Curtis Leibel 780-438-2500

When taking possession of your new home/condo, you usually have some ideas on how to make it your own.  This could be anything from changing some light fixtures, repainting or even entire kitchen renovations.  If you live in a condo, it is important to know what you can and cant do before tearing walls apart.

Now every condo board is slightly different in how they deal with this, so it is important to thoroughly read through the condo bylaws as well as talk to the Board of Directors to get an understanding of the process your condo conforms to.   More often than not you will need written permission from the Board before proceeding.

Most bylaws will include a clause along the following lines:

“owners shall not make structural, mechanical or electrical alterations to the owners unit or to the common property without the prior written consent of the board”.

If a renovation is done improperly or doesn’t have the approval of the Board, the condo corporation has the authority to charge back all costs associated with returning the condo to its original state.

As an example – some things that are generally considered just decorative and don’t need board approval may include painting and changing light fixtures.  Others that are generally assumed to be renovations and thus need approval may include bathroom vanity replacement, electrical upgrades and hardwood flooring installation.

It is important to stress that every condo corporation has slightly different bylaws and procedures when it comes to renovations, so it is imperative you inquire and do the necessary research before proceeding.

When purchasing a new home, it is a good idea to include a property inspection condition.  It gives you a chance to bring in a professional  to examine the property thoroughly in order to find any defects.  A lot of new buyers don’t know what to expect from this and can often be overwhelmed with the amount of items that may need fixing/proper maintenance.  Here is a list of things that seem to come up in almost every inspection:  (Keep in mind that most of these come up in older houses, because the current standards have since changed)

1) Grading – over time, ground will settle and erode.  This can be made worse by poor landscaping, plugged eavestroughs, wind exposure, etc.  This can lead to huge water problems in the future if not addressed, however it is a very easy remedy to rebuild the grade if you are aware of it.

2) Frost free hose bibs – outdoor taps that prevent freezing and burst pipes inside the house.

3) GFCI plugs – any plugs nowadays that are within arms length of sink or water supply should be a special GFCI plug which can stop the current and reduce the risk of shock.

4) Caulking – over time caulk can shrink and crack and lose its effectiveness.  In heavy use areas it should be replaced every 5 to 10 years

5) Grout – same concerns as with the caulking

6) Shingles – Although the shingles may only be 5 years old, there may be areas of wear which are in much worse condition.  Valleys will see the most damage, as well as areas which are missing connectors from one roof level to another lower level.

7) Hot water tank – The age can usually be found in the serial number.  Most tanks are usually missing a discharge tube which should be inserted to reduce the risk of scalding should there be a malfunction.

8) Dryer venting – a lot of Dryers are vented to the exterior through a plastic tube which can be a fire hazard

9) Smoke detectors/carbon monoxide detectors – all newer furnaces require a carbon monoxide detector be installed.  As well, a lot of smoke detectors will have dead batteries or be located in poor positions.

10) Stove venting – a lot of older stovetops are not properly vented to the exterior.

This is a list of things that will most likely come up (among many others) when completing an inspection on an older house.  It is important to not become overwhelmed by the list, but to understand it is merely suggestions in order to get your house up into tip top shape.  The majority of these items are cheap easy fixes that just require a little care and attention over the years.

One thing that I always recommend to buyers when purchasing a property is pulling title on it before writing an offer.  Numerous items may show up; restrictive covenants , encumbrances, and liens – lets take a brief look at a liens here.

A property lien is defined as a legal claim on a tract of real estate granting the holder a specified amount of money upon the sale of the property.  Liens are often registered against a property acting as collateral for owed money.

There are many types of liens, the most common being mortgages.   Other liens you may potentially come across: from the city (property taxes oweing), Canada Revenue Agency (personal taxes oweing), Condo corporation (condo fees), lenders of second mortgages, or construction/renovation liens.

Any lien other than a mortgage could raise some red flags as to the ability of the owner to sell the property.  It is important to note the price you are purchasing the property vs. what is oweing against the property in order to avoid any headaches or delays down the road when transferring the property.

“Financing” condition and “Property Inspection” condition tend to be the 2 most common conditions on purchase contracts in Alberta.   You can do a lot to help your lending potential (increase income, decrease expenses) but ultimately the lender has the final say on what you can or can not be approved before.

I bring this up, because sometimes there are other circumstances that may affect lending ability specifically when purchasing a condo.

Size of the unit is often a concern.  In fact, if the unit is under 500 sq ft, certain lenders may not approve the lending and thus result in the termination of the purchase. It is important to clarify this with your lender before putting an offer in.

Condo documents can also play a role in approval.  Buildings that have been subject to special assessments, or could be subject to one in the future, may be disapproved by the lender.  It is always a good idea to go through the condo documents with extra scrutiny just for your own purposes as well to avoid unexpected costs in the future.

Another thing they may look at is percentage of owners residing in property vs. renters.  If there is a disproportionate number the lender may see this as a negative.

The unfortunate thing when purchasing a condo is that often these things can be out of your control, so it is up to the lender to decide whether or not they approve of your purchase.  The best thing to do is to give them as much information as possible and the necessary time to examine everything sufficiently.

Some items that you will come across when purchasing or selling your home include chattels and fixtures.  I get many questions asking what they are and what the difference is.  As defined:

Chattel: an article of personal property, as opposed to real property; a thing personal and moveable; it may refer to animate as well as inanimate property; personal property which has no connection to real estate (Black’s Law Dictionary).

Fixture: an article in the nature of personal property which has been so annexed to the realty that it is regarded as a part of the land (Black’s Law Dictionary).

The big difference between the two is that chattels are MOVEABLE.  So, for some examples:

chattels – fridge, stove, washer, dryer, furniture, free standing shelving/bookcases, drapes

fixtures – window covering  hardware,  mounted shelves, cabinets, mirrors, light fixtures.

It is important to note that in any real estate purchase CHATTELS are not included unless specified in the contract.  Conversely, any FIXTURES are to be included in the purchase unless otherwise stated.

One problem I encounter when I work with buyers or sellers of condos; is that of self managed condos.  That being a small condo unit that chooses to manage itself as opposed to hiring a management company.

There is nothing wrong with this in itself, and often can lead to cost savings and better management in certain cases.  In other cases however, it can lead to gross mismanagement and money wasting.

The important thing to remember, is that by law – all condos need to follow certain criteria. (ie. they need to have proof of estoppel, insurance and compliance of bylaws, etc…).

When purchasing a self managed condo, it is important to ask these questions before proceeding with anything:

How is management conducted?

Are there meetings between the owners?

Who signs estoppel certificates and are they provided?

How is insurance for the building handled?

Where are the minutes?

Is there a reserve fund?

If you cant get a clear answer to all of the above questions, it may be wise to avoid the property altogether rather than dealing with potential issues that could arise during conveyancing.

Above all, if you have any questions regarding these matters, feel free to contact myself, or any certified Real Estate member that could help lead you down the right path.

Great news for all you first time home buyers out there – you can now get a $5000 tax credit when purchasing your new home.

All you have to do is meet the following criteria:

• you or your spouse or common-law partner acquired a qualifying home; and
• you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer).

If so, under line 369 on your tax return, you can claim up to $5000.  Just another great way our country is encouraging first time home buyers to get into the market.

2014 was another booming Real Estate year for the province of Alberta.  According to recent MLS stats, Alberta saw an increase in number of sales again in 2015 of 8.3% compared to that of 5.1% of the national average.  As well, average prices in Alberta rose again by 5.2% to just slightly over the 400k mark.

So what does this mean for the future?  Its no secret that in a community that relies so heavily on the oil industry, plummeting oil prices can be quite worrisome for all areas of industry, including Real Estate.  Gregory Klump, the chief economist of the Canadian Real Estate Board, has this to say:

“It’s not clear how far oil prices may drop or for how long they’ll stay down. How that plays out may affect the outlook for interest rates, job growth, consumer confidence, and sentiment about making major purchases.”

However, that being said, interest rates still remain at historic lows, and real estate activity is holding strong.  The CREA is still predicting sales activity growth again next year in Alberta, albeit only 0.1%.  Alberta is also expected to see the greatest price increase at 1.9% compared to the national average of 0.9%

What does it all mean?  Well, it is impossible to know what 2015 will bring.   All we can do state the facts at this point – Alberta still has one of the strongest economies in North America, oil prices SHOULD eventually fluctuate back towards the norm, and we currently continue to see low interest rates which encourages buying.  If this continues to be the case, I would suggest we can continue to predict further growth in our province throughout 2015.

All stats taken from:   http://creastats.crea.ca/natl/

When looking at building, developing or investing, one of the most important things before making a purchase is doing some research into the type of zoning of the lot.  Zoning laws different from province to province and even city to city, so it is a good idea to become familiar with the bylaws set out in your specific region.  Only certain developments may be permitted on a particular lot and if you would like to make any changes to the zoning, it will first have to be approved not only by a city land officer, but also potentially the surrounding neighbors affected by the change.

Again, the very depth of the subject is too much to get into in a blog, but I will give you a quick rundown of the specific zonings you may come across in the city.

(For more specific information, visit:http://www.edmonton.ca/city_government/urban_planning_and_design/land-use-zones-summary.aspx, most info in this blog has been obtained from there )

There are roughly 6 or 7 types of zoning, but the most common that you may encounter are residential and commercial zoning.  Within these 2 zones, there are further subdivided classifications:

FOR RESIDENTIAL ZONING:

RF1 – Single Detached Residential Zone

• This zone provides the opportunity for single family housing.

RF2 – Low Density Infill Zone

• This zone provides the opportunity for retaining single family housing, while allowing some duplex development.

RF3 – Low Density Redevelopment Zone

• This zone provides the opportunity for single family and duplex housing while allowing some apartment or row housing with up to four units.

RSL – Residential Small Lot Zone

• This zone provides the opportunity for single family housing with attached garages on smaller lots.

RPL – Planned Lot Residential Zone

• This zone provides the opportunity for single family housing on smaller lots and accessed by a rear lane.

RF4 – Semi-Detached Zone

• This zone provides the opportunity for primarily semi-detached and duplex housing.

RF5 – Row Housing Zone

• This zone provides the opportunity for relatively low to medium density housing, such as row houses or town houses.

RF6 – Medium Density Multiple Family Zone

• This zone provides the opportunity for medium density housing, such as row houses or town houses that may have separate second storey units.

RA7 – Low Rise Apartment Zone

• This zone provides the opportunity for low rise apartment buildings up to four storeys.

RA8 – Medium Rise Apartment Zone

• This zone provides the opportunity for medium rise apartment buildings up to six storeys in height.

RA9 – High Rise Apartment Zone

• This zone provides the opportunity for high rise apartment buildings.

RR – Rural Residential Zone

• This zone provides the opportunity for permanent single family residential development in a rural setting.

RMH – Mobile Home Zone

• This zone provides the opportunity for mobile homes developed within a mobile home park or subdivision

AND NOW COMMERCIAL ZONING:

CNC – Neighbourhood Convenience Commercial Zone

• This zone provides the opportunity for convenience commercial and personal service uses, intended to serve the day-to-day needs of residents within the neighbourhood.

CSC – Shopping Centre Zone

• This zone provides the opportunity for larger shopping centres intended to serve a community or regional area. Residential, office, entertainment and cultural uses may be included in this zone.

CB1 – Low Intensity Business Zone

• This zone provides the opportunity for low intensity commercial, office and service uses located along arterial roadways that border residential areas.

CB2 – General Business Zone

• This zone provides the opportunity for businesses that require large sites and a location with good visibility and accessibility along, or adjacent to major public roadways.

CB3 – Commercial Mixed Business Zone

• This zone provides the opportunity for medium intensity commercial development near capacity transportation nodes.

CHY – Highway Corridor Zone

• This zone provides the opportunity for high quality commercial development along roads serving as entrance routes to the City.

CO – Commercial Office Zone

• This zone provides the opportunity for medium intensity office, commercial and residential development in the inner city, around Light Rail Transit station areas or other locations offering good accessibility by private automobile and transit.

Hope this sheds some light on the type of zonings permitted in Edmonton.  Feel free to call or email me with more in depth questions if you need to dive deeper into this!

When looking at purchasing a new property, whether as an investment property or a principal residence with a significant other, it is important to know what would happen in the case of an unexpected death.  When you go to sign the papers at your lawyers, and there will be more than 1 person on title, you will be asked if you would like to be Joint tenants or Tenants in Common.

Joint tenancy – neither owner has their own divisable share of the property. In this case they both have full possession of the whole land/building.  This means that each owner has a “right to survivorship” – if one joint owner passes, their interest in the property is completely dissolved and the surviving owner takes over 100% ownership.

Tenancy in Common – In this case both owners hold rights to their own divisible share of the property.  Most often this is 50% each, but can be set at whatever percentage the two or more owners agree to at the time of signing.  Each owner has their own share in the property and can do what they want with their share without the consent of the other.  If one owner were to pass away, their share in the property will be passed on to the beneficiary in their will.

There are definite advantages and disadvantages to each scenario, but when deciding which is best for you it is important to plan ahead in the case of unexpected death of one of the owners.  For example, if the other owner dies in tenants in common scenario, do you know who will be the beneficiary?  What happens if the beneficiary decides they want to sell, even if it will be at a loss?  Likewise, if you unexpectantly die in a joint tenancy scenario, would you trust that the other owner takes full control of property (including profits) and your wife/husband/children potentially recieve nothing?

Ultimately it is important to discuss all your options with your lawyer before you sign off on possession of a new property to ensure that you protect you and your families best interests in the event of an unexpected death.