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Blog – Refcio & Associates

CLOSING ISSUE CONSIDERATIONS

Published November 19, 2021

The closing date is usually the final step in the purchase or sale of a home.  However, the closing very often (even more so since the onset of the ongoing COVID-19 pandemic) may be required to be extended.

The completion (or lack thereof) of the real estate transaction on the originally agreed upon closing date is a very important term of the Agreement of Purchase and Sale between the Seller and the Buyer. Accordingly, whenever there is the need for a deviation of the agreed-upon closing date there are a number of considerations that should be taken into account on a closing.

The recent decision of the Ontario Court of Appeal in Ching v Pier 27 Toronto Inc. (2021 ONCA 551) addressed closing considerations such as “time being of the essence,” “repudiation,” and “relief from forfeiture of deposits”.

Time being of the essence is the idea that there is only a certain amount of time in which the transaction must close. The Court of Appeal in Ching states that “when time is of the essence and neither party is ready to close on the agreed date the agreement remains in effect” and “either party may reinstate time of the essence by setting a new date for closing and providing reasonable notice to the other party” (at para 52).

Repudiation, or a breach, is when a buyer or a seller in a real estate transaction fails to meet one or more of the terms of the Agreement of Purchase and Sale. The Court of Appeal in Ching states that repudiation alone does not terminate a contract, the repudiation must be accepted by the innocent party for the contract to be terminated (at para 32).

Relief from forfeiture of deposits is a remedy the Courts can use that allows a buyer or seller that repudiated a real estate contract to have their deposit returned. The Court in Ching also referenced a number of legal tests to be utilized if relief from forfeiture of deposits was sought.

Accordingly, the Ontario Court of Appeal decision in Ching will likely set the standard for future determinations of liability with respect to varying of closing dates, and anyone considering varying the closing date of their real estate transaction should consider the decision in Ching before doing so.

For more information about varying closing dates or assistance with real estate purchase or sale transactions, please contact our firm for a free initial consultation with one of the lawyers at Refcio and Associates.

Please be advised that the information contained in this blog is for general information purposes only, and should not be treated as legal advice. Every legal situation is different, and the information contained in this blog may not apply to your particular set of circumstances. If you would like a free initial consultation tailored to your circumstances, please follow THIS link (https://www.rrlaw.ca/london/) to contact our office.

NOTICE PERIODS

Published

It is well established by the Courts that an Employer has an almost unfettered right to terminate the employment of an employee. However, in the event of a termination of employment on a without cause basis (meaning no fault of the employee) the debate over the amount of notice or pay in lieu thereof required to be provided by an employer to a former employee upon termination will vary on a case by case basis.

A “notice period” is the amount of time an employee is entitled to continue their employment and receive their normal salary or pay before they are dismissed. Once the appropriate notice period is determined, either by agreement between the parties or by way of subsequent Court Order, the employer may elect to simply provide payment to the employee and not require the employee to perform any further duties or responsibilities (which is by far the most common option).

The longer the employee has worked with the same employer, then the longer the required notice period.  While each case may vary, a common accepted guiding principle has been a maximum notice period of twenty-four (24) months for those employees who are terminated after reaching more than twenty (20) years of continuous employment with the same employer.

Recent decisions at Ontario courts have resulted in notice periods longer than 24 months i.e. Dussault v Imperial Oil Ltd. (2018 ONSC 1168) and Mikelsteins v Morrison (2018 ONSC 6952). The latest ruling on notice periods from the Ontario Court of Appeal held that this recent development in employment law was unreasonable.

In the case of Dawe v Equitable Life (2019 ONCA 512) the Court of Appeal held that the longest reasonable notice period is 24 months, barring exceptional circumstances. The court was unclear on exactly what exceptional circumstances may be. However, the court did provide some guidance on what were not exceptional circumstances, including being a few years away from retirement age, and being employed in a senior position at a company where you have worked your entire life.

If you have recently been terminated due to the COVID-19 Pandemic or for any other reason, it’s important that you know your rights. Please contact our firm for a free initial consultation with one of the lawyers at Refcio and Associates.

 

Please be advised that the information contained in this blog is for general information purposes only, and should not be treated as legal advice. Every legal situation is different, and the information contained in this blog may not apply to your particular set of circumstances. If you would like a free initial consultation tailored to your circumstances, please follow THIS link (https://www.rrlaw.ca/london/) to contact our office.

 

 

Please be advised that the information contained in this blog post is for general information purposes only, and should not be treated as legal advice. Every legal situation is different, and the information contained in this post may not apply to your particular set of circumstances.

FIRST-TIME HOMEBUYER SERIES: THING TO CONSIDER- ONTARIO’S LAND TRANSFER TAX

January 28, 2021

PURCHASING A HOME IS ALWAYS A MEANINGFUL AND SIGNIFICANT EXPERIENCE FOR FIRST-TIME HOMEBUYERS. STILL, SOMETIMES THE EXCITEMENT THAT SURROUNDS A HOMEBUYER’S TRANSACTION CLOUDS THE REALITIES OF SOME OF THE UNEXPECTED COSTS ASSOCIATED WITH PURCHASING A RESIDENTIAL PROPERTY FOR THE FIRST TIME. ONE OF THESE UNEXPECTED COSTS IS THE DREADED LAND TRANSFER TAX (LLT).

LTT is often overlooked when considering the total cost of purchasing a home. Whenever you acquire land or a beneficial interest in land, you pay LTT to the province when the transaction closes. LTT usually is based on the amount paid for the land, in addition to the amount remaining on any mortgage or debt assumed as part of the arrangement to buy the land. Homebuyers in Toronto also incur an additional municipal tax in conjunction with LTT.

To help offset the cost, Ontario, British Columbia, Prince Edward Island, and the City of Toronto offer land transfer tax rebates for first-time homebuyers, where the maximum amount of the refund is $4,000.

To claim a refund, you must be at least 18 years of age, you cannot have owned a home or an interest in a home anywhere in the world, and your spouse cannot have owned a home or interest in a home, anywhere in the world while they were your spouse. Previous ownership in a home means you do not qualify for the land transfer tax first-time homebuyer’s refund. The method of acquiring the home (e.g., purchase, gift or through an inheritance) is not relevant. Additionally, the refund will be reduced if one (or more) of the purchasers is not a first-time homebuyer. The refund will be proportionate to the interest acquired by the individuals who qualify for the refund.

As a first-time homebuyer, it is essential to factor these costs into your total budget when purchasing a property. For more information on LTT and how much this may cost you when buying your first home, please submit a request for a detailed, personalized quote directly through our website.

PLEASE CONTACT REFCIO & ASSOCIATES IF YOU HAVE ANY QUESTIONS.

JUST KNOW WHAT YOU’RE GETTING INTO: TIPS FOR FIRST-TIME HOMEBUYERS

Published September 29, 2020

(AND NO, LAND TRANSFER TAX IS NOT A SCAM)

While a typical right-of-passage of adulthood has traditionally included the first purchase of a home, skyrocketing prices, lack of inventory, bidding wars and income insecurity have made this milestone incredibly challenging for today’s first-time home-buying demographic – arguably more now than any time in the past (especially so if you don’t have any help from the ‘Bank of Mom & Dad’).

Given these mounting costs, we’re finding that an increasing proportion of our residential real estate legal services’ clients are first-time buyers – those who are tech-savvy, well-researched and conscientious of value. We’ve designed the whole intake process to be available 24/7/365, directly through our website and transparent and with personalized written closing costs quotes that detail all cost components. If you’re interested in getting a closing costs’ quote, submit your request directly through our website at any time. Curious? We are confident that the value of our services will soon become apparent.

Here’s a Top 8 Things Every Buyer or Seller Should Know, a helpful resource we created to remind all buyers and sellers of important items pertinent to their upcoming transaction. Check it out! Even if you’re bought & sold before, it’s a handy reminder. Even if you’re bought & sold before, it’s a handy reminder.

One of the most costly components to any purchase transaction is Land Transfer Tax – which is calculated based on the purchase price of the property… and no, this is not a scam made up by lawyers (in actual fact, we are asked this surprisingly frequently). Here’s an online LTT calculator. Note that those purchasing in Toronto have the ‘privilege’ of paying double the amount. Again, that’s not a scam.

First-time homebuyers are eligible for up to $4,000.00 in rebate on the LTT owing on the purchase of their property if they meet the qualifying criteria (same link as above but further down the page). This brings me to what I actually wanted to address today — the second most frequent question we’re asked about LTT rebate eligibility: What if my spouse has bought a home previously but I have not – can I still get the discount on LTT? As ever, the devil here is in the details and it is always best to confirm everything with a lawyer first.

Scenario 1: Generally speaking, if ‘Spouse A’ has not sold their property by the time ‘Spouses A & B’ get married, unfortunately, you, as ‘Spouse B’, lose your eligibility to claim LTT credits. Oh, the joys of marriage! This means that even if ‘Spouse A’ sells their property after you are married (i.e. to afford a new matrimonial home that both spouses buy together), count on full LTT being owed. I recognize that there are many possible permutations and combinations of scenarios and several other factors to consider to confirm LTT rebate eligibility – so always plan to ask your lawyer before drawing up your closing costs budget.

Scenario 2: Conversely, if ‘Spouse A’ sells their property before marriage, ‘Spouse B’ (who has not previously purchased a property anywhere in the world), may be eligible to claim up to 50% (i.e. up to $2,000.00) of their LTT credits on a joint-purchase with ‘Spouse A’. Naturally, since ‘Spouse A’ has already purchased (and since sold) their first property before marriage, they are not eligible for any further LTT rebates. Ever. Again, there are many possible permutations and combinations of scenarios and several other factors to consider to confirm LTT rebate eligibility – so always plan to ask your lawyer before drawing up your closing costs budget.

Tough stuff.

The other cost component we’re asked about frequently is the need for Title Insurance. Again, this is not a scam. And no, the lawyer does not keep that money, either. In fact, Title Insurance (which is again based upon the property’s value) is required by all major financial institutions. It is utilized to protect/preserve the value of the property from any potential title defects which a survey may not reflect. It is our Firm’s opinion that even if there is to be no mortgage on a property purchase (lucky!), all clients ought to have a Title Insurance policy because the potential risk of liability/loss is far outweighs the nominal cost that Title Insurance protection provides.

Oh, the joys of home ownership.

Good luck on your upcoming (first… or next) purchase! Let us know when you’re ready to move forward.

 

 WANT TO REACH ME? HAVE ANY QUESTIONS OR COMMENTS ABOUT THIS POST? PLEASE SUBMIT YOUR RESPONSE IN THE BOX BELOW AND I’LL BE SURE TO GET BACK TO YOU AS QUICKLY AS POSSIBLE.

Tristan serves as the Chief Operating Officer of Refcio & Associates Law Firm and as an independent business consultant to clients of the firm.

FOOD & REAL ESTATE

Make Sure You Know What You’re Ordering

In my unique role, I interact often with prospective clients who are trying to decide on a law firm for their upcoming real estate transaction. Many are first-time homebuyers. Almost all have questions: ‘Who’s the best lawyer?’, ‘What’s a good price?’, ‘Is Land Transfer Tax a scam?’, ‘How much do you charge?’, ‘Do I meet with a lawyer when I sign?’, ‘What ID can I use?’, ‘Can you help with a quick close?’ etc. etc. etc.

Recently, a prospective client called to ask how much we charge for a refinance on their home. This individual was surprised to be asked how many other payouts they intended to have completed throughout the course of this matter (most people have 2-3… but we’ve seen some with over 20). They had browsed our website and found our pricing page that features our smorgasbord list of the flat-rate legal fees we charge for our most common services; however, they had not understood that Title Insurance, government fees, and disbursements would be charged on top of that (hence why we encourage people to submit a request directly through our website in order to receive a free, detailed and personalized closing costs quote in writing). Don’t worry. Most people aren’t aware of all the costs involved, either.

As we educated the prospective client about each cost component required to process the transaction, they got a much better understanding of the total cost of what they were seeking to complete. It was suggested that as they compare law firms on price, they are assured to obtain fulsome quotes that include all ‘ingredients’ so that they may make the most informed decision on total costs involved (and not just the quoted legal fee).

When we provide written quotes, we make sure to include everything so that clients know ahead of time and can budget accordingly (helps to relieve anxiety, doesn’t it?). We actually encourage cross-shopping; we’ve found that most clients who ask us about our pricing will return after realizing just how cost-competitive we are.

Lesson: Make sure that you get apples-to-apples before you go for the whole enchilada.

 WANT TO REACH ME? HAVE ANY QUESTIONS OR COMMENTS ABOUT THIS POST? PLEASE SUBMIT YOUR RESPONSE IN THE BOX BELOW AND I’LL BE SURE TO GET BACK TO YOU AS QUICKLY AS POSSIBLE.

Tristan serves as the Chief Operating Officer of Refcio & Associates Law Firm and as an independent business consultant to clients of the firm.