Dumb, Dumber and Landlord licensing.

Landlords are easy targets for governments who wish to drum up votes. One example is limiting the rental increase to .7% in a year in which the HST was implemented. It is obvious that licensing small landlords will:

- increase the cost of being a landlord. Sooner or later this cost will be passed on to the tenant in the form of increased rents;

- decrease the supply of rental housing, which will of course increase rents.

So, we know that licensing landlords will hurt renters.

That said, I suspect that in this case, this is really an attack on student housing. Once again, this is dumb. Students at the University of Waterloo and Laurier bring an enormous amount of money into the local economy. The last thing the city should do is make it more difficult for them to find housing.

The taxpayers of the City of Waterloo are being hurt by their City Council – but, hey what would you expect?

This issue also came up in the October municipal elections. It was pathetic to see candidates trying to get votes from tenants by advocating the licensing of landlords.

http://www.landlordrelief.ca/2010/10/31/tenants-rights-raised-at-toronto-danforth-debate/

More importantly though is about rent control.

Without rent control there may as well not be any guidelines or rules about terminating tenancies. Because withot rent controls a landlord would simply have to increase the rent to an impossible to afford level resulting in the tenant movign. Then the landlord could reduce the rent back to reasonable market values for the next tenant.

Real estate agent jailed, fined $1M for grow-op scheme

NEWMARKET–A Markham real estate agent who turned 54 rented homes into Canada’s largest-known illegal marijuana grow-op was sentenced Tuesday to five years in prison and fined more than $1 million.
Phu Nhi (John) Trac, 46, said only, “No, Your Honour, thank you,” when asked before sentencing if he had anything to say.
Charges were dropped against his wife, Yvonne Le, and brother, Phu Nhut (Mike) Trac, who sat impassively with him on a bench behind the lawyers.
If John Trac fails to pay the fines within two years, he must serve another five years, Ontario Superior Court Justice Michael Brown ruled.
“This was an organized, sophisticated criminal enterprise,” the judge said. Trac’s “degree of responsibility and involvement was substantial and essential to the operation.”
John Trac’s lead accomplice, Sutton Group real estate agent Sau San (Jennifer) Wu, fled the city and remains wanted by police, a pre-sentence hearing was told in May.
Brown sentenced Trac to prison terms totalling 14 years with some to be served concurrently, making the actual jail time five years, on convictions for drug trafficking, money laundering, income tax evasion and electricity theft. He recently had assets worth $2.5 million returned to him by the court, said Crown attorney Lisa Mathews and continued to practise real estate until his licence was revoked recently.
He appears to have the means to pay the fines and avoid the extra jail term, she said.
At the same time, his debts with Revenue Canada for unpaid taxes exceed $1 million and interest penalties against him continue to mount, court was told.
The fines are linked to tax evasion, withholding GST payments on real estate commissions and crime profit.
Trac came to Canada at 16 in 1979 as one of the “boat people” refugees who fled Vietnam after the fall of Saigon and ended up in a camp in Malaysia.
He worked his way through high school and university, earning a B.Sc. in electrical engineering from the University of Toronto and becoming a top performing agent at Living Realty.
Between 2001 and 2002, he also masterminded a pot-farming operation, renting homes from unsuspecting small landlords in affluent neighbourhoods across the GTA.
The police task force that busted him recovered more than 27,550 plants worth more than $30 million, the biggest case of its type in the country at the time.
Last December, Trac pleaded guilty to producing and possessing marijuana for the purpose of trafficking, money laundering, plus income tax and GST evasion.
He later tried to take back his guilty plea, but Justice Michael Brown rejected his motion.
The Crown was also asking that Trac be forced to pay restitution of $257,627.26 to 11 homeowner victims, but the judge declined, saying “contentious” legal issues remain in linking Trac directly with the losses of the homeowners.
“We’re pretty upset about that,” said homeowner Luciano De Luca of Oakville.
The judge said other avenues remain open to the homeowners to seek compensation.
“He was a micromanager of his criminal organization,” York Region Det. David said at the first day of Trac’s sentencing hearing earlier this year in Ontario Superior Court in Newmarket.
The rental agreements gave the first clues to the scheme. Similar tenant names, business references and previous addresses would appear, some real, others bogus, most linked to Trac or his associates.
But it was the wiretaps that showed Trac involved in every aspect of the massive scheme, Noseworthy said.
He gave his underlings advice on how to avoid detection. He took an interest in how the plants were progressing and in the price of marijuan

A former Richmond Hill real estate agent who fled Canada in 2006 before facing trial on numerous drug charges, is back in police custody in Canada after being spotted on the Internet advertising a daycare in Bucharest.

The drug charges originate from an investigation that began in 2000 in response to an increase in large-scale indoor marijuana grow operations in York region. Police allege that while Sau San “Jennifer” Wu was operating as a licensed real estate agent, she procured rental properties to be used by marijuana growers.

Through a joint investigation that included — among others — York Regional Police, Toronto Police, the OPP, the RCMP and Canada Revenue Agency, Ms. Wu was linked to more than 55 indoor marijuana grow operations spanning the GTA and police arrested her in 2002.

Detective Dave Noseworthy said no one suspected Ms. Wu and her accomplice, who was also a real estate agent. Police allege she and her partner would seek out other agents looking to rent a property, provide a fictitious application form for a tenant and facilitate the lease agreement. Then, they would allegedly offer the house to “farmers” for marijuana grow operations and control the utility and rent payments.

But when it came time for Ms. Wu to stand trial in February 2006, she had fled the country.

Det. Noseworthy never gave up trying to find her and would periodically search the Internet for leads. On Nov. 19, 2010, he found a picture of Ms. Wu on an advertisement for a daycare she was operating in Bucharest.

Det. Noseworthy was among officers who took custody of Ms. Wu from Romanian authorities in Bucharest. They arrived at Pearson International Airport on Friday.

He said Ms. Wu, 46, has a standing in Romania similar to permanent residency and could have fought extradition, but she chose to waive this right, which sped up the process. Among the charges she is facing are possession of proceeds of crime, theft of electricity, a variety of tax evasion charges and failure to appear in court.

Ms. Wu was scheduled to appear before the Ontario Court of Justice in Newmarket on Monday. Her case was put over to another day, Det. Noseworthy said.

“Every other person who had been arrested in relation to the case had been prosecuted and served their time and she was still free,” Det. Noseworthy said. “It’s always in the back of your mind — that you want to tie this loose end up and finally put it to bed — and it’s satisfying. It’s very satisfying.”

National Post
adonnelly@nationalpost.com

If you want to see another way that governments hurt tenants see the Toronto tenant tax:

http://www.youtube.com/votejohnrichardson#p/a/u/0/4Yp2nNXdNE4

Tenant issues a hot topic at Ward 31 debate
Bedbugs among key concerns identified

Tenant issues were a big topic of concern at the Ward 31 (Beaches-East York) debate held Thursday, Oct. 7, at Gower Park Place.

The non-profit housing building near Victoria Park Avenue and Dawes Road hosted the debate organized by the Scarborough Civic Action Network. Nearly 50 people came out to hear six of the seven council candidates answer questions about safety, taxes and housing.

The first question touched on the problem of bedbugs and asked candidates whether they would be in favour of mandatory landlord licensing.

Incumbent Janet Davis said she has been working with tenants for many years and was in favour of the idea.

“We need to look at everything possible to make them look after their buildings and clean up bedbugs,” she said. “We spend so much money enforcing property standards bylaws, your tax dollars should not be used to force landlords to clean up buildings.”

Brenda MacDonald is in favour of taking a more aggressive approach to dealing with landlords who don’t maintain their properties.

“I do believe licensing of landlords would be appropriate, but I’m not sure how fast our legislation can put that into place,” she said, adding something needs to be done immediately to address tenants’ concerns.

Rasal Rahman knows firsthand the issues tenants face as he lives in a building that has some problems.

“Landlords should be responsible for these things, as well as the city too,” he said.

Donna Braniff and Robert Walker were also in favour of licensing, while Leonard Subotich was the lone voice against.

“I’m opposed to licensing landlords,” he said. “It’s just another drag on businesses.”

Another question posed about housing was how the candidates would work to alleviate the long waiting list for affordable housing in the city.

Most candidates believed this is a problem that needs all levels of government to come together on.

Some also thought it was a place for private developers too.

“The people of Toronto have a lot of building going on…Instead of having the builders donate money, have them put affordable housing into those units,” Braniff said.

Davis said this is a problem the city has tried to address, but without the upper levels of government there to support them it’s difficult.

Candidates also presented their visions for making the ward a safer place.

“Safety is a concern…mostly in this ward along Danforth where there are so many for lease buildings,” MacDonald said, adding she’d like to see more police walking or biking the beat to be a more visible presence.

Walker would like to see more people on the street and more lighting, and more enforcement in known trouble areas.

“We can go to the places where we know there’s crime and shut them down,” he said.

Braniff said she was part of a safety audit done on Main Street and nothing came of it.

“The community needs a better safety plan in place,” she said. “We in the community are dealing with the drug dealing and the prostitution.”

Davis pointed out crime statistics have gone down in 54 Division in recent years.

“Do we have some challenging areas? Yes. I agree there are some spots on the Danforth that we should shut down,” she said. “The Danforth is getting much better. It’s beautiful.”

For many candidates the fiscal situation at city hall is another big concern.

“Taxes have gone up because city hall doesn’t take care of our money. Services have gone down because city hall is not spending our money on services,” Walker said. “What I would do is find out where we’re overspending. The city budget needs to be gone through line by line.”

Braniff doesn’t believe taxpayers are getting value for money while MacDonald said more disclosure is needed.

Davis defended the city budget and pointed out 75 per cent of the operating budget is for police, fire, EMS, TTC and mandatory social services.

“So when people talk about rolling back taxes and cutting taxes you should ask them what they’ll cut to achieve that,” she said. “There are not easy solutions, but you’re being given false, simple solutions.”

Recreation services and child care were also discussed.

Candidate Peter Agaliotis was absent while Rahman left early.

How to go? Full service realtor or discount broker

October 25, 2010

Stephen Hodge may someday be a rarity in the real estate business.

As a full service broker with upscale realty firm Chestnut Park, he provides an array of services to his client.

That could include picking them up to show homes, listing properties, conducting open houses and sometimes even staging the home to make it more appealing to a buyer.

“People underestimate the amount of work that goes into selling a home,” says Hodge, who works with his wife Christine, who is also an agent.

“Selling a house isn’t like selling anything else, there’s a tremendous amount of knowledge required.”

For their efforts the Hodges charge the going rate, which could be as much as 5 per cent of the value of a home. But the dominance of the full service broker in Canada may be on the wane after an agreement tabled Monday between the Competition Bureau and organized real estate opened the market to discount brokers.

The deal means that discount agents who continue to simply list their client’s home on the Multiple Listing Service and do nothing else will be protected.

The deal will likely mean cheaper fees and a wider range of real estate services for Canadians, ensuring a greater mix of full service and discount brokers.

“CREA shall not adopt, maintain, or enforce any rules that deny the ability of members to provide mere postings for sellers, or that discriminate against members because they offer, or wish to offer, mere postings for sellers,” says the agreement made public by the federal Competition Tribunal.

Details of the 10- year agreement boil down to just a page in length. But it has the power to shake up the industry in favour of consumers.

Some brokers already offer listing services for as low as $109, but they operate in a grey area. Other discounters have been anxiously waiting for the new rule changes before venturing into the market.

The new agreement means that all agents can offer the services without fear of reprisal from the Canadian Real Estate Association, which owns the MLS, where more than 90 per cent of the sales are made.

But the attention to discounters have not sat well with full service agents such as Hodge.

“I think there will be a opportunity for consumers to save money, and that’s good, but what I see is a lot of attention focused on what you can save, rather than what agents bring to the table,” says Hodge.

In a down market for example, agents will be able to move slow-moving homes faster than people two try to sell their properties themselves, he says.

“In a market like today it will take a lot more effort to sell that home and that’s where the expertise counts,” says Hodge.

Despite Hodge’s decision to provide full service, Queen’s University professor John Andrew says the new rules mean the standard 5 per cent commission rate many buyers pay for selling their home will likely not be the normal cost of doing business in the future.

“The same thing happened to travel agents when the internet came along. People booked their own flights,” said Andrew.

“The public is doing a lot of the work. And when you look at what other professionals charge in the real estate transaction such as lawyers, compared to the real estate agent, the gap is huge.”

Phil Soper, CEO of Royal LePage, acknowledges that real estate agents don’t always have the best reputation.

“There is a sense that they make a lot of money for little work and that doesn’t elicit a lot of compassion. But a good, knowledgable agent can make a tremendous difference in the transaction,” said Soper.

Soper said there will always be a need for full service brokerages because not all consumers want to do the work themselves. “They will still have a choice, and overwhelming, many people still choose an agent to guide them through what can be a very complicated process.”

Andrews said the landscape has already changed dramatically since Competition Bureau Commissioner Melanie Aitken decided to challenge CREA earlier this year.

Aitken wanted to open up the market to more competition, and thought some rules were too restrictive. In the United States, Internet brokers had historically been blocked from accessing MLS sites managed by the National Association of Realtors. But a 2005 lawsuit by the federal Justice Department opened up the market.

The agreement registered on Monday means that the two sides will not have to show up for a date next April at the Competition Tribunal.

The new agreement also makes sure that private sellers who use the MLS are not shut out.

CREA is also prevented from enacting rules that would prevent listing a seller’s contact information in the realtor’s only section of the site. This would allow sellers who want to sell their homes privately to be contacted.

The deal also sets a baseline rate for compensation for buyer’s agents who bring in a client to the vendor. They must pay them at least one cent.

Hodge, meanwhile, said he will still keep offering full services to his clients.

“We allow our clients to focus on their lives so they don’t waste their time, that they get the home that suits them. And I think they appreciate that.”

How much could you save?

The difference in costs varies for real estate services. Here are two examples.

Full service broker:

Although prices are negotiable, the cost of selling your home could be as much as 5 per cent of the selling price.

Under a traditional method, 2.5 per cent of the sale price would go to the selling broker and 2.5 per cent to the buying broker.

For a $400,000 home that works out to $20,000 – $10,000 to the listing broker and $10,000 to the buyer’s broker.

Discount broker:

Discount models vary. But if you decided to sell your home yourself and list it on the MLS, you could pay as little as $109.

In this case you would save the $10,000 you would normally pay a listing broker who would do all the work for you.

You would have to show the home yourself and do all the negotiating. You would also incur expenses such as the $109 listing fee, any advertising, cost to make up feature sheets or signs, and time off to present the home.

It would be up to you to determine how much you want to pay to the buyer’s broker.

If the buyer contacts you directly and without an agent, then you have possibly saved yourself another $10,000.

However, if the buyer comes in with a realtor, that realtor will want to be compensated. That could work out to 2.5 per cent or less, depending on what you stipulate.

Under the new rules, you must pay at least 1 cent to the realtor. However, at that level of compensation, don’t expect them to make a beeline for your property.

“Real estate agents who find a buyer for houses listed on the MLS by flat-fee agents can expect to be paid something for their effort. But in some cases, that payment will be one, shiny penny.

That is the minimum amount set out in an agreement between the federal Competition Bureau and the Canadian Real Estate Association in an agreement ratified by CREA boards. The deal, which puts an end to a year-long battle between the two, ensures that homeowners can pay a broker a flat fee to have their homes listed on the Multiple Listing Service.

The agreement, released in full on Monday after it was ratified by CREA on Sunday, ensures that brokers who post MLS listings for a flat fee will be able to operate without interference for at least the next 10 years.

CREA changed its rules earlier this year to allow alternative business models to compete with the traditional commission-based structure. But Competition Commissioner Melanie Aitken was worried the association might arbitrarily change its rules down the road to stifle competition and make it difficult for low-cost operators to exist.

The new agreement also ensures that sellers who opt for a flat-fee listing can have their contact information made available to interested buyers, through a link on the MLS listing. It also dictates that the seller must offer a finder’s fee for any agent who brings them a buyer – but stipulates only it must be more than zero.

As before, only licensed brokers will be allowed to post MLS listings.

“[The settlement] reaffirms the commitment to the rule of law and our commitment to competition,” said Georges Pahud, president of CREA.

Ms. Aitken said the deal ensures Canadians will be able to choose between various service models. “For Canadian homeowners, it ensures that they will have the freedom to choose which services they want from a real estate agent and to pay for only those services,” she said. “For real estate agents, it ensures that they will be able to offer the variety of services and prices that meet the needs of consumers.”

A host of services have already started, with some offering to post listings for as little as $100. Joe William, an Ottawa broker, has been offering one-cent commissions for most of this year.

“My customers aren’t interested in paying commissions,” he said. “So that’s why we use that price. And I’m telling you, some agents write to me asking for that penny.”

Propertyguys.com, the country’s largest for-sale-by-owner company, is using an Ontario broker to post its customers’ listings and offers real estate agents a finder fee of $1 – although it encourages its customers to negotiate a commission with anyone who finds them a buyer.

While several of the flat-fee operators have worked quietly on the fringes for more than a year, Richard Rutkowski of Wiktor Realty Corp. said now that the changes are official, he will be able to launch formal complaints about agents who refuse to show his low-commission, flat-fee listings.

Agents are obligated to show any house in which their client may be interested, he said, but many take a pass on his listings because of his business model. “Now we get to step it up and make sure agents are playing by the rules,” he said. “We can complain to regulators if agents are bad-mouthing us or avoiding our properties.”

Phil Soper, president of Royal LePage, said the deal was a reasonable one. However, he said its contents are almost less important than the fact that a deal was reached after a year of difficult negotiations.

“You have no idea how distracting this has been, at a time when the market itself has been tumultuous – it was expanding rapidly, people were worried about bubbles and then it contracts,” he said. “Against this backdrop, you have all this disagreement. It was very distracting.”

http://www.theglobeandmail.com/report-on-business/economy/housing/real-estate-deal-opens-up-closed-shop/article1771467/