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Volatile real estate market makes divorce even more painful – The Globe and Mail



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The challenges of going through a divorce in the current real estate market may begin as soon as one partner decides to move out.fizkes/iStockPhoto / Getty Images

Higher interest rates and strained affordability in the Toronto-area housing market are creating thorny issues for married couples going through separation or divorce.

The turbulence that often comes with relationship breakdown is magnified in 2023 if the couple owns property and needs to divide the value of the matrimonial home in a volatile real estate market.

“This is creating increased conflict,” says Lisa Chegini, managing partner at the family law firm Caspersz Chegini LLP in Vaughan, Ont., “It includes this whole unfortunate circumstance of each party’s money being held hostage in the home.”


The challenges may begin as soon as one partner decides to move out.

A spouse who wants to buy another house or condo unit may come up against the obstacles of low supply, high prices and stringent conditions around getting a mortgage, she says.

And moving into a rental property can be just as difficult with low vacancy rates and soaring rents, Ms. Chegini adds.

For most couples, the home is their biggest asset, she points out, and the timing of a sale becomes all-important. Some homeowners who purchased at the height of the market during the pandemic, for example, may not be able to sell for the same amount today.

In that case, one or both spouses might favour putting off a sale with the hope of fetching a higher price later.

There are caveats with that approach, warns Ms. Chegini, explaining that, when both spouses are on title, the one who moves out needs to keep paying half of the mortgage, property tax and insurance payments in order to benefit from a rise in value.

A spouse who is not on title is not entitled to any share of the gain in the value of the house after the date of separation.

Few people have enough cash to contribute to those carrying costs while they are also paying for rent or the mortgage on a new place, she points out.

Ms. Chegini is seeing adults move back in with their parents or siblings as a result.

The financial strain is exacerbating existing problems between many couples, she adds.

“It is more acrimonious than in the past.”

Such scenarios are also leading to an increase in the number of partners wanting to purchase the other’s share of the matrimonial home – especially when the couple has children.

Single parents often figure they won’t be able to afford another house in their neighbourhood, she says, and they’re reluctant to move the kids a long distance from their current school.

In family law, one partner does not have the right to buy out the other’s equity in the home, she points out, and a judge can’t order a reluctant party to agree.

Therefore, the only way to come to an agreement is for the two to co-operate, she says. If the couple is likely to clash, she advises them to sell instead.

In her own practice, she figures no more than 30 or 40 per cent of couples are able to reach such a deal.

In the past, couples would often estimate the value of the home and divide it up between them without bringing in an appraiser.

But market values have been fluctuating in the past couple of years, and sometimes one partner will try to gain an opportunity to increase their own wealth by speeding up a sale, stalling or shopping around for the appraisal that suits them.

“Once they see these appraisals coming in, they start fighting over the numbers,” she says.

Ms. Chegini is currently working on a file with one appraisal done in February and another in May. Prices in the Greater Toronto Area shot up 10 per cent or more during that time.

“Now we have a battle of the appraisals,” she says, adding that the spouses will likely take the matter to court.

But Ms. Chegini cautions that such legal wrangling is often not worthwhile because mounting legal fees will quickly erase any gain that one side makes. In her experience, couples often have trouble letting go of any amount above about $25,000.

Because of the recent flux in the market, Ms. Chegini now recommends that couples bring in an appraiser before they start even an informal negotiation around one spouse staying in the home.

The spouse who wants to keep the house may have trouble qualifying for a mortgage at current mortgage rates, Ms. Chegini warns. She has heard of couples trying to find creative solutions such as having the departing spouse remain on the mortgage so that the lender will see two incomes.

Those tactics involve all kinds of risk for the lender and the couple, she says, but the lack of housing is making it harder for one party to hold onto a house.

“The chronic shortage is really creating these pressing issues.”

Mortgage broker Jason Georgopoulos of Dominion Lending Centres, has also been meeting with couples who grapple with financing after a split.

In one case, a partner wants to buy the other’s share of the house but can’t qualify for a mortgage at a rate that makes sense, says Mr. Georgopoulos.

At the start of their negotiations, the couple calculated costs assuming a mortgage rate in the five per cent range. Now the spouse who wants to purchase needs to qualify at an interest rate of 8 or 9 per cent.

The changing circumstances have caused the couple to go back to the bargaining table, he says.

Appraisals, meanwhile, have been unpredictable.

“The valuations of properties are coming in all over the place – it almost changes week-to-week and month-to-month depending on what’s happening in your neighbourhood.”

Mr. Georgopoulos also urges the borrower to make a realistic decision about whether the financial burden they are taking on is feasible for the long term. He wants to ensure that clients are agreeing to a plan they can live with for five years or more.

“Just because I can get you the money doesn’t mean you should take it,” he says.

Ms. Chegini says lawyers who practice family law were hoping that turmoil would settle down as couples became accustomed to dealing with COVID-19. At the peak of the pandemic, many tensions arose around children and precautions such as masking and visiting family, she says.

But climbing interest rates and stubborn inflation have exacerbated many conflicts, she says, and people lack visibility about the future.

“There’s that feeling of loss of control because there’s no light at the end of the tunnel.”

In addition to the pain of marriage breakdown, couples are grappling with greater financial hardship if the property has lost value since they purchased it.

“They say, ‘I thought my biggest investment would have some kind of return – even if my relationship didn’t work out.’”

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Class action against commissions in real estate clears another hurdle



After two years of deliberations, the Federal Court has granted approval for a class-action lawsuit alleging price-fixing and anti-competitive practices to proceed against the real estate industry in the Greater Toronto Area (GTA).

The lawsuit, filed in April 2021 on behalf Toronto resident Mark Sunderland and anyone who sold a home in the GTA after 2010, alleges misconduct by several of the nation’s leading brokerages, including Century 21, Remax and IproRealty Ltd. The Canadian Real Estate Association (CREA) and the Toronto Regional Real Estate Board (TRREB) are also named in the lawsuit.

On Sept. 25, Chief Justice Paul Crampton permitted the case to proceed, positing that there exists a plausible argument that rules put illicit restrictions on the pricing of buyer brokerage services. The respondents had petitioned the court to dismiss the claim, citing a lack of merit. 


The lawsuit contends that the brokerages engaged in an agreement to artificially increase buyer brokerage commissions, which were shouldered by home sellers in the GTA. It is also alleged that CREA and TRREB facilitated and contributed to the execution of this arrangement.

Commission structures for real estate agents and their brokerages differ nationwide, usually involving a percentage-based commission derived from a home’s sale price. In Alberta and British Columbia, the commission structure is typically seven per cent on the initial $100,000 and three per cent on the remaining balance. Conversely, in Toronto, commission is five per cent on the entire amount of the sale.

Although the seller is responsible for paying the entire commission, it is divided between the brokerage representing them and the one representing the buyer.

According to Garth Myers, a partner at Kalloghlian Myers LLP — the law firm responsible for filing Sunderland’s lawsuit — the agreement to split the commission obstructs market competition by forcing sellers to shoulder costs that would typically not be incurred in the absence of such an arrangement, consequently restricting the ability to negotiate prices and leading to inflated brokerage commissions. 


“What we’re hoping to achieve in this case, is to eliminate these rules, which will result in cost savings to real estate sellers and buyers in the Toronto market,” Myers said. “We think there’s massive public benefit if we are successful. And so far, the court has agreed with us.”


Kalloghlian Myers is pursuing compensation not just for Sunderland, but also for those who have sold residential real estate dating back to 2010.


“We won’t stop until we can get compensation for sellers who have been impacted by this,” stated Myers.

In an email, the Canadian Real Estate Association said, “we continue to believe the claims against TRREB, CREA and other defendants are without merit, and we will continue to defend our members in this case.”


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This $2 million Toronto home underwent a huge makeover and now looks better than ever



Back in 2014, we featured 325 Perth Ave. as the house of the week, boasting how great of a catch it was with its open concept layout, basement apartment, and deep backyard.

Nine years later, it’s had a massive glow-up and is now better than ever.

Listed for $1,899,000, 325 Perth Ave. underwent the renovation of a lifetime back in 2021.

325 Perth Avenue Toronto


The living room with custom built-ins.

“The owners bought this house in 2014 against 32 other offers and for 133 per cent over asking price, and the media debated heavily at the time if it was a smart decision,” realtor Maggie Lind told blogTO.

But they really made the best of their decision and in 2020, they began a renovation to add a 16-foot addition, build a laneway suite and gut the main floor.

325 Perth Avenue Toronto

The primary bedroom ensuite bathroom.

But then the pandemic hit.

325 Perth Avenue Toronto

One of three bedrooms in the main house.

“Because of COVID the laneway house was completed first, and the owners, and their two boys (both under 6) moved into it, even though it was only 350 square feet. Each night they went back to the construction to sleep in the two bedrooms on the second floor,” added Lind.

325 Perth Avenue Toronto

The kitchen.

The sacrifice was worth it, though, as the renovated home is gorgeous.

325 Perth Avenue Toronto

The dining room.

The main floor, with an open-concept floor plan, wide plank white oak flooring, and custom built-ins, is beautiful.

325 Perth Avenue Toronto

The hidden powder room beside the dining room.

There’s also a cheeky hidden powder room on the main floor and the custom kitchen is sleek and modern with quartz counters.

325 Perth Avenue Toronto

The family room.

The 16-foot addition at the back of the house is now a cozy family room that walks to the back garden and is filled with natural light.

325 Perth Avenue Toronto

What was formerly the primary bedroom is now another bedroom upstairs.

Upstairs, there are three bedrooms, including a completely new primary suite.

325 Perth Avenue Toronto

The new primary bedroom.

It has soaring ceilings, double closets, and an ensuite bathroom with a deep soaker tub, walk-in shower, and double vanity.

325 Perth Avenue Toronto

The lower level unit.

The basement has a separate entrance and could be used as an income-generating space as it has a kitchen, bedroom and bathroom.

325 Perth Avenue Toronto

The bedroom in the basement.

And if one income-generating space wasn’t enough, there’s also the laneway house at the back of the property.

325 Perth Avenue Toronto

The laneway house with a garage.

The laneway home is similar in design to the main house – modern, bright, and airy.

325 Perth Avenue Toronto

The kitchen in the laneway house.

It’s a studio apartment with about 400 square feet of living space, as well as parking and a storage room. It also has its own laundry, making it ideal for tenants and guests alike.

325 Perth Avenue Toronto

The backyard with storage.

Currently, the laneway house is tenanted for $1,700 a month.

325 Perth Avenue Toronto

The back of the house with two decks.

This home really went from a snack to the full meal deal.


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New to Canada? Here’s how to purchase or rent a home



As a new immigrant, navigating the Canadian real estate market can feel daunting, especially if it differs significantly from that of your home country.

Whether you’re contemplating buying or renting a home, this brief guide will help you get a better lay of the land so you know what to expect.

I’ll outline some of the most common property types while explaining the documentation you need to rent or purchase a home, and the key expenses you should budget for.

Can non-Canadians purchase real estate in Canada?

Before jumping in, I’d like to address the Prohibition on the Purchase of Residential Property by Non-Canadians Act and how it could affect new immigrants searching for housing. The act was passed by Parliament(opens in a new tab) in June 2022 and came into effect in January 2023.


The temporary foreign homebuyers ban(opens in a new tab) was passed in an effort to reduce pressure on the real estate market and make housing more affordable. The ban will remain in effect for two years before expiring and effectively prevents non-Canadians and foreign corporations from purchasing a home.

Canada has been going through an affordable housing crisis(opens in a new tab) characterized by strong demand and a lack of affordable homes. The current shortage has been one of the leading drivers of inflated home prices and rental rates(opens in a new tab), experts say.

New data from the Canada Mortgage and Housing Corporation (CMHC) shows that 3.5 million more housing units(opens in a new tab) will need to be constructed in order to restore affordability by 2030, in addition to homes that are already being built.

While the foreign homebuyers ban remains in place today, immigrants who have obtained permanent residency status or citizenship are exempt. Some other exemptions include(opens in a new tab):

  •  International students(opens in a new tab) who meet certain requirements, including having spent most of the last five years in Canada
  •  Foreign nationals with temporary resident status, such as refugees and those fleeing international crises
  •  Consulate staff members and diplomats
  •  Foreign work permit holders with at least three years of filed tax returns

Types of properties you can rent or buy

Now that we’ve discussed the elephant in the room, here’s a quick look at the most common types of property you can rent or buy in Canada:

  •  Detached house: A single-family home that stands alone on its own property, separated from other homes by open space.
  •  Semi-detached house: A house that shares one common wall with another home, but is not attached to any other structure.
  •  Townhouse: A multi-level home that shares one or more walls with adjacent homes, usually in a complex.
  •  Condominium: Condos are individually owned units within a larger building or complex. Owners have exclusive rights to their units but share common areas such as hallways and building amenities.
  •  Apartment: A rented living space within a larger building. Apartments are similar to condos, but require a monthly lease agreement and can’t be purchased outright.

Most common living arrangements

Whether you plan on renting or buying a home, these are the most common agreements you can choose from.

1. Standard lease

A standard lease is a fixed-term rental agreement(opens in a new tab) that can be as long as both parties want. Typically, apartments offer lease terms that range from three months to a year in length, or even longer. This legal agreement outlines monthly rent payments, utility responsibilities, and other rights, rules and responsibilities that both parties have agreed to.

Remember that each province and territory has specific laws and regulations regarding landlord and tenant obligations. It’s always a good idea to research some of the key regulations in your province or territory so that you know your rights as well as what’s expected of you.

Signing a longer-term lease or renewing an existing one can lock you into a lower rental rate, versus terminating your current tenancy and looking for a new rental property on the market. In many provinces and territories, landlords are allowed to increase rent(opens in a new tab) once a year for existing tenants, and several governments have set limits on how much landlords can raise rates.

Meanwhile, in several provinces such as Ontario, there are no limits on how much a landlord can ask from a new renter. Also keep in mind that breaking a lease early can result in penalties.

2. Month-to-month lease

Many landlords offer month-to-month rental agreements for those who are uncomfortable with a long-term commitment. Most provinces and territories require tenants to provide a minimum of either one month(opens in a new tab) or 60 days’ notice(opens in a new tab) if they plan on leaving, regardless of whether they have a long-term or monthly lease.

However, in provinces such as Nova Scotia(opens in a new tab) and New Brunswick(opens in a new tab), tenants with monthly leases have more flexibility. Those who rent on a monthly basis must give at least one month’s notice before moving out, while those on a year-to-year lease must provide at least three months’ notice.

The downside of month-to-month leases is that rental rates are generally higher, as landlords assume more risk. Once you move out, it could take them time to find another tenant, and they may need to invest money in cleaning or preparing the unit for the next occupant.

3. Purchasing a home

Buying a home involves securing a mortgage with a bank or other financial institution, and making an initial down payment. You own the property and are responsible for all mortgage payments, property taxes, insurance and maintenance. It’s a long-term financial commitment that may involve a lengthy approval process.

4. Rent-to-own

With today’s high mortgage and interest rates(opens in a new tab), some buyers are considering rent-to-own agreements(opens in a new tab), which offer a compromise between renting and purchasing.

In a rent-to-own arrangement, tenants rent a property for a specific period of time with the option to purchase the home at the end of their rental term, often at a predetermined price. Additionally, a portion of the rent payments may go towards the home’s down payment.

The downside is that rent-to-own arrangements typically involve higher monthly payments. Your payments will be broken down into two parts(opens in a new tab) – your monthly rent and the money you put towards a down payment or home equity.

Renting: The basics

A landlord is defined as an individual, company, or entity that owns a property and leases it to a tenant in exchange for rent payments.

When you apply to rent a property, landlords typically ask you to complete an application form with your personal details. Although documentation requirements may vary depending on the landlord, most rental agreements require prospective tenants to provide the following documentation:

  •  Passport, visa, or immigration documents for identification
  •  Proof of income, such as bank statements, pay stubs, or an employment letter
  •  References from previous landlords (if applicable)

Many landlords may also request approval for credit and background checks. Your landlord may require a higher security deposit if you’re new to Canada and have little or no credit history. A security deposit generally can’t be higher than one month’s rent(opens in a new tab), but those with good credit and rental history may be offered a lower security deposit.

The fees you’ll need to budget for include:

  •  A security deposit: While this fee can vary according to province or territory(opens in a new tab), it is usually equal to one month’s rent and is paid at the start of the tenancy. You should receive this amount back at the end of your lease agreement, along with any accumulated interest, provided you leave the unit in good condition and don’t violate any terms. Landlords in provinces such as Ontario often use this money as payment for the last month of rent.
  •  Common area maintenance (CAM) fees: Often referred to as “CAM fees” or simply “maintenance fees,” this is paid in addition to your monthly rent to help maintain the property’s shared spaces. Fees may cover services such as landscaping, pest control and trash service.

Your monthly rent payments are typically made in one of four ways:

  •  Cash
  •  Cheque
  •  Electronic bank transfer
  •  Credit or debit card

Each landlord may have their own system for collecting rent payments. For example, larger commercial properties often won’t accept cash due to security risks and may require a cheque, money order, or electronic payment.

In most provinces and territories, landlords aren’t allowed to increase rent more than once every calendar year and must adhere to laws governing rental increases. Landlords must also give you between one and three months’ notice of plans to increase rent, depending on the length of the agreement. Once your lease is up, you can renew it or move out.

Buying a home: The basics

The application process to buy a home is typically far more demanding than renting. Unlike signing a lease agreement, buying a home requires you to obtain a mortgage.

A mortgage is a loan from a bank or financial institution to finance your home purchase. You’ll pay regular installments over a fixed period of time. Along with contributing to your home equity, a portion of your payments will go towards interest fees charged by the lender.

There are two types of mortgages you may encounter:

  •  Fixed-rate mortgage: These have a constant interest rate throughout the term, ensuring predictable monthly payments. Borrowers are shielded from interest rate fluctuations in the market.
  •  Variable-rate mortgage: The interest rate can change based on market conditions, potentially affecting monthly payments. Borrowers might benefit from lower rates but also face the risk of rate hikes.

In addition to documents and references that show proof of residency, most lenders want to see several years of financial history to ensure you’ll be able to keep up with the long-term commitment of a mortgage. This can include proof of income and employment history.

Your credit report and score(opens in a new tab), which determine your creditworthiness, are also major factors that lenders will consider before approving you for a mortgage.

Traditional mortgages usually require a down payment of at least 20 per cent of the home’s value. CMHC-backed mortgages may only require a five per cent down payment(opens in a new tab), but will involve a lengthier approval process and the purchase of additional mortgage insurance.

Here’s a quick breakdown of the fees associated with buying a home:

  •  Down payment: This is a percentage of the home’s purchase price that is paid prior to moving in. Providing a down payment allows you to secure your mortgage. Some lenders may ask for an even larger down payment based on your individual financial situation.
  •  Mortgage payment: This is the monthly amount you pay for your home loan.
  •  Mortgage insurance: A monthly insurance payment that provides coverage in the event that you default on your loan. This is usually optional for traditional mortgages but is always required for CMHC-backed loans.
  •  Homeowners insurance: This insurance covers you from unexpected damage to your home, such as hail, flooding, and natural disasters. This coverage can be obtained through insurance providers.
  •  Property taxes: These are annual taxes paid by property owners to the municipal government.
  •  Closing costs: These are additional expenses, aside from the cost of purchasing your home, that must be paid to complete a real estate transaction. They can include a land transfer tax(opens in a new tab), inspection fees, and other legal or administrative costs.
  •  Homeowners Association (HOA) fees: Homes in some neighbourhoods require monthly HOA fees, which go towards maintaining and improving common areas and shared structures within the community.

All of these fees can add up and contribute to a higher upfront cost than you may have expected. When determining your budget, take some time to look into the average prices of these fees based on where you’re located and the value of the property you’re looking at.

Once you’ve completed the mortgage financing process and paid your closing fees, you will have officially purchased a home.

Is it better to rent or buy in Canada?

If you’re new to Canada and have limited income and credit history, you may find it difficult to obtain a mortgage and purchase a home outright.

Before buying a house, you should put together a budget detailing your projected monthly expenses and research the average home prices in your area to better understand how much of a mortgage you can afford(opens in a new tab).

If you’re serious about buying a home, it’s worth getting in touch with a real estate agent. They will be able to show you your options based on your budget and can help you navigate the complexities of applying for a mortgage.

If you’re unable to get approved for a mortgage, it may be best to start by renting your home or enrolling in a rent-to-own agreement with your landlord. Both of these options provide flexibility while you take time to build your credit and income history.


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