Isenberg & Shuman

Barristers, Solicitors & Notaries

April 2014

In This Issue:
How to take Title to your Home Ontario tenants can pay rent up front Sales and !erage "rice #p in $arch bout #s

How to take Title to your Home

By 2orne Shuman

Once you ha!e decided to purchase a home, you will be faced with important decisions that will impact your estate for a long time3 #nderstanding the importance of how to take 4title5 )or ownership- to your property is one important aspect of estate planning3 In the e!ent of your death, it will also help your beneficiaries administer with more certainty your affairs pertaining to your property3 This article discusses the different ways of taking title to your home and the implications of each choice3 Once you ha!e finali6ed the offer to purchase and ha!e hired a lawyer to close the deal, you will need to decide how you are going to take title to the property3 Specifically, you will need to instruct your lawyer regarding the form of ownership that you want3 7ssentially, the decision will boil down to two distinct choices3 8hate!er choice you make will be clearly stated on the Transfer to your home3 If more than one person will reside in the home, you can choose to take title to the property as 9oint tenants or as tenants in common3 Oftentimes, spouses take title as 9oint tenants3 Simply put, this means that upon the death of one of the 9oint tenants )for e:ample, the husband-, the sur!i!ing 9oint tenant )the wife- becomes the sole and absolute owner of the property3 Not only spouses can take title as 9oint tenants3 If two sisters, for e:ample, are purchasing a home, they too can take title as 9oint tenants3 #pon the death of one sister, the other sister automatically becomes the owner of the property3 n important point to remember, howe!er, is that if you take title as 9oint tenants, whate!er is in your will concerning the disposition of the property becomes ineffecti!e3 That is, upon the death of one of the 9oint tenants, the property is automatically transferred to the sur!i!ing 9oint tenant, regardless of what the will of the deceased says about how the property is to be treated3 ;our second choice in terms of how you may take title is to take title as tenants in common3 If two people take title as tenants in common, this gi!es them the option of specifying the percentage of ownership attributed to each owner3 2et<s say that two brothers, &red and Barney, are purchasing a home and it is decided that &red will contribute =/> of the purchase price and upkeep of the home and that Barney will contribute ./>3 In this case, it may make more sense for the brothers to take title as tenants in common3 &red would take title to a =/> interest in the home and Barney would take title to a ./> interest in the home3 8hen people take title as tenants in common, their

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wills shall determine how their respecti!e shares are to be distributed3 ccordingly, upon &red<s death, his will would determine how his =/> interest in the home ought to be distributed3 This is unlike a 9oint tenancy, where the property would be transferred automatically without reference to the will3 How you choose to take title to your home is an important matter that you should first discuss with your lawyer as one component of your total estate plan3

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Ontario tenants can offer rent up front

By( $ark 8eisleder "rinted 8ith "ermission

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%or!ers !s Bumbia( Ontario Superior %ourt decision has important lessons about lease negotiations between landlords and tenants3 Ontario tenants can offer a landlord rent up front, a court has ruled3 recent decision of the Ontario Superior %ourt pro!ides important lessons about lease negotiations between landlords and tenants in Ontario3 Here<s what happened( lison %or!ers agreed to rent a home from Tan!eer Bumbia in $ississauga from $ay +, .@+1 to pril 1@, .@+* for B=,/@@ per month3 Bumbia initially refused %or!ers< rental application because %or!ers was from the #C, was here on a !isitor<s !isa and was hoping to e:tend her time here by getting a work !isa, according to her lawyer3 Bumbia was concerned as to whether she would maintain the payments3 %or!ers then paid one years< rent in ad!ance, BD@,@@@, to demonstrate her good faith3 Bumbia accepted this3 %or!ers also paid a security deposit of B=,/@@ up front to co!er potential damages to the unit3 The problem is that under Ontario<s Eesidential Tenancies ct, a landlord cannot reFuest more than first and last month<s rent before a tenant mo!es into the property3 The ct also states that anything in a lease that !iolates the ct is !oid3 s such, after mo!ing in, %or!ers brought an application to court to pay the e:tra months< rent and the security deposit back to her, as she claimed that this was all demanded by the landlord3 In an original decision dated October =, .@+1, Gudge Cofi Barnes of the Superior %ourt of Ontario looked at a te:t sent by the tenant<s real estate agent to the landlord<s agent that said 4 lison will pay +.

month<s rent up front35 Based on that, he decided that since the tenant offered the money up0front, it was legal3 Howe!er, since the security deposit was not offered by the tenant, this amount had to be paid back3 The case was appealed and in a decision dated &ebruary +., .@+*, Superior %ourt 9udge &rank $arrocco agreed with Gustice Barnes and e:plained that while a landlord could not reFuire a tenant to pay more than first and last month<s rent as a condition of the tenancy, if the tenant offered to pay more money in ad!ance and the landlord accepted the payment, then it would be legal3 In addition, the court held that interest on the entire prepayment of rent had to be paid by the landlord, in accordance with the rate prescribed under the ct, which was .3/ per cent in .@+1 and 3A per cent in .@+*3 Barnes cited a decision in .@@D of Eoyal Bank ! $ac"herson in support of this position3 In the $ac"herson case, the tenant prepaid a year<s rent of B.*,@@@ to the landlord and then the landlord lost the property to the bank after defaulting on his mortgage3 The tenant said he did not owe any rent as he had prepaid it for a year3 The bank argued that since the payment was illegal, it should not be binding3 The court disagreed, and said that the bank must step into the shoes of the landlord and be bound by the prepayment3 It would be unfair to penali6e the tenant by not recogni6ing the prepayment3 s a result of the $ac"herson case, lenders who sell a rental property after an owner defaults will typically state that the buyer accepts any tenancy arrangement3 buyer in this situation must do due diligence in ad!ance to try and !erify what payments were made by the tenant to the prior landlord so that they are not faced with a similar situation where the tenant has prepaid rent to someone else and now they are stuck with it3 Here are the lessons to be learned from these cases( 2andlords cannot ad!ertise that they will reFuire more than first and last month<s rent in ad!ance of the tenant mo!ing in3 This includes any security deposit3 If the tenant offers to pay e:tra money up front, make sure that it is clear that the offer is coming from the tenant3 This could include a deposit to co!er any damages or clean the unit when the tenant wants to bring a pet3 Tenants need to keep a receipt for the payment as proof that the amount was paid, in case it is e!er challenged later by anyone3
Eetrie!ed from( www3thestar3comHbusinessHpersonalIfinance

Sales and Average Price Up in March

TORONTO, April , 2014 ! Toronto Eeal 7state Board "resident Jianne #sher announced that Kreater Toronto rea E7 2TOESL reported strong year0o!er0year increases in Toronto$2S home sales and the a!erage selling price in $arch .@+*3 Home ownership affordability, backstopped by low borrowing costs, continued to be a key factor underlying this growth3 total of A,@A+ sales were reported in $arch .@+* M up by =3. per cent in comparison to $arch .@+13 Sales growth was much stronger in $arch compared to the first two months of the first Fuarter3 Sales for '+ as a whole were up by three per cent compared to the first three months of .@+13 4Sales acti!ity in the KT accelerated last month3 %ompared to last year, a greater number of buyers found affordable home ownership options, as e!idenced by sales growth for all ma9or home types3 gainst this backdrop, howe!er, o!erall in!entory at the end of $arch remained lower than last year3 This means competition between buyers increased, which is why the a!erage selling price continued to climb,5 said $s3 #sher3 The a!erage selling price for $arch .@+* sales was B//=,,A* M an increase of almost eight per cent compared to the a!erage reported for $arch .@+13 The a!erage price for the first Fuarter of .@+* was up by A3/ per cent year0o!er0 year3 48ith borrowing costs remaining low and in fact declining, strong home ownership demand will continue to butt up against a constrained supply of listings3 Strong price growth will be the result for the remainder of .@+*3 If the pace of price growth e:perienced in the first Fuarter is sustained, TE7B may re!ise its outlook for the a!erage selling price,5 said Gason $ercer, TE7B<s Senior $anager of $arket nalysis3

Eetrie!ed from( http://www.torontorealestateboard.com

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8e are a family run law firm with o!er *@ years of e:perience3 8e ha!e earned a reputation in the community for pro!iding e:cellent legal ser!ices at reasonable prices3 8e pride oursel!es for being accessible to our clients while pro!iding personal ser!ices3 "I#$LAI%&R: The 'aterials pro(i)e) on this site are for infor'ation purposes onl*+ These 'aterials constitute ,eneral infor'ation relatin, to areas of lafa'iliar to our fir' la-*ers+ The* )o NOT constitute le,al a)(ice or other professional a)(ice an) *ou 'a* not rel* on the contents of this -e.site as such+

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