New Landlord and Tenant Rules in Ontario as of February 2007

New Residential Tenancy Rules Take Effect in Ontario

February 2, 2007 -- New rules regulating residential tenancies took effect on January 31, 2007. The new rules are a result of a provincial government initiative that began almost two years ago with consultations that included input from TREB.

TREB Input Achieved Results

When the provincial government began consultations on making changes to residential tenancy rules, one of the most significant changes proposed was with regard to rent control. The proposal considered eliminating the current system of vacancy de-control, which allows landlords to negotiate rent freely with a prospective tenant when dealing with a vacant unit. Once the tenant has agreed to a rent, they are then protected by the annual rent increase guideline, set by the provincial government, which stipulates how much the rent can be increased each year.

Given the high vacancy rates in recent years, TREB, and other groups, told the provincial government that the system of vacancy de-control was working, as intended, to improve availability and standards of rental accommodation. As a result of this input, the provincial government decided to maintain vacancy de-control.

New Rules

The new Residential Tenancies Act, which is now in effect, makes various changes to rules governing rents and landlord-tenant relationships. Some of the key changes include:

The annual rent increase guideline will be based on the Ontario Consumer Price Index, which will be the rate of inflation for the year running from June to May.
Landlords will be able to inspect rental units for maintenance problems, with 24 hours notice.
Landlords will have more remedies to deal with a tenant if he/she is causing willful and/or excessive damage in a rental unit or building. The new remedies will cut the eviction process approximately in half.
Improvements to processes under the Landlord and Tenant Board (formerly known as the Ontario Rental Housing Tribunal)
Interest paid to tenants on last month’s rent deposit will be the same as the Consumer Price Index

More Information

Complete background information, including highlights of the new Residential Tenancies Act, is available at a special web site established by the provincial government.

Read more about Landlord and Tenant Investment Property Issues

For more information please contact A. Mark Argentino

A. Mark Argentino Associate Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc.
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1

BUS 905-828-3434
FAX 905-828-2829
E-MAIL mark@mississauga4sale.com
Website: Mississauga4Sale.com

The Real Real Estate Market in Canada is Surging

Canada's Real Estate Market Surging

While eastern Canada's real estate market may be cooling off, the booming Western Provinces are more than making up for it. The Canadian Real Estate Association (CREA) reports that home prices were up 12.9 per cent in April compared to the same month last year. The average home sold in Canada through the MLS system cost $280,740 in April.
After prices increased by 10.2 per cent in 2005, CREA is predicting a further 6.1 per cent increase this year and another 4.7 per cent hike in 2007. Meanwhile, Canada Mortgage and Housing Corp. (CMHC) says prices will go up 11.2 this year, recording their strongest growth in 17 years. It says more balanced conditions next year will slow prices to an increase of 4.8 per cent.

RBC Economics, which has compiled a Housing Affordability Index since 1985, says rising interest rates and higher prices means the cost of home ownership rose at a faster pace than income for the last two quarters. British Columbia is the least affordable province. The home ownership costs of a detached bungalow in Vancouver was 64.4 per cent, which means that mortgage payments, utility costs and property taxes would take up 64.4 per cent of a typical household's monthly pre-tax income. In Toronto, the index was 41.7 per cent; in Montreal, 34.9 per cent; and in Calgary, 32.7 per cent.

CMHC recently published a study that used average hourly earnings data for different centres across Canada, and calculated the number of hours a person would need to work in order to bring the mortgage payment on an average house down to 30 per cent of monthly income. The 30 per cent benchmark is generally recommended to determine if you can afford to buy a house, but the CMHC study included only mortgage payments and not utilities or taxes.

It found that to own a house in Vancouver, with mortgage payments at 30 per cent of income, someone would have to work 331 hours a month. There are only 162.5 hours available in a typical work month.

Toronto required 257 hours, Calgary 186, Montreal 168, St. John's 125, and Saguenay, Quebec, 82.

The same study was conducted to see how many work hours would be required to pay rent. Toronto was the most, at 157 hours, followed by Vancouver at 153 and Halifax at 129. In Thunder Bay, Ont., fewer hours were required to own a house (97) than to rent (108).

With prices rising and affordability deteriorating, how is it that housing sales will set a new all-time record this year, according to CREA forecasts?

Even though the Bank of Canada has increased interest rates seven times since last September, mortgage interest rates are still near historically low levels.

Economist David Tulk at TD Economics says that although variable-rate mortgages are impacted by the prime lending rate, fixed-rate mortgages are tied more closely to the bond market, and they have not increased as much as the Bank of Canada rate. He says it's the level of the rate, which is still low, rather than recent changes that impacts the real estate market the most. Most economists believe the central bank's rate will not rise again for some months.

Personal income in Canada strengthened steadily throughout last year, says CMHC. The unemployment rate set a 32-year low in March and a record share of Canadians are employed, says the federal housing agency. That creates high levels of consumer confidence and strong demand for housing.

Immigration into the country is also set to exceed the target range for new permanent residents this year and in 2007, says CMHC. Newly arrived immigrants generally settle into rental housing at first, and then many move to home ownership.

More Canadians are also moving into less expensive housing as the boom in multi-unit buildings continues. "The apartment/condominium market is witnessing particularly explosive growth, having accounted for fully two-thirds of multi-family starts last year," says Adrienne Warren of Scotiabank Group. "The number of apartment starts in Canada has increased at a 15 per cent average annual rate since 1998 - three times the growth in the stock of single-detached homes, semi-detached homes or townhouses. Not since the early 1970s have we seen such an extended boom in apartment construction."

Warren says that "for many young renters contemplating home ownership, condominiums and other multi-unit developments represent an affordable entry point, and perhaps the only viable option."

Copyright © 2006 Realty Times. All rights reserved. 6/2/06
Used by permission.

For more information please contact Mark Argentino

A. Mark Argentino Associate Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc.
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1

BUS 905-828-3434
FAX 905-828-2829
E-MAIL mark@mississauga4sale.com
Website: Mississauga4Sale.com

Real Estate Investment Property Purchase - 7 Important Considerations

Real Estate Investment Property Purchase - 7 Important Considerations

If you are considering an buying an investment property, there are 7 important items to consider.
1. Financing, typically lenders will only lend up to 65 percent of the value of the property when it's for investment purposes. This limit is in place because lenders consider an investment property a higher risk

If you have equity in your current principal residence or in other property, then you may wish to borrow from those sources to maximize your mortgage and financing Generally speaking your investment property. The reason for this objective is because you are allowed to use mortgage interest paid on your investment property to reduce the amount of income and hence tax paid on your investment property.

2. Another important consideration for your investment property is choosing the best location. If you are considering a townhouse or a high-rise condo for your investment, then you want to ensure that it is located close to major shopping, transportation and schools and amenities that will appeal to prospective tenants. Often tenants will only have one vehicle and require these types of amenities to be located close to the property. You will usually get higher rent when your location is desirable.

3. Generally speaking, a high-rise condominium will allow you the most flexibility and least amount of effort and maintenance during the tenancy compared to any other type of property. Once a high-rise condo is rented, it is nearly a hands free investment. This does not come without any cost, as the maintenance fees associated with a high-rise condo will be much higher compared to a townhouse or other type of property. Your second choice for maintenance free investment property may be a townhouse. The reason is that all of the exterior maintenance, such as snow shoveling and lawn and garden maintenance will be taken care of by the condo corporation and not the tenant. The only items that you and/or the tenant will have to take care of are the interior items and these are usually minor in nature.

A freehold townhouse, semi or detached home will require more maintenance and effort on your part and the tenant throughout the year. This may be more desirable or not, depends upon your circumstances. Many investors choose freehold properties for their investment properties as they have the time or prefer to do some of the maintenance themselves or at least have control over the entire property compared to condo type properties.

4. As a continuation of the items considered in number 3, these different properties will appreciate at different rates, all things being equal. For example, if a high-rise condo has an appreciation of 10% in a year, then a townhouse may appreciate 12 to 14% and a freehold property may increase 15% or more. This larger appreciation would be offset by the fact that more maintenance may be required by you the owner.

5. It is important to consider all the expenses when you purchase an investment property. The obvious expenses are the principal and interest costs associated with the mortgage or financing on the property, the annual taxes and any monthly maintenance fees if the property is a condominium.

You may wish to consider regular maintenance items to protect the value of your investment property and the systems that are associated with your property. Other expenses you may incur are regular maintenance items such as furnace cleaning and maintenance and inspection. This is a very important item if your investment property is a freehold. Other items such as the condition of the roof, foundation, interior and exterior walls and windows, appliances, lighting and window coverings, electric garage door openers and any other systems or items that are mechanical in nature should be checked on a regular basis to not only protect the value of your investment but also to prevent the failure of these items as opposed to regular maintenance.

6. Once you have purchased your investment property your other major consideration is finding a good quality tenant. In my nearly 20 years of experience I have found that there are two major considerations in your tenant. The number one consideration is that you find a tenant who has the ability to pay the rent and if possible can show a good history of paying the rent. The second most important item is to make sure that your tenant will take care of the property for you in your absence.

Other items you will have to consider are that you must investigate the credit worthiness of the tenant, their personal and credit history, their employment status and confirmation of employment. You may contact their previous landlord and personal references that they supply on the application. These items can be critical and will give you insight into your prospective tenant. In my experience, the degree to which a prospective tenant completes all fields on a rental application and provides all the information you request and is straightforward and forthright with all answers to your questions and inquires will give a good indication of the quality of the tenant that you are looking at.

7. You have to decide to find the tenant yourself or use a real estate agent. When you attempt to find the agent yourself, you can personally meet the tenant ahead of time and see the type of people that will occupy your property. You will have to do all the credit and personal investigations of the tenant. I have found that when you use a real estate agent to find a tenant for your property, the quality of the tenants are usually better than through private means. The reason for this is that tenants who are relocating with their company or those tenants that have better employment and personal history know that the properties on the mls are better compared to the private properties and will utilize the mls to find their property. As well, the mls is a much more efficient method of finding a rental property and many tenants use the mls to find their next rental.

Of course, a real estate agent can find you a good quality tenant and perform all of the credit and personal investigations on your behalf. In the Toronto and GTA, the typical fee to have your property rented through the mls is one months rent commission.

Conclusion

As you can see, there are many important items to consider with an investment property that you are considering to purchase. Your personal situation, financial ability and degree of involvement in your investment property will ultimately determine the type of property that you will purchase.

I can assist you with all of the complexities when you purchase and rent out your investment property. Please don't hesitate to email me

Great Rental located at 6650 Falconer Drive for rent $1295 per month

Great Rental located at 6650 Falconer Drive for rent $1295 per month
Located near Creditview and Eglinton

Great Quad Townhome In Excellent Complex-High Demand Quad Unit Seldom Offered - Similar To Detached Home - Excellent Fenced Yard With Large Deck Backs Green space + Kids Playground-Best Location In Complex- Shows Very Well, Many Extras & Upgrades, Large 4 Bedroom Converted To 3Bdrm

Centrally Located In Excellent Complex Near Creditview and north of Britannia, Super Location Walk To Malls, Community Centre, Bus Service Close, Excellent Landlord
Fridge, Stove, Built in dishwasher, Washer, Dryer, All Elf's & Window Coverings, Central Air Conditioning, Newer 4 Piece Bath, Newer Renovated Kitchen, Ceramic Floors & Newer Casement Windows & Appliances Are Nearly New, Newer Furnace& Electronic Air Cleaner, Wainscotting In Hallway, Filter Kitchen Water, Finished Basement
Top Quality Main Bath, Mostly Fresh Paint With Neutral Decor, Large Deck, Cable Tv + Water Included In Rent - Condo Corp Allows Owners To Park 2nd Vehicle In Visitors, Great Home And Area!

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