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What Real Estate Professionals Need To Know About Incorporating – Real Estate and Construction – Canada – Mondaq News Alerts

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Canada:

What Real Estate Professionals Need To Know About Incorporating

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On March 4, 2020, Bill 145 received royal
assent and amended and replaced the Real Estate and Business Brokers
Act
with the Trust in Real Estate Services
Act
(TRESA). The most significant amendment
ushered in under TRESA is that real estate professionals are now
permitted to carry on their business through their own Personal
Real Estate Corporations, which presents some advantageous
opportunities.

As of October 1, 2020, a real estate professional can receive
remuneration from a brokerage directly to a corporation controlled
by them, which has some significant tax advantages versus receiving
remuneration directly as an individual. As a real estate
professional it is important to understand the rules and conditions
when incorporating a Personal Real Estate Corporation and how it
might impact your business.

1. Incorporation

A Personal Real Estate Corporation (PREC) must be incorporated
in Ontario or continued into Ontario. It can be an existing
corporation that you ‘convert’ into a PREC. Unlike other
professional’s corporations, there are no restrictions in the
corporation’s articles that restrict the business that the PREC
can carry on. In addition, again, unlike other professional’s
corporations, there are no naming restrictions. The corporation
does not have to contain the words ‘Personal Real Estate
Corporation’ and does not have to be limited to only ‘the
sale of real estate’. The foregoing lack of restrictions allows
for maximum flexibility for real estate professionals and how they
use their corporations.

2. Registration

One registrant – One corporation. The PREC can only have one
registrant holding all of the voting shares of the corporation and
all of the officer and director positions. This is fundamental to a
PREC because it allows the PREC to avoid the extra step of applying
to the Real
Estate Council of Ontario
(RECO) to be its own registrant.

Other professionals must apply to have their professional
corporations registered and recognized by their governing bodies.
Not having to register a separate entity with RECO saves time and
money for the real estate professional. No application fee and no
renewal fees. All that is required is an email notice to RECO with
the name and address for service of the PREC.

3. Payment of Remuneration

There are several conditions that are required to be met in
order for a PREC to be exempt from registration with RECO and
therefore capable of receiving remuneration. A particularly
important one is a written agreement between the real estate
professional, the brokerage and the PREC. This agreement will
govern the relationship between the brokerage, the PREC and the
real estate professional and it must be in place prior to the
brokerage paying any remuneration to the professional. It will
contain language that requires the professional to certify that the
PREC is properly incorporated and organized, properly registered
with RECO and that it has met all the conditions for exemption.
Lastly, it will confirm that the brokerage is relying on the
accuracy of those statements to be able to pay remuneration
directly to the PREC.

After many years of hard work and lobbying by the Ontario Real Estate
Association
(OREA) and others, the typical red tape that is
associated with the incorporation process for other professionals
has been avoided, making incorporation even more attractive for
real estate professionals.

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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Asserting Privilege In The Condominium Context

Field LLP

The issue of asserting solicitor-client privilege in the condominium context is an interesting one, especially as between the condominium corporation and the individual unit owners

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Fort McMurray real estate agent pushes shop local campaign for Christmas

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A Fort McMurray real estate agent is encouraging people shop local by creating a video series called 30 businesses in 30 days.

This month, Melanie Galea started posting videos showcasing small businesses in Fort McMurray. From pet stores, to coffee roasters and spas, Galea has been trying to remind locals about what businesses they could be shopping from.

“It just seemed like it was needed more than ever,” said Galea.

“These business owners are ready for Christmas.”

She said there are concerns that businesses are going to be shut down and several businesses have already closed during the pandemic and flood.

“People are staying home, they’re maybe not spending quite as much money. Some businesses are doing well, but I’ve seen businesses shut down because of what’s happening right now.”

Galea did a similar promotion in 2015, making videos to showcase 30 businesses. Thirteen of those stores have since closed.

Galea put a call out for businesses to contact her about making a video, and she was even surprised to find out about companies she had never heard of before.

“It’s great to see there are new businesses,” said Galea.

“The reaction has been fantastic.”

Galea said her videos have even inspired former McMurrayites. She said a former Fort McMurray resident, now living in Edmonton, reached out to Galea to ask about buying gift cards from Fort McMurray shops.

 

Carley Johnson sold her first bag of coffee in February. She’s seen an uptick in customers since Melanie Galea posted a video about the coffee company. (Submitted by Carley Johnson)

 

The entire series took about 100 hours to create. She charged $50 per business to do the video, but it’s costing her more than $250 per episode.

“This is my give to the community,” said Galea. She started filming the series in the beginning of October.

Carley Johnson, owner of Firebag Coffee Company, started selling coffee and coffee accessories in February. She roasts coffee at her home in Fort McMurray and sells it online and at local markets.

Since her video went live, she’s had people reach out to her saying they didn’t know her business existed and says her sales have increased.

 

From left to right, Catharine Vangen, Michael Langille, Kimberly-Ann McGregor and Brandon Kelloway. Langille stands with the employees of his pet store; he says some people don’t even know his shop is still open after the April flood. (Submitted by Michael Langille)

 

The company does free delivery in town, and she says they do about 25-30 orders a day.

“Since the video’s run I’ve probably had at least 5 to 10 new people contact me every day.”

“It’s wonderful,” said Johnson.

Michael Langille’s video hasn’t gone public yet — it’s slated for Dec. 9. He’s the owner of The Little Pet Company, which is in the midst of expanding.

“Some people think that we’re still shut down since the flood,” said Langille. “It’s about broadcasting that we’re here.”

He said many people thought the flood destroyed the shop, which it didn’t.

The store was “busier than ever” for the first few months of the pandemic, but recently noticed a “sgnificant change” in the number of customers coming in.

Langille said he doubled his store’s inventory with the expansion, but “we’re not seeing double the sales by any means.”

“We might’ve seen a ten per cent increase, which is not what you want to see when you’re expanding your business.”

He’s hoping the video gets people coming into the store, and spending their dollars in town, rather than online.

Source:- CBC.ca

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JPMorgan’s Pil Sees Quick Return to Office Boosting Real Estate

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(Bloomberg) — People will likely return to the office more quickly than expected and that will help boost the price of some commercial real estate, according to J.P. Morgan Asset Management.

Investors may be making a mistake by extrapolating the future from the current situation with lots of working from home due to Covid-19, according to Anton Pil, global head of alternatives at J.P. Morgan Asset Management, part of JPMorgan Chase & Co. Top malls worldwide should see a faster-than-expected rebound in traffic, he said, and there’s an overshoot in expectations about how many people will want the status quo versus returning to the office.

“I’m expecting a pretty significant rebound in valuation,” Pil said in a phone interview Wednesday. “Financing terms are at some of the lowest levels that we’ve ever seen, and the income generation continues to be quite strong, at least if you own top-notch offices in strong locations.”

Urban centers have been able to survive previous pandemics and will do so again this time, Pil said. He pointed to the co-working trend as evidence that even when people could work from home they found there was value in being around others.

However, investors are taking things slowly at this point, with commercial real estate dealmaking in the third quarter far below pre-pandemic levels, according to data from CBRE Group Inc. and Real Capital Analytics Inc.

Pil also said that easy monetary policy and available financing means that it’s harder to tell which companies have simply been hurt by the pandemic and which have business models that just aren’t viable. J.P. Morgan Asset Management has stuck to a relatively conservative approach that’s focused on the actual assets companies own, he said, to avoid potential trouble on that front.

Venture capital will be a very robust market over the next year or two, Pil added. Lots of new businesses will be started by people who were laid off or had salaries reduced during the pandemic, he said, plus the efficiency of working from home and broader adoption of cloud computing has made starting a business cheaper and easier around the globe.

 

Source:- BNN

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Toronto’s Real Estate Board Tells Brokers Stop Showing More Than 2 Years of Sold Data – Better Dwelling

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Toronto’s golden age of real estate brokerage innovation is coming to an abrupt end. Toronto Regional Real Estate Board (TRREB) sent a memo this week, on sold data. The board informed brokers they will only be allowed to show two years of data going forward.

TRREB Ordered To Allow Brokerages To Show Sold Data

The board formerly known as TREB was sued by the competition bureau in 2011. The bureau argued it was anti-competitive to prevent real estate brokers from sharing sold information. This dispute went on for years, until the supreme court finally rejected any appeals in 2018. Shortly after, the board provided member brokers with a data feed, complete with sold data. Almost immediately, this brought Toronto real estate out of the dark ages.

Release of Sold Data Drove Brokerage Innovation

Allowing the display of sold data led brokerages to build a number of Zillow-like products. Some brokers began providing sold data to clients going back over a decade. Toronto’s formerly dated, agent-driven model, was suddenly refreshed. Buyers were able to research, without an agent acting as a direct barrier to information. Unfortunately, that wasn’t TRREB’s intention.

TRREB Memo Demands Halt On Displaying Data Over 2 Years Old

TRREB sent member brokers a reminder this week that included a restriction that was previously unclear. The board notes several restrictions, but the biggest one is how much sold data can be shown. The memo reads, “Only two (2) years of sold data can be displayed or accessed at any time on the VOW, Website, or App.” 

The updated interpretation of the bureau ruling is going to have a big impact. Starting soon, brokerages will restrict sold data to just 2 years. Much of the innovation that allowed people to research on their own will disappear. Instead Toronto will return back to it’s agent-driven model, where individuals have to request details from agents. This coincidentally will also conceal readily available sold data from the 2017 detached frenzy.

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