GTA Homes and Condo Specials

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***Blacklisted Condos: For Buyers and For Sellers***

Being on the blacklist means that CMHC feels that your condo corporation is at risk of losing value so it will not insure a mortgage for the units in that corporation. So instead of needing only 5% down to get a mortgage, buyers will need a 20% down payment. For some condos, even with 20% down payment, lenders will still not approve for mortgage.

***How do condos get on the list?

A condo will get put on the blacklist when:

1. A property has a number of foreclosures. (Power of Sales.)
2. The Reserve Funds are depleted.
3. There are Operating Fund deficits.
4. The corporation has taken out special assessments or loans.
5. The city issues work orders against the corporation.
6. Property values have dropped.

***How many condos on the blacklist?

More than you would suspect. Some new glass-wall condos in the downtown that are suing their builders are on the same list as many of the older thirty to forty-year-old corporations in the Etobicoke, North York and Scarborough suburbs that surrounds the downtown.

***For Sellers***

If you own a condo with a CMHC backed mortgage and then the corporation runs into financial troubles and gets blacklisted, you may find out that you cannot get your bank mortgage renewed when it come due for renewal.
When it’s time to sell, existing owners may have trouble finding qualified buyers for their units. Units in these buildings do sell but the prices may take a hit and it will take longer to close a deal.

***For Buyers***

Even if you have your pre-approval in place, it is always good practice to speak to them about buildings you are going to be offering on to see if they have any red flags to raise ahead of time. How do you protect yourself: Always have a real estate lawyer review the status certificate and ask your mortgage lender if the condo you want to offer on is blacklisted.

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Do you have a rental property or thinking of buying one but not sure what expenses to deduct from your rental income.
Any expenses incurred to earn the rental income are deductible for tax purposes. If your tenant reimburses you for these costs, you either have to report the receipt as income or reduce the expense by the reimbursement. These expenses must be supported by receipts. The following are some of the expenses you should consider when preparing the rental property income tax information:

Mortgage Interest:
Most banks provide an annual mortgage statement. If your bank does not provide an annual statement, you need the terms of the mortgage in order that an amortization schedule can be prepared for the period these terms apply to.

Mortgage interest is only deductible if the funds were used for the rental property. For example if you borrowed money by mortgaging your rental property and then used the funds to buy your personal home, the interest is not deductible.

Property Taxes:
The total property taxes for the year are on your Final Property Tax bill. If you pay your property taxes with you mortgage, the annual mortgage statement may also provide this information.

Utilities, which you pay for the rental property, can also be deducted. These include hydro, gas, and water.

Insurance premiums for the property insurance are deductible. Life insurance is also deductible if required for financing for the rental property.

Repairs and Maintenance:
These include any repairs and maintenance done on the rental property such as landscaping costs, painting, or cleaning services. Larger repairs such as replacing the roof or the windows are also deductible.

It is important at this time to distinguish between repairs and capital expenditures. For repairs, the total cost is deductible in the year it is paid. For capital expenditures, a percentage of the cost is expensed each year.

Generally, a repair fixes or replaces an item on the property that was already there to maintain the normal expected life of the rental property. Capital expenditures add to the value of the property. For example, replacing all the fixtures in an existing bathroom would be classed as a repair. Adding a new bathroom to the building would be considered a capital expenditure.

Management Fees: 
If you are paying a management agent to take care of your property for you, then these fees are deductible. These would also include condo fees.

Legal and Accounting Fees:
Although these are not required to earn the rental income, they are however necessary administrative functions and are therefore also deductible. These include bookkeeping costs and cost of preparing your rental statement for income tax purposes and also legal fees incurred in collections of delinquent accounts.

Vehicle Expenses:
Vehicle expenses incurred for the purpose of the rental property can also be deducted. This may involve traveling to and from the rental property or to do miscellaneous errands such as purchasing supplies or doing repairs and maintenance. However, you must be careful to exclude any personal portion of the vehicle expenses. If you are using the vehicle for other purposes, you must keep proper records of the kilometers driven for the rental property. This can be accomplished by keeping a log noting the date, purpose and number of kilometers driven. You cannot deduct motor vehicle expenses you incur to collect rents. These are personal expenses.

Other expenditures, which you may incur include office expenses, telephone, cable and advertising costs.

Below are the list of expenses that you cannot use as a rental expense.
Land transfer taxes
You cannot deduct land transfer taxes you paid when you bought your property. Add these amounts to the cost of the property.
Mortgage principal
You cannot deduct the repayments of principal on your mortgage or loan on your rental property.
You cannot deduct any penalties shown on your notice of assessment or notice of reassessment.
Value of your own labour
You cannot deduct the value of your own services or labour.
Personal portion of expenses
If you rent part of the building where you live, you can only claim the amount of your expenses that relate to the rented part of the building.
Please remember, the most important thing when claiming rental expenses is to have accurate records and keep all receipts and invoices.  Any questions in regards to other expenses please consult your tax accountant.
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It is intended to provide peace of mind by offering a technical review of the home. This review usually entails a VISUAL INSPECTION of the major systems and their components, as defined by the enclosed Standards of Practice. A home inspection can help you gain a better understanding of the home, but it is not magic. It is a snapshot of the condition of the home today.

1. Visual Inspection:

The home inspection is a visual inspection only of the readily accessible features of the Property. The report to be provided to the Client documents the inspector’s examination of the Property based on that visual inspection. The inspector will not conduct any invasive or destructive testing of the Property. Your inspector will not be able to report on the homes hidden defects due to the limitations of a visual inspection.

2. Standards Of Practice:

The home inspection will be performed in accordance with industry accepted Standards of Practice. The Client acknowledges having had the opportunity to review and understands the Standards of Practice.

3. Inspection Not Exhaustive:

The home inspection is not technically exhaustive and all encompassing. The client acknowledges that, as a result of the limitations of a visual inspection, some detectable deficiencies may go unnoted in the inspection report. The client accepts these limitations. The inspector is a generalist, not a specialist in all disciplines, and may refer the client to specialist(s) for further evaluation of certain items. The Client acknowledges that there may be problems with the Property which will not be apparent from a visual inspection.

4. Not Building Code Or By-Law Compliance Inspection:

The home inspection to be completed is not a Building Code or By-Law compliance inspection. The Client acknowledges that it may be necessary to confer directly with authorities to confirm whether the Property meets Building Code or By-Law requirements.

5. Major Problems:

The goal of the home inspection is to identify existing major problems that are apparent on a visual home inspection of the property. A listing of minor building flaws or minor repairs and maintenance items will not be provided, except as a courtesy, at the home inspector’s discretion.

6. Cost Estimates:

Cost Estimates provided in the Home Inspection Report are minimum only and they are intended to be guideline figures. They are based on the most cost effective solution to address the problem and will not include betterment. The inspector is not responsible for the cost of replacement or repair. It is recommended that the client obtain at least three cost estimates from qualified specialists before finalizing budgets for any work.

7. Environmental Concerns:

The home inspection will NOT address environmental concerns including, but not limited to: UFFI, air quality, water quality/quantity, sealed/underground fuel storage tanks, asbestos, radon gas, molds, toxins, carcinogens etc. The home inspection report will also NOT address infestation by wood boring insects, rodents or other vermin. The client acknowledges that it may be necessary for the client to retain specialists in such areas to identify and evaluate these types of risks.

8. No Guarantees Or assumption Of Risk:

A home inspection is an information service. As such, the home inspection and the home inspection report are not a guarantee, warranty or insurance policy regarding the physical state of the Property or the current or future adequacy, performance or condition of the property. The home inspector will not assume any risk in connection with this home's condition, deficiencies, performance, or lack thereof. Legal liability is limited in amount to the fee paid for this home inspection. The home inspector/inspection firm reserves the right to review/inspect any items that may be the subject of a dispute prior to any repairs/alterations being made.

Top 10 Most Common Home Inspection Problems

  1. Improper Surface Grading and Drainage.
    By far the most frequent problem. It is responsible for the most common household aggravations, including water penetration into the basement or crawlspace. All basements will eventually leak.
  2. Improper Electrical Wiring.
    A number of respondents found this to be a significant defect. This includes such situations as insufficient electrical service, inadequate overload protection, and amateur (often dangerous) wiring connections.
  3. Roof Damage.
    Ranked third, leaking roofs are a frequent problem. This is caused by old or damaged shingles or improper flashing and drainage.
  4. Heating Systems.
    Defect items in this category include broken or malfunctioning controls, blocked chimneys, and unsafe exhaust disposal.
  5. Poor Overall Maintenance.
    A common problem with all homeowners. Signs of poor maintenance include cracked, peeling or dirty painted surfaces; crumbling masonry; makeshift wiring or plumbing; and broken fixtures and appliances.
  6. Structurally Related Problems.
    As a result of problems in one or more other categories, damage is sustained by such structural components as foundation walls, floor joists, rafters and window and door headers
  7. Plumbing.
    Though not ranked as a number one problem, plumbing defects still rank high. This includes the existence of old or incompatible piping materials, as well as faulty fixtures and waste lines.
  8. Exteriors.
    Flaws in this category, such as windows, doors and wall surfaces, rarely have structural significance but may pose discomfort to the occupants due to water and air penetration. The most common culprits are inadequate caulking and/or weather-stripping.
  9. Poor Ventilation.
    In an effort to save energy, many homeowners have "oversealed" their homes, resulting in excessive interior moisture. Significant moisture can lead to rotting and failure of both the structural and non-structural elements.
  10. Miscellaneous.
    This category includes interior components (often cosmetic in nature) which were so infrequent that they did not rank individually in the survey.
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