The Faithful Servant

Man Signing Contract

When you enter into a listing agreement or buyer representation agreement with a real estate registrant you become a CLIENT of the brokerage that that registrant is licenced with. That means that every registrant within that brokerage, including the owner, the broker of record, all brokers and sales representatives are held by LAW to owe specific duties to ALL clients. Your agent is a Fiduciary. The true meaning of Fiduciary is “faithful servant”.

What are Fiduciary Duties?

(For the purposes of this article,

  • The Terms registrant, agent, broker, sales rep, real estate professional, are all interchangeable
  • Registrant shall mean all registrants of a brokerage
  • Obligated shall mean within the bounds of the real estate transaction)

Fiduciary duties are generally broken down as follows:

LOYALTY

This is the most important duty a real estate registrant owes to a client. A registrant is obligated, to act at all times, solely in the best interests of the client, excluding all other interests, including those of the registrant. A registrant must be aware of all situations that could cause a conflict of interest, such as buying their clients property, or selling their property to a client.

An example of breach of loyalty is when a registrant buys a property listed with his/her firm, and immediately resells it at a profit. Such conduct is usually considered appropriate and lawful by persons who act at “arms length”, but a registrant would be considered to have stolen an opportunity for profit that rightfully belongs to the client.

OBEDIENCE

A registrant is obligated to obey a client’s lawful and reasonable instructions, even if the registrant doesn’t agree with them. The key word here is “lawful”, the duty does not include an obligation to obey unlawful instructions, such as instructions to not market a property to minorities or to misrepresent the condition of a property or to misrepresent a buyer’s potential to buy. However, if a seller tells a registrant to list a house at a given price, the registrant must obey the sellers wishes (if the registrant choses to work for that seller).

REASONABLE CARE (COMPETENCE)

A registrant is obligated to use reasonable care and diligence when pursuing the client’s affairs. The standard of care expected of a buyer’s or seller’s real estate broker is that of a competent real estate professional. By reason of his/her license, a broker is considered to have skill and expertise in “real estate matters” superior to that of the average person, and they must use that skill and knowledge in pursuit of a client’s affairs.

However, no registrant is expected to perform tasks or know information outside the scope of his/her real estate license. Real estate licensees are not expected to perform services normally provided by engineers, home inspectors, lawyers, accountants, or other professionals. If concerns arise outside the scope of a registrant’s responsibility, the registrant must acknowledge that and suggest that the client seek assistance from a reliable outside source.

DISCLOSURE

A registrant must disclose to his/her client any information relevant to the transaction in which the registrant has been engaged to assist. This includes any facts affecting the value or desirability of the property and all known relevant and material information. For instance, if a registrant notices a crumbling chimney on a house he/she is showing and fails to mention it, he/she would be in violation of his/her fiduciary duty to his/her buyer client. On the other hand, a registrant is not expected to know of problems that can not be seen or that should be uncovered by another professional.

A registrant’s duty of disclosure to his/her client must not be confused with a registrant’s duty to disclose any know material facts about the property value to non-clients (customers, general public, etc). The duty to disclose known material facts is based on a real estate registrant’s duty to treat all persons honestly. The duty of honesty does not depend on the existence of a client relationship.

A registrant must also disclose to all clients, at the earliest practicable opportunity, and in writing, any actual or potential conflicts of interest.

CONFIDENTIALITY

A registrant must not use information acquired for any purpose that is likely to cause the client harm or to interfere with the client’s business, now or in the future. In other words, a real estate registrant must keep confidential any information that may weaken a client’s bargaining position. For example, a registrant representing a seller can not disclose to a buyer what the seller is willing to accept. Conversely, a registrant who is representing a buyer is prohibited from disclosing to a seller how much that buyer is willing to pay.

The duty of confidentiality should not be confused with a real estate registrant’s responsibility to disclose known material facts about a property to potential buyers. The obligation to disclose such facts, including defects, is based on the registrant’s duty to treat all persons fairly and honestly.

ACCOUNTING

A registrant must account for and safeguard money, documents and property entrusted to their care. For example, registrants must ensure that a listed house is secure; that they know and keep track of the comings and goings; that they keep control of keys; and that a licensed registrant attends all showings. A registrant must ensure the deposit is safeguarded by the brokerage or lawyer until closing.

 

For further information on this topic you can go to:

http://www.crea.ca/sites/default/files/files/realtor%20code.pdf

or Google “Fiduciary Duties Real Estate”

 
Kathy Dimaline is a Real Estate Broker for RE/MAX Grey Bruce Realty Inc.  The comments on this Blog are the opinions, only, of Kathy Dimaline and do not constitute any legal advice or legal opinion and does not represent the interests or opinions of RE/MAX Grey Bruce Realty Inc., brokerage.

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Tax Credits for Home Owners



TaxSavingsBoth the Ontario Government and Federal Government offer incentives to Home Owners.

The Ontario Government offers a $10,000 Healthy Homes Renovation Tax Credit…click here for details:  http://www.ontario.ca/taxes-and-benefits/healthy-homes-renovation-tax-credit

Here’s the link to the Canadian Home Renovation Tax Credit:  http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhmrnvtn-eng.html#q1

Here’s the link to the Canadian First Time Home Buyer’s Credit:  http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html and an alternate link:  http://actionplan.gc.ca/en/initiative/first-time-home-buyers-tax-credit

Please check the sites to ensure these credits are still available…and check with your accountant to see if you qualify.

Good savings!

Kathy Dimaline is a Real Estate Broker for RE/MAX Grey Bruce Realty Inc.  The comments on this Blog are the opinions, only, of Kathy Dimaline and do not constitute any legal advice or legal opinion and does not represent the interests or opinions of RE/MAX Grey Bruce Realty Inc., brokerage.

Do You Need a Permit for a Dock on your Shore?


If you have a waterfront home or cottage or vacant waterfront lot and you want to install a dock so that you can keep a boat at your shore you need to do some investigation prior to construction.

Investigate Conditions

Investigate Conditions
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On smaller inland lakes, having a dock at your shore is a common occurrence.  However, on the larger Great Lakes, I strongly suggest analysing water conditions, shoals and prevailing winds. There are many days where the lake is very calm and it looks like you can put a dock out, but there are just as many days where the lake is extremely rough due to wave action or winds.  This wave action can do major damage to your dock and your boat.  Pull out charts or talk to neighbours who are familiar with the area to check for shoals and other water hazards.  It is most likely you will have to be in a protected harbour that offers access to the open lake.  FYI, these types of properties tend to have higher real estate value.

Example of a Boat Slip

Example of a Boat Slip

Once you determine that you can have a dock, you want to then determine what type of dock.  The main types of docks are:  boat slips, often carved out of rock at the shore; crib docks which have large areas in the water that are netted and filled with stones, rock or concrete; pole docks, which are becoming more and more popular because you can pull them in for winter protection; cantilevered docks that protrude out from a raise shore, usually on a rock formation; and floating docks, which usual extend off of any of the above mentioned choices.

Example of Crib Dock in Progress

Example of Crib Dock
Under Construction
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The Ministry of Natural Resources control any work that may affect water vegetation or fish habitats.  Anything that involves dredging in the water or any large construction on the shore or bottom of the lake…whether you are adding to the shore (ie adding sand) or removing rock or sand from the shore.

As far as a dock is concerned, you need to apply for a work permit if you are creating a boat slip or channel involving dredging or if you are creating a dock with cribs or a boathouse that is placed on the lake bottom that is more than 15 square meters.

Example of a Pole Dock

Example of a Pole Dock

Generally, you DO NOT need a permit for cantilevered docks, floating or pole docks and any other dock with a total surface of less than 15 square meters on the lake bed.   However, I recommend, if you plan to install a dock at your property you should contact your local Ministry of Natural Resources office for confirmation of their rules and regulations.

You can find further information on this website:  http://www.mnr.gov.on.ca/en/Business/CrownLand/2ColumnSubPage/STEL02_165788.html

Happy Boating!

Kathy Dimaline is a Real Estate Broker for RE/MAX Grey Bruce Realty Inc.  The comments on this Blog are the opinions, only, of Kathy Dimaline and do not constitute any legal advice or legal opinion and does not represent the interests or opinions of RE/MAX Grey Bruce Realty Inc., brokerage.

“0” Tax on Your Property

Ontario’s Conservation Land Tax Incentive Program

BP20If you own a piece of property that can be deemed as “provincially significant” you can apply for a Land Tax Incentive.  This program, if approved on your land, will exempt you from property taxes on that portion of your land deemed significant.  This is where we often get lands for sale with “0” or very little taxes.  To qualify you must agree to maintain your property as conservation Land and not carry out activities that would degrade, destroy or result in the loss of the natural values of the site.  Properties must be a minimum of 1/2 an acre.

The program runs on a year to year basis.  Once qualified, you will receive a notice each year asking if you want to continue your eligibility for the following year.  You must certify that the information that you provide is accurate, that you intend to maintain the property as Conservation Land and you authorize a representative of the Ministry of Natural Resources to enter your property, from time to time, to confirm.

If you have been receiving a tax exemption and the MNR discover that you are not maintaining as Conservation Land, you lose your exemption and the municipality can recover up to 5 years of taxes that were not paid.

BP1Only lands considered highly significant by the Ministry of Natural Resources qualify.  Lands that are eligible are:  provincially significant wetlands (often identified on your property with EH zoning),; provincially significant areas of natural and scientific interest (identified on your property as ANSI); habitat of endangered species (could be flora or fauna); and lands that come under the Niagara Escarpment Commission (identified on your property as Development Control).

I have this exemption on a piece of property and it’s nice not to have to pay taxes on it.  You can still use the land, you just have to agree to protect the designated natural heritage value of your property.

For more information click here:  www.ontario.ca/CLTIP

Kathy Dimaline is a Real Estate Broker for RE/MAX Grey Bruce Realty Inc.  The comments on this Blog are the opinions, only, of Kathy Dimaline and do not constitute any legal advice or legal opinion and does not represent the interests or opinions of RE/MAX Grey Bruce Realty Inc., brokerage.

How to Downsize/Declutter

I pulled this up from the Houzz site.  Great suggestions on how to Downsize and Declutter your home.  Great ideas weather you are buying or selling.

Beware the New Northern Bruce Peninsula Comprehensive Zoning By-Law

NBPLogo

First of all, I have to tell you that because of the huge outcry from residents about these New “Proposed” By-law changes that were recommended for approval, the Northern Bruce Peninsula Council has agreed to postpone the passing of these By-laws, “until further notice”.  However, it is my opinion that these will come up again in future and everyone should be aware and be prepared.

Having said that, I had the link from the Municipality to share with you so that you could review the changes yourselves, but found out that shortly after the meeting all documents regarding the New Comprehensive Zoning By-laws have been removed from both the Municipal site as well as from the Planning Department’s site.  Which I find surprising!  Unfortunately I didn’t save the files because they were too large.

I called the Municipality and was told “We don’t think you need to worry about that” and “There is no impact on anything at the present time.”  However, if you want to do anything to your property now, they are verbally quoting from the New Comprehensive Zoning By-Law…and…Here’s an excerpt from a recent letter from the Planning Department regarding an issue with one of my client’s properties:

“Staff have proposed to change the zoning of the lands from C4 to R2 (or an analogous LR Lake Residential*) zone as part of a recommended new comprehensive zoning by-law for the Municipality of Northern Bruce Peninsula that would replace by-law 2002-54. The Municipality has deferred passage of this by-law in order to address other matters with the by-law that are unrelated to your property. At present there appear to be two options:
1. Allow the zoning to be addressed through a comprehensive zoning by-law review/ change as is currently underway, noting that the timeline for this by-law is unclear”

*this is a new zoning category in the New Comprehensive Zoning By-law

When the County and Province are recommending sweeping changes to our properties and have spent a huge amount of money and time into preparing a document for New Comprehensive Zoning By-laws in this area, I have a hard time believing that we won’t be seeing this again.

I will point out that major changes were to EH (more of it identified especially in the Tobermory area) and a new EH-a (Provincially Significant Wetlands), which has significant impact on many properties due to the 120 metre set back.  When I reviewed the EH-a, I discovered there is a huge area in Stokes Bay, Little Pine Tree Harbour/Pleasant Harbour and Dorcas Bay where an “Environmental Impact Study” may need to be completed before building or altering your properties.

Also, most of Lions Head and Isthmus Bay would be impacted with a similar “may” need an “Environmental Impact Study” for what is called “Intake Protection Zones”.

I did save the maps for these and have highlighted the areas affected, for your review.  Here’s the link:

http://www.davismclay.com/ComprehensiveZoning.pdf

I did not have enough time to review all changes before the links were removed, sorry!

The changes were made “public” by placing an ad in the Tobermory Press.  It took some time for residents to digest this and begin the outcry.  I am sure that many people are still in the dark.  I found it interesting in the report (link below) that they decided not to mail this out to all residents because they wanted to “save costs” (page 2 under Notice of Public Hearing).

I am attaching the link for the Minutes of the Council meeting (which I attended) as well as the link for the full report from the Planning Department and letters to the Planning Department from residents.  Hopefully these links will still be available (if not, I have saved both on my computer).  This will give you a very good idea of the sweeping proposed changes.

Report on new by-laws:

https://northernbrucepeninsula.civicweb.net/Documents/DocumentDisplay.aspx?Id=21132

Minutes of Council meeting:

https://northernbrucepeninsula.civicweb.net/Documents/DocumentDisplay.aspx?Id=21424

If you have any questions, feel free to call me, I’ll share what I know, but I can no longer review the zoning maps (because they too have been removed) to tell you how this may have impacted your property.

I will inform you of any new developments should this become active again.

BEWARE AND BE PREPARED!

Implications of Renting your Vacation Home or Cottage.

for-rent

Renting your vacation home or cottage is a great way to offset some of the costs, such as mortgage and property taxes.  However, before you decide to rent your property you need to do a bit of research on the implications.

First, there’s wear and tear on your cottage.  Do you want to share your personal space, and personal items with strangers?

InsuranceSecond, how does it affect your insurance?  In some cases insurance companies will not insure you if you are renting your property…or, they will charge you a much higher premium.  In any case, make sure you have the proper insurance, especially for third party liability.  The last thing you want is for someone to hurt themselves on your property and sue you.

Thirdly, is your property in rentable condition?  Have you taken all precautions to protect your personal items?  Have you removed all hazardous goods?  Does your home or cottage and property meet standard safety codes (this will be very important if there is ever an insurance liability claim—don’t get caught short).

TaxFourth, do you fully understand HST implications?  Will the sale of your property in the future be subject to HST?  This is a tricky one because HST rules are so convoluted.  A general rule, but you should always check with an accountant, is that you need to personally use the property equal to or greater than the amount that you rent it out.  If you go through a rental agency, you will have to charge HST, but in order to avoid being subject to HST when you sell, you can not claim any Input Tax Credit.

Here’s the link to the HST guide as it pertains to Vacation Property:  http://www.cra-arc.gc.ca/E/pub/gi/gi-025/gi-025-e.pdf   Good luck!  Once you read this you will probably realize the importance of reviewing with your accountant.

Fifth, do you plan to rent it out yourself or go through a rental agency?  Rental agencies charge high commissions (much higher than Real Estate agents, I might add), but can get you a higher weekly rate.  Be sure you know what services they provide.  Most expect you to arrange for a cleaner between rentals and to have a handy-man  available for any issues that may crop up during any rental period.

Remax.caLastly, (probably not the last thing to think about, but the last I’ll put down in this Blog)…How will renting out your vacation home or cottage affect the sale of your property when you decide to sell?  Generally, as a Real Estate agent, we are only allowed to show rental properties between renters…which is usually only a window of about 4 hours on a Saturday or Sunday.  This is very restrictive and difficult to work around when we have an interested party.

Renting works for many people…just be sure it is right for you!

Watch for my next Blog on….

Lets Talk About Poop!

Don’t forget to send your comments, stories, or ideas, in the comment section below or via email at dimaline@amtelecom.net.

. .

. Kathy Dimaline is a Real Estate Broker for RE/MAX Grey Bruce Realty Inc.  The comments on this Blog are the opinions, only, of Kathy Dimaline and do not constitute any legal advice or legal opinion and does not represent the interests or opinions of RE/MAX Grey Bruce Realty Inc., brokerage.

© Copyright Kathy Dimaline, All Rights Reserved

Demystifying the Buyer Representation Agreement–Commission Clause

Buying

Buyers, when you make the decision to hire a Real Estate professional to work for you to help locate your new home, cottage or property, you likely will be asked to enter into a Buyer Representation Agreement.

In most real estate transactions, in its simplest form, it is the seller that pays the Brokerage the commission.  However, there is a provision for commission in a Buyer Representation Agreement as well…and you should know about it.

ReadingMost Buyer’s don’t even read this clause, yet you could end up paying commission, so, it is important to read and understand the implications.

As a Buyer, you are agreeing that the Brokerage is entitled to be paid a commission of a certain percentage of the sale (usually paid by the seller).  However, the commission clause further states that you, the Buyer, will pay any deficiency between what the seller pays and what the Brokerage receives.

What this means is:  If an agent enters a percentage say of 6% in this clause, and upon the sale to you of the property of your choice the Brokerage is only paid 3% commission from the seller…you could be on the hook to pay the deficiency, in this case 3% (ie of $300,000 that could be $9,000).

Another example is, if you enter into a Buyer Representation agreement with an agent with Brokerage A at 6%, and during the term of that agreement you purchase a property through another agent with Brokerage B, or you purchase a property privately, you could be obligated to pay the full 6% to Brokerage A (ie of $300,000, that could be $18,000).

You need to be diligent with your agent so that you fully understand your obligations.  Ask questions!  Many listings offer different commissions…make sure that you know what kind of commission the brokerage is entitled to on the property that you have chosen and what your commission obligation is (if any) before you sign an offer to purchase.  You may find it in your best interest to renegotiate this Buyer Representation before you sign the offer.

Unless you make very specific commission arrangements (ie on a private sale) with your agent, my solution is:  Have your agent stroke through the commission portion of this clause and include a statement that the Brokerage will be “paid by the seller or the listing brokerage as per the listing agreement”.  This way you will have a comfort level that you will not be paying any commission.

EducateDon’t get caught paying commission without knowing about it…you need to read, understand and negotiate this clause with your agent.  Don’t let it scare you—just be an educated buyer!

I’ll review other clauses of this agreement and other points of this particular clause in future Blogs.

Here’s the clause in its entirety:

BuyerRepCommisson

Read before you leap!

Watch for my next Blog on….

Renting your Vacation Property

Don’t forget to send your comments, stories, or ideas, in the comment section below or via email at dimaline@amtelecom.net.

. .

. Kathy Dimaline is a Real Estate Broker for RE/MAX Grey Bruce Realty Inc.  The comments on this Blog are the opinions, only, of Kathy Dimaline and do not constitute any legal advice or legal opinion and does not represent the interests or opinions of RE/MAX Grey Bruce Realty Inc., brokerage.

© Copyright Kathy Dimaline, All Rights Reserved

Townhouses, Condominiums, Duplexes…is it possible?

Condo

I get asked regularly about development opportunities on the Bruce Peninsula.  Most people are not happy with what I have to tell them…but please let me assure you I DO NOT make the rules.  I am, however, obligated to tell you what they are or to pass you on to the appropriate government bodies.  You need to do some additional research before making any plans to build anything other than a single family residence.

The rule is, you are allowed one residence per building lot, whether it’s a small lot in town or 100 acres.  So, if you are hoping to do certain types of developments in this County, you need to first speak to the County Planning Department.  I recommend that you ask for an “opinion” first (they don’t charge for that), if the opinion is positive, then move forward with applying for a zoning change.

Here’s a list of all of the County Planners:

Bruce Stickney

Planner

bstickney@brucecounty.on.ca

work 519 881 1782 x 259

David Smith

Senior Planner

dsmith@brucecounty.on.ca

work 519 881 1782 x 257

Heather James

Planner

hjames@brucecounty.on.ca

work 519 881 1782 x 295

Jack Van Dorp

Planner

jvandorp@brucecounty.on.ca

work 519-534-2092 x 125

Here’s the link to the County of Bruce Official Plan:

http://www.brucecounty.on.ca/assets/departments/planning/files/County%20Documents/County%20Plan_Consolidated_Public_%20June2012.pdf

Good luck…call me to help you find the perfect property!

Watch for my next Blog on….

Buyer Representation–Commission Clause

Don’t forget to send your comments, stories, or ideas, in the comment section below or via email at dimaline@amtelecom.net.

. .

. Kathy Dimaline is a Real Estate Broker for RE/MAX Grey Bruce Realty Inc.  The comments on this Blog are the opinions, only, of Kathy Dimaline and do not constitute any legal advice or legal opinion and does not represent the interests or opinions of RE/MAX Grey Bruce Realty Inc., brokerage.

© Copyright Kathy Dimaline, All Rights Reserved