Category Archives: Real Estate Buying Selling Law

Articles by Lawyers about Real Estate Law. Serving Burlington, Milton, Oakville, Mississauga.

COVID-19 Impact on Residential & Commercial Tenancies


The Ontario government hasn’t provided any assistance yet to commercial tenants. There is mounting public and media pressure to get something done before April 1st. Media reports have been urging commercial landlords to be lenient with their tenants and show some compassion such as:

  • Rent deferrals;
  • Rent abatements;
  • Alternative pay structure;
  • Short term arrangements.

Read more about COVID-19 impacts on commercial tenancies


This is a collection of information on what the Province of Ontario is doing or intending to do for residential tenancies in dealing with the fallout of the COVID-19 crisis:

NOTE: Despite Premier Doug Ford’s announcements to protect residential tenants, No formal policy details have yet been unveiled by the government.


  • March 19, 2020: Ford announces suspensions of all evictions;
  • March 19, 2020: LTB suspends all hearings relating to eviction applications, the issuance of eviction orders etc…
  • March 26, 2020: The Government of Ontario issued an Emergency Order suspending limitation periods and procedural time periods relevant to tribunal proceedings;
  • March 26, 2020: Doug Ford announced that Ontario tenants who don’t pay rent on April 1st won’t be evicted, but this is only for emergencies. Premier Doug Ford’s point is that people should not have to decide between paying rent and putting food on the table.

Read more about COVID-19 impacts on commercial tenancies

What to To Do With Your Pending Real Estate Deal

(THIS IS NOT LEGAL ADVICE – the discussion is just one lawyer’s observations and views intended for a general audience)

The concern for buyers is that they may be laid off and not have the financial resources to carry a mortgage for an indefinite time after closing until their financial circumstances go back to normal.

It is a real dilemma.

A quick review of the standard OREA purchase and sale agreement shows that it does not contain a “Force Majeure” clause.

Force Majeure is a very unique legal concept that can relieve parties from their contractual obligations – like closing on a real estate transaction - on the narrow and high threshold exception where something not reasonably expected interferes and makes closing impossible or impracticable.

The legal principle is important because it can be used by a buyer who fails or refuses to close on a deal to be released from the contractual obligation to close and secure return of their deposit.

Presently, the virus is a worldwide pandemic that no one could have reasonably expected resulting in such great economic decline, particularly of non-essential products and services – with massive layoffs, financial uncertainty and massive number of EI applications. (See Wikipedia definition of force majeure

Even if a buyer is not laid off work, the response to the pandemic has necessitated an economic slowdown so great that most industries are affected resulting in widespread economic uncertainty.

Clearly the State of Emergency called by Cities and Provinces and the looming imposition of the Federal War Measures Act – all speak loudly to the application of a “force majeure”.

Beware, the legal principle of force majeure is not an automatic right. The burden remains on a buyer to argue the application of a force majeure in a court of law if a seller refuses let the buyer out of the binding agreement and/or return of the buyer’s deposit.

Although our office has not yet had a buyer failing or refusing to close, this is a risk as time passes. As we see deals not closing, litigation may follow the end of the pandemic and economic recovery.

So, what should realtors do in the meantime to protect themselves and their clients?

There are two clauses you should advise your clients to include in purchase offers or counter-offers, namely:

  1. A force majeure clause and;
  2. An employment clause that allows your client to be released from the deal and return of deposit if they are laid off or terminated from employment prior to closing.

I understand that such clauses could jeopardize acceptance by a seller. Nevertheless, realtors should advise their clients to include such clauses and document your advice by sending the client an email.

We, at GGS, would be happy to assist in drafting these clauses to include in offers and counter-offers on behalf of your clients.

Karmel Sakran
Managing Lawyer

411 Guelph Line, P.O. Box 400
Burlington, ON L7R 3Y3

T: 905-639-1222
F: 905-632-6977

It’s not a bubble – It’s a devastating storm

Real Estate Bubble?

Real estate lawyer, closing costs

I believe it is everyone’s right to have a safe and affordable home to raise a family.  The reality in today’s economy is quite the opposite.  I see people making desperate decisions to buy a home out of their price range for fear that they won’t be able to afford anything similar if they wait.  They are maximizing their credit cards, borrowing more from parents and cutting back on certain activities for their children just to make ends meet.

I had recently quoted Benjamin Tal, Chief Economist with CIBC World Markets, who spoke of a generation that is going to “inherit inequality”.  I won’t even attempt to explore the depth of the subject, but suffice it to say that there is a growing demand for rental units.  Just yesterday, I had a client that is selling her home because she can’t afford to live in it.  Yes, she intends to bank the little amount of equity she will get out of selling her home and rent.  I see this trend more and more.

The implication of what Tal was saying is that if you are not a homeowner now that you may not likely be a homeowner in the near future given the trend of skyrocketing home prices.  And, today’s Globe and Mail article about Ontario pushing Ottawa for some form of tax on speculative buyers or increasing the capital gains tax is a sign that governments recognize the seriousness of the problem.

Just think, you have people buying properties based on speculation of profiting, low inventory of homes on the market and first-time home buyers trying to get into the market.  How does a first-time home buyer compete with an investor with very few homes for sale?

Don’t get me wrong.  I don’t criticize investors.  After all, they have children for whom they want to provide a home and ensure a financial nest egg for themselves.  I get it.  But, if average people can’t afford to buy their own home and must turn to renting, that will put a corresponding strain on all levels of government, primarily provincial and municipal, to provide affordable housing.  It is a storm brewing like no other.

Ironically, I know that builders are in tune with this growing demand for rental housing units and have already started building a mix of condominiums and rental apartments.  The only issue is that market pricing remains an issue because demand is growing for good rental units.

My question is whether all levels of government can create a unified strategy in concert with builders whereby builders have the right incentives to build affordable rental units for growing families?  A grand idea perhaps, but if it works, would this not be a more cost-effective alternative to managing government deficits and pressure to keep increasing tax revenues?  Just saying……

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Burlington, Hamilton, Milton, Mississauga, Guelph

What does Trump have to do with Real Estate and homeownership in the GTA?

Real Estate and Homeownership in the GTA

Benjamin Tal, Deputy Chief Economist with CIBC World Markets, made a spectacular presentation to kick off the Landpro conference today at the Paramount Centre in Vaughn.

Tal spoke about the economy and real estate outlook for the GTA.

Tal started with Trump’s election and ended with the rise of housing prices, the trend towards a reduction in the number of CMHC insured properties and the need for “purpose built” developments (aka the need for more rental units).

Taking liberty with Tal’s insightful analysis, he believes Trump will only last 1 term as President because his expressed and demonstrated approach to creating more “jobs” (his mantra) is inconsistent with the economic realities occurring in the USA and the world.  He called Trump “inflationary” and predicted that Trump will fail in creating more jobs and trade.

Tal pointed out that the manufacturing sector in the US is outperforming Canada which should be the exact opposite given our much lower dollar.  But overall, manufacturing jobs have been falling long before China entered the WTO.

The number of American workers receiving disability benefits in 2016 outnumbered the number of production workers.  Government tax cuts reduce revenue which increases government borrowing.

Canada’s share of low paying jobs is rising.  And although there is an availability of good jobs, Tal said employers can’t find workers with the right skill sets to perform those jobs.

Canadian manufacturing is near full capacity and needs investment to lift exports.

From 2015 to 2025, there will be approximately $800 billion in the transference of wealth in the form of inheritances which Tal labelled as “inheriting inequality”.   This is tied to an individual’s ability to buy homes at their current prices and future prices.

The Bank of Canada’s real motive in keeping interest rates low is to support our weak dollar and not necessarily to promote private homeownership.

Rising home prices in Toronto are forcing people to look further and further away from City centre to find homes within their price range.  Although low-interest rates continue to promote new homeownership, the high cost of homes coupled with the new federal mortgage rules constricting the number of CMHC insured homes, Tal predicts will create an increased demand for rental units.

Sorry, Tal if I butchered your fantastic presentation – it was refreshing and insightful.

Real Estate Lawyers for your homeownership purchase or sale »

Article by Real Estate Lawyer Karmel Sakran »

The Principle Residence Exemption is under attack – flipping homes

The Principle Residence Exemption and flipping homes

Principle Until recently, when you sold your principle residence you did not have to declare it on your tax return and you were not at risk of paying income tax on its increase in value from the original purchase price.

As of October 3, 2016, the federal government requires you to report the sale of your principle residence to determine a pattern of whether the principle residence exemption should be disallowed.

According to the Minister of Finance, Bill Morneau, the federal government wants to target “perceived abuses of the PRE” or, in other words, to target individuals that flip homes for profit as a source of taxable income.

And, despite the fact that the federal government established a number of legislative measures and CRA administrative changes (all of which I leave to your accountant to explain), the fact is there remains much uncertainty on who will not qualify for the PRE.

The biggest difficulty for CRA is that making a “profit” (being the growth or increase in equity) has always been a natural aspect of homeownership.  We use the increased equity to “upsize” and even to “downsize” and bank the excess.  The point is that we have always used our home as a source of advancement and retirement.

The financial environment for homeowners is now uncertain.  Homeowners are now faced with the prospect of having to justify why they are entitled to the increased equity from the sale of their home and why they qualify for the principle residence exemption.

How will CRA determine when the growth or equity from the sale of a home constitutes taxable income?

Will someone’s intentions and personal reasons factor into the equation?  If so, what personal reasons will qualify?  I didn’t like the neighbourhood?  The school?  The neighbours?  Change in employment?  Or, I simply changed my mind about the home?

How much profit is too much before it becomes taxable income?  $10,000?  $100,000.00?

How long must a person or family live in the home before it’s sold?  Six months?  Six years?  And how much renovation is too much?  Interior non-structural improvements?  A one-room addition?  Demolition and complete re-construction?

I find it difficult to imagine regulations that will define all these questions into an objective application for all situations.

As an aside, those that claim the PRE means that they are not entitled to claim or deduct the substantial costs associated with buying or selling a principle residence, like:

  • realtor and legal fees;
  • land transfer tax;
  • title insurance;
  • mortgage interest and pre-payment penalties;
  • relocation costs;
  • repairs and improvements/renovation;
  • municipal taxes;
  • development costs;
  • and more.

And, you are not eligible to claim the H.S.T. rebate when it’s your principle residence.

The fact is that there is an imbalance of power between CRA and taxpayers. I suspect that many taxpayers will be forced to settle and pay tax against some or all of the growth/increased equity generated from the sale of their home just to get CRA off their backs.

It is a murky area that may inhibit one’s right to mobility and investment in one’s own home. Trying to capture a few “perceived abusers” will risk eroding pride of homeownership and cause harm and harassment to a greater number of well-intentioned individuals.

So what if a person makes a living flipping homes?  If it is their principle residence, why should they not qualify for the principle residence exemption?  I say leave the principle residence exemption alone, subject only to the authenticity of one’s residence.

Real Estate Lawyers for Burlington, Hamilton, Milton, Mississauga, Guelph »

“WHY” the new stress test lending requirements?

Home Buyers stress Test –  Real Estate

Home Buyers Stress Test -  Real Estate 

The federal government, bless their heart, have implemented a financial stress test for homebuyers effective October 17, 2016.

Qualifying for a mortgage has always been a “stress test” for borrowers but we never called it that.  The federal government tweaked their lending rules in four substantive ways:

  1. Banks now have to assess mortgage applicants against the Bank of Canada’s five-year fixed rate (currently 4.64%);
  2. No more than 39% of your total household income can go towards your housing costs such as utilities, property taxes, mortgage and home insurance;
  3. You must have a minimum credit rating of 600; and,
  4. Amortization must not exceed 25 years.

In the past, homebuyers could qualify under the bank’s five-year variable rate (currently under 3% for most financial lenders).  Now, of course, the new lending rules mean that many new homebuyers or high ratio borrowers will have to wait until they have a larger down payment or consider buying a cheaper home.

Quite frankly, the new lending rules are most unfair to first-time homebuyers.  Others before them got away with much more lenient lending rules and, as a result, were able to buy their new home.  That doorway has now been closed.

Why the new lending rules by the federal government?  Many know that the federal government, through the Canada Mortgage and Housing Corporation (“CMHC”), insures high ratio lenders.  Those are individuals that put less than 20% and more than 5% down on the purchase of a home.

The federal government has legislated a $600 billion limit on the total dollar amount of its mortgage insured loans and, the current balance of CMHC insured outstanding loans sits at $523 billion as of 2016 Q2.  The upper cap of $600 billion is almost maxed out.

In looking at the CMHC Mortgage Loan Insurance Highlights 2002 – 2016 Q2 it appears to me that the federal government wants to stabilize the risk to itself and to homeowners from the volatility of the market.

Although there are several CMHC indicators which remain consistent (such as the average loan to value ratio of CMHC insured homes remaining between 53% to 55%), the soft and unpredictable economy coupled with other CMHC indicators suggest borrowers are being more aggressive in their borrowing habits.  In my view, this trend is concerning to the federal government.

Looking at some CMHC statistics and specifically, CMHC insured households:

  • the average loan amount per household prior to 2015 sat around $140,000 and increased in 2015 to $175,000; that’s an average increase of $35,000 insured per household;
  • the number of insured households per quarter:
    • 2013 Q1 – 52,000;
    • 2013 Q3 – 114,000 (highest prior to 2016 Q2);
    • 2014 to 2015 Q4 range of 50,000 to a high of 91,000;
    • 2016 Q1 dropped to 63,700 households; then,
    • 2016 Q2 dramatic spike to 117,500 newly insured homes (highest ever).

When you consider the recent spike of $35,000 in the average dollar amount insured per household and the highest jump ever in 2016 Q2 to 117,500 of insured households, these raise huge concerns for the federal government.  Clearly, first-time homebuyers are caught up in the buying frenzy and bidding wars.  With the stagnant low interest rates, people are making more and more aggressive bids, including high ratio borrowers which is likely contributing to the overall increase in the average insured amount per household.

When you also consider the borrowing trend of high ratio borrowers insured by CMHC/federal government alongside a recent report (at huffingtonpost) that downgraded Canada’s economic growth forecast to 1.4% for 2016, plus the fact that the Bank of Canada is hard pressed to increase its lending rate, the federal government stepped in to tighten its lending rules for high ratio (and low ratio) borrowers.

In the event the “bubble bursts” in the housing market, the symptom will be the decline or attrition in housing prices while the substantive socio-economic impact will be families losing their home.  This is what, I suspect, the federal government wants to avoid.

Article written by Karmel Sakran

Buying a home? Talk to a Real Estate Lawyer »

Burlington, Hamilton, Milton, Mississauga, Guelph

Oct. 19, 2016

Boomers Plus Seminar – should you cash in on your home?

Boomers Plus Seminar – should you cash in on your home?


Come out to the BOOMERS PLUS SEMINAR to be held on:

TOPIC: Is it a good time to sell or buy your home in today’s market?

September 29, 2016 from 7pm to 9pm at

REMAX office located at 4121 Fairview Street, Burlington


Selling a home? Talk to a Real Estate Lawyer »

Burlington, Hamilton, Milton, Mississauga, Guelph



Thanks to all the runners, donors and volunteers, we raised $2,500 for the YMCA Strong Kids Campaign!

It was a fun way to start Canada Day and everyone had a blast.  The kids did the 1km run first with all adults waiting for the 5km start.

Here is a short video of the action.

Need to talk to aLawyer »

Green Germann Sakran (GGS) is a law firm with a long tradition of excellence in serving its clients with a combined experience of more than 70 years. GGS Lawyers specialize in the areas of Real Estate, Wills, Trusts and EstatesCorporate and CommercialFamily LawCivil Litigation and Personal Injury. We are a law firm with a long tradition of excellence in serving its clients. Its core founders were two brothers, Donald Green and Blair Green along with… Read more

Burlington, Hamilton, Milton, Mississauga, Guelph