FAQ REAL ESTATE

What Is An Agent’s Commission Rate?

One of the first questions potential clients want to know when they contact our brokerage is, how much commission do you charge to sell a property? Now, there is not a “one-size-fits-all” answer when it comes to real estate commissions.

It is common practice for Sellers to pay a 5% commission on their property’s final sale price in Toronto. Typically, a commission between the listing agent and the Buyer’s agent is evenly split – 2.5% to the listing agent and 2.5% to the Buyer’s agent. All amounts set out as commission are payable, plus applicable taxes (HST) on said commissions when the transaction closes. Real Estate commissions come out of the proceeds of the sale of the property. Generally, they are disbursed by the Seller’s lawyer to the listing brokerage, who in turn reimburses the Buyer’s agent with their split.

Real estate commissions and associated fees vary, depending on the brokerage and the level of services provided. In other words, commission rates are negotiable, and therefore, there is no standard or fixed fee as many assume. Commission rates or fees that brokerages charge are solely the choices of those providing the services. Keep in mind; commissions are written into the listing agreement, the contract between the Seller and the Listing Brokerage. Meaning, the Seller must agree to the commission before signing the listing agreement.

Should I Renovate To Increase My Return On Investment?

Even though there is no limit to how much you can spend on a home renovation, it’s essential to consider how your investment fits your lifestyle. This is also true if you are on a budget, as most are. If not planned out effectively, the cost of a home renovation may not be recouped. Especially, if and when you want to sell, this is something to keep in mind. So, the question is, how can you maximize both the utility and value of your home renovation?

First, you will want to consider the market data in your neighbourhood. This is when a real estate professional comes in handy – especially in the Toronto real estate market! Regardless of how familiar a designer is with a community, a real estate agent will have a greater understanding of the entire makeup of a neighbourhood and the homes within it. Local agents are exposed to a considerable amount of upgrades! They witness first-hand the impact that a home renovation has had on the value of not only the home itself but the neighbourhood as well. With this experience, an agent can discuss which renovations have returned the best value in each area. So, be sure to capitalize on their knowledge and build a baseline budget. You never know; it may end up being less or much more than anticipated!

Further, a realtor specializing in your neighbourhood is the best person to provide advice on the nuances of the market.

Do I Need To Stage Before I Sell?

If you’re thinking about selling your property, you want to do it in a manner that shows your home in its best light. The art of selling your property always starts with the first impression. Some simple questions are; Does your listing stop a busy prospective buyer dead in their tracks? Can they visualize themselves living in your home and feel they would pay a premium to do so? But most importantly, can you afford not to have your property shown in its best possible light?

Most, if not almost all real estate searches start online. Studies show that you have 2.7 seconds to make a first impression! In real estate, this all starts and ends with staging & photography. Here’s why:

• Over 90% of buyers decide what homes they want to look at based on online photos first
• Most buyers form an opinion about a property within the first 7-10 seconds of arriving
• A staged property will sell, on average, 17% higher than a non-staged home

When it comes to sales, people tend to buy with emotion and then justify with logic afterwards. Staging can be the fastest and easiest way to connect your property directly to the hearts & minds of your potential Buyer!

Do I Need A Pre-Listing Home Inspection?

It’s in the Seller’s best interest to elect to have a home inspection completed shortly before listing their property for sale. This report is called a pre-list inspection. There are three main reasons a seller may elect to do this.

1. Fixing to Sell

First, although a seller knows a lot about their home, a pre-list home inspection reduces the number of red flags in a buyer’s inspection report. An inspector will help point out minor faults that the Seller may quickly remedy before going to market. For example, missing handrails or switch covers over an electrical outlet or a leaky faucet, which the owner can quickly and inexpensively fix. An inspection report can be updated once any flagged items are managed.

2. Full Disclosure

Second, a home inspection will tell buyers about the details of your property. Beyond the ageing components and possible defects, it will tell buyers that you are willing to ‘show your hand’ as the Seller. An inspection will reveal all that’s known about the home’s condition at that particular point in time. An honest seller wants prospective buyers to know what they are walking into so there are no surprises later. A “caught-off-guard” buyer may suspect foul play and return to the Seller with legal action. Any known issues, either patent (obvious) or latent (existing but perhaps not yet visible), should be listed.

Should I Paint Before I Sell?

Before listing your home for sale, we have found that the fastest, least expensive and most significant impact one can make on their property is by painting the space white!

Based on years of experience and bringing hundreds of properties to market, we can confidently say that there’s one colour that stands out above the rest. We are talking about white!

1. It’s Gives The Illusion Of More Space

It’s no secret that lighter walls make a room feel larger, and white is no exception. Especially in smaller condos, white paint can help make your space appear larger, especially when the ceiling is the same colour too!

Your space will also feel cleaner, fresher and brighter from top to bottom (it’s a guarantee)!

2. Easy to Visualize

White paint makes space feel more welcoming to potential buyers who may visit your home or condo. It allows them to easily visualize themselves and transport their style into your home without being distracted.

Should I Sell My Home Using My Friend Or Family Member?

Selling a home is a very serious business. Sometimes, it is not the best strategy to mix business with friendship or family. Suppose something goes wrong or experiences challenges along the way. In that case, it is much easier to objectively confront a detached professional rather than someone with whom you will be sharing the next holiday dinner. Sometimes, friends and relatives would work particularly diligently for you too and would be the best choice.

Objectively assess their capabilities and past performances with others before signing on the dotted line. If you feel obligated to use a friend/family member, but you don’t think they will do the best job for you, rest assured, there are alternate ways to involve them in the transaction. It is not unheard of for one realtor to pay the other a referral fee. Discuss the options with the realtor that you would prefer to use.

The best place to start is by getting recommendations from friends, relatives and colleagues who have recently transacted in real estate. Realtors particularly appreciate clients that have been referred. You can also go online to search out those who have been busy in your community, have great Google Reviews or a solid social media presence.

What Are The Costs To Sell My Home?

HOME REPAIRS

Before your property gets listed, you may incur some expenses to get it ready for the market. Fresh paint may cost a few hundred or a few thousand dollars. Landscaping and other repairs may come into play and require substantial investments depending on what needs to be completed.

HOME INSPECTOR PRE-INSPECTION REPORTS

Sometimes, sellers have their house inspected prior to putting it on the market. This report can give assurance to buyers contemplating submitting an offer on the property. Pre-inspection reports tend to be priced in the $400 to $600 range. We can advise whether or not to get a pre-inspection report as part of our marketing strategy discussions.

PENALTY FOR EARLY DISCHARGE OF MORTGAGE

If you have to discharge your mortgage upon completing your sale, you may incur a discharge penalty from the mortgagee to do this. Talk to your mortgage broker or bank to find out what these costs may be. Even an open mortgage can incur a processing fee to be discharged.

What Is A Listing Presentation?

A Listing Presentation is a complimentary, no-obligation presentation outlining how a potential Selling agent will prepare and market your property for sale and why you should consider working with them to sell your home. The Selling agent should be prepared to address your questions about pricing, offer strategy, marketing, staging and much, much more. It’s essential that the presentation is customized to your particular property and highlights why working with this real estate professional is the obvious choice! They should work hard to earn your business and it starts at the “pitch”!

What Is A Listing Agreement?

The first formal step in a real estate transaction is to complete The Listing Agreement Form: a contract between a Seller and a Selling agent that permits the Listing Brokerage to act on the Seller’s behalf for a defined time.

The Listing Agreement details the conditions of the arrangement between you and your real estate agent and notes the length of time for which the agreement is valid.

The agreement will also include your property address, commission breakdown, the agreed listing price and details about what may be included and not included in your sale. Once the agreement has been finalized and signed by all parties, the listing agent is authorized to move forward with marketing your home on the Toronto Multiple Listing Service.

What Is An Exclusive Listing?

An Exclusive Listing is when a property Seller enters a Listing Agreement with a real estate brokerage, but the listing itself does not appear on the MLS System. Exclusive Listings may be referred to as “off-market listings” or “pocket listings.”

Generally, agents and brokers can only be viewed within the same brokerage as the Selling agent, and these listings typically attract buyers through direct referral. When a property is listed on Exclusive, it will not appear on Realtor.ca (the public side of the MLS System) or any other popular search tools like Home Finder, House Sigma, or IDX feeds on brokers’ websites.

In light of this, the sale of your home may have less visibility to other real estate agents and prospective buyers compared to listings marketed on the MLS System.

Should I Sell My Property Exclusively?

There are several reasons that a Seller may consider listing their property on Exclusive:

1. This is often a popular approach for luxury homes at higher price points. There is an added level of privacy during the home selling process.

2. Exclusive listings may be helpful for an estate property or a home occupied by elderly owners. It’s less invasive when the house is not open to the public. The Seller and their agent have more control and can oversee things by qualifying potential purchasers in advance of viewing to avoid unnecessary inconvenience, preparation and disruption.

3. Many agents and brokers list a property on Exclusive before going to the market using the MLS System. This strategy is an excellent way to “test the market” before exposing the listing to the public. In other words, agents can invite colleagues and clients to view a property to provide feedback on pricing, condition, location and staging before formally listing the property online. If any adjustments need to be made to the listing plan, they can handle it up front. It’s a wise choice for listings that are difficult to price or have a unique value proposition.

What Is The Downside Of Listing On Exclusive?

In a market like Toronto that is currently hot-to-trot, it does not make sense for a Seller to list their property off-market unless there is a predetermined strategy or rationale as to why!

In a Seller’s Market like ours (lots of demand, little inventory) – it makes the most sense to expose the property to the open market to elicit the highest and best price for a home. If a home is not advertised to a sizable & qualified buyer pool, the Seller could leave money on the table. In these market conditions, it’s impossible to predict what a Buyer may be willing to pay you for your home – but we can guarantee that it’s often more than we would all expect these days!

What Is A Confirmation Of Co-Operation Form?

Confirmation of Co-operation and Representation [Form 320] is presented to the parties in a real estate transaction before the offer or purchase, and sale agreement is tabled. This form documents the specific relationships of those involved in the real estate transaction. It serves as proof that both the Buyer and the Seller acknowledge the arrangement between the companies they’ve elected to represent their respective interests. It’s a document illustrating who is working for whom and how the commission is paid out.

When Is The Best Time To Sell?

Depending on the province, city or neighbourhood, fluctuations in the market may follow a pattern. Patterns can be seasonal and repeat themselves every year, or they may depend on a transient variable. Generally speaking, Toronto locals move in the spring, summer and fall when weather conditions are most suitable. Because most real estate transactions have a closing period of 30 to 90 days, the most popular times to buy a home in Toronto are typically in the spring and fall. Holidays, extreme weather, interest rate hikes, changes to mortgage rules or local media coverage also affect buying behaviour.

Almost all houses look better in the late spring and summer, and if curb appeal is a factor, listing during the warmer months is something to consider. While home sales peak in the spring and fall, they do happen year-round, so if your goal is to move sooner rather than later, you will still be able to achieve your desired outcome, but it may just take a little longer. A mitigating consideration is that though there are fewer buyers from December to February and from June through August, there are fewer listings as well – which means less competition for your home once it’s on the market.

How Much Is My Property Worth?

The hard truth is that a home is worth whatever buyers are willing to pay for it. Determining a home’s fair market value at the outset goes a long way to setting the stage for a seller to receive the most that the market will pay. The fact is, the marketplace determines the ultimate selling price. And the single greatest factor in attaining top market value is the property’s initial listing price.

COMPARATIVE MARKETING ANALYSIS (CMA)

One of the essential things a realtor will do is collaborate with a seller on the initial listing price. Your realtor should be researching the market and perform a Comparative Market Analysis (CMA). The CMA compares your house to similar properties that have recently sold and properties currently listed for sale. CMAs consider elements such as location, pricing, features, lot size, and property condition. A comprehensive CMA and analysis of relevant sales often point to a market price suggestion for the subject property.

What Is A Bully Offer?

A bully offer is a pre-emptive offer. The purpose is to ‘bully’ other buyers out of the buying process. You do so by making an aggressive over-asking offer in advance of the prescribed offer date indicated in the Broker Remarks. This way, you can potentially avoid the competition by offering a “sweet deal” that the Seller cannot turn down.

The analogy we like to use when working with buyer clients is that it’s like going to a nightclub. There’s a lineup outside that runs down the street and around the corner. So, a nightclub goer who’s tired of being in the cold chooses to pay the doorman “a premium” to bypass the line. In the same way, many buyers fed up with being out in the preverbal Toronto real estate cold (after losing out on several properties in bidding wars) sees the long-term benefit of paying a premium for a property.

As a rule of thumb, a bully offer is generally significantly over the list or asking price. It’s almost always a firm offer, meaning no conditions. And it is presented with a sizable certified deposit cheque. For a bully offer to work, the offer price has to be so enticing to the Seller; they fear losing the opportunity to sell at a premium. There is often a misunderstanding that a bully offer means being the “first buyers to offer” on a home. This is inaccurate. Instead, a bully offer is an offer that the homeowner would have a tough time refusing!

What Is An Irrevocable, And Why Is It Important?

When you offer on a property, that offer has an expiration date and time, and for a good reason. When offering on a property, you don’t want a seller coming back three years from the time of submission long after you have moved on saying that they have accepted your offer. The expiration of your offer is known as you’re irrevocable. When submitting an offer as part of your offer strategy, you will need to decide how long of a period to give the Seller to consider your offer before it expires.

Many factors go into deciding how long your irrevocable period should be. The first consideration is that the longer your irrevocable period, the more time you are exposed to the open market and the greater the possibility of competing against other offers. Remember, it is the Selling agent’s job to drum up multiple bids once yours has been submitted. They will inform all parties that have seen or expressed interest in the property that an offer has been submitted. However, the flip side is that Toronto is perpetually in a seller’s market. You want to ensure that you give the sellers enough time to respond without making them feel unduly pressured or causing them to get their back up before you have even commenced negotiations.

What Is A Status Certificate?

One of the most important documents you should pay attention to is the status certificate when buying a condominium. This document is a financial snapshot in time (good for 30 days only) of the current state of a condo corporation. It provides essential information and insights about the financial health of the building.

You can score a copy of the status certificate from the building’s property management. Typically, this is around $100.00. Under the Condominium Act, the certificate must be given to you within ten days from the order date. Most lenders will want to see a copy before releasing funds on close.

As a prospective buyer, it’s part of your due diligence to obtain and review the status certificate. The importance of this document cannot be overstressed enough, especially given that ill-informed buyers will often overlook this step in the condo purchasing process. Essentially, when purchasing a condo, you are not just buying a property. Instead, you are becoming a part-owner of the condo corporation. As such, you want to ensure that the corporation is in good financial health.

Do I Need To Pay The Buyer Agent Commission?

If you are working with a buying agent, you may be asked to sign a contract called a Buyer’s Representation Agreement (BRA) before you start looking at properties. You may sign one of these documents but are not in any way required to do so. Generally speaking, the buyer agent is compensated through the listing brokerage from the proceeds of the sale. So, the purchaser is not responsible for any commissions or associated fees.

Typically buyers are usually only accountable to directly compensate the buying Realtor if they purchase a property that has not been listed for sale on the MLS System. However, there are exceptions to this rule! As a buyer, you should review compensation with your realtor in detail before signing a buyer’s representation agreement.

How Do I Ensure I Don’t Overpay?

This is one of the most common concerns from buyers and understandably so, especially in a market that moves with the velocity that Toronto’s. The first thing to understand is that when considering offering on a property, what is its market value and what is the property’s intrinsic value to you. Sometimes these prices are aligned, and sometimes they aren’t, which is fine. The key is to understand both and then knowing how to proceed from there.

Assessing market value is more of an art form rather than a science. Market valuations, especially in Toronto, are more of a range rather than a specific price. It is essential to work with an experienced and capable agent to understand and explain a property’s value. Most property valuations are assessed by looking at past recent sales of similar properties in a building or neighbourhood. Factors like location, condition, lot size, exposure, upgrades, room count, parking, date of sale and market appreciation can all play a role in comparisons. Note that comparables are properties that have sold firm and not properties currently on the market or for sale.

What Is An Offer Date?

Toronto is a real estate market onto itself due to strong underlying fundamentals as demand far often outstrips supply, and sometimes by a lot. In a real estate market like Toronto’s, characterized as being in a deep seller market, sellers may choose to hold an offer date. Meaning the sellers are stating their intention not to look at offers until a specific date and time in the hopes of creating a bit of a frenzy and multiple offers or potentially even a bully offer scenario.

Essentially what this entails is that the property will go on the market for a prescribed time period; usually, 5-7 business days, allowing for the home to be marketed and viewed by interested parties. Generally speaking, the list price is below the property’s market value and the Seller’s sale price expectations. This is solely a marketing strategy to generate interest in the property and hopefully garner multiple offers.

This type of selling strategy can be highly effective, but not always. It is vital to decide your level of interest and determine the home’s market value based on your wants and needs as a buyer. Should you wish to offer on a property with an offer date, it’s essential to work with your buyer agent to get a good understanding of the process. Sometimes it takes a couple of times to fully grasp the hang of it, which is perfectly normal; however, a great realtor on your side can help speed up your learning curve and get you on the path to homeownership!

Should I Rent Or Should I Buy?

If you are a renter and renting, it might seem like the easier and more affordable choice. However, you are essentially robbing yourself of not leaping into homeownership at the first opportunity over the long term. While it’s true that Toronto is the most expensive real estate market in Canada, it is also the most expensive rental market.

Given its strong fundamentals over the last 20 years, the Toronto real estate market has seen appreciation on average of 5% compounded year over year. Once you add in the principles of leverage, the low cost of borrowing, inflation, and no taxable liability on the profit from the sale of your home, why would you want to pay your Landlord’s mortgage versus putting yourself on the path to financial freedom? Good question.

The biggest challenge will be putting together your down payment. If you commit to buying and make small sacrifices to save, you’ll be on your way in no time! And remember, the best time to plant a tree was 20 years ago. The second best time is now!

How Much Are Land Transfer Taxes?

In Toronto, when purchasing a property, you are subject to the land transfer tax. Toronto is the only municipality in North America that has a double Land Transfer Tax. When purchasing a property in Toronto, a purchaser will be subject to paying both provincial and municipal taxes. The Land Transfer Taxes are calculated on a sliding scale and are paid at the time of closing. Generally, these costs need to be paid in cash and cannot be rolled into your mortgage. So it’s essential to be mindful of these costs in advance of the offering on a property.

A first-time home buyers rebate is available for all purchasers who have never formerly owned a property anywhere else in the world. First-timers can qualify for a refund up to a maximum of $4,000 for the Ontario portion of the tax. And up to $4,475 from the Toronto municipal land transfer tax.

When trying to calculate your potential land transfer tax liability on the purchase of the property, it’s always best to speak to your real estate lawyer. Below is a synopsis of the sliding scale works:

Is It Better To Work With A Bank Or A Mortgage Broker?

We typically recommend that it’s in your best interest to work with a capable and tenured mortgage broker. A mortgage broker can shop around to all schedule A and B-lenders to find you the right option that best suits your needs, while a bank has a much narrower scope by only having access to their products and services. A mortgage broker can hunt around to find you the best possible financing arrangement at no additional cost to the borrower, so there is no real downside.

Looking at mortgage options can be pretty overwhelming. When you have a capable broker advocating on your behalf, they are there to look after your own best interests, while when working with a bank, it can be a much different dynamic. Real estate, by nature, is a twenty-four-hour business, and a mortgage broker is self-employed and is someone who understands the importance of timely communication in a way that a bank employee may not.

Some great mortgage advisors work for chartered banks, but in our experience, our clients have greatly benefitted by working with an independent mortgage broker. When trying to put together your financing plan, it’s essential to know your options. If you have a long-standing relationship with your bank, it certainly would be worth exploring.

Do I Need A Mortgage Pre-Approval

In Today’s Home Buying Environment, a Mortgage Pre-Approval is Essential (And Incredibly Easy to Get).

Getting a Mortgage Pre-Approval
A mortgage pre-approval lets you know the maximum mortgage amount the lender will lend you. It also demonstrates to a seller that you are a serious, willing and capable buyer. It goes a long way to provide the lender’s formal loan commitment once you have found the home you would like to buy.

Do I Go to My Bank or Mortgage Broker for My Pre-Approval?
You should see both. See what your bank can do for you. Interview a mortgage broker as well because they have access to many lenders. Mortgage brokers understand what qualifications each lender is looking for, to structure your application accordingly (and know where the bargains are).

How Much Can I Afford?
You can afford a house that costs as much as the mortgage amount for which you qualify, added to your total down payment.

When Do I Need To Pay The Deposit?

In Toronto, the real-estate deposit is paid ASAP!

However, the answer to this question can vary by local practice. There are subtle differences in the management of deposit cheques, depending on how competitive your marketplace is. In downtown Toronto, typically, the expectation is to provide the deposit cheque with the offer itself. This means working with your financial institution for the funds in advance of submitting your offer paperwork. Your realtor will present your bid on the property with the deposit “herewith,” as stated on the first page of your Agreement of Purchase and Sale. Your offer should also include a photograph of your certified deposit cheque confirming you have the physical funds available and ready to go!

Knowing that the deposit is an essential component to a successful offer, it’s vital to have access to cash-on-hand when searching for a home or condominium.

How Much Does My Real Estate Deposit Need To Be?

What is considered a good deposit amount in Toronto? There isn’t a fixed rule as to what constitutes a sufficient amount to include in a deposit. However, the amount is a solid testimony to the intention of the purchaser. In Toronto, deposits are generally 5% of the offer price at a minimum. In a multiple offer scenario (a bidding war), we at Fox Marin encourage purchasers to bring a deposit cheque closer to 10%. If the Seller counters your initial offer price, it’s not typical to also counter your deposit amount. Don’t forget that your deposit cheque applies against your total down payment due on closing. These funds are not “over and above” costs.

Where Does My Real Estate Deposit Go?

The deposit holder is identified on the first page of the Agreement of Purchase and Sale. All deposit funds need to be made out to the holder’s name. Remember, it’s critical to ensure there are no spelling mistakes in the “payable to” section of your deposit cheque. Deposits are traditionally held by the statutory Real Estate Trust Account of the Seller’s brokerage. Then, the cheque remains in trust until closing and is applied against the purchaser’s downpayment. If interest is payable, it must be stated in the agreement. A real estate agent does not personally hold onto the deposit.

As per the Real Estate Council of Ontario, if the deposit funds are held in the listing brokerage Real Estate Trust Account (which they generally are), the funds are insured under the RECO Deposit Insurance Program. The insurance covers up to $100,000 per claim, subject to the policy’s terms and conditions. Consumer deposit insurance offers protection in the event of fraud, insolvency or misappropriation of funds by a real estate agent or their brokerage.

Is A Real Estate Deposit Refundable?

Often, a real estate deposit is returned to a buyer if there are conditions in the offer that are not satisfied.

For example, if you have made an offer that includes a Condition of Mortgage Financing, but the bank refuses your application during the conditional period.

If you’re unable to proceed with your purchase because the condition cannot be met, both the Buyer and Seller need to sign a Mutual Release Form before your certified deposit cheque is returned to you, the Buyer.

Should the Seller suspect you have not acted in good faith, they may refuse to sign the Mutual Release Form and hold back your deposit. If this is the case, the funds will remain in the named trust account, and the dispute between the Buyer and Seller would become a legal issue. A judge would eventually release the funds (to the Buyer or Seller) through a court order if not settled in advance.

What Happens To My Deposit If I Default On Closing?

Many people assume that the Seller automatically gets to keep the deposit if the buyer defaults (cannot close). However, this is not always true. In fact, cases that involve deposits of $25,000 or less are decided in small claims court and significant deposits (typical to Toronto’s market) in the Superior Court of Justice. In most scenarios, if the Buyer defaults, the Buyer does not get their real estate deposit back. In addition, the Seller may sue the Buyer for damages, legal fees, and carrying costs. In short? If you’re serious about purchasing a home or condo, do your due diligence upfront and don’t assume anything! You want to ensure you’re in a good financial position to purchase a property before leaping in with both feet, only to realize that you cannot move forward with your purchase down the road. A home purchase is not as easy as a refund at Home Depot.

Why Should I Buy Something Pre-Construction?

Toronto is a costly city. And it is only getting more expensive. Investing in pre-construction can be a great way to invest in the Toronto Real Estate Market passively (and more affordably). Here are some of the advantages of buying pre-construction versus resale.

1. AN EXTENDED DEPOSIT STRUCTURE
One of the most significant challenges to entering or investing in Toronto real estate is the required upfront deposit. The ability to spread out 20% deposits in increments of 2.5- 5% over 3-5 years can be far more palatable to first-time buyers and investors. For first-time buyers and investors alike, the extended deposit structure to building completion allows purchasers to save money. Many of our first-time home buyers and investors see it as a forced saving or investment strategy.

2. GENTRIFYING IS YOUR BEST BET
Historically, the long-term prices of residential homes have always gone up. For this reason, you can improve your odds of appreciation by acquiring properties in highly gentrifying neighbourhoods. Given that the property you are purchasing will not be available for 3-5 years, it makes sense to acquire a new home in an area on the rise. These neighbourhoods will have a lower purchase entry point and higher potential to outperform the overall market down the road.

How Much Of A Deposit Do I Need For Pre-Construction?

One of the great advantages of buying pre-construction is that, unlike buying resale (an existing property), you do not have to come up with your entire deposit all at once. Instead, your payments are spread out over time. Although no two developers or projects are the same, a typical pre-construction deposit structure would look something like this:

• $5,000 on signing
• The balance ( less $,5000) of 5% in 30 days
• 5% in 90 days
• 5% in 365 days
• 5% on occupancy

In a typical pre-construction agreement, a deposit structure will stretch over 3-4 years. While purchasing pre-construction affords you more time to come up with the deposit, given its spread-out payment structure, you still are putting significant skin in the game and entering into a 3-4 year contractual agreement. In committing contractually to a developer who has much more experience and deeper pockets than you do, it’s imperative to understand the full ramifications of your commitment.

What Is The 10-Day Cooling-Off Period?

Now, if you’re thinking, “did I make the right decision” after signing and feeling Buyer’s remorse, don’t fret. You have the 10-day cooling-off period to make up your mind.

In Ontario, you have what is known as the 10-day cooling-off period as per Section 73 of the Condominium Act. During this time, a buyer can rescind their pre-construction Agreement of Purchase and Sale for any reason. Meaning the Buyer has ten calendar days from the date an executed copy of the agreement has been received to review all the documentation with their lawyer and double-check their financial circumstances. During this time, buyers want to ensure that they are confident and ready to move forward with the purchase. After the 10-days is up, a buyer no longer has the right to walk away from the sale without legal or financial ramifications.

Do You Need A Mortgage When Purchasing Pre-Construction?

You do not need a mortgage, given that what you are buying does not exist and most likely will not for several years. You will, however, require a mortgage pre-approval that will satisfy a developer’s requirements. Most resale mortgage pre-approvals are only good for 90 days. When purchasing pre-construction, in the actual agreement, it will be agreed that the purchaser must provide a mortgage pre-approval as per the developer’s terms within a stated period. The developer requires approval to satisfy their lenders, which reduces the risk for defaults at the close. It is essential to know that you will qualify to get a mortgage pre-approval to buy a pre-construction property, and best to do this in advance of the 10 Day Recission Period.

What Is A Platinum Pre-Construction Agent?

An experienced platinum agent will be able to gain you access to development projects that will sell out long before they ever reach the public. To learn more about getting front-of-the-line access to development projects, we invite you to read our article about how to Get Into Pre-Construction Early. A platinum agent will also steer you towards suitable projects and developers and away from those to best avoided.

Buying pre-construction is a niche market that requires specialized knowledge to guide you through the process and empower you with the correct information to make the best investment decision. While developers have sales teams that sell their projects, it is always important to remain cognizant that they represent the developers’ best interest and are not concerned with yours.

How Do I Choose The Right Floorplan When Buying Pre-Construction?

When buying pre-construction, it’s paramount that you choose a good floor plan. Your choice of the floor plan can be a make-or-break decision for your investment or future home. Especially as a pre-construction buyer, purchasing from a floor plan can be difficult. So, think about some of these considerations:

• The best condos are the ones that have the most natural light.
• Wide and shallow floor plans are superior to long and narrow ones, which often tend to be darker.
• Does the master bedroom have a door?
• How is closet space?
• Are the ceilings stipple?
• Is there a kitchen island or an option to have one available?
• Is there some usable outdoor space?
• Will you be able to hook up a gas BBQ?

What Lawyer Should I Use For Pre-Construction?

A new home Purchase and Sale Agreement is a very thick and intimidating document that can often span hundreds of pages. While reasonably standard, developers’ lawyers have written these agreements and can be somewhat one-sided to favour the developer. It cannot be stressed enough how important it is to have a real estate lawyer – one that specializes in this line of work – to review the documents for you during the 10-day rescission period. An expert lawyer will know what to look for, search for discrepancies and understand what’s up for negotiation!

Furthermore, lawyers specializing in pre-construction agreements have the experience to guide a pre-construction buyer in the right direction. They will be able to walk you through the document and outline your commitments and closing costs. The closing costs – including developer charges and taxes – can be upwards of $75,000. And, since you can’t roll these costs into a mortgage, it’s essential to be aware of what’s coming down the pipeline in 3 to 5 years, should you decide to move forward.

What Is The HST Rebate?

The HST rebate is not always clearly explained at the time of purchase. Often, there is a lot of confusion surrounding HST, especially for first-time buyers and investors. So, it is crucial to understand that HST (unlike residential resale) applies to all new home and condo purchases.

As a pre-construction buyer, if you are an end-user (meaning, you will live in the home or condo as your principal residence), the developer will pay HST and will, in turn, have the right to apply for the rebate.

If you declared yourself as an investor, you would have to pay the HST owing and with the option to apply for the rebate independently. In most instances, you will be eligible to get most (if not all your money) back within 3-6 months from the date you remit for your rebate with the CRA. It would be wise to speak with your lawyer about this before firming up so you’re clear about the financial ramifications at closing.

What Are The Closing Costs For Pre-Construction?

There are a lot of costs to consider as a pre-construction buyer. Specifically, these are costs that are due on close and which are not on the developer’s price list or disclosed in their marketing material. You must have a qualified lawyer review all these costs to properly evaluate the opportunity. What’s more, is that you’re not taken off guard when the property closes 3 to 5 years from now. The average closing costs can range from 8 to 10% of the total purchase price. These costs include, but are not limited to:

• Development charges
• Land transfer taxes
• Utility connection fees
• Education levies
• Park levies
• Reserve contributions
  …and, the list goes on.

The moral of the story is, don’t get caught off guard! Know your costs and what can be capped at the time of purchase.

What Is A Tarion Warranty?

Formerly known as the Ontario New Home Warranty Program, Tarion is a private corporation that oversees and regulates the new home industry. The governing body licenses all new home builders in Ontario under the Ontario New Home Warranties Act. Specifically, its mandate is to protect the rights of new home purchasers.

To serve new home buyers and owners, the corporation has registration requirements. That being said, all new home builders and new home sellers (known as “vendors”) must register and renew annually.

Every new home and condo build must enroll in the program. Because of this, all new homes built by a Tarion builder have coverage under the warranty program. The program gives a purchaser the peace of mind they could never get when buying a resale property.

The warranty status stays with the property for the entire term, even in the event of a sale. Should a property sale occur, the new owner will assume whatever is left on the warranty coverage. Moreover, when purchasing a home that is less than seven years old, new purchasers should contact Tarion to inform the change in ownership.

What Is A Cap Rate?

The cap rate is a quick and effective tool for an investor to evaluate a property. The methodology to calculating the cap rate is as follows; The cap rate is determined by dividing the net operating income of a property [Revenues – Operating Costs] into the purchase price. The formula does not include mortgage payments, as every investor handles debt differently.

The assumption is that a buyer will acquire property without debt, making it easier for an investor to compare apples to apples.

The cap rate does not take into account factors like location or the condition of a property. Most cities work off their individual cap rate, which becomes a standard baseline to evaluate all properties within an area or geographic region.

The standard cap rate in Toronto ranges from 3-4%. If an investor can achieve more than 4%, they are doing very well, and it indicates that the property potentially outperforms other similar type assets.

How Much Is Capital Gains Tax?

This is a question asked by many investors, as the tax treatment of selling an investment property is different from selling your principal residence. When selling your principal residence, there is no tax liability on the proceeds from the sale; however, when an investment property, the profit is considered taxable by the CRA. Fifty percent of the profit realized from the sale would be tax-free, while the remaining fifty percent would be considered as income and would be taxed at your current income tax rate. For example, if you bought a property for $500,000 and sold it for $1,000,000, you would have realized a profit of $500,000, $250,000 would be tax-free, and the other $250,000 would be taxed as income at your current tax rate.

What Is The Greenbelt?

In 2005 the Liberal Government of Ontario passed legislation to create protected farmlands and environmentally sensitive areas from development. In addition to protecting farmers and the environment, the bill was also explicitly intended to restrict and contain urban sprawl. Today, the Greenbelt runs from Pickering to Hamilton, literally forming a non-developable belt around Toronto; Lake Ontario to the South has virtually made Toronto a huge island.

One of the intended effects of making Toronto an island was to concentrate future development “to grow up and not out.” The legislation causes many positive outcomes by encouraging density over sprawl. In turn, it has enabled the creation of walkable neighbourhoods and has stopped Toronto from becoming an endless sprawl. However, this policy has come at a price, as developable land in the GTA is finite and dwindling.

What Factors Make A Good Toronto Real Estate Investment?

Investing in real estate can be very lucrative, especially in a market like Toronto’s. That being said, not all real estate investment opportunities are equal. There are many factors involved in determining how well an investment could perform and if the opportunity is the right type of investment for a specific investor.

You know the saying – three rules of real estate are; Location, Location, and Location. While it’s true that location is the most important determinant when looking at making a real estate investment, there are many considerations involved when looking at a location from an investment lens, for example. At the same time, you might pay a premium for a desirable spot! It could make more sense to invest in a less expensive but gentrifying location, where the entry point is lower. The potential to see appreciation over the long term may be significantly higher in the gentrifying area. Are there any future upcoming improvements, like transit, parks or schools in the works? How easy would it be to attract qualified tenants?

Should I Invest Outside Of The City?

Investing in real estate in downtown or central Toronto is like buying blue-chip stock. Owning Toronto real estate is like holding an asset with an excellent track record that will always be in demand. A high entry point relative to other markets is the price you have to pay for the type of security.

Properties entice some investors outside of the GTA as they are seduced by the lower price points and barriers to entry. Properties in the outskirts of the GTA are far more prone to being negatively affected during market corrections or downturns, and finding quality tenants can also be a significant challenge in outlying areas compared to the city centre. While it is true that no two investment opportunities are the same, real estate investment opportunities should not be judged solely by price.

As “you get what you pay for” applies as much to real estate as it does with anything else!

Should I Hire A Property Manager?

The answer to this question is, it depends. Every investor is different, as is every investment scenario. In most instances, a condo investor can manage their properties and tenant relationships with the help of a competent rental realtor. For the most part, other than leasing out the property, condos generally don’t require too much work or upkeep from the Landlord’s perspective. If you are a busy professional who wants to be completely hands-off, then a property manager could be a great solution. The general going rate is 10% of gross rent per month.

For investors who own multi-family properties, the amount of time, energy and resources required can be significant. While some investors like to be hands-on, that can often result in a considerable time commitment, which may take away from other investment opportunities. Over time as the number of units and doors continue to increase, factoring in the economy of scale, it would make sense to hire a competent and professional property management company, allowing the portfolio to run passively.

How Do I Protect Myself From Bad Tenants?

It is no secret that the Provincial rental laws and the Landlord and Tenant Board’s governance are biased in favour of tenants’ rights at the expense of landlords. The news is filled with horror stories about tenants not paying rent or causing damage to properties, with landlords having very little recourse. In an environment where it can be tough to evict a delinquent or reckless tenant, the stakes are very high for landlords to get it right the first time when they rent out their properties.

The first piece of advice? Don’t go it alone, and make sure that you hire a professional realtor who has seen and done it all. While a landlord needs to focus on rental rates, they should also evaluate the quality of the Tenant from day one. Often a lower rental rate to a great tenant can pay huge dividends over the long term.

An experienced rental agent can help you ensure that all the correct documentation is in place and can do the proper due diligence to ensure that the information provided is accurate and acceptable. Furthermore, an in-depth social media scan or Google search can be very effective.

Is The Toronto Real Estate Market A Good Long-Term Investment?

Over the last twenty years, the Toronto Real Estate Market has appreciated at a rate of five percent per annum year-over-year and has withstood the subprime crisis and the Covid 19 pandemic without issue! Over the last few decades, the Toronto Real estate market has been one of the strongest appreciating and most stable real estate markets globally. Currently, there are more cranes in Toronto than anywhere else in North America. The key to understanding the Toronto Real estate Markets’ futures is understanding the strong fundamentals that have spurned its growth and how that may impact its future.

Without overcomplicating things, the Toronto Real Estate market, like most markets, is driven by two factors: supply and demand. Due to the Greenbelt and failures in short-sighted and un-coordinated levels of government policy, new home supply in Toronto has been curtailed. Due to the Green belt and the scarcity of land, the cost to build houses has become price prohibitive, and as a result, most new homes built are mid and high-rise buildings. The GTA, just to keep with demand, requires around 50,000 new units per year and every year, Toronto is falling short of coming close to hitting this number.

How Can I Leverage The Equity I Have In My Property

One of the best ways to grow a real estate portfolio is to leverage the existing equity you have on a property, either through a refinance or a line of credit. It’s best to speak with a lender or mortgage broker on how to capitalize on this potential.

If you have owned property or properties in Toronto for several years, the chances you have built up a significant amount of home equity are great.

If you can pull that money out of an investment property, that money is tax-free until the time of sale. And, if you’re leveraging funds from your primary residence, tax is a non-issue.

You can then use that money as a down payment towards a second or third investment property. When you factor in the tax benefits, the power of leverage and long-term appreciation, maximizing your equity to build your portfolio makes a lot of financial sense.

Do I Need To Pay A Realtor?

One of the major advantages of working with a rental agent in Ontario, particularly in Toronto, is that their services come at no additional cost to you, the tenant. In most cases, the landlord covers the realtor’s fees, which are typically a percentage of the monthly rental rate. This means you can benefit from professional assistance finding your perfect rental home without any out-of-pocket expenses.

Here’s how it works: Once you and the landlord finalize the lease agreement and you move into your new home, the landlord’s brokerage will issue a payment to the tenant’s brokerage. This payment compensates the tenant’s realtor for their services in helping you secure the rental property.

By partnering with a rental agent, you gain access to their expertise, market knowledge, and negotiation skills, ensuring you find the best home to meet your needs. This arrangement simplifies the rental process, provides valuable support, and lets you focus on settling into your new home.

In summary, utilizing the services of a rental agent in Ontario is not only cost-effective but also enhances your overall renting experience by providing professional guidance and support throughout the process.

Why Is A Leasing Agent Important?

In a large and fast-paced market like Toronto, partnering with an informed and trustworthy leasing agent is crucial for anyone considering renting. Here’s why a leasing agent is essential:

• Market Expertise: A good agent stays updated on market trends and government policy changes, ensuring you have the most current information. This knowledge helps set appropriate expectations and informs you about the best available properties.
• Tenant Rights: An experienced leasing agent will educate you on your rights under the Residential Tenancies Act, ensuring you are not taken advantage of by landlords or property managers. Understanding your rights is vital to navigating the rental market confidently.
• No Cost to Tenant: One of the significant benefits of working with a leasing agent is that it doesn’t cost you anything. The landlord typically covers the agent’s remuneration, allowing you to benefit from professional assistance without any additional expense.
• Negotiation and Advocacy: A leasing agent acts as your advocate, helping to negotiate lease terms and ensuring your interests are protected. They can address any concerns or issues that arise during the leasing process.
• Streamlined Process: A leasing agent simplifies the rental process from property searches to lease signings. They handle the logistics, paperwork, and communications, making your experience as smooth and stress-free as possible.
• Access to Listings: Leasing agents often have access to a broader range of property listings, including those not publicly advertised. This access increases your chances of finding the perfect rental home.

What Paperwork Do I Need To Prepare To Rent?

Preparing an offer to lease in Ontario, particularly in a competitive market like Toronto, can feel daunting. Often, multiple tenants are vying for the same property, and it’s not always the highest bidder who secures the lease. To set yourself up for success, it’s crucial to have your supporting documentation ready before you start viewing rental properties. Here’s a checklist of the essential documents you’ll need:

1. Letter of Employment: This letter should be on company letterhead and include your start date, job title, income, and a contact number for your employer to verify these details if needed.
2. Full Credit Score and Report: Obtain your credit report from reputable providers like Equifax or TransUnion. While many banking apps offer a snapshot of your credit score, this is insufficient for rental applications.
3. Government-Issued Photo ID: Provide a driver’s license or passport. Health cards are not acceptable for this purpose.
4. Residential Rental Application: This form outlines your interest in the property and includes personal, professional, and landlord references. The landlord or listing agent will likely contact these references to assess your suitability as a tenant.

Preparing these documents in advance demonstrates your seriousness as a potential tenant and ensures a smoother and faster application process. Being well-prepared can significantly impact a competitive rental market, helping you stand out and secure your desired home.

What Are The Benefits Of A Rental Agent?

As a prospective tenant in Ontario, partnering with a full-service rental agent offers numerous advantages that can streamline and enhance your rental experience. Here are the key benefits of using a rental agent:

• Understanding Your Wants and Needs: A rental agent will take the time to understand your specific requirements, such as preferred locations, parking needs, pet policies, and the number of bedrooms.
• Sourcing Potential Properties: Agents can access a wide range of listings and identify properties that match your criteria, saving you time and effort.
• Booking Viewings: Your agent will handle the logistics of scheduling appointments to view homes or condos that interest you.
• Highlighting Features: During property viewings, a rental agent can point out the pros and cons of various features, helping you make an informed decision.
• Quickly Narrowing Down Options: The Toronto rental market moves fast, and a rental agent can quickly narrow your search, ensuring you don’t miss out on great opportunities.
• Organizing Your Rental Package: Agents will help you prepare all necessary documentation in advance, such as your letter of employment and credit score, making your application more competitive.
• Protecting Your Interests: When reviewing and signing your rental agreement, a rental agent will look out for your best interests and ensure you understand all terms and conditions.
• Explaining the Rental Agreement: Your agent will clarify the terms and conditions of your rental agreement so you fully understand your responsibilities as a tenant.

By leveraging a rental agent’s expertise, you gain access to professional guidance, extensive market knowledge, and support throughout the rental process, ultimately making your search for a new home smother and more efficient.

What Happens If The Owner Sells The Property?

If the owner sells the property, tenants in Ontario, Canada, have specific rights and protections under the Residential Tenancies Act (RTA). Firstly, if you are on a fixed-term lease, the new owner must honour the lease agreement until its end date. You can continue living in the property under the same terms and conditions until the lease expires. If you are on a month-to-month lease, the new owner can choose to continue renting the property to you under the same conditions.

However, if the new oner intends to use the property for personal use or a family member, they must provide you with a minimum of 60 days’ notice before the end of a rental period. This notice must be in writing and given using the appropriate form. The new owner must also compensate you by providing either one month’s rent or offering another acceptable rental unit.

During the sale process, your landlord must give you at least 24 hours written notice before any showings and can only show the property between 8 a.m. and 9 p.m. As a tenant, you have the right to maintain your privacy and peaceful enjoyment of the property during this time.

If you receive a notice to vacate because the property is being sold, knowing your rights and options is essential. You may be eligible for compensation, and if you believe the notice is not legitimate, you have the right to file an application with the Landlord and Tenant Board to dispute it.

In summary, while the sale of the property can lead to changes in your rental situation, Ontario’s RTA ensures that you are protected and have sufficient time and support to make necessary arrangements. Always consult the RTA or seek legal advice if you have any concerns or questions about your situation.

Can My Landlord Increase The Rent?

In Ontario, Canada, landlords can increase the rent, but they must follow the Residential Tenancies Act (RTA) guidelines. To increase the rent, your landlord must provide you with at least 90 days written notice before the increase takes effect. This notice must be given properly as specified by the RTA. Rent increases can only occur once every 12 months, whether you are on a fixed-term lease or a month-to-month tenancy.

The amount by which the rent can be increased is regulated by the provincial government and is subject to a rent increase guideline, which is announced annually. For 2024, the rent increase guideline is set at 2.5%. However, there are exceptions where a landlord can apply to the Landlord and Tenant Board for a higher increase. These exceptions include situations where the landlord has incurred significant capital expenditures or faced extraordinary increases in operating costs.

It’s important to note that some rental units may be exempt from these guidelines. For example, new buildings, additions to existing buildings, or most new basement apartments occupied for the first time for residential purposes after November 15, 2018, may not be subject to rent control.

Can I Ask My Landlord To Paint Or Do Upgrades Before I Move In?

Yes, you can ask your landlord to paint or make upgrades before you move in, but they are not obligated to agree unless such changes are explicitly detailed in your lease agreement.

According to the Canada Mortgage and Housing Corporation (CMHC), landlords have the following obligations:

• Maintenance and Repairs: Landlords must maintain the property in a good state of repair, fit for habitation, and comply with health, safety, housing, and maintenance standards at their expense.
• Utility Services: Landlords must ensure a reasonable supply of fuel, electricity, hot and cold water, and other utility services (unless the tenant has agreed to obtain and pay for these services).
• Enjoyment of Premises: Landlords must not interfere with the reasonable enjoyment of the premises by the tenant, household members, or guests.
• Property Seizure: Landlords cannot seize a tenant’s property without legal process for rent default or any other obligation breach.
• Non-Harassment: Landlords must not harass, obstruct, coerce, threaten, or interfere with the tenant.

Can I Submit Offers On Multiple Properties At Once?

Technically, you can submit offers on multiple rental properties simultaneously, but it is not advisable. A reputable real estate agent will likely discourage you from doing so. Here’s why:

If two or more of your offers are accepted simultaneously, you could be contractually obligated to lease multiple properties for the same period. This situation can lead to significant legal and financial complications.

Instead, it’s best to focus on one property at a time. If you have two properties you’re interested in, prioritize the one you prefer and submit an offer within a reasonable short, irrevocable time (expiration date/time for your offer). If the first offer is not accepted, you can quickly proceed to make an offer on the second property.

This approach ensures that you remain within legal boundaries and avoid unnecessary stress, making your rental search smoother and more efficient. Working closely with a knowledgeable rental agent can help guide you through this process and ensure that you make strategic and well-timed offers.

Can I Make Changes To The Property?

Tenants cannot change a rental property without the landlord’s express written consent. Most lease agreements explicitly state that no alterations are to be made to the unit without prior approval from the landlord. This includes any cosmetic changes such as painting walls, installing new fixtures, or making structural modifications.

If you are already living in the unit and wish to make these changes, even something as simple as a paint job, it is essential to follow these steps:

• Review Your Lease Agreement: Carefully read your lease agreement to understand the specific terms and conditions regarding property modifications. The lease will likely outline that no changes are allowed without written consent from the landlord.
• Submit a Written Request: Draft a formal request to your landlord, property management, or owners. Clearly state the changes you wish to make, why you want to make them and offer to restore the property to its original condition if necessary.
• Include Details and Visuals: In your request, provide as much detail as possible. Include descriptions, materials, colours, and, if possible, visual aids or examples of your proposed changes. This can help the landlord visualize the modifications and make an informed decision.
• Obtain Written Consent: Ensure that any approval you receive is in writing. This written consent should outline the agreed-upon changes and any conditions or requirements set by the landlord, such as restoring the property to its original state at the end of your tenancy.
• Respect the Decision: If your landlord declines your request, respect their decision. Unauthorized modifications can lead to potential disputes, penalties, or even eviction.

How Can I Get Out Of My Lease?

When a landlord and tenant sign a lease agreement, both parties are obligated to honour the entire lease term while providing a minimum of 60 days’ written notice to terminate the lease using the appropriate government-issued forms. Here’s how you can navigate ending your lease as a tenant:

Tenant Termination Process:

1. Notice Requirements: As a tenant, you do not need to provide a reason to terminate your lease. However, you must ensure the termination date does not conflict with the initial lease term agreed upon in your lease agreement. A minimum of 60 days’ written notice is required.
2. Using Government-Issued Forms: To provide notice, use the official forms issued by the Landlord and Tenant Board (LTB). These forms ensure that your notice is legally valid and properly documented.

Landlord Termination Process:

If a landlord wishes to terminate a tenancy and the tenant is in good standing, the reason for termination must fall under specific categories set by the LTB, and they must use the N12 or N13 form:

1. N12 Form: This form is used if the landlord or their immediate family member intends to move into the property and live there for at least one year or if the landlord has signed an Agreement of Purchase and Sale and the new owner intends to move in and live there for at least one year. A minimum of 60 days notice must be provided, and the termination date must not conflict with the initial lease term.
2. N13 Form: This form is used when the landlord needs to conduct extensive renovations that require the unit to be vacant. In this case, tenants have the first right of refusal to move back in once the repairs or renovations are complete.

Do I Need To Pay First And Last Month’s Rent?

Yes, a Landlord in Ontario has the legal authority to collect the first and last month’s rent deposit from a tenant when the lease agreement is signed. This deposit serves as a security for the landlord and must equal the rental rate agreed upon in the lease.

The first month’s rent deposit is typically used to cover the rent for the first month of your tenancy, while the last month’s rent deposit is held by the landlord and applied to the rent for the final month of your lease term.

For more detailed information on the first and last month’s rent deposits, refer to Section 106 of the Residential Tenancies Act. This section outlines the legal guidelines and protections for tenants and landlords regarding rent deposits.

By understanding these requirements, you can better prepare for your rental obligations and ensure a smooth leasing process. If you have any questions or concerns about rent deposits, consulting the Residential Tenancies Act or seeking advice from a knowledgeable leasing agent can provide additional clarity and support.

What Should I Do If I Have Issues With My Landlord?

If you encounter issues with your landlord in Ontario, here’s a comprehensive approach to address and resolve them.

Direct Communication:

• Identify the Issue: Identify and document the issue you are experiencing.
• Communicate Clearly: Contact your landlord directly, either in person, by phone, or through written communication (email or letter). Clearly state your concerns and the specific issues you are facing.
• Seek Resolution: Propose a solution or ask your landlord for their suggestions on resolving the problem. Aim to reach a mutually agreeable resolution through open and respectful dialogue.

Document Everything:

• Record Interactions: Keep detailed records of all interactions with your landlord. Note dates, times, and the content of conversations.
• Save Correspondence: Retain copies of all written correspondence, includingemails, letters, and text messages. These records can be crucial if the issue escalates.

Use Official Channels:

• File a Complaint with the Landlord and Tenant Board (LTB): If direct communication does not resolve the issue, you can file a formal complaint with the LTB. The LTB offers mediation and adjudication services to help resolve disputes between tenants and landlords.
• Complete Required Forms: To file your complaint, you must complete the necessary forms, which are available on the LTB’s websites. These forms should be completed accurately and thoroughly.
• Mediation Services: The LTB provides mediation services in which a neutral third party helps facilitate a resolution between you and your landlord. This can often be a quicker and less adversarial way to settle disputes.
• Adjudication Process: If mediation is unsuccessful, your case may go to a hearing before an LTB adjudicator, who will make a binding decision based on the evidence resented.

Can My Landlord Enter My Rental Unit Without Permission?

In Ontario, your landlord’s ability to enter your rental unit is governed by strict rules under the Residential Tenancies Act (RTA). Understanding these rules ensures that your privacyand rights as a tenant are protected. Here’s a comprehensive overview:

Emergency Situations:

• Immediate Danger: Your landlord can enter your rental unit without prior notice if there is an emergency that poses an immediate threat to life or property, such as a fire, flood, or gas leak.

Written Notice Requirements:

• 24 Hours’ Notice: For non-emergency situations, your landlord must provide you with at least 24 hours written notice before entering your unit.
• Details of Notice: The written notice must include:
  • The reason for entry.
  • The date of entry.
  • A specific time frame during which the entry will occur must be between 8 a.m. and 8 p.m.
• Delivery of Notice: The notice can be delivered directly, left in your mailbox, or posted on your door.

Permissible Reasons for Entry:

• Repairs and Maintenance: Your landlord can enter your unit to conduct necessary repairs or maintenance as long as proper notice is given.
• Inspections: Entry is permitted for inspections related to the condition of the unit or to ensure compliance with health, safety, or housing standards.
• Showing the Unit: If your landlord intends to sell the property or rent it to a new tenant, they can show the unit to prospective buyers or tenants, provided 24 hours’ notice is given.
• Other Legal Reasons: Your landlord may enter the unit for other legal reasons specified in RTA, such as pest control or to fulfill an obligation under a municipal bylaw.

What Is The Standard Duration Of A Lease Agreement?

In Ontario, the standard duration of a lease agreement is typically one year. However, lease agreements can vary in duration and may also be month-to-month, particularly after the initial term has ended. Understanding your lease’s specific terms and duration is crucial for both tenants and landlords. Here’s a detailed look at lease durations:

Fixed-Term Leases:

• One-Year Leases: The most common lease duration is one year. This provides stability and a clear timeframe for the rental period for both the tenant and landlord.
• Other Fixed Terms: While one year is standard, fixed-term leases can also be for shorter or longer periods, such as six months or two years, depending on the agreement between the tenant and landlord.

Month-to-Month Tenancies:

• Post-Initial Term: After the initial fixed-term lease expires, the tenancy often automatically converts to a month-to-month arrangement unless a new lease agreement is signed. This provides flexibility for both parties.
• Direct Month-to-Month Leases: Some lease agreements are initially established as month-to-month. This arrangement can benefit tenants who prefer not to commit to a long-term lease or landlords who anticipate future changes to the property.

Reviewing Your Lease Agreement:

• Key Clauses: Thoroughly review your lease agreement to understand the specific terms and duration. Pay close attention to clauses related to the lease term, renewal options, and termination notice requirements.
• Renewal Options: Some lease agreements may include automatic renewal clauses or options for renewal at the end of the term. Understanding these provisions can help you plan accordingly and avoid unexpected lease terminations.

What Utilities & Services Are Included In The Rent?

The utilities and services included in the rent can vary significantly depending on the rental agreement in Ontario. Understanding what is covered is essential to avoid surprises and ensure your budget appropriately. Here’s a comprehensive guide to what you need to know:

Common Inclusions:

• Water: Many rental agreements include water as part of the rent. This is common in multi-unit buildings and apartments.
• Heat: Heating costs are often included, especially in older buildings with central heating systems. However, tenants may be responsible for these costs in newer buildings with individual heating systems.
• Electricity: Some rental agreements cover electricity, but this is less common. Always confirm whether you will need to pay for your own electricity useage.

Possible Additional Inclusions:

• Gas: If the property uses gas for heating, cooking, or hot water, check if the rent includes this.
• Internet and Cable: Some rental agreements include basic internet and cable services, which are more common in student housing or luxury rentals.
• Garbage and Recycling: Disposal services are typically included, but it’s good to confirm with your landlord.

How Is The Rent Payment Process Handled?

The rent payment process in Ontario is typically straightforward but can vary based on the lease agreement. Rent is commonly due on the first day of each month, although the exact due date may differ as specified in your lease. Payment methods can include post-dated checks, electronic transfers, or automatic withdrawals. Post-dated checks are often convenient as they ensure timely payments without the need for monthly reminders. Electronic transfers through online banking are increasingly popular due to their immediacy and convenience, while some landlords may also accept automatic bank withdrawals. Confirming the accepted payment methods in your lease agreement is essential to avoid misunderstandings.

Understanding your lease agreement is crucial for adhering to the payment terms, which should clearly outline the due date, acceptable payment methods, and any associated fees or penalties for late payments. Familiarize yourself with any late fees to avoid unexpected charges. Always request a receipt for each rent payment, especially if paying in cash, to provide proof of payment and help resolve any potential disputes. Keeping a record of all payments, including dates, amounts, and methods, is also advisable for reference.

If you encounter payment issues, such as insufficient funds or needing a partial payment, communicate with your landlord as soon as possible to discuss alternative arrangements. It’s important to note that landlords are not obligated to accept partial payments and can issue a notice of non-payment if the full rent amount is not received. The Residential Tenancies Act (RTA) outlines the legal obligations of both tenants and landlords regarding rent payments, so ensure you understand your rights and responsibilities under this act. Additionally, any rent increase must comply with the guidelines set by the Ontario government, and landlords must provide 90 days written notice before the increase takes effect.

Maintaining clear and open communication with your landlord about rent payments is essential. To avoid conflicts, promptly notify them of any changes in your payment method or potential payment issues. If a dispute arises regarding rent payments, document all interactions and seek advice from the Landlord and Tenant Board (LTB) if necessary. By understanding the rent payment process and adhering to the terms of your lease agreement, you can ensure a smooth and trouble-free rental experience.

What Happens If I Can’t Pay My Rent On Time?

If you can’t pay your rent on time, it’s essential to notify your landlord immediately to discuss possible solutions. Open communication can sometimes lead to an agreement that prevents further complications. In Ontario, landlords have the legal right to serve a Notice to End a Tenancy Early for Non-payment of Rent (Form N4) if the rent is not paid by the due date. Upon receiving this notice, you have 14 days to pay the overdue rent and cancel the notice, thereby avoiding eviction.

It’s crucial to understand that while the initial late payment might be resolved within this 14-day period, repeated late payments can lead to eviction. Consistent lateness can cause the landlord to lose trust in your ability to pay rent reliably, prompting them to seek termination of the tenancy. The Residential Tenancies Act (RTA) provides guidelines and protections for tenants and landlords, so familiarizing yourself with these rules can help you navigate such situations more effectively.

If you face financial difficulties that make it challenging to pay rent on time, consider seeking advice or assistance from local tenant support organizations. They may offer resources or programs to help you manage your rent payments. Always address payment issues promptly to maintain a good relationship with your landlord and ensure your tenancy remains in good standing.

Are Pets Allowed In Rental Properties?

Whether pets are allowed in a rental property in Ontario depends on the terms set by the landlord, but there are important legal protections for tenants with pets. According to Ontario’s Residential Tenancies Act (RTA), landlords cannot include “no pet” clauses in lease agreements, meaning such clauses are legally void. However, landlords can initially refuse to rent to tenants with pets, allowing them to screen potential tenants based on pet ownership before a lease is signed.

Once you have moved in with your pet and the landlord has accepted you, they cannot evict you simply for having the pet. Eviction can only occur if the pet causes significant issues, such as damage to the property, disturbances to other tenants, or health and safety concerns. This means that your pet is well-behaved and does not create problems, so your tenancy is protected under the RTA.

Communicating clearly with your landlord about any pets before signing the lease is essential. Ensure that any agreements regarding pets are documented in writing to prevent misunderstandings. Additionally, being a responsible pet owner by maintaining cleanliness and preventing disturbances can help foster a positive relationship with your landlord and neighbours. Understanding these legal protections and responsibilities will help you navigate renting with a pet more effectively, ensuring a harmonious living environment.

How Do I Request Repairs Or Maintenance For The Property?

To request repairs or maintenance for your rental property in Ontario, you should inform your landlord or property management in writing, clearly detailing the issue and requesting timely repairs. A written request ensures a documented record of your communication, which can be crucial if the issue escalates. Be specific about the problem, including any relevant details, such as the location of the issue within the property and how it affects your living conditions.

Under the Residential Tenancies Act (RTA), landlords in Ontario are legally required to maintain rental units in good repair, ensuring they are fit for habitation and comply with health, safety, and housing standards. This includes addressing problems such as plumbing issues, heating malfunctions, electrical problems, and structural repairs. Prompt attention to maintenance requests is part of a landlord’s obligation to provide a habitable living environment.

If your written requests for repairs are ignored or not addressed in a reasonable timeframe, you can escalate the issue by contacting the Landlord and Tenant Board (LTB). The LTB provides a formal process to resolve disputes between tenants and landlords, including issues related to maintenance and repairs. You can file an application with the LTB to request a hearing, where you can present your case and seek an order requiring the landlord to make the necessary repairs.

By understanding your rights and following the appropriate steps to request repairs, you can ensure that your rental property remains in good condition and that any maintenance issues are addressed promptly. Keeping thorough records of all communications with your landlord or property management about repairs can protect you if disputes arise.

Can The Landlord Refuse To Renew My Lease?

In Ontario, a landlord can refuse to renew your lease under specific circumstances outlined by the Residential Tenancies Act (RTA). Legitimate reasons for refusal include the landlord or their immediate family member needing to move into the unit, selling the property to a buyer who requires it for their own use, or conducting extensive renovations that necessitate the property being vacant. In such cases, the landlord must provide proper notice and use the appropriate forms—such as the N12 form for personal or family use and the N13 form for major renovations.

The proper notice involves giving you at least 60 days written notice before the end of your lease term. The notice must specify the reason for not renewing the lease and adhere to the requirements set by the RTA. If the landlord fails to follow these procedures or if you believe the refusal to renew your lease is unjust, you have the right to dispute it. You can file a complaint with the Landlord and Tenant Board (LTB), which will review your case and make a determination based on the evidence presented.

It’s important to understand that the landlord’s refusal must be for legitimate reasons, as the law specifies. If the LTB finds the refusal to renew the lease unjustified, they can order the landlord to allow you to continue your tenancy. Understanding your rights and the proper procedures can help you navigate this situation effectively and ensure that any refusal to renew your lease is handled fairly and legally.

What Should I Look for In A Rental Agreement Before Signing?

Before signing a rental agreement in Ontario, it’s crucial to carefully review and understand all the key details to prevent future disputes and ensure a smooth tenancy. Start by confirming the rent amount and payment due dates. This section should clearly state how much rent you must pay and when it is due each month. Understanding these details can help you avoid late fees and ensure timely payments.

Next, check which utilities and services are included in the rent. This typically involves water, heat, and sometimes electricity, but can vary. Ensure you know what is included and what you must arrange and pay for separately, such as internet or cable services.
Another critical aspect is the lease duration. Standard leases are often one year, but month-to-month or other terms are also possible. Make sure the lease period aligns with your needs and plans.

Review the rules regarding pets if you have or plan to have one. While Ontario’s Residential Tenancies Act prohibits “no pet” clauses, landlords can initially refuse tenants with pets. Understanding any specific pet-related terms can prevent conflicts later.

Examine the responsibilities for maintenance and repairs. The lease should detail what the landlord is responsible for maintaining and what the tenant must handle. This includes who to contact for repairs and how quickly issues should be addressed.

Look for any clauses about termination and renewal of the lease. This section should outline how and when either party can terminate the lease and the process for renewing it. Knowing these terms helps you plan for the end of your lease period and avoid unexpected moves.

What Are The Consequences Of Breaking A Lease Early?

Breaking a lease early in Ontario can lead to several financial and legal consequences, making understanding your obligations and the potential repercussions essential. When you break a lease, you may be responsible for paying rent until a new tenant is found to take over your lease or until the original lease term ends. This responsibility arises from the principle that the lease agreement is binding, and the landlord is entitled to receive rent as agreed upon.

One of the first steps you should take if you need to break your lease early is to discuss your situation with your landlord. Open communication can sometimes lead to a mutually agreeable solution, such as finding a suitable replacement tenant. If the landlord agrees to an early termination, ensure all terms and agreements are documented in writing to protect both parties and avoid future disputes.

Financial penalties are common when breaking a lease early. These can include losing your security deposit, paying an additional month’s rent, or covering the costs associated with re-renting the unit, such as advertising and cleaning expenses. The specifics will depend on the terms outlined in your lease agreement, so reviewing these details is crucial.

In cases where an agreement cannot be reached, the landlord may take legal action to recover lost rent and associated costs. This can involve filing a claim with the Landlord and Tenant Board (LTB), which will adjudicate the dispute. The LTB can offer guidance and support in resolving these issues, ensuring that both tenants and landlords adhere to the legal framework set out by the Residential Tenancies Act (RTA).

What Is The Process For Resolving Disputes With My Landlord?

Resolving disputes with your landlord in Ontario involves a structured process designed to protect the rights of both tenants and landlords. The first step is to communicate your concerns directly with your landlord. Open and respectful communication can often resolve issues without further action. Clearly state the problem, provide any supporting documentation, and suggest potential solutions. If direct communication does not resolve the dispute, you can escalate the matter by filing an application with the Landlord and Tenant Board (LTB).

The LTB offers mediation and adjudication services to address a variety of disputes, including maintenance issues, rent increases, and eviction notices. Mediation is a voluntary process in which a neutral mediator helps both parties reach a mutually agreeable solution. This process can be quicker and less adversarial than a formal hearing. If mediation is unsuccessful or not chosen, the next step is adjudication, where an LTB adjudicator hears the case and makes a binding decision based on the evidence presented.

To file an application with the LTB, you must complete the appropriate form detailing the nature of the dispute and the desired resolution. There is a filing fee, but fee waivers may be available for those who qualify. Once the application is submitted, the LTB will schedule a hearing, and both parties will have the opportunity to present their case.

It is crucial to document all interactions with your landlord and gather evidence to support your case. This includes keeping copies of written communications, photographs of any issues, receipts for repair requests, and any other relevant documentation. Organized and thorough evidence can significantly strengthen your position during mediation or adjudication.

What Should I Do If I Suspect My Landlord Is Violating Tenancy Laws?

If you suspect that your landlord is violating tenancy laws in Ontario, it is important to take systematic and proactive steps to address the issue. Start by meticulously documenting the violations and gathering evidence. This can include keeping a record of all communications with your landlord, taking photographs or videos of any problems, and collecting any other relevant documentation, such as repair requests or notices.

Once you have gathered sufficient evidence, contact the Landlord and Tenant Board (LTB) for advice on proceeding. The LTB is the governing body responsible for enforcing the Residential Tenancies Act (RTA), which outlines the rights and responsibilities of both tenants and landlords in Ontario. You can file a formal complaint with the LTB, detailing the suspected violations and providing the evidence you have collected. The LTB will then investigate the matter and can take action against landlords who are found to be in breach of the RTA. This can include orders to comply with the law, tenant compensation, or other penalties.

In addition to contacting the LTB, seeking legal advice from a tenant advocacy group or a legal professional specializing in landlord-tenant law is also advisable. These organizations can offer valuable guidance and support, helping you understand your rights and the best course of action. They can also assist you in preparing your case and representing you during any legal proceedings.

Ensure that all interactions and steps are documented and organized throughout this process. This will strengthen your case and provide a clear event and action timeline. By following these steps, you can effectively address any suspected violations of tenancy laws, protect your rights as a tenant, and ensure that your living conditions are safe and fair.

Are There Any Rent Control Regulations I Should Be Aware Of?

Yes, Ontario has rent control regulations that limit the amount of rent landlords can increase annually. These regulations are designed to protect tenants from significant and unexpected rent hikes. The provincial government sets the guidelines for permissible rent increases, updated each year to reflect economic conditions, such as inflation rates. For instance, the rent increase guideline for a particular year may be capped at a specific percentage, which landlords must adhere to when adjusting rent.

However, it’s important to note that certain newer buildings are exempt from these rent control rules. Specifically, rental units in buildings that were first occupied for residential purposes after November 15, 2018, are not subject to the same rent increase limitations. This exemption aims to encourage the development of new rental housing by providing developers and landlords with more flexibility in setting rents.

To ensure that any rent increase complies with Ontario’s rent control regulations, tenants should check the current rent increase guidelines on the Government of Ontario’s website. This resource provides up-to-date information on the maximum allowable rent increases for the year. If a landlord proposes a rent increase that exceeds the government-set guideline, it is not automatically valid, and the landlord must apply to the Landlord and Tenant Board (LTB) for approval, justifying the need for a higher increase.

Understanding these regulations can help tenants protect their rights and avoid being subjected to unlawful rent increases. If you believe a rent increase is not compliant with the guidelines, you can seek advice and assistance from tenant advocacy groups or file a complaint with the LTB. By staying informed about rent control regulations, tenants can better navigate their rental agreements and safeguard their financial stability.

Why Is The Applicant Offering Several Months Upfront?

There are several reasons why an applicant could offer several months or a year of rental payments upfront:

1. They are protective of their financial information and wish to keep their supporting documents private (employment letter, income verification, credit report).
2. Their income is insufficient, or their credit is low, and they are offering upfront payment as a gesture of good faith that they will be able to make their rental payments.
3. They do not want the responsibility of remembering to make their rental payments on the first of every month.

While a landlord is not permitted to require this additional deposit, a tenant can agree to provide as much as they would like to aid in securing a particular property.

How Much Can I Increase The Rent?

In Ontario, rental increase guidelines are based on the Ontario Consumer Price Index, a Statistics Canada tool that measures inflation and economic conditions over a year. Each summer, the Government sets the rate for the following year, and if you want to increase your Tenant’s rent during that period, you must give them a minimum of 90 days’ notice.

If you own a first-occupied property prior to November 15, 2018, you must follow these guidelines and are only permitted to increase the rent by the designated amount. While the percentage increase has varied over the past 20 years (from 0% to 3.9%), the average permissible increase since 2000 has been 2%. For 2022, the rental increase guideline was set at 1.2%.

However, if you own a property that was first occupied after November 15, 2018, you are not required to follow this guideline and are able to increase the rent to whatever you deem to be fair market value.

In both these instances, you are only permitted to increase your Tenant’s rent once every 12 months.

Can I Request Rent To Be Paid With Post-Dated Cheques?

While many landlords and tenants believe that the only way rent can be paid is by way of cheque (what year are we in?), a landlord cannot demand that rent be paid in one particular fashion – even if agreed to in writing.

While post-dated cheques are an acceptable form of payment, so long as rent is paid on the first day of each rental period, a tenant can submit these payments in any manner they choose.

Can I Show The Property If My Tenant Gives Notice To Vacate

Once your Tenant has given notice, you or an authorized representative has the right to show the property under the following conditions:

1. Provide your Tenant with 24 hours notice
2. State the date and time you will need access to the property (between the hours of 8 AM and 8 PM)
3. State the reason for entering the property

What Legal Ways Can I Evict A Tenant?

There are only a handful of ways legally to do this! In all scenarios, you should contact a paralegal or lawyer who is well versed in landlord and tenants rights and will be able to advise on the situation and properly file the paperwork with the Landlord and Tenant Board.

Some of these situations include:

1. Due cause – the Tenant fails to pay rent, causes damage to the property, disturbs other tenants, or conducts illegal activity on the premises. And, in these instances, it’s not an easy process. There are no guarantees.
2. You would like to occupy the property yourself or have an immediate family member (spouse, child, parent) or caregiver move in at the end of the Tenant’s lease term.
3. You are going to conduct a major renovation that requires a building permit at the end of the Tenant’s lease term.

Can I Evict My Tenants When I Sell?

In brief, no. From the Government of Ontario website:

“Your Landlord can only evict you in specific situations and must give you written notice using the proper form provided by the Landlord and Tenant Board. The form must give the reason for eviction.

Even if your Landlord gives you written notice, you don’t have to move out. Your Landlord must first apply for and receive an eviction order from the Landlord and Tenant Board (also known as the board). You have the right to go to a hearing and explain why you should not be evicted.”

Generally, selling is not a legal reason to be able to evict your tenants. As a landlord/owner, you can still legally sell the property, but the Tenant has the right to stay, have their rent amount stay the same, and become the Tenant of the new owner in the event of a successful sale.

What Is The Landlord And Tenant Board?

The Landlord and Tenant Board was created by the Residential Tenancies Act on January 31, 2007, to give residential landlords and tenants rights and responsibilities, and sets out a process for enforcing them. The LTB resolves disputes between landlords and tenants through mediation or adjudication; they resolve eviction applications from co-ops and provide information to landlords and tenants about their rights and responsibilities.

Do I Choose Higher Rent Or A Better Tenant?

It depends on circumstances, but in most instances, it is better to retain a tenant at the earliest opportunity, provided they are of a suitable calibre than wait out for the highest bidder.

A bird in the hand is more valuable than two in the bush and landlords that turn away tenants solely in the hopes that another candidate will come along willing to pay more often get bit in the behind in the form of the property sitting vacant for longer than expected – ultimately costing them more in lost revenue than the rental differential – and when a new candidate does come along, there’s no guarantee that they will not offer the same low ball price, especially if the property has a longer than average days on the market and has developed a stigma.

Your highest priority should be securing a AAA candidate who will be reliable and not cause any headaches and the rental price comes after that. Not many individuals realize that the first week you are on the market is the most important as this is when you tend to receive the highest and best offers and from the best candidates while the listing is still new and shiny and creates urgency—hoping for better candidates to come along after that period becomes less likely. So, we recommend trying to work with any high-quality candidates you have in hand at the first opportunity.

What Are My Rights If A Tenant Damaged My Property?

If the damage falls outside of reasonable wear and tear, then a landlord first needs to identify and record the damage and assess the amount required for repair. A landlord should then try to resolve the matter directly with the Tenant by requesting financial repayment, and if the Tenant refuses, the Landlord should go through the proper channels via the Landlord and Tenant board or small claims court.