Latent Defects – What About a Haunted Building?

Is a Haunted Property a Latent Defect? 

The Facts of the Case

In September of 2010 the plaintiff purchased a commercial property in Kitchener from the defendant.  On December 28, 2010 an article appeared in the local Kitchener newspaper. Mr. Kramer, a director of the defendant, was quoted as saying the following about the subject property, to the newspaper reporter:

and it’s haunted”, “I have heard this from a couple of people – up on the third floor, there is an office up there and they said some days you see somebody moving around inside of there and there is nobody there” & “we used to make jokes that Jimmy Hoffa was in the basement … It’s a labyrinth in there”.

It should be noted that there is almost no case law on the stigmatization of property in Canada and whether or not a vendor is obligated to disclose it.

The plaintiff put forward no evidence that anyone had died in the building whether from natural causes or some criminal act.  Further, the plaintiff’s testimpny was that he has never seen a ghost, did not believe there was a ghost and that all conversations about the property being haunted were a joke and were not serious.

Haunted BuildingJustice Sloan questioned how the plaintiff would provide evidence as to the existence of a ghost.

The Court looked at two previous.  The first was a 2006 Small Claims Court case from the province of Québec, Knight v Dionne where the Court decided that where the son of the vendor had taken his own life 10 years earlier in a personal residence, that fact did not have to be disclosed to the purchaser.

The second decision was Guglielmi v Russo, which was an appeal from the Small Claims Court in 2010.   Justice Swinton quotes

“… A latent defect of quality going to fitness for habitation and which is either unknown to the vendor or such as does not to make him chargeable with concealment or reckless disregard of its truth or falsity will not support any claim of redress by the purchaser.” 

Justice Swinton goes on to state:  

“In any event the vendor is not liable for damages for a latent defect of which he has knowledge unless it renders the premises unfit for habitation or dangerous.”

 The Decision:

In 2013, after hearing this evidence, Justice Sloan dismissed the case that this “haunted” commercial property had a latent defect. 

The plaintiff was not satisfied with this decision, and appealed Justice Sloan’s decision to the Court of Appeal.  Not surprisingly, the Court of Appeal dismissed the plaintiff’s appeal. 

For more information about patent and latent defects , and what must be disclosed to potential homebuyers, Click Here. 

Should Toronto Eliminate the Municipal Land Transfer Tax?

Toronto Real Estate – Land Transfer Tax

The City collects revenue from property taxation. Toronto real estate Transactions with closing dates after February 1, 2008 were charged a Municipal Land Transfer Tax (MLTT).

According to a recent article by Susan Pigg at the Toronto Star, a Report commissioned by the Ontario Real Estate Association claims that municipal home and sales levy has led to a 2.3 Billion dollar drop in economic activity and repealing it would create 12,000 new jobs in the next 5 years.  

“It’s bad for our economy and bad for homebuyers,” says Costa Poulopoulos, president of the Ontario Real Estate Association.  (Who, for full disclosure’s sake, commissioned the report.)

Toronto Real Estate land transfer tax

According to the Study,  Toronto has seen an estimated decline of more than 38,000 home transactions since the tax was imposed in 2008, making home ownership more expensive and Toronto the only city in Canada where homebuyers are double-taxed: they have to pay both a municipal and a provincial land transfer tax on the purchase of a home.

Furhter, the report states that the loss of sales has translated into a roughly $2.3-billion drop in economic activity in Toronto since 2008, and a $1.2-billion reduction in GDP. There would be nearly 15,000 more jobs in sectors from real estate to law to furniture and appliances stores without the Toronto-only land transfer tax.

The economic analysis was done by Altus Group Economic Consulting.  The study relied heavily on two previous studies: a 2012 C.D. Howe Institute report that estimated the impact of the tax on housing transactions, as well as a 2013 study for the Canadian Real Estate Association that examined the economic impact of a typical house transaction in Ontario.

Altus researchers then took those reports one step further, looking back and also ahead at the economic fallout of the tax.

The study went on to note that the economic damage is much bigger than the gain for the city, the average revenue the municipal land transfer tax generated each year since 2008 has been $270.2 million.

The annual take now is about $350 million a year, thanks largely to soaring house prices. That’s close to double the amount collected in 2008.

Toronto Mayor Rob Ford had long vowed to eliminate the municipal land transfer tax.  However, when faced with strong resistance to getting rid of the revenue stream for the city, he talked about reducing it by 5 or 10 per cent instead. He has yet to follow through with either eliminating or reducing the Toronto Land Transfer Tax.  A recent Toronto Star Article suggested that it should be made an election issue for the upcoming mayoral election.  

Land transfer taxes now add up to more than $14,000 in upfront costs on a $550,000 home purchase in Toronto — about $7,500 of that being the provincial tax and $6,700 the city tax.

“This research proves that the (municipal tax) is doing more harm than good where our economy is concerned,” said Poulopoulos. “It gets in the way of the economic spinoff that occurs when homes are purchased and sold.”
The real estate umbrella group commissioned the study, hoping to make repealing the tax both a municipal and a provincial election concern, and to get out front of the issue before any other Ontario municipalities, such as Missississauga, move to implement their own version of the tax.  The study is being released along with a new Ipsos Reid survey that found 85% of Toronto residents think the tax makes it harder to become homeowners, and 72% said the upfront costs would come at the expense of spending on other economic generators, such as renovations, furniture or new appliances for their new home.

Will Toronto Eliminate the Municipal Land Transfer Tax?

At the end of the day, whether it be repealed or decreased will likely be a decision of the new mayor of Toronto.  It will be interesting as the mayoral race progressing to see where they all stand on the issue.

Will it happen?  Who knows.  We were already promised by the current mayor that the tax would be eliminated.

Toronto Condominiums – Ceiling Heights Lowered on some projects

The Sky is Falling – Be Prepared to Duck

How Toronto Condominium Developers are Saving Space

Now we aren’t talking about Chicken Little, but it comes as no surprise to people who have been seeing new Condominium developments over the years that on average,  units are getting smaller.  

RealNet Canada Inc. released its latest stats for new condos in Toronto… and the numbers showed that the average size of a unit has shrunk to about 797 square feet, from closer to 900 square feet five years ago.

However, as noted in a recent Globe and Mail article, there is a new trend that is slowly creeping into new Condominium developments.  The ceiling heights are being lowered.  Toronto Condominium construction

When purchasing a Condominium pre-construction, you often only see two dimensional floor plans which will show you how large the unit will be.  What people often fail to consider, is the height of the ceilings.  Particularly if you are not aware of what a “normal” ceiling height ought to be. 

According to Matthew Slutsky, president of BuzzBuzzHome, “Nine feet is normal, 10 is luxury,” he says. “It’s gone up, eight used to be the norm about a decade ago. Around 2007 to 2008 it started to change to 9 being the standard.”

Why would developers be lowering ceiling heights?

When you think about it, it makes sense.  If a project is approved for a certain height, and they take six inches off per floor over 18 storeys, they can add another floor.  This allows developers to add condominium units, without making them smaller than they already are. 

What does that mean for you?

Nobody likes surprises when it comes to real estate.  If you don’t know to look for ceiling heights in the agreement, you may not turn your mind to the issue. This demonstrates why it is so important to have a real estate lawyer review your Agreement of Purchase and Sale.  

When you purchase a new condominium from a builder you have 10 days to have the document reviewed.  For more information about the 10 day cooling off period, click here.

Make sure you know what you are getting into.  Protect yourself.  


Selling your home? Be careful what you say.

When Selling Your Home, be careful what you say about the property.

What you say, can in fact hurt you.  If you are selling a home, be mindful of what you say/write about the property. 

Here is an example of what can happen.

In September 2009, The defendant, Hussain Al-Saffar (“Hussain”),  purchased a property for $439,000.00 in Toronto, Ontario.  When Hussain purchased the property, the basement was unfinished and was sold to him “as is”. 

Hussain obtained the relevant permits and hired contractors to extensively renovate the property,

Of importance to this case, the basement was completely finished, including drywall and carpeting, with the exception of the furnace room area where the interior foundation wall remained exposed and visible. Included in the description of the attributes of the Property were words that the house was “gutted to the bare bone(s)”, which became the focal point of this case.

Although Hussain oversaw the renovations, he never in fact lived in the Property.  Hussain subsequently put the house on the market.

The plaintiffs, Clare Angela Mauro and Anne Delores Mauro (“Mauro’s”),  signed an agreement of purchase and sale to purchase the property from Hussain on or around August 18, 2010 in the amount of $658,000.00. The Mauro’s had an inspection performed on the property.  The report alerted the plaintiffs to potential leakage problems with the basement, including that it was unpredictable and should be monitored. The closing took place September 3, 2010. Agreement of Purchase and Sale

Almost immediately after closing, the Mauro’s smelled must and dampness.   No further investigation was done behind the drywall because  they did not want  to do any unnecessary damage to the finishes of the basement.

On year after closing, there was a major flood.  Most of the costs incurred to repair the damage were covered by insurance.  When renovating the damage, it was discovered that the  north foundation wall leaked water into the basement. In addition, they found cracks in the mortar between the cinder blocks, including one crack that appeared to have been crudely plugged with a piece of wood to stop the flow of water.

The Mauro’s claimed Hussain must have known about it if he gutted the basement to the bare bones, as he claimed. Hussain claimed that he had not seen any leaks and did not notice the piece of wood because he did not strip the basement walls to the cinder blocks, but rather just insulated and dry walled the area in front of the existing plaster.

The Decision:

This case Mauro v. Al-Saffar was heard at the Toronto Small Claims Court.  The plaintiffs claimed $8,659.00 for damages in repairing a leaky basement wall, including damp proofing, treatment for mold, and content removal and replacement in the property purchased from the defendants, in addition to $1,000.00 in punitive damages. 

Deputy Judge Prattas found that even though Hussain did not know the problem existed with the basement walls, he was still responsible to pay.   Deputy Judge Prattas:

Since the defendant testified that he went only to the plaster, which I have accepted, then the defendant’s statements in the MLS Sheet and Sales Brochure were under the circumstances of this case untrue and inaccurate; they were made carelessly and negligently and misled the plaintiffs as to the true condition of the Property and more particularly the basement.  In my view the plaintiffs were misled into believing that they were getting a basement which did not have a latent defect with water leakage potential.

However, because of the warnings of the home inspector, the Mauro’s should assume part of the risk, since they chose not to do any further inspections. 

Deputy Judge Prattas found Hussain 50% liable for the damages, or $4,329.50. No punitive damages were awarded. 

What does this mean?

Typically, A seller is not liable for any defect that they had no knowledge of. if a seller does not know about a problem with the property.

What distinguished this case, was the fact that Hussain had made representations (although carelessly untrue and inaccurate) that the purchasers relied on. 

For more information about patent and latent defects, and what must be disclosed to potential purchasers click here. 

What can be learned is that you should always be careful and truthful about what you say about the property. 


Toronto Real Estate – Average Price for a Single Family Home Passes 1 Million

Toronto Real Estate Prices Continue to Increase

Month after month, we keep hearing about Toronto Real Estate prices steady climb upwards.   

Home sales in Toronto continues to climb.  According to the data from Realnet Canada, total sales jumped 60% from last year, condominium sales were up 68%, and low rise homes are up 51%.   

The price for detached homes increased by 19.2% in the past year.  Condo prices were up only 0.2% to an average of $368,874.00.  This does show the divergence between condominiums and detached homes.  Despite the increase of sales and prices of single family homes, the supply is low for the increase of demand, and sales are actually below the 10 year average.  

 According to the Toronto Real Estate Board, it now costs over 1 million dollars to buy an average single family home.  The precise number is $1,012,172.00.  Toronto Real Estate Prices

My recent article looked at whether we are in a housing bubble.  Click here to be redirected to that article.  

What do you think will happen to prices in Toronto Real Estate?

When Things go Wrong After Closing – Closing Non Merger

What Conditions Survive Closing?

It is something that I hear about all too often.  I just closed the deal on my new home and X, Y and/or Z are not working.  The Agreement of Purchase and Sale promised that everything would be in good working order.  What can I do?

The answer isn’t what you probably want to hear. After Closing

Even if the Agreement of Purchase and Sale contains a warranty that it will survive closing, there isn’t much that can be done.  What this “warranty” promises is that X, Y and/or Z will be working on the day of closing, but not a second after closing.  So if they worked, and then a day later broke.  It becomes your responsibility to fix it.  What the seller is promising is that  X, Y and/or Z are working, and will work until closing, the promise will survive closing.  However, it does not mean that the seller is promising that X, Y and/or Z will work after closing.  When you are the purchaser this can seem frustrating, however, put yourselves in the seller’s shoes.  Would you want to or be able to promise that something that is no longer in your control or care will work?  Likely not.  This is the same principle. 

If the Agreement of Purchase and Sale does not contain a condition that it will survive closing, then the issue must be negotiated between the parties prior to closing. 

Recommendation:  The day of closing, go to the house.  Check that everything is as it should be and is working.  It becomes a harder sell when a day, a week, a month goes by and only then did you realize that a particular appliance doesn’t work.  If something isn’t working on the day of closing, contact your real estate lawyer.  It is often difficult to prove when something broke, which brings me to my next point. 

Home Inspections are so omportant.  If there are issues they can be addressed between the parties before closing.  It also provides proof whether certain things/appliances were in good working order prior to closing.  If you are still on the fence about including a clause about home inspections, Click Here to see more information about why it is so important to have a home inspection.  

When will a warranty extend beyond closing?  There are certain circumstances where warranties will extend beyond closing.  For example, if the closing is in the winter and the pool has been closed, the seller may promise that the pool is in good working order, and provide a date in the future (in that circumstance likely sometime in the summer) where the pool will be operational.  

Whether you are buying or selling property, the terminology or “jargon” may not make a lot of sense unless you know what to look for.  It might sound self serving, but I always recommend having a real estate lawyer review Agreements of Purchase and Sale.  Protect your investment.   Contact Us to ensure your rights are protected. 

Canadian First Time Home Buyers Increase their Budgets

According to a Bank of Montreal Study the average first time home buyers have increased their budget to $316,000.00

This is up almost 6% from an average of $300,000 in last year’s report on first time home buyers.  

What is even more interesting is that buyers in Vancouver, Calgary and Toronto real estate have even higher budgets for their first homes.  

key-3-939487-mThe numbers from the online interviews conducted by BMO from January 25 – March 6, 2014: 

Approximately 30%  of the 513 Canadians interviewed online for the study said they expected assistance from parents or family.

Nearly 61%  said they have made cuts to their lifestyle to save for their first home.

To view the article from the Globe and Mail Click Here.

Toronto Real Estate – Are we in a housing bubble?

Is Toronto Real Estate About to Have A Price Correction?

A recent article by Julian Beltrame of the Toronto Star looked at The Conference Board’s major survey of real estate prices in Canada and concluded that there are no signs of an imminent crash.  This includes the the super-hot Toronto Real Estate market.Housing Bubble

The Conference Board does not believe that Canada’s housing market will suddenly crumble, saying the most likely outlook is for a modest decline nationally, and only in some specific markets.  After taking a comprehensive look at real estate Nationally, as well as in major urban centres, the Conference Board concluded that the conditions of a crash simply don’t exist, despite numerous reports that the market is overbuilt and overvalued.  

The Ottawa based think tank suggests that with the possible exception of Toronto, housing statistics in the past three years have been in line with the 20 year average.  Despite this, the Conference Board found that even in Torotno, there is only a “borderline” case that it could be overbuilt.  

“At this point in the housing cycle, there is a risk that Canadian housing prices in some market segments are due for a modest correction…Nevertheless, we believe that continued population growth, additional employment gains and modest mortgage rate increases will limit potential price declines in 2014 and 2015.”

However, there is a case for more dramatic price adjustment further out if mortgage rates begin to increase and affect affordability, the Conference Board says, but even in that scenario it is likely to be a soft rather than a hard landing.

In recent years, some economists and international organizations such as the OECD, the IMF, Deutsche Bank and The Economist magazine have described Canada’s housing market in bleak term,  characterizing it as among the the most expensive in the world based on historical averages and other metrics.

However,  the consensus of economists within Canada has tended to be more subdued. Last week, the Canadian Real Estate Association also predicted a slowdown as mortgage rates start edging up later in the year.  Despite this forecast, they still predict the market overall growing in 2014 and 2015.

The Conference Board says fears of a housing bubble about to burst in Canada are exaggerated.

The Conference Board concluded that some of the evidence cited by correction hawks, including comparing home prices as a multiple of rental costs, don’t take into account historically-low mortgage rates that keeps affordability steady. Specifically citing Toronto real estate, it notes that in 2013 mortgage payments consumed less than 20 per cent of average household income.  This is the same as it was in 1993.

“Mortgage costs, not just house prices, are the principal deciding factor for potential homebuyers,” says Robin Wiebe, the think-tank’s senior economist.

Even when mortgage rates do start rising, the Conference Board believes it will happen gradually and over an extended period. For instance, it forecasts rates with only a gain of 200 basis points — two percentage points — by 2017 or 2018.

But at current low rates, the typical homeowner on a posted five-year rate will have paid down $42,104 principal on a $100,000 in mortgage debt, so affordability won’t be seriously impacted once it comes time to renew at a higher rate.

The Conference Board provides an outlook on six major cities:

  • Toronto Real Estate:  Balanced with healthy price growth.  A major correction is is difficult to see given solid employment and population growth.
  • Vancouver Real Estate: Moved back into balance last spring. Recent price gains will give way to slower advances in 2014.
  • Calgary Real Estate: A approaching sellers’ conditions, noting strong price gains last year.
  • Edmonton Real Estate: Balanced, with brisk resale and price growth activity last year.
  • Ottawa Real Estate: Market cooling due to falling employment from the government sector, flatter sales and tempered prices.
  • Montreal Real Estate: Flirting with buyer’s market conditions with sales and average prices having dropped somewhat last year.

Are they right?

That is a question I am asked all the time.  My answer is always the same.  Ask 10 people and you will get 10 different opinions.  There is no magic crystal ball.  However, this does show that the predictions are not all dark and gloomy.  Real estate is an investment.  Like any investment, it can appreciate or depreciate.  For the past 15 years I have heard that prices in Toronto are going to drop drastically.  I can say that those people have been proven wrong. However, even if there is a drop in real estate prices; statistically, in the long run, real estate will usually bounce back.  It is important to think about how long you will be able to live in or keep that property you are thinking of buying.  

If you are thinking about purchasing a home, while it is important to consider  the investment potential of the property, and the overall economic outlook, it should not necessarily be the only deciding factor.  Waiting until the market drops or the “bubble bursts”, may price some people out of the area they are looking to buy.  At the same time, purchasing a property out of a fear that there will no longer be any affordable properties in the city may not be the best course of action.

The answer at the end of the day is “it depends”.  (I know, the lawyer gave a non answer).  The truth is, there are a number of individual  factors to consider when buying property.  What I know for certain, is there is no way to predict with any certainty what the future will hold.  


Tarion Warranty – Just What Does It Cover?

What is a Tarion Warranty? tarion

Purchasers of real estate from a builder, whether it be a home or a condominium, are often confused about the warranty protection programs available on their newly built units.  

Tarion is a non-profit, private corporation established in 1976 to protect the rights of new home buyers and regulate new home vendors and builders according to the terms of the Ontario New Home Warranties Plan Act (the “Act”). Not only does the Act require builders in Ontario to provide new home warranty coverage, but they must also be registered with Tarion and enrol every new home prior to the start of construction. Tarion is also responsible for managing a guarantee fund to ensure that builders honour the statutory warranties, and for enforcing the overall terms of the Act. For more information Click Here.   

Who is covered under a Tarion Warranty?

Homes, this could be a detached home, a townhome, a row-home or a unit in a quadruplex are covered.  Residential dwelling units in a standard condominium project or a dwelling built on a vacant land condominium unit will have coverage if they meet the “new home requirements.” For more information about which homes are covered, or to determine whether your new home will be covered under the Tarion Warranty, Click Here

When does the coverage start?

The clock starts ticking when the home is “completed for possession”.  What this means is that for a home, coverage usually starts when the deal is closed and you own the home.  For condominiums, coverage begins at the date of occupancy.  If you are unsure about when your warranty started, ask Tarion to confirm their position before any warranty claiming periods expire.

What does a Tarion Warranty Cover?

Deposit Protection:

In the event that your builder goes bankrupt or breaches the terms of the purchase agreement, Tarion will protect your deposits to a maximum of $20,000. Deposits paid for all other new homes are protected to a maximum of $40,000.

However, any funds given to hold a condominium unit before you have an official signed purchase agreement are not protected under the warranty.

Delayed Closing or Occupancy:

Under the delayed closing and delayed occupancy warranty, your builder guarantees that your home will be ready for you to move in either by a date specified in the purchase agreement or by a date that has been properly extended if circumstances occur that delay the home’s completion. In many cases, your builder will be required to compensate you if a delay occurs. Be sure to read the Tarion Warranty Critical Dates that are included in the Agreement of Purchase and Sale. 

Unauthorized Substitution

This protects the purchaser from a builder unscrupulously substituting items specified in the purchase agreement. For example, if a particular back-splash color or material was agreed to, substitution without your written authorization is not allowed. This also extends to the inclusion of specifics (think stainless steel appliance by a notable brand, shutters or blinds of a particular suasion etc.). Your recourse as a purchaser is to demand that the original items specified be included or that cash compensation be given. In practice, your Agreement of Purchase and Sale will often include a clause allowing the builder to provide you a close match, or the next best substitute, often deemed by availability.

Common Elements

For most condominium projects, warranty coverage also includes the shared areas of the building, referred to as Common Elements.   

How long am I covered?

One Year Warranty

  • Requires a home is constructed in a workman-like manner and free from defects in material;
  • Protects against unauthorized substitutions.   
  • Requires the home to be fit for habitation;
  • Protects against Ontario Building Code violations; and
  • Applies for one year, beginning on the home’s date of possession even if the home is sold.

Two Year Warranty

  • Protects against water penetration through the basement or foundation walls;
  • Protects against defects in materials that affect windows, doors and caulking and defects in work that results in water penetration   into the building envelope;
  • Covers defects in work or materials in the electrical, plumbing and heating delivery and distribution systems;
  • Covers defects in work or materials that result in the detachment, displacement or deterioration of exterior cladding (such as   brickwork, aluminum or vinyl siding);
  • Protects against violations of the Ontario Building Code that affect health and safety; and
  • Applies for two years, beginning on the home’s date of possession.

Seven Year Warranty

Your home’s seven year warranty covers major structural defects (MSD) and begins on the date you take possession of the home and ends on the day before the seventh anniversary of that date.

For example, if your home’s date of possession is January 1, 2005, the seven year MSD warranty begins on January 1, 2005 and remains in effect until and including January 1, 2012.

A major structural defect is defined in the The Ontario New Home Warranties Plan Act  as:

In respect of a post June 30, 2012 home, any defect in work or materials in respect of a building, including a crack, distortion or displacement of a structural load-bearing element of the building, if it,

  1.  results in failure of a structural load-bearing element of the building,
  2. materially and adversely affects the ability of a structural load-bearing element of the building  to carry, bear and resist applicable structural loads for the usual and ordinary service life of the element, or
  3.  materially and adversely affects the use of a significant portion of the building for usual and ordinary purposes of a residential dwelling and having regard to any specific use provisions set out in the purchase agreement for the home

The seven year MSD warranty includes significant damage due to soil movement*, major cracks in basement walls, collapse or serious distortion of joints or roof structure and chemical failure of materials.

In addition to the general exclusions, the seven year MSD warranty specifically excludes: dampness not arising from failure of a load-bearing portion of the building; damage to drains or services; and damage to finishes.

What is Not Covered By Tarion?

Normal Wear and Tear

  • Normal shrinkage of materials that dry out after construction such as nail “pops” or minor concrete cracking
  • Settling of soil around the house or along utility lines (other than subsidence beneath the footings of the home)
  • Scuffs and scratches to floor or wall surfaces caused by moving, decorating or day-to-day use of the home by the homeowner

Damage Caused by Improper Maintenance

  • Dampness or condensation caused by failure to maintain proper ventilation
  • Damage resulting from improper maintenance

Damage Caused by a Third Party

  • Damage caused by municipal services or utilities
  • Damage caused by floods, “acts of God”, acts of civil or military authorities or acts of war, riot, insurrection, civil commotion or vandalism
  • Damage caused by insects or rodents, unless it is the result of construction that does not meet the Ontario Building Code

Secondary Damage Caused by Defects that are Under Warranty

  • Personal or property damage, such as personal injury, loss of income and other secondary loss associated with warranted defects or repairs

(However, your homeowner insurance may cover such secondary or consequential damage.)

Supplementary Warranties

  • Warranties or agreements provided by your builder over and above the statutory warranties.  Such matters are between the builder and the homeowner and are not enforced by Tarion

Deficiencies Caused by Homeowner Actions

  • Alterations, deletions or additions to the home that were made by the homeowner
  • Changes by the homeowner to the direction of the grading or the slope of the ground
  • Defects in materials, design or work that was supplied or installed by the homeowner


  • The seven year MSD warranty does not extend to elevating devices

HVAC Appliances

  • The seven year MSD warranty does not extend to appliances that form part of the heating or cooling apparatus, equipment or systems, whether for water, air or other substances, including furnaces, air conditioners, chillers and heat recovery ventilators

Specific Defects Accepted in Writing

  • Ascertained defects in work or material accepted in writing by the homeowner

 There is a lot to cover, and this has only  scratched the surface.

If you need more information about Tarion, Click Here. 

Comparison of Toronto Real Estate Market Segments

Toronto Real Estate – Single Family Homes v. Condominiums 

There are two main types of properties in the City of Toronto.  There are single family homes, which include detached, semi detached or townhouses.  On the other side there are condominiums.  

Undeveloped land in Toronto is becoming harder to come by.  Any large properties that are developed, are usually turned into condominiums.  New homes are usually built when an older existing property is town down, and a new one is built in its place.  Toronto Real Estate

There is no shortage of speculation about the future of Toronto real estate.  CBC recently posted an interesting article comparing Single Family Homes and Condominiums.  To read the article, Click Here.  

“One market is facing too much supply, while another appears to be heating up,” according to one of Canada’s biggest banks. “The GTA housing market is a tale of several markets with divergent conditions.”

Single Family Homes:

Across the Toronto as a whole, prices for single-family homes have increased by 12% in the past year. That’s much stronger than the gains seen in all other categories of real estate.

However, it is important to recognize that the volume of sales are well below historical norms. 

The bank points out that there were 43,000 detached homes sold in the resale market across Toronto in 2013. On top of that there were 9,900 new builds. When you compare that with with 22,000 new builds in 2002, you can see where supply and demand economics fit in. Price increases can be largely attributable to a lack of supply.  Of course this isn’t the only consideration, historically low mortgage interest rates  must also be factored into this scenario.

According to the Bank, for every detached house that gets built, there are three new condos built.


Anyone who has been to Toronto recently can see that there are currently a lot of condominiums, with more being built every year.  The average price of a new condo is $545,000, according to TD Bank. However, the price for existing condos is much lower, averaging $347,000.  On the other hand, older condominiums are also generally larger.  The average condominium unit in 2005 was 925 square feet.  In January of 2014, the average condominium had shrunk to 798 square feet in January.

With 70,000 new units expected to come online this year and next (twice the historic average) that’s a gap the Bank doesn’t expect to close any time soon.

“The new condo market is increasingly finding it more difficult to compete with condos on the resale market, which are both large and cheaper,” TD said.

In addition, the buildings are getting significantly taller. Development rules have resulted in more builders producing condominiums instead of single-family homes and within that, according to the bank, “condo development in the GTA has focused on high-rise projects where the economics of construction have been more favourable.”

In the year 2000, only about 28%t of condominiums were being built in high-rise towers. Today that ratio has jumped to 60 per cent.

According to the Bank , Higher land, construction and regulatory costs have made it more difficult for newer buildings to compete with older buildings. 

What about Renters?

The Bank also sounds a modest alarm about the market for investors who rent out their units. Recent estimates are that 26% of the condominiums in Toronto aren’t owner-occupied, but rather are rented out — at an average cost of $1,700 a month, the report said.

Investors face more of a risk to flip and sell their units upon completion, and are less likely to ride out a cold market if prices decline.

“It is likely that a good portion of these rented units will ultimately end up on the market,” the Bank said. First-time condo sellers getting less than they’d hoped for is also likely to have an impact when they try to move up to the single-family home market, TD notes.

What Does This all Mean?

A peek into the attic of Toronto Real Estate shows a complex market moving in many different directions.

“Markets that have a higher concentration of single-detached and low-rise condominiums — including many regions in the 905 areas code — are expected to outperform relative to those with a higher concentration [of] high-rise condominiums.”


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