Episode 5: Amy-Lynn Hart | MSSH Law

🎙️ New Episode is Live | Windsor-Essex Real Estate Pulse

This month, I’m joined by Amy-Lynn Hart of McGregor, Sims, Schmoranz, Hart Professional Corporation for an incredibly informative conversation on real estate law.

If you are buying, selling, investing, or planning your estate, this episode is essential listening.

Amy-Lynn breaks down the true role of a real estate lawyer in a transaction and why communication from the start makes everything smoother. We dive into title searches, title insurance, ownership structures like joint tenancy versus tenants in common, and why legal planning should never be an afterthought.

We also cover rural property considerations, condo regulations, status certificates, HST rebates, estate planning, wills, spousal rights, and what happens when ownership becomes multi-generational.

Real estate is not just about finding the right home. It is about protecting yourself legally and financially every step of the way.

To connect with the team at: McGregor, Sims, Schmoranz, Hart P.C.:

Website: www.msslawyers.ca
Email: info@msslawyers.ca
Phone: 519.733.8441
Facebook: https://www.facebook.com/msslawyers
Insta: https://www.instagram.com/mcgregorsimsschmoranz/

🎧 Watch or listen now. The links to YouTube, Spotify, and Apple Podcasts are in the comments section of this post.

If you are planning a move or reviewing your estate plans, this episode will give you clarity and confidence.

Transcript

SPEAKER_00 0:00

Hello, everybody, and thank you so much for joining me today on my podcast. And I am so, so excited because I am here today with Amy Lynn from uh McGregor Sims Schmorans and Heart.

SPEAKER_01 0:16

Thank you so much for joining us. Thank you for the opportunity. I'm excited to be here with you.

SPEAKER_00 0:20

And I'm so excited to pick your brain and get so much knowledge from you. This is excellent. Absolutely excellent. So Amy Lynn is a lawyer here. She is one of the partners, and she is going to educate us today on all things real estate related. So we're just gonna fire them at you. Perfect. I'll do my best. Okay, so first of all, um, who is MSSH and tell us a little bit about you guys and your company.

SPEAKER_01 0:48

Sure. So MSSH is McGregor Sim Schmoran's Heart law firm. We go by MSSH, or lots of times we answer the phone Schmoran's Heart now just because the name's getting a little bit long. But we have two office locations, one in Harrow and this office here in Kingsville. We now have five lawyers and seven clerks. Wow. We focus on real estate, wills, powers of attorney, estate administration, corporate commercial work, employment law, and family law. We are governed, sorry, governed provincially so we can service clients across Ontario and we have a virtual uh platform that we use. If clients can't come into the office, we can meet with them over the computer and we can do electronic signing with them.

SPEAKER_00 1:34

That is so important. I love that you guys do that, and that is one of the biggest things that real estate agents look for in this area because there's a lot of people who move here from different provinces, from different areas, and from Toronto, especially. Yeah. Right? Yeah. And there's no way that they're gonna be able to come in here and they're gonna be able to sign paperwork. They need to be able to do it virtually. They need to be able to re meet their um their lawyer virtually and be able to sign that paperwork.

SPEAKER_01 2:00

Yep, exactly. I had clients who lived in the GTA and came down here to view a home and then went back up to Mississauga where they were from and uh closed the transaction fully virtually without coming back to this area until closing day because they were selling their property up there and waiting to come back until closing.

SPEAKER_00 2:22

And that's how it should be. It should be it should be that easy. Right. Yes, yeah. When I first got into real estate, the one of the first lawyers I worked with, I had a couple that was moving back down here and they didn't do anything virtual or or virtual signing or anything like that. And as a brand new young realtor, I was like, what do you mean you don't do that? We don't do that. Because we do that as realtors. Yes. Right? So it's hugely beneficial. And something else I always tell my clients is if you are buying and selling, even if you're far away, like this area is much different in how we operate. Like, I mean, we operate the same, lawyers operate the same and all that kind of stuff, but we are such a small community. And the way that we do business down here, again, it's the same, but we're so close knit. There's a lot more communication and talking and stuff like that. So it's really good to have a realtor down here who has all the connections and has all those relationships already built to get your house closed. Than, you know, working with somebody who's far away and doesn't know the realtors, doesn't know the home inspectors, doesn't know anybody else in the area.

SPEAKER_01 3:32

Yeah, that's right. That's right. And the other thing, too, that's great with the um signing platform that we use is it's accepted by banks. So sometimes we find some of the other platforms like Adobe or DocuSign, uh, they're not accepted by lenders. And so if you're working with a lender, uh it's important to make sure that they will accept the virtual signatures, which our platform is accepted by all lenders now. So yes, it's very beneficial to our clients.

SPEAKER_00 3:58

That's good. Easy peasy. So, what exactly uh does a real estate lawyer what do you do? And what are some things that you don't do? Well, we don't negotiate the deal.

SPEAKER_01 4:08

That's where you come in. That's right. That's where your value is extremely uh important for our clients and making sure that the deal is structured from the get-go the way clients want it to be. Yeah. Um, and then once a deal is signed, that's when a lawyer steps in and we do things like uh conduct title searches, we do some issue spotting. So if there's any issues related to encumbrances or encroachments or liens, uh, then we identify those issues earned early on and take steps to uh rectify those. We communicate with the lenders and we review mortgage instructions and prepare closing documents. And then on closing day, we transfer the funds and we register ownership.

SPEAKER_00 4:49

That's right. Those are all the things that a real estate agent absolutely can't do. That's right. That's out of our scope of practice. We don't even have, like, I get people who ask me stuff about that. You know, what about this with the property or blah, blah, blah, blah, blah. And I'm like, I don't even have that information. Right. Yes. Like, yeah, title searches are important. Yeah, they're extremely important. Now, what don't you do? Because this is um something that people tend to not understand, right? Is sometimes a deal will close and there's things that like you do the title search, you you check on liens and things like that, but there's not all liens that you can look at. There's not all information that you can get. And I've heard where clients get upset because they're like, oh, they didn't find out that there was this lien on it on the property, like a maybe a say a hot water tank that was still owed or something utilities-based, depending on what type of property it is, because different properties you can't search things. Like if it's um a mobile home, right? Right, that's a leaseland property. So that's a little bit, that's a little bit different.

SPEAKER_01 5:47

Yeah, it doesn't have the same kind of title searches for sure. Um, in those situations, we try and do additional searches on the individual selling to see if there's any writs of execution that are registered against the individual themselves. Okay, so that is a service that we do provide for our clients. And uh, you know, we we we oftentimes find the hot water tank issues. Uh the notice of security interests are no longer allowed to be registered on title. So if we do come across those, we um discharge them. But it's important to uh review the information with the clients early on to make sure that they turn their mind to those types of things that maybe they forgot they registered if they bought the property 20 years ago. Right. Um, or if there is old mortgages that were paid off, but the lender never actually discharged them from title. So we try and uh pick up on those things when we do our title searches.

SPEAKER_00 6:41

Yeah, and you know what, it's easy sometimes for that stuff, like you said, they especially they lived in a property for 20 years. And I get people who come to me and you know, they've started the process of getting a mortgage and things like that, and everything is great, and then all of a sudden something pops up and it's this random credit card that they had when they were 16 years old that they thought they closed out, right, and they didn't close out. Well, it's kind of the same thing in the process with your house, right? There could be something that you don't even know about or completely forgot.

SPEAKER_02 7:09

Right, right.

SPEAKER_01 7:10

And and that's where title insurance comes in. Uh title insurance is an insurance policy that protects the buyer's interest in the property. So it's a one-time fee that clients pay. Um, and it's usually a couple hundred dollars. It's on a fluctuating scale, depends on the purchase price of the property. The policy protects the buyer's interest for as long as they're the owners on title. So if there were things that come up post-closing that weren't discovered beforehand, then you can initiate a claim with the title insurance uh company and they take over actually. They will assign a lawyer and they will work to rectify the issue.

SPEAKER_00 7:48

Yeah, and title insurance is extremely, extremely important, especially in this area. So when we have um people who are coming and they're buying a house, especially from the GTA, if they're in the Toronto area, a lot of times in their offers, they will get a survey done. Yes. And that's different down here.

SPEAKER_01 8:06

Yeah, we don't do surveys hardly ever anymore.

SPEAKER_00 8:09

Don't do them. And when we get an offer, like on the real estate side, I'll get an offer and it will say in the offer, survey to be done. And I call up the Toronto realtor and I go, we don't do that. We're crossing it out. And they go, What do you mean you don't do a survey? We're like, we don't do a survey. They go, well, no, if you have to do a survey, I say, no, you get title insurance down here. Like, we good luck. Good luck getting a survey. It's gonna take six weeks, maybe six months.

SPEAKER_01 8:33

Well, that and the cost is two to three thousand dollars for a residential survey. That's right. Whereas a title insurance policy might be three or four hundred dollars. So significant savings for a client and covers more than just what a survey would provide.

SPEAKER_00 8:47

Yeah, title insurance is extremely important and everybody needs to get title insurance 100%. Now, let's talk a little bit more about title insurance because I think it's so important. Yes. Um, with title insurance, so if something is disclosed on the property, because I've heard about this before where clients have said, you know, oh, after we close, we'll just go through title insurance.

SPEAKER_01 9:07

You have to you have to have the title insurance policy before closing. That's right. Um, and if not, then it requires a specific uh approval, which I have not uh heard of clients being successful.

SPEAKER_00 9:20

No, they will not be successful in that. So if you're thinking, oh, you know what, we'll close on the property, then we'll we'll talk about this with our title insurance pro uh title insurance, they're gonna right away be like, well, you knew about it, so no. Right?

SPEAKER_01 9:34

Yeah, it's different than home insurance, right? You can change your home insurance in the future. You could, you know, switch from one um policy provider to another. Title insurance is not the same. They need to have the policy in place before title transfers.

SPEAKER_00 9:47

That's right. And one of the things that can be done though, because I've had uh deals where something's come up and it's the homeowner, the current homeowner, is like, I had no idea, right? Especially when it comes to say a husband has owned a property for a really, really long time and he was single and got married, right? And they've been living in it for 20 years, but he's at that property for 40 years, the wife has no idea right what's gone on, and something's come up with the title, and before closing, because she had no idea, she was able to go through her title insurance.

SPEAKER_01 10:18

If yes, so if you uh get married subsequent to one person owning the property and obtaining a title insurance policy, and then that person subsequently gets married, their spouse is covered under their policy. Yeah, yeah, yeah.

SPEAKER_00 10:31

So that is a benefit for it. But just to think, no, we'll deal with it after closing, no, no, no. You got to deal with it before closing. That's right. So tell me a little bit about when clients come to work with you, what can they expect?

SPEAKER_01 10:42

Yes, so clients can expect um a very structured, proactive approach. We believe that communication is important right from the start of the process, making sure we understand what our clients' uh goals are. And if there's anything particular or quirky about the property that we're gonna want to pay attention to and make sure we do a bit of a deep dive into it to uh maybe do some extra title searches or ask some more questions or possibly prepare a specific agreement that might apply to the property or the ownership structure. So clients can really expect that we are gonna communicate early with them from the first phone call. We will send them an intake form for them to complete. They return it to us with a copy of their identification. And then I assign a lawyer and a clerk to the file, and that way the client always knows who their point person is when they call the office.

SPEAKER_00 11:34

Which is great because that's something that you absolutely need, right? I mean, you're because you're not always talking directly to yourself, the lawyer. A lot of times you're you're conversating and the questions that you're gonna have is with the clerk, right? That's right. And all your clerks here are really, really great. And it's it's a lot nicer for the client when they know, hey, I'm gonna call and this is my person, and they're gonna have the answers for me. And if they don't, they're gonna talk to you know my lawyer about it and it's gonna get done.

SPEAKER_01 12:01

That's right. That's right. We have weekly meetings with all our staff, and anytime there's something that comes up on a file, the clerk will come to us and let us know. If a clerk talks to a client, they send us an email and let us know that they talked to them on what was discussed, and they ask if we have anything else for them to add. So it's definitely communication is really important. And our clerks are fantastic. We are very proud of the team that we have here. Yeah, they're really great.

SPEAKER_00 12:24

They're really great. And so are your um, I don't want to call them junior lawyers. What are they? Yeah, associates. Associates, yes, associates, yeah, not junior lawyers. Yeah, our associates. Yes, they're very, they're very, very good here, too. Yeah, yeah. Um, okay, and uh what can clients, well, sellers, what can two-part question here? Sure. What can sellers do to protect themselves? And then also what can buyers do to protect themselves?

SPEAKER_01 12:51

So sellers really want to uh make sure that they've communicated with their real estate agent, uh, make sure their realtor understands the property and what the client's expectations are when they're selling. And uh for our purpose from the lawyer side of things, we really want clients to start preparing their documentation. So if they're selling property and there's a mortgage registered on it, if there's a reliance hot water tank or some other line of credit or something that's affecting title, they need to gather those statements and bring them into us so that then we can follow up and we have enough time to make sure we order those payout statements. Yeah. Um, it's also important for sellers to make sure they understand what's included in the agreement of purchase and sale. So there's uh clauses in there that relate to chattels and fixtures. So a chattel is something that's technically a movable object, and the sellers would normally be able to take the item when they move. But for the purpose of seeing the deal close, they're leaving behind some items. Most commonly it's appliances, uh, pool equipment if there's a pool on the property. Yeah. Uh sometimes we see riding lawnmowers included, um, or or you know, snowblowers or uh, you know, anything else that that the parties agree to. So those chattels, it's important for the clients to know what they are leaving behind. Conversely, it's also important to understand what a fixture is. So clients are not supposed to take the bathroom mirrors with them. Uh they're not supposed to take grandma's chandelier from, you know, the dining room. And if they do, it needs to be written into the agreement noting that those fixtures that are attached to the premises they actually want to take, but they have to replace it with something else.

SPEAKER_00 14:32

Yeah, especially when it's something that's an heirloom. That's right. I always recommend that before photos happen, anything that you are going to be taking with you, especially if it's like the chandelier, right? Take it down and replace it with something else. You're gonna have to do it anyways, right? That's right. That's great advice. Take it down, replace it with something else. Now we don't even have to worry about it. And if it's something that you can't do, we're gonna put it in the we're gonna put it in your listing as that it's excluded. But it's always better if you can take it down, even like fridges. So I've got a property that's going up on the market this week, and uh the fridge is going to her daughter, and so I said before the photos happen, let's get that fridge out. So they've done that, right? We got our photos taken, the new fridge is gone, the other fridge is put in, it works great, all that kind of stuff. So there's no problem. It sets the expectations, right? It sets to be the expectations, and I mean there's so many moving parts with real estate, right? That when you're like, I feel like this fridge didn't look like this, and you go back through the photos, and you're right. In the photos, the fridge didn't look like that. It was the different fridge, but now this fridge is here, and this is actually the one that you saw. Well, what does it come down to if you take it to your lawyers and say this isn't the fridge that I originally bought?

SPEAKER_01 15:46

That's right. That's a great point. And and another um item that that kind of follows that is the condition of the property. So if something significant happens uh or there's some damage or something um that changes the condition from when the buyer saw it and placed the offer to closing day, the seller may be responsible for rectifying or paying for some of the damage or the repairs.

SPEAKER_00 16:11

Absolutely, absolutely. I remember my parents when we moved from London to Kingsville, actually, they had um they pulled out on moving day. They were moving the furniture and stuff like that, and they moved a desk that had been against a wall for a really long time and behind it was a shower. And when they pulled it out, the whole area where it was was uh white, like that efflorescence. Yes, right? Yeah, and they're like, Oh my goodness. Come on, grab a paintbrush and like what do we do? Yes, and so they ended up calling the realtor and they notified the homeowners and the homeowner, the new homeowner said, Well, we're gonna be doing renovations anyway, so it's okay, which I mean, thank goodness, right? But that kind of stuff, again, the wall was fine before. You can't now leave a wall that has a moisture issue and you know, problems and stuff like that, right? Just like you can't leave, you can't leave um a fridge that's no longer the freezer isn't working, or the ice machine's not working, or it has to be the same as as when you came to see it.

SPEAKER_01 17:09

Yeah, that's right. Yeah. So those are some some ways that sellers can um prepare for closing. It's also important to understand closing day. Um, the agreement of purchase and sale says that uh closing will happen by six o'clock. Well, land registry office closes at five o'clock. So you can't register uh a transfer of ownership if it's after five o'clock on closing day. Yeah. And so it's important for sellers to make sure that they're out of the property in time. And if not, let their lawyers know so that uh we don't close before they're ready. Because once we close, technically keys belong to the buyers and the seller needs to be out.

SPEAKER_00 17:47

Yes, absolutely. Um, there's a time for that, and you do have to be gone, otherwise, it's it's a whole thing that you don't want to have to deal with. And um on your note of it closes at five o'clock. Like there is nothing you guys can do about that. The computer shut down at five o'clock. Like it's not a personal, my lawyer didn't get it done. It's a it's five o'clock, and I don't know how you want to put it, but the government shuts it down. That's right. Like you're done.

SPEAKER_01 18:12

That's right. That's right. Yeah. And and the same with wires, a lot of our transactions close by wiring of funds back and forth between law firms. And if a wire is not received or sent by five o'clock, it won't happen until the next business day.

SPEAKER_00 18:24

That's right. And and that is something that happens. The other thing is that uh the wires get held depending.

SPEAKER_01 18:30

Yeah, hopefully I I think that has become a bit of an issue. Um, we, you know, our position is wires shouldn't be held when they're drawn on a lawyer's trust account. Right. Um, and so we work hard with our bank to make sure that our wires don't get held. But I have heard of that happening at other banking institutions. Some banking institutions.

SPEAKER_00 18:48

It depends on the banking institution and a whole bunch of, again, moving parts. Right? That's right. So having all your ducks in a row and everything signed and everything into your lawyer's office and having communication with your lawyer is so key, especially on closing days. Yeah, that's right. Yeah, exactly. And okay, so what about the buyer's side? How can how do you guys help protect buyers? Sure.

SPEAKER_01 19:09

So buyers, um, you know, similarly, they need to understand that they're purchasing not just a beautiful property and their dream home, but also legal rights and ownership. And so um it's important to understand what that means if there's easements involved or shared driveways involved, and that there might be some restrictions on their use of property and understanding what their future use is going to be. If it's something different than the zoning that's currently on the property, then they may not be able to use the property in the future the way they want to without approvals.

SPEAKER_00 19:41

Yeah.

SPEAKER_01 19:41

Um, so that's that's important for buyers to make sure they review those details with their lawyer. And it's also important to make sure they get that title insurance policy. Yes.

SPEAKER_00 19:50

Again, title insurance is very, very important. Um, but when it comes to, especially right now, because we're seeing a lot of families that are come, they're they're doing like multi-generational or they're or they're planning on doing an additional dwelling unit.

SPEAKER_01 20:04

Right. Right? It's making sure that the municipality allows for those additions or changes for sure.

SPEAKER_00 20:10

That's right. And I think a lot of times people get in their heads, well, if we're in Ontario, you're allowed to have two or three units on a pro on a property. Yeah. Okay, that's that might be true, but also there's bylaws.

SPEAKER_01 20:22

Bylaws and and ownership becomes complicated. So if we have parents uh purchasing property or building on property that their children own, who's going on title and how are we taking title? And those become important issues to address when you have um multi-generational families on one property. Similarly, even if it's just a single person or a married couple uh buying property, they'll want to determine who's going on title. And and uh with lender requirements, what does the lender allow for? So do both parties qualify under the mortgage, allowing both to go on title, or was the approval only given for one?

SPEAKER_00 21:00

Yes, that's a very good point. And when you are, and I know we're gonna talk a little bit more about um wills and stuff like that, but when so there's a lot of brothers that are buying properties together, or sisters that are buying properties together, um, or you know, like a brother and sister, they're both they're both married and the couples are purchasing a property together, or families, you know, kids and the parents, we're seeing mostly that, that are that are buying properties together. Whenever I see that, I say you need to talk to your lawyer about how this is going to work and how this is going to be structured. Because what if you so you've got mom and dad, you've got the daughter and her husband. What if the husband decides he's no longer part of this family? How does that work? What happens with the house at that point? Right. Does it get sold? Can they buy him out? Right. And it it's almost the same like with investors too. Sometimes there's investor parties, and that's I mean, that's kind of a whole other topic. But It's kind of the same thing, right? Because how is that structured? How is that set up? If some if one of the partners wants to leave, can they sell their share? Can they how is it set up?

SPEAKER_01 22:08

Yeah. There are lots of different options, but again, communication with your lawyer is key to make sure that we structure it the way the parties want. There, there is opportunity to have multiple individuals on a property. Um, but an agreement setting out ownership and what happens if one person wants out is important. Um and if it does qualify as a matrimonial home, then there will be a consideration for a payout to a spouse.

SPEAKER_00 22:34

Yeah, and and that is very important. So especially if you're parents, I know you want to be helping out your kids, and it's really hard for first-time homebuyers right now, but this is a piece that is extremely important that you sit down with your lawyer and you talk about how to properly structure this and that your kids are there and everybody who's purchasing the home is at that appointment and they know how it's structured and they know if someone's leaving or how if they're getting out or if the parents pass, how that's working.

SPEAKER_01 23:01

Yes, for sure. And and two, for estate planning purposes, understanding if they've contributed to the improvement on one child's house, but they have two or three other children, right? What does that look like when those parents eventually pass away and how are inheritances uh for the children affected?

SPEAKER_00 23:20

Yes, and while we're on this topic, actually, um, because this is another big one that I hear a lot about, is that parents are giving parents are going on as a cosigner, but they're not actually a co-signer. They're they're like actually on title, right? So they're on title and then they in a year or two they want to come off title. So, first of all, there's some tax implications. There may be, yes. Yeah, depending on what's how it's set up and everything, right?

SPEAKER_01 23:47

Exactly. So if a parent is going on title with a child for mortgage purposes, then we usually have our clients sign a bear trust agreement, which means that it's clearly set out from the beginning that the parents are not the true owners of the property. Yeah, they're there just for financing purposes and that the child maintains the mortgage payments, the property, the property insurance, uh, and any other uh responsibilities associated with ownership. And that is sufficient proof for Canada Revenue Agency to avoid having to pay capital gains when the parents come off title.

SPEAKER_00 24:26

And this is so important because I see it all the time. And as soon as I have a parent that's like, it's okay, it's okay, I'm gonna co-sign. I'm like, great, that's awesome. You need to talk to the lawyer about this because you don't want to be paying capital gains. And they the parents are just like, I just want to help my child. I'll sign here. Where else would you like me to sign? You know, and you're great parents, and you know, parents have to be doing that nowadays for their kids to get home, but you also still have to protect yourself and protect your assets and stuff like that, right? And you don't want to be paying capital gains, that's for sure, right? Yeah, those that's extremely, extremely important. All right, let's talk a little bit about rural properties because we got a lot more, we got a lot of rurals around here. Around here, yes, and with rural properties, it becomes there is just so much more than buying a house in the city.

SPEAKER_01 25:16

For sure. So both for buyers and sellers, it's important to understand uh the tax implications on buying and selling farmland. So there's gonna be HST payable, um, and there could also be capital gains due. So I always recommend my clients connect with an accountant to make sure that they fully understand what the tax implications are going to be. Yes. And that they have set aside the appropriate monies to do that.

SPEAKER_00 25:45

Yeah, and also it depends on the lender, too. So this is huge with your lenders when you're buying, especially farm property, right? Because lenders are gonna evaluate the property different based on what they're doing.

SPEAKER_01 25:57

That's right.

SPEAKER_00 25:58

Right? So some are gonna say, oh, well, you can have this outbuilding, and others are gonna say, well, you can have two, or you can only have them so close to the house, and you can we're gonna give you an acre of property, which is usually the standard for your residential. Most of them are like that, but some are different, and there's just so many moving parts with that. Uh, if you're gonna buy, there's a lot of people that are like, I want to go out to the country, and me and my family are gonna build a bunch of tiny homes and we're all gonna live together in a compound. Okay. Um, that's great. That's my mother's dream. But at the same time, can you do that? What is this land gonna be? Just because you're approved for a mortgage of a million dollars and you're like, I'm gonna go buy a farm property for a million dollars, that doesn't mean that you're the mortgage company is gonna give you.

SPEAKER_01 26:40

No, that's right. The the appraisals are different. Yes. Um, and an appraisal for a bank purpose is different than a letter of opinion from a realtor, right? Yes. And so um a formal appraisal will likely be required. And yes, they will want to see in the agreement of purchase and sale an allocation of purchase price. So if there is a farmhouse on the property, how much of the purchase price is allocated to that versus how much is allocated to the farmland? And uh that's where that one acre becomes important to try and exclude the house and and the acre surrounding it from the capital gains tax. That's right. Uh if if we're talking about a seller's perspective and uh and then the capital gains on the remaining acreage.

SPEAKER_00 27:24

Yeah, yeah, it's a it's a lot of moving parts, so don't just have a pre-approval and go out and buy a farm property.

SPEAKER_01 27:30

Right. And farm properties also require different surveys uh or title searches, I should say. Uh different title searches because we want to see if there's environmental impacts, we want to know what the zoning is, we want to know if there's any specific liens or you know what the prior history is on use and what the clients hope to do with it in the future.

SPEAKER_00 27:50

Yeah, what they're hoping to do with it in the future future is very big too, right? With any property, but a lot more with the farm property too. And we're seeing a lot of the farm property that's changing over. Right. Right? Yeah. Um, whether it's being built bought by big corporations and they want to turn it into uh housing, right? Like we're seeing a lot of that happen now. And the government's made it a little bit easier for that to happen, but still that's a process. That's right, right? And exactly the same thing if you're looking to purchase a property like this for your family and put a bunch of different homes on it too, right? So it's a it's a longer process, but it's a process with real estate, you should always be doing all of your due diligence, but especially with farmland and commercial property. That's right. Yeah. Okay, so I want to talk a little bit about condos. Okay. Condos and townhouses, too, because there's a lot of condos and a lot of townhouses that are being built. Yeah. And a lot of people are a lot of the older adults are moving into condos and they're moving into townhouses, right? They're selling their properties and moving into those. Yeah. So what are some really important things that mainly buyers need to know? Because I think it's a lot of new build condos.

SPEAKER_01 28:56

So the most important change right now is the increase in the HST rebate. Yeah. So on newly constructed homes and condos, um, the the rebate used to cap at $24,000 and it was regardless of purchase price. And it was first-time home buyers too. Right. Yeah. And so the the cap now has been increased. You can get the full 13% back on a purchase price up to a million dollars. That's $130,000. That's a lot. That's a big thing. That's a lot of money. Yes. So the the government, I think, is definitely trying to um initiate some some more interest in um property and real estate development these days.

SPEAKER_00 29:36

And they need to. That's right. They need to because they they they encourage building condos, they encourage building new builds, they they encourage building.

SPEAKER_01 29:44

And well, and and condos and townhouses are a great way of addressing the um the lack of housing that's right. And the need for it. So uh you can fit more people into a condo than you can on, you know, in an acre subdivision.

SPEAKER_00 29:59

Yeah, but it just it still has to be affordable, and that's kind of been the issue. So I'm really glad that they've made this change. And there's a lot of perks with that, right? Which is awesome, especially if it's on condos. Right. That's fabulous.

SPEAKER_01 30:12

Yeah, right. And if if buyers are purchasing um an existing condo unit, then there's a status certificate that they need to make sure is included in the agreement of purchase and sale.

SPEAKER_00 30:25

That's right.

SPEAKER_01 30:26

And that they send the agreement and the status certificate to the client to or sorry, to their lawyer to review. Yes. Uh, there is a time period that you have to have that reviewed within. And a status certificate's really important because it it gives gives clients an indication of the financial health of the corporation. Yeah. So what clients may not know is that they're purchasing into this corporation, which is an existing entity, and there are common elements in that corporation. Yeah. And so the financial statements are important because they show us what the maintenance obligations are for the condo corporation, if a roof needs to be replaced or if a parking lot needs to be upgraded, and how are we going to pay for those things? So the common fees that clients pay as part of their the purchase into a condo get allocated towards the reserve fund. And the reserve fund is the money that's used to do those upgrades in the future. So if the reserve fund doesn't have enough money and the financial statements are showing that there's a number of upgrades to be made in an older building, then there may not be enough money to do it, which means clients will uh receive a special assessment. They'll have to put more money into the reserve fund. So it's important to review those documents in advance and understand from their lawyer if it's a good investment for them and whether or not they can financially uh meet those obligations.

SPEAKER_00 31:54

Yeah, and the status certificate is so important. So, first of all, as a as a realtor, I get questioned like can you just look at the status certificate? I can, but again, that's out of my scope of practice, right? It needs to go to your lawyer. Can you choose to just look at it? I mean, you can read, sure, you can choose to look at it, but again, it should, it needs to go to your lawyer, right? Your lawyer needs to look it over and and you guys are gonna pick it out and pick out things that are important, give you kind of the overall temperature of not just the building, but also your unit. Right, right. Now, the other thing, if you can touch on this for me, when should how soon from a purchase should that status, like how updated should that status certificate be? Because we see this is the thing, is I a lot of times people will get a status certificate and I'll see it and they're listening. And it'll be like the status certificate from you know, two doors down that sold last year, yeah, or sold six months ago. And first of all, that's a six-month-old status certificate. Secondly, it's not even for the unit that you're purchasing, and that's what gets given to um, that's what gets given to the client. That's not protecting a client. How does that so I send them back?

SPEAKER_01 33:04

Yeah, yeah. You should send them back. I contact the the property management company for the condo corporation. Yes, and I specify what unit we're looking for. Yeah. And uh and we want it to be as recent as possible. And so if I'm sending in a request on March 1st, I want the status certificate to be dated the same. Yeah. With the most recent financial statements and the most recent budget projections and reserve fund allocations.

SPEAKER_00 33:29

Yeah, and I'm I'm really glad that we're talking about this because I feel like this is something that tends to be a little bit controversial in the real estate side. Like when I list the property, do I just get the status certificate? Well, yeah, during COVID, because you're gonna sell it right away. Right, right? Absolutely during COVID, you got that status certificate before listing it online. But now the market condos are very hard to sell right now. They are sitting for quite a while. So if you get that, in my opinion, if you get that status certificate now and that condo takes you six months to sell, that status certificate is pretty much no longer valid at that time.

SPEAKER_01 34:04

Right, right. So it, I mean, it's it's a good idea to have the status certificate if the seller wants to understand if there's any issues that a buyer might point out. Uh, not that in a status certificate, there's not really anything a single unit owner could do about the health of the condo corporation. Um, but more so you want to see a current date on a status certificate from a buyer's perspective, anyway.

SPEAKER_00 34:30

Yeah, absolutely. I'm so glad that we talked about that. So glad that we talked about that. A lot of people don't even know what a status certificate is.

SPEAKER_01 34:36

Well, and status, so from a really practical perspective, status certificates include bylaws for buyers on what they can and can't do with their property, what pets they can and can't own, what upgrades they can make to their their individual unit. So, um, and whether or not uh you mentioned about townhouses. So if the condo corporation is is townhouse units, some of them allow for divider fences between the units in the backyard and some of them don't. So um, you know, buyers shouldn't assume anything going into it. It's better to have it in writing and uh know what the bylaws say.

SPEAKER_00 35:11

Now, and we we're seeing a lot of new build condos, so things are a little bit different with the new build condo and the condo fees and the status certificate and things like that, as opposed to buying a resell property. So can you touch on that a little bit?

SPEAKER_01 35:24

So they well, because they won't have projections, right? And so it's harder to understand uh there's not gonna be money in a reserve fund, there's not gonna be historical financial statements to review, and the common fees will change after the condo is completely built. Yeah. So there, if you're buying a new build, uh there are additional considerations and you'll want to make sure that you have some extra income to cover common fees if they increase. Yeah, absolutely. Absolutely.

SPEAKER_00 35:56

We talked a little bit when we were saying about people who are buying homes together, whether it's families, that type of thing. So there is uh joint tenancy and tenants in common. That's right. Can you touch a little bit on that? And I know we already talked about like buying a property with your family and stuff, but even when you're buying a property as an investor, can you touch a little bit on both of those?

SPEAKER_01 36:18

So so the most common um types of ownership are joint tenancy and tenants in common. Joint ownership just means that where two or more uh people are named as owners on the property and one of them passes away, the property automatically transfers to the surviving partner by operation of law. It's called right of survivorship. Yeah. Okay. So um where two spouses are named on title and one spouse passes away, the surviving spouse becomes the sole owner of the property. Yeah. Tenants in common is different. Where two or more people are owners of a property, they set out their share or their interest in the property by a percentage. So it could be 50-50, it could be 70-30, uh, it could be in proportion to their down payment and who put what down and what that translates into a percentage share. And when one of those tenants in common passes away, their interest passes to their estate. And the owner is determined by the clauses in their will. Yes. So that's very different uh than than joint tenants, where if there's three people on property, one passes away, there's two that own it equally after that. Yeah. Whereas tenants in common, uh, it it passes through to the estate.

SPEAKER_00 37:33

Yeah, and your tenants in common, that's where you get into more of like if you've got two families moving in together. That's right.

SPEAKER_01 37:40

Yeah. So you could have you could have husband and wife who own 50%, and mom and dad who own 50%. Between those two spouses, they could be joint tenants.

SPEAKER_00 37:50

Yeah.

SPEAKER_01 37:50

But at against the whole, they're tenants in common. Tenants in common. Yeah.

SPEAKER_00 37:54

So there's a it's a lot of things like you really need to be aware of with that.

SPEAKER_01 37:58

That's right. And and if you do own property as tenant in common, it's important to make sure that you have your estate plan complete. Because if you pass away, there's going to be some issues in determining where that percentage goes.

SPEAKER_00 38:10

Yeah. And one of the biggest things I think with estate planning, let's turn to talking about estates, is a lot of people don't even have wills. Yes. It's it's a huge thing. Yes. Um, they don't have wills, nothing's set out. So what happens if you pass away and you don't have a will?

SPEAKER_01 38:29

I just had a client pass away before they could come in and sign their will. Oh my. And so the individual had come in to see me and we had gone through the process of doing the estate intake. I took uh instructions for drafting the will, and uh the week before the signing appointment, the person passed away. Oh. So in that situation, the law sets out who inherits the assets. But it's a whole other process because we no longer have a will that names an estate trustee and beneficiaries. So even though I had my notes, they weren't finalized and they weren't signed off on by the individual. So in that situation, we have to apply for probate through a different process where we don't have a will and we have to rely on what the legislation says in dealing with the assets.

SPEAKER_00 39:26

We're not really talking about family law here today, but Amy Lynn, they do do family law here. Yes, right? So if you don't have a will and you have children, that's real estate's one thing. Yes. But kids, I mean, that's a nightmare situation without a without a will.

SPEAKER_01 39:42

Absolutely. And and even family law related to real estate becomes really important because if if the real estate is a matrimonial home, uh then even if the even if only one spouse is on title, the law provides that the non-title owning spouse still has rights to the property. Um so estate planning is really important. And uh ensuring that you meet with a lawyer and that you structure your assets to end up with the beneficiaries that you want them to go to is important.

SPEAKER_00 40:12

Yes, that's extremely important. And uh can we talk a little bit about like set first, first wills and secondary wills?

SPEAKER_01 40:19

Yes, primary and secondary wills. Primary and secondary.

SPEAKER_00 40:21

I was close.

SPEAKER_01 40:22

Yeah, one of the other things that we had talked about is corporate ownership of real estate. Yes. So there are considerations, and sometimes it makes sense for our property to be owned by a corporation. Yeah. However, it's also important to understand that you lose the primary uh residence or principal residence exemption if you own it through a corporation. There is also different uh tax planning requirements and compliance obligations for the future. So whether or not uh individuals want to purchase through a corporation or in their personal capacity is really a discussion that should happen with an accountant and a lawyer to make sure that it makes sense for the particular situation. So primary secondary wills. Primary secondary wills just cover those assets that can either pass outside of uh probate or we require probate uh to have the will validated and the estate trustee named as the authority to deal with the assets. So that's what probate is. Probate is the process whereby the court confirms that the will is valid and the court appoints the estate trustee as the legal representative to deal with the assets. So if uh we have a single will, most people, if they don't own corporations or they don't have uh an interest in a business, um, they only have a single will. And that means when they die, the assets will be frozen until we obtain this certificate of appointment of a state trustee through the court process. Yeah. And as part of that process, we have to pay a state administration tax. And a state administration tax is about 1% of the value of all the assets owned by the deceased. So that can be a sizable chunk when we're talking about an estate that's worth one or two million dollars. Yeah. One of the ways to minimize that estate administration tax is to place some of the assets in a secondary will. So any corporations or business interests that are owned could be placed into a secondary will, and that would exclude them from the probate process. So then you don't have to pay tax on them. If property qualifies as a first dealing, those uh those assets would also be placed in the secondary will and excluded from probate.

SPEAKER_00 42:42

It's always good when you don't have to pay taxes.

SPEAKER_01 42:44

That's right.

SPEAKER_00 42:46

Especially when you're going and doing probate and stuff like that, because there's so many taxes and fees and all that extra stuff that you have to deal with. So anything that you can save from that is Yep.

SPEAKER_01 42:56

So primary secondary wills are are kind of a unique tool, mostly used by corporations. Um, or sometimes um where there's a farming um operation that's been in the family for a long time and it may qualify as a first dealing. And then we see secondary wills implemented.

SPEAKER_00 43:14

Implemented there too, yeah. That makes sense. Um now spouses and matrimonial homes. So here's something that I deal with a lot. I go into a house and it's I go in and it's clearly a husband and wife or a couple that's living there. They've got kids, they got pictures up, they've been together for 15 years. His name is on the house. Nobody else's name is on the house, right? And for us, we have to still have a signature of the wife on the paper. For sure. Yeah, because that is her matrimonial house. She she still, even though she actually doesn't own it, she's not on title, she still has it's still hers. That's right.

SPEAKER_01 43:53

So she would have to consent to um buying or selling. That's right. Uh, and she would also have to consent for mortgage purposes. Yes. So in if a if a client is refinancing, for example, and the spouse is not on title, they still have to consent to the refinance.

SPEAKER_00 44:07

Yes. And this is something that a lot of people don't know. And um I do hear of a lot of spouses, people have been together for a long time, and you know, now they've got kids and they say, well, the worst part is that I'm just haven't I wasn't on the house. I wish I would have on the house.

SPEAKER_01 44:22

It's really a simple process to put a spouse on title. Yeah. Um it's it's just a transfer one from one spouse to both spouses. And uh if there is a mortgage on title, then then we usually have to get bank approval for that. Um, but I don't think a bank is going to dispute having another person who they can go after in the event of default. No.

SPEAKER_00 44:44

So they're always looking for more people. That's you can always add people, it's taking them off, it's the problem. Yes, yes, that's right. Yeah. So that is very important is that even if you're on a house and your husband's on the house, but you're not on the house, those are still your rights, or vice versa. If you move in with your wife and it's her house when you guys met and it's been five years, ten years, a year. Yes, right? Yeah. What is the time on that?

SPEAKER_01 45:07

So it legal legal marriage is the key, right? The matrimonial home, uh, the legislation that applies to a matrimonial home is specific to legally married spouses. Yes. So common law relationships do not have the same legal rights under the Family Law Act. Right.

SPEAKER_00 45:23

But if you're married, yes. But if you're married, yes, yes, it's instant from the date of marriage. Yes. Even if they weren't in the house when you got married. Right. Yeah, yeah. Important to know. Oh, when we're talking about spouses, can one spouse buy out the other house?

SPEAKER_01 45:39

Yeah. So in the event of separation, for example, lots of times um the more family law we do, uh, the more we're seeing that one spouse wants to stay in the property, especially if there's kids involved. So one spouse will um get approval for financing to pay the other spouse out. And then that that other spouse comes off title.

SPEAKER_00 46:00

So now if there's a spouse that wants to buy the house, they want to stay in it, they want to stay out with the kids and stuff like that. Can if they have the money to be able to do that and they want to, is that something that they can do? Or does the other spouse have the right to say, no, we're selling it?

SPEAKER_01 46:17

Well, I think the other spouse would say that if they wanted to see if they could get more money, right? So in that situation, it's usually best to get some letters of opinion from realtors as to value to show the spouses what you know market conditions are and what they would be able to achieve on a listing versus if one spouse was just buying the other out. So if one spouse refuses to allow the other spouse to buy them out, then it is a situation that they either need to go to mediation and try and sort out through mediation or potentially take through litigation.

SPEAKER_00 46:54

And I really appreciate your time and just all that you do for the community and real estate and everything like that in Kingsville and families in general. You guys here at MMSH are so involved in Kingsville and and it's just it's wonderful.

SPEAKER_01 47:10

Well, thank you. Thank you for inviting me to be here. And uh, we appreciate the relationship that we have with our realtor friends and the opportunity to work together to serve clients. I think that a client is always better served when all the parties involved to communicate.

SPEAKER_00 47:24

It is, it's all about teamwork. Yes, it is. It is when I meet a client, I'm like, listen, uh, it's not just me out here. I'm like, it's your mortgage broker, it's your lawyer, it's your accountant. We are your team and we all need to be able to talk to that's right, right? The best deals and the things that go the most smooth in real estate are when the lawyer works together and the mortgage broker works together. We can all kind of talk to each other just to help help the client to have the best experience, right? That's right. Um, so is there anything that you would like to add, any advice you would like to give? Call your lawyer.

SPEAKER_01 48:02

Make sure you have a great realtor and that you communicate with your lawyer and you get in touch with them early.

SPEAKER_00 48:08

That's right. Get in touch with your lawyer early, and if you have questions, just call your lawyer. Yeah. Yeah. Awesome. All right. Thank you very much. Thank you.