What Were THey Thinking?

There's air conditioning.

What If My Co-owner Wants to Rent Out His Flat?

One of the most popular posts on my blog is the one dealing with the differences between Properties Held in Divided Ownership Versus Undivided Co-Ownership

Here's the latest question. I thought it deserved its own entry. 

Hello,

I own the lower portion of an undivided co-property. The owner of the upper is moving and has has been trying to sell his section. Since he has not had any offers he is now considering renting. According to our co-prop agreement he requires permission from the institution with which he has a mortgage and from me. I do not feel comfortable having someone who is a tenant rather than an owner living above me. Therefore I do not want to give him permission. According to him he says that he does have the right to rent out his apartment regardless of any reason I give. Is this true? Can he challenge this if I don't want to give him authorization?

Thank you for any help

Hello Anonymous,

There are two issues. First, if the agreements says you must consent, then that should be the end of the story. I would hope that your neighbor would  drop the matter there.

The second issue has nothing to do with you but is equally germane and potentially waaaay more scary for your upstairs neighbor. What does the mortgage lender say? Generally speaking, lenders (and in Quebec that means either National Bank or Caisse Desjardins) do not allow owners of undivided co-owernship properties to rent their places out because there is no automatic right for a financial institution to repossess the unit, ie to get a tenant out. That makes it harder for them to sell if a borrower defaults on a mortgage.

You have the same mortgage lender, presumably. What does your mortgage say? If there is a prohibition against renting, it will be there in black and white. If your upstairs neighbor violates the terms of his mortgage the bank could, in theory, call the mortgage loan.

I would be surprised if he has the right to rent.I would be surprised if he would want to go up against his bank. That doesn't generally go well.

Hope this is helpful.

My Hero! Century 21 Agent Amy Barratt Jumps for Kids

Every year Century 21 puts its corporate clout behind the Easter Seals campaign, raising money to help handicapped kids and their families, in one way or another. Last year, the company launched a new campaign, Drop Zone, in which C21 agents across the country suited up and rappelled down tall office buildings. Each jumper pledged to raise a mimimum of $1,500 to send a handicapped child to camp.

I am so proud to say that Amy Barratt will be taking part in this year's Drop Zone challenge. She will be rappelling down the side of 1981 McGill College Ave. in the heaty of Montreal on Saturday, September 20. You might also know 1981 McGill College Ave. as the 20-storey glass building with the marzipan/margarine people sculpture out front.

I've already sponsored Amy in this endeavor and have encouraged her to wear a super hero costume as she makes the leap.

Check out her Drop Zone page by clicking on this link

Here's a video of last year's event. It makes the thing look hardly scary at all.

Mortgage Rules Change Today

Starting today, borrowers face a new set of rules when it comes to mortgage lending in Canada.
The changes will have particular impact on younger/first-time buyers and could make it harder and/or more expensive to buy that first home.

As of today, buyers with less than a conventional 20-per-cent down payment will no longer be able to spread their mortgages over 30 years. The amortization period is being shrunk to 25 years. This is the measure that has been making headlines since June when the new rules were announced by Finance minister Jim Flaherty.  Funny thing is, the 25-year mortgage was the norm until relatively recently. The 30-year mortgage was introduced to stimulate the housing sector. Now that the job is done, we are reverting to the old rules.

 If you have 20 per cent to put down and thus don't need the Canada Mortgage and Housing Corp. to insure your mortgage, you can still get a 30-year term.

The second change to the mortgage game is that home owners will no longer be able to take quite as much equity out of their homes. Starting today, owners will be able to refinance up to 80 per cent of the value of their homes, down from 85 per cent.

 Flaherty put the new measures in place to A) cool key overheated housing markets. B) to discourage Canadians from taking on too much debt C) to persuade homeowners to stop treating their houses like ATM machines and pay off those pesky mortgages.

Flaherty announced the new measures largely in response to overheating in the Toronto market. Not everyone thinks they were the best approach.

In an interview with The Globe and Mail, Philip Soper, the head of Royal LePage, said that Flaherty used a hammer, when a fly swatter might have done the job.

 “The market is clearly cooling on a national basis, and I’m concerned that what is essentially a Toronto problem is being attacked with a blunt instrument that’s going to hurt the housing market nationwide,”

Maybe so. Mortgage industry insiders say the tightening will have the same effect as a one-per-cent interest rate hike. The government says the more stringent requirements will have an impact on about 5 per cent of new buyers, forcing them to the sidelines until either they save more or have higher paying jobs.

Some think the tighter lending rules will result in a market slowdown that would make it easier for young/first-time buyers to get into the market. Guess we'll see.

Several of my buyer clients have asked me what the mortgage rules will mean. I'm not convinced it will have much impact in Montreal. I don't see too many buyers opting for 30-year mortgages. I think I've had two clients over the course of the last two years. In Greater Toronto, some 40 per-cent of first-timers opt for 30-year mortgages. Different market, different circumstances. If clients ask my opinion, I encourage them to put down as much of a down payment as possible and to opt for as short an amortization period as possible. Call me crazy but I don't think it would be a terrible thing if marginal buyers were forced to the sidelines.

One last point. As of today, the CMHC will no longer insure mortgages priced above $1 million. It boggles my mind that the federal government was up until now insuring houses worth that much. Whatever happened to buying within your means. scraping and skimping to buy that first home? Seems to me that a $1-million home ought to be a move-up property. It would be in Montreal, but I suppose that in hotspots like Toronto and Vancouver, that kinda cash will get you a crack house or shack.

Check out  Crack Shack or Mansion and you'll see what I mean.

What Were They Thinking?

I've been saving them up, folks!  Sometimes the details are a little fuzzy, but this is ridiculous.

6348 Hurteau, Ville Emard, A Shoebox Bungalow with Soul

Don't be unduly fooled by its cuteness! This brick bungalow is as rock-solid as a house can be.

6348 Hurteau is a typical early 20th century bungalow, flat-roofed and longer than it is wide. I coined the term "shoebox house" a few years back to describe this quintessential Montreal bungalow because of their simple, straight-lined design.

This property has been in the same family for more than 65 years. Four sisters grew up sharing one of the bedrooms. Their father had walled off one end of a double room to create a windowless tailoring workshop. Their mother, an amazing gardener, grew roses, peonies, hydrangeas, columbines and raspberries in the fenced yard. Earlier this week, I picked about three cups of raspberries and baked them into a really tasty pie!

This house has two real bedrooms, with the possibility of creating a third by dividing one of the double rooms.

It has a compact but very clean bathroom which has been recently freshened up with paint and new tile.

There's a combined living and dining room. as well as a spacious eat-in kitchen that gives onto an unheated sunporch that is usable during three seasons. The ceiling height throughout is at least nine feet, which gives this compact row house a definite feeling of spaciousness.

The roof was redone in December, 2011. The floors, all hardwood, are original.The basement has a laundry room, workshop and storage, with a separate door to the back yard. The house has electric baseboard heating, as well as an updated panel.

The asking price is $257,000 and the vendors are very motivated to sell. I'm having an open house on Sunday, 2-4 p.m.. Drop by for a peek. I'm thinking of putting a raspberry pie in the oven.  Maybe I'll offer you a piece. Maybe.