The Importance of Disclosure

One of our favourite column-writing lawyers, Mark Weisleder, has another great article about the problems of disclosure. 

 

He mentions the plight of a couple selling their home. A week before closing, their basement flooded; something it had never done before. They paid for the repairs and, certain that it was a one-time thing and that the problem was fixed, they didn’t mention anything to the Buyers. A few weeks later, the basement flooded again, only this time the Buyers had to pay several thousand to fix the problem.

This situation is not an uncommon one. On the one side, you have basically honest people who didn’t know they needed to mention something. From their point of view, it had never happened before and they had paid to fix it, so the flooding was really a non-issue. They didn’t mention it, not out of spite or maliciousness, but just because they didn’t know they should have. 

On the other hand, you have a couple who is reasonably frustrated by this new expense that comes so soon after their new purchase. They had thought they were protected by the home inspection and by all the signed agreements, and yet here they were with a flooded basement. 

Unsurprisingly, the situation went to court. The Sellers were lucky that the judge sided with them in saying that it was a reasonable assumption that the flooding was a one-time occurrence given past history. Had it gone the other way, the Sellers could have been liable for several thousands of dollars above the cost of repairs. 

Mr. Weisleder summarizes the lesson quite well: 

The lessons from this case are:

 •  For Sellers, disclose all problems you know about. If you are not sure, err on the side of disclosure.

 •  If you as a seller sign an SPIS (Seller Property Information Statement), to be safe, do not permit it to be attached to the agreement. That way, you will be protected if you made a mistake in completing it.

 •  Buyers should not rely on the SPIS because it is not supposed to be a warranty; it is just to be used for information purposes.

 •  If something matters, always include it in your home purchase agreement. Do not rely on verbal promises or advertisements.

The moral of this story- ALWAYS disclose EVERYTHING. If you aren’t sure if it’s relevant, check with us and we’ll let you know if the information should be passed along.

Guest Post: Preparing your house for Winter

Here are a couple useful tips from Steve Otts at Ottawa Valley Home Inspection Ltd. 

Fall is the time to ensure that your house is ready for the oncoming winter. To get ready for the season of snow, start with the basics. Remove all the items from the yard (tables, chairs, kids toys, etc) and stow them away in your garage or shed. Drain and remove all garden hoses. Turn off the hosebibs (exterior taps) on the inside of the house and then open and drain the hosebib on the outside of the house. Even if you have the newer frost free hosebibs, it’s still a good practice to shut them off on the inside to be safe.

It is also the time to ensure that the grading slopes away from the house and that it hasn’t settled during the year. This is especially important with a new house or one that has had the yard dug up for any reason because the ground is still soft and can settle. It is quite important that the grade slope away from the house because during the spring thaw when the ground is still frozen it won’t absorb any water. Thus it will run along the surface downhill and you want it running away from your house and not towards your house and your basement.

It’s also the time to clean and inspect your rain gutters. If you have any trees around that are close to or higher than your house, you will probably need to clean the leaves out of them. This prevents a frozen blob of leaves from blocking the water flow during the spring thaw. At the same time ensure that the gutters and downspouts are securely fastened to the roof and walls.

Other items that should be done before winter are to get your annual inspection and cleaning of your gas or oil burning furnace. In addition, if you have a wood burning appliance, and use it, you should get the chimney swept.

It is also a good time to do a visual inspection of your roof, shingles and flashings. Use a good set of binoculars or hire someone to do it for you. Check all doors weather stripping and ensure it is in good useable condition and that it is not ripped or broken. Also check the caulking on the windows, you can use your binoculars to look at the second story windows.

Being prudent now before the snow comes will almost always save you headaches in the winter or spring.

Steve Ott

Ottawa Valley Home Inspections Ltd.

Building, Septic & WETT Inspections

Covering Eastern Ontario and Western Quebec

www.ovhi.ca

613-724-0868

Keeping Your Home Winter Safe and Saving Money

We Canadians are used to cold, but sadly, many of us have no idea how to winter proof our homes. Poor preparation and inattention can cost you lots of money in repairs and heating bills. Here a few quick tips on how to keep your home in tip top shape.  

      Insulate your attic hatch.

Heat rises, so if you are finding it hard to keep your house warm, your attic might be poorly insulated. This is also a great time to check your roof for any moldy, weak, or leaky spots. Trust me, you don’t want a house full of snow because you didn’t check.

Check for leaks and seal all doors, windows and cracks.

Just because your windows are closed, doesn’t mean cold air isn’t getting in. If your windows tend to sing on windy days, you probably have a leak. Make sure all the edges are properly sealed.  You can find the source of the leak by lighting some incense near a window and seeing which way the smoke blows.  

Clean out your ducts and vents. Make sure they are all sealed properly.

Wintertime is bad for allergies. Before winter comes along, have your ducts and vents cleared free of dust and debris. This will also help with the flow of hot air. Make sure all the ducts are properly connected and sealed. Last thing you need is to spend extra money on heating because all the air is escaping in your basement. Remember, the only thing duct tape can’t be used for is to seal ducts.  

Properly insulate all of your electrical outlets.

Make sure you hire a professional to do this! Foam gaskets should be used around all electrical outlets to prevent moisture building up around them and cold air from getting in. If you can feel air coming out of your sockets, you need to insulate.  

To keep warm, have a party.

Most homes have the thermostat set too high. Turning it down just 1 degree can save you lots of money. If your house is properly insulated, your windows and doors sealed, and your outlets plugged, but you still feel cold, invite people over. Body heat can be a cheap and efficient way of heating up your home. And fun to! Why did you think it was called a house warming? 

From all of us at Team Jamieson, we hope you have a safe, happy, and fun winter.

What if I'm a renter? Tips from Anna

I moved to Ottawa in 2005, and not including a brief stint in Residence, I have lived in rentals that whole time. I have lived in most of the types of properties available. In total I have lived in 3 apartments, 2 house rentals, and 2 “room” rentals. Over the years I have developed a keen sense of what to look for when you are renting, as well as what is involved in the whole process. 

As a regular feature, I plan to cover some of the following topics: 

• ·         Types of Rentals Available
• ·         Finding a roommate
• ·         How to protect yourself
• ·         How to find a place.
• ·         How to inspect a new, potential unit
• ·         What is included in the rent
• ·         Paying Rent; and
• ·         The lease: types, co-signers, etc.

The place to start when you begin to rent is to figure out exactly what you want and what you can afford. A good key is to start with a budget. Figure out exactly how much you can afford for housing per month. Take out the cost of phone, internet, cable, and any other amenities you are going to need. The final number will be what you can afford in rent per month. 

For example.my boyfriend and I can each afford $500 a month, for a total of $1000. The internet plan we use costs $60 a month. This means my boyfriend and I can afford to pay up to $940 per month in rent, utilities in.

Why is this budget so important? 

There is no point in looking at any places before you know how much you can spend. Not only that, but the type of rental you will be looking for will depend on how much you can afford. 

Anything less than $650 in Ottawa means you have almost no choice but to get a roommate, unless you want to live in student housing.

Between $500 - $750 you might be able to find your own place, depending on what you are willing to put up with. 

If you are willing to live with a roommate, than the options on housing are a lot greater. 

Your options of rentals are: 

Room in a House, Student Housing, House Rental, or Apartment

Each of these has their own distinct advantages and disadvantages, which I will discuss next time

Julie: My Real Estate Story - Part 4

Continued from part 3 

Within 3 weeks we had all the units ‘lipsticked’ and rent was 34% higher than when we bought the building. The place became a cash-generating machine, with almost $1600 per month alone, on a $22,000 initial investment.

Amazingly, after a whole lot of sweat equity and $6,000, the building I had paid $192,000 for 8 months earlier was now worth $300,000. In the bank’s eyes, that is. They based their evaluation on a short list of the upgrades I had done and the increase in rent, that’s all they required. I just remember thinking how unbelievable it was that the bank was willing to cut me a cheque for $90,000. Time to go shopping again. I had no more money, but that wasn’t about to stop me from looking.

It didn’t take long for me to realize that I was having to teach the Realtors I was working with how to analyze the numbers and see some not so obvious potential in the investments properties. Some gurus said that I should have a business card that says “Professional Real Estate Investor” though I wasn’t one. They thought it was a good idea to fake like I was, which I wasn’t about to do. Go to every Realtor you can get your hands on and tell them you are looking to buy a rental property, others would say. I quickly realized that by doing that, the only Realtors who would be willing to work with me were bottom feeders who NEEDED the business, so I quickly realized that I certainly didn’t need them.

 I’d like to break up this story to tell you all that I love the smell of a campfire.  Not to mention Akon’s silky smooth voice.

At that time, I had learned over the past year or so of reading every business and real estate book I could get my hands on, attending real estate seminars and the real life experience viewing building after building was not an education that any Ottawa Realtor had, nor wanted to have. I was sick of getting burned, so I decided to become licensed for my own buying purposes. Word quickly spread, and I’ve been fortunate since day one to not have to make outgoing phone calls, they seemed to come to me.

12 month leases VS month to month leases

Mark Weisleder offers some interesting insights into why a month to month lease may be preferable for both renters and landlords.

For renters, the advantage is obvious. If at any time you are unhappy with your accommodations, you can break the lease with 60 days’ notice.  For students whose family live outside of the city where they are studying can take advantage of such a lease to rent only during the school year and avoid the troublesome hassle of finding subleasers.

For landlords, a month-to-month lease lets you terminate the lease at any time, provided you give 60-days’ notice.

It is a great article, although it lacks one extra point. A big percentage of renters are young adults, who may still be students. Many of them may be moving in with roommates, or boyfriends/girlfriends. Anyone who has been involved in such a situation will remember how roommates and lovers are occasionally unreliable or dramatic.  You might find yourself suddenly with help in paying the rent. A month-to-month lease makes it easier for students in such a situation to get out of a lease they cannot afford, before defaulting on the rent.

In this way the leaser and the landlord save themselves the hassle and cost of eviction proceedings.

Julie: My Real Estate Story - Part 3

I have fond memories of renovating the second apartment in that building. It was late in the evening and my husband at the time had planned to pop by to do a few quick things. When he entered the apartment it smelled of french fries, which were still warm inside the stove. And I had not made them. He quickly looked around the apartment and there was evidence that someone had decided to use the facilities, having shaved in the bathroom sink, and dropped the kids off at the pool, without flushing. Very nice indeed. Welcome to Vanier he thought, flushed the toilet and rinsed out the sink, ready to continue renovating. While he was working in the master bedroom he noticed something wedged on the top of the closet door that hadn’t been there before. Weird, he thought. As he got closer to have a look he realized the thing wedged was actually a pair of fingers… belonging to the person hiding inside the closet.

Backing up slowly, he had the thought that most of us would have in this crazy scary situation. I’LL CALL MY WIFE, and ask what I should do now. And that’s exactly what he did, with a hammer in his hand of course. You can imagine my shock, and all I remember saying to him was ‘And why in the hell are you calling me instead of the cops?’ Come honestly.

As per my direction he told Mr. Closet to get out. Our visitor exited out the window as I imagine was how he entered it in the first place.