a subsequent purchase of $400,000 for various other items, including furniture and art.

In his decision, Mayer refers to the agreement as a “term sheet,” and notes that it is a one-page document with no title that does not refer to the property or its address. It does, however, include a bullet point indicating that Williams or CDRW would make a $600,000 deposit into a “lawyer’s trust account by July 24, 2020.”

Despite the purported deadline, no such deposit was ever paid, according to the court decision.

Instead, Mayer writes, after an inspection of the property that revealed issues with the building envelope, the Williams family decided it no longer wished to buy the property.

Angus had his lawyer create a formal purchase and sale agreement, which was sent to Williams on July 29 with a deadline of July 30. When Williams did not respond, Angus’ lawyer sent follow-up emails that were also ignored.

According to Mayer, none of this correspondence referred to the term sheet. The first reference to the alleged agreement came in an email to Williams from Angus’ lawyer on Aug. 12, 2020, which “set out Mr. Angus’ position that he considered the alleged agreement for purchase and sale of the Property to have been repudiated.”

Angus eventually sued Williams and CDRW for $600,000, arguing that the signed term sheet constituted a legal obligation for the man or the company to pay the deposit.

Mayer rejected this argument, concluding that a “reasonable objective bystander” would not view the agreement as legally binding, given the circumstances surrounding it and the lack of detail within it.

“The term sheet does not refer to the property,” the judge writes in his decision.

“Although it is a virtual certainty that the property was the subject of the ‘first transaction’ in the term sheet, the lack of even a cursory reference to the property suggests a casualness which is not consistent with an intention to formally bound to a contract to purchase an expensive piece of real estate.”

That casualness, coupled with multiple written references – including within the term sheet itself – to having a lawyer or real estate agent complete paperwork, would lead a reasonable objective bystander to conclude that “the understanding or intention of the parties was that their legal obligations were to be deferred until a formal contract had been approved and executed,” Mayer writes.

For these reasons, the judge dismissed Angus’ lawsuit, noting that the usual order would be that the defendants are entitled to payment of their court costs, and inviting the parties to make submissions on that matter if they wish. 

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Real estate: 27 per cent of homeowners accessed credit, survey finds – CTV News

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A new survey exposes balance sheet vulnerabilities for some Canadian homeowners amidst rising interest rates.

Released by BNN Bloomberg and RATESDOTCA, the survey found that 27 per cent of homeowners who participated have accessed a home equity line of credit (HELOC). Almost 80 per cent of those participants have used it, and half of them said they have done so in the last two years.

Aside from the pressure of increased interest rates, HELOCs are complicated by new real estate loan guidelines announced by the Office of the Superintendent of Financial Institutions on Tuesday. In late 2023, borrowers will be required to pay principal and interest on combined loans above 65 per cent of the property value.

Prior to these guidelines, HELOCs were an ideal way for homeowners to tap into their home equity during the prior decade’s low interest rates and high home prices, but the survey findings suggest that the Bank of Canada’s recent interest rate increases might have changed the way older Canadians leverage their home value. With HELOCs being based on variable-rate interest, borrowers will be hooked to higher payments.

Since HELOC lenders are able to demand full payment at any time, this can raise concerns for consumers who have not set aside extra money to pay down their HELOC amidst the pressure of rising interest rates.

According to the survey, 58 per cent of respondents said they have an outstanding balance on their HELOC.

Although the majority said they borrowed less than $50,000, 10 per cent said they borrowed more than $100,000. Balances of at least $50,000 were more common for Canadians aged 55 and older.

Of the 1,507 Canadians surveyed, 65 per cent said they were homeowners.

With files from BNN Bloomberg and RATESDOTCA

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In Ontario, real estate buyers are holding out for a price cut – The Globe and Mail

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A house for sale in the Riverdale area of Toronto on Sept. 29, 2021.Evan Buhler/The Canadian Press

The stalemate that is taking hold in the Ontario real estate market right now arises from a belief that is becoming more entrenched each month: buyers reckon prices have farther to fall.

House hunters see properties in some areas selling at 15 per cent or so below the high-water mark set in the first quarter and decide to hold off for an even steeper discount. Sellers either refuse to budge or feel the landscape shifting under them and rush to complete a transaction before more ground crumbles away.

The war in Ukraine, stubborn inflation and the rise in interest rates have precipitated a much more tumultuous real estate market than industry watchers were predicting even a few months ago, according to John Lusink, president of Right at Home Realty.

Mr. Lusink says sales for June are set to come in about 26-per-cent below even his conservative projections at the start of the year, continuing a trend that has been on a downward slope since February.

“We can throw that forecast out the window,” he says of his projections for 2022.

The landscape is the same across the Right at Home network, which spans 12 regions of Ontario.

The number of listings, meanwhile, is gradually increasing after a slow spring, he adds.

Mr. Lusink expects the final tally for Right at Home’s sales in June to show a 37-per-cent drop from the same month last year.

“It’s, needless to say, concerning.”

Rishi Sondhi, economist at Toronto-Dominion Bank, points out that sales and prices have fallen disproportionately in Ontario and British Columbia, where prices climbed the most during the pandemic. The retrenchment in activity is especially hard in the Greater Toronto Area, where investors have played a particularly large role in the past year.

The downturn is part of a worsening picture across Canada, as sales and prices continued to decline in May under the weight of higher interest rates, Mr. Sondhi points out. Some sales were likely pulled forward to late 2021 and early 2022 as people braced for higher rates, he adds.

The economist says some GTA buyers also likely purchased new homes before selling existing properties, expecting the market would remain hot, he adds. Those sellers may be forced to accept lower prices now in order to complete the new deal, but he expects that dynamic to run its course before too long.

Mr. Sondhi is forecasting a continuing decline in prices throughout the rest of the year as a reflection of sharply higher interest rates.

Alongside the buyers betting that prices will slide, Mr. Lusink says, stands another cohort ready to buy – but the task has become much harder with the rise in rates. One buyer Mr. Lusink spoke with recently had obtained a fixed-rate mortgage at 4.3 per cent, which is almost double the rates buyers were able to lock in just a couple of years ago.

The mortgage “stress test” requires borrowers to show they can handle mortgage rates approaching seven per cent and above, he points out.

A recent survey commissioned by Right at Home also shows a shift in attitudes: Only 19 per cent of potential first-time homebuyers in Ontario plan to buy in the next two to three years, compared with 30 per cent who planned to buy in 2021, according to the study.

The percentage of homeowners planning to sell who are doing so to take advantage of current market conditions increased to 23 per cent this year from 11 per cent last year, the data shows.

The Maru Public Opinion Survey polled 813 Ontario adults in May and has an estimated margin of error of plus or minus three per cent 19 times out of 20.

In Burlington, Ont., real estate agent Tanya Rocca is already seeing homeowners preparing properties for sale before the fall market arrives.

“It’s very busy right now,” says the agent with Royal LePage Burloak Real Estate Services. “People are panicked.”

Ms. Rocca says prices in the area which have dropped between 12 and 15 per cent from the February peak.

The average price of a freehold property dropped to $1.431-million in May in Burlington, she says, compared with the $1.51-million buyers were paying in April and the $1.6-million in February and March.

Homes on Bessborough Drive in Toronto’s Leaside neighbourhood on May 11.Fred Lum/the Globe and Mail

The affluent city, which sits on Lake Ontario west of Toronto, was one of the many communities that saw a large influx of buyers during the pandemic as people sought more space. Burlington’s historic downtown core and large selection of detached houses with pool-sized lots have made it very popular with families.

Ms. Rocca says many buyers didn’t even have a chance at a house in the midst of ferocious bidding wars; now people have their choice of properties.

Some current sellers have been caught in the market transition, Ms. Rocca adds, because they bought a new property before selling an existing one.

“Buyers, in fairness, are getting the power back – which they love,” she says. “There are great opportunities out there because people need to sell.”

Ms. Rocca was shocked at some homeowners earlier this spring who were disappointed on offer night when they received bids that came in $300,000 or $400,000 above the asking price.

“People were debating whether they should take it.”

She recalls one pair of homeowners with a home backing onto a golf course who listed their property with an asking price of $2.5-million. The sellers were disappointed they didn’t receive a hefty amount above asking.

“They got their asking price literally the week things started to shift,” Ms. Rocca says. “They were so close to not taking it.”

As the summer begins, it’s not uncommon to see listings sitting with 30 to 50 days on market, she adds.

In the current environment, Ms. Rocca recommends setting a price near the realistic market value. She often “sharpens” it a little bit to make it more attractive compared with other competing properties in the area.

To help homeowners come to terms with the new reality, she stresses that first-quarter prices were the result of an overheated market – not an accurate reflection of value.

“This is not money they’ve lost – they never had it.”

Ms. Rocca says some people who purchased properties in Burlington at the beginning of the pandemic are now being called back to offices in Toronto. With more cars on the road and the price of gas skyrocketing, many are reluctant to commute.

“People were making such rash decisions during COVID,” she says, adding that some of those folks are now selling and moving back to the GTA.

With such an extended run-up in real estate prices while rates were low for years, the market in Ontario saw a few blips but no real correction, she points out. A move to restore balance is healthy, in her opinion.

“I think we’re going through a cycle right now which is very much needed.”

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OSFI makes real estate loan changes aimed at reducing lender risk – Investment Executive

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IIROC’s Kriegler to lead new SRO

Regulators are also forming a new advisory committee to review SRO consolidation

  • By: IE Staff
  • June 27, 2022
    June 28, 2022
  • 17:46

Ottawa lost average of $22 billion a year in unpaid tax from 2014-2018: CRA

The agency released its first report on Canada’s overall tax gap

Executive moves this week

Industry veterans are taking on new roles, including Andrew Kriegler with the forthcoming new SRO and Morningstar’s Michael Jantzi

CSA lays out priorities under incoming chair

Three-year plan focuses on CFR enforcement, dispute resolution and crypto

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