Archives for February 24, 2015

Stigmatized Properties

obligation, disclose, property

Questions arise about obligation to disclose whether property has stigma

 

Bob Aaron in Legal, Home Buying, Home Selling

HiRes
Is a real estate agent obligated to disclose to purchaser clients whether the house they are interested in buying is stigmatized by a connection to a crime, murder, suicide, marijuana grow-op, or haunting by ghosts?

That’s the question that arose late last year when I wrote about a court case in which the buyer unsuccessfully sued the seller following rumors that the building was haunted.

In the view of the Real Estate Council of Ontario, the provincial regulator of the profession, there is no obligation for an agent to disclose the existence of stigma to buyers.

A registrar’s bulletin entitled “Stigmatizing Issues” is published on RECO’s website at reco.on.ca. The bulletin is a guideline for real estate agents and is also useful to help members of the public know what to expect from real estate agents in these circumstances.

As examples of stigmatized properties, the bulletin cites:

  • the property was used in the ongoing commission of a crime (e.g., drug dealing, chop shop, brothel);
  • a murder or suicide occurred at the property;
  • the property was previously occupied by a notorious individual, such as an organized crime figure or a known murderer;
  • there are reports that the property is haunted;
  • the house was a former grow-op, which has been properly remediated.

If a real estate agent is not informed about a property’s stigma, there is no obligation to disclose it. I also stated that Ontario agents are obliged to disclose the existence of stigma if they know about it.

After the column appeared, RECO contacted me to say my statements were incorrect and pointed out their bulletin on stigma which states — incorrectly in my view — “there is no legislation or case law in Ontario to suggest that a seller, or his or her representative, is required to disclose the existence of stigmas to buyers.”

But, in my view, that statement is wrong.

original post on http://www.movesmartly.com/

 

I have seen this question come up a lot around grow-ops, I would disagree with the writer of this article in terms of grow ops that have been properly remediated specifically.  If a home was renovated and certified by a city licensed remediator – then the property is in most cases in better shape than it was before the grow op ever existed.  To have realtors out there needlessly narrowing the pool of buyers for these properties is just not necessary.

 

To your success,

Tim R

Prime Example of Media Affecting Outlook on Real Estate Market

real estate market, average price, TD

TD predicts the average price of a Calgary home will fall from $459,500 to $439,500 in 2015 (-4.4%) and then to $424,500 in 2016 (-3.4%).    Sales are expected to plummet by -47% this year and -1.9% next year.

The report goes on to say: “Calgary and Edmonton have already experienced a sudden and abrupt turn, and by January, existing home sales had already slumped by 45% and 30% from peak levels reached last year, respectively. Meanwhile, annual average existing-home price growth slid into negative territory.”

It’s too bad TD is focusing entirely on the average price which is a volatile and misleading measure in the context of the following facts:

  • The median price was up 1.08% y/y in January
  • Benchmark price was up 7.69% y/y in January
  • Teranet HPI which tracks repeat home sales was up 7.1% y/y in January
  • Luxury sales ($1M+) in January were down -42% y/y

If the Calgary real estate market continues on this path, price declines are obviously expected.  However, I think TD is jumping the gun by stating that prices have already slid into negative annual growth by referencing only the average price.

 

The above is an excerpt frohttp://calgaryrealestatereview.com/2015/02/12/td-calgary-edmonton-housing-markets-likely-to-correct/

 

This type of media attention is exactly the kind that can cause panic in the market place.  There have been layoffs in the oil sectors over the last few months with others expected to continue over the next 6 months, this will certainly have an effect on the average sale price in Calgary and the area but what that impact will truly be is yet to be seen.  There are still many people moving to Calgary for work – not just on the oil rigs but in construction and other sectors as well which are still doing well and are not as impacted as the oil patch and related industries.  I think that this correction was on the horizon for a number of months now and was going to happen no matter what the oil prices did, the oversaturation of high priced homes was incongruent with the buying power of your average Albertan.  I am speaking of the true buying power of the average Albertan and not the influx of buyers that are only buying due to the historically low-interest rates and are going to be in trouble in 5-8 years when the rates start to increase.  The media plays a large role in public perception of how a province is doing fiscally and they of course sensationalize the little things to sell advertising – the true fundamentals have not yet to greatly decline in Alberta from what I have seen so far, based on that I say again that it is too soon to tell on whether or not this current market blip will end up resulting in a downward trend.

 

To your success

 

Tim R