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What do you do when you find the perfect home, but you haven’t sold your current home? Most people consider putting an offer on their dream home, with a “subject to the sale of the buyer’s home” condition. However, this scenario is probably not your best option.

A “subject to sale” condition means that the buyer’s offer is conditional on them selling their own home – if they don’t sell their home by the deadline on the condition, the deal dies. If the seller is agreeable to a “subject to sale” condition, they will typically add a clause of their own, so if the sellers receive and accept another offer, the original buyers will have to remove all of their conditions within a certain period of time (typically 24-72 hours) or the new buyers get it.

So, what’s wrong with a “subject to sale” condition?

From the seller’s perspective, a pending offer – even if it is “only” a “subject to sale” offer – can deter other buyers from considering the home. While you don’t have to disclose the fact that you’re pending until a new buyer is interested, with the amount of inventory on the market right now, this can be enough to make a buyer look another way.

From the buyer’s perspective, this type of condition does not put you in a strong negotiating position. Think about it, you have to convince the sellers to accept an offer that is conditional on another home that they know very little about selling. This means your offer is going to have to be strong in every other way, especially price. They’re also going to want you to remove any other conditions (like financing and inspection) quickly, which means you could easily end up paying for an inspection, only to lose the home to another party. Now you also have to sell your existing home, and your motivation to sell just went waaaaay up. This could mean paying a premium for your new home, and selling for less than you could otherwise.

So why would anyone write or accept an offer with a “subject to sale” condition?

It all depends on market conditions, and the properties in question. Without going into every possible scenario, a seller may accept this type offer because they can negotiate hard on the other points. For one thing, an offer with a “subject to sale” condition is better than no offer at all in most cases. As long as the time clause you negotiate is relatively short, a “subject to sale” offer probably won’t scare away other buyers. With a good negotiator representing you in the right market conditions, a “subject to sale” offer can actually motivate other potential buyers to write better offers.

If you’ve truly find your dream home, and it’s unlikely you’ll find anything else you like, then a “subject to sale” condition may be your only option. You need to keep in mind that the house is really still on the market, as long as your offer is “subject to sale” and you could find yourself with 24 or 48 hours to remove your conditions – can you get financing for two homes in 48 hours? If you absolutely must have the home, and money is no object, then go ahead and put in an offer that is subject to the sale of your current home. But think about this… if it really is the perfect home, and you’d remove your condition if the seller’s get another offer anyway, why don’t you just write a strong offer in the first place, and try and get all the other things you want such as a possession date that works for you and a good price?

An even better scenario, is to get your existing home sold first and then make a strong offer without the risk of owning two homes. Keep in mind of course all this information is very general, not specific to any situation, and will change with the market.

When someone dies and they own real estate, the number one question we are asked is: “What about timing? When can we sell the real estate?”

Answer: It depends on several factors.

When land is owned by a deceased person, it can only be transferred after a Grant or Court Order is issued. This process can take many months.

In the meantime, significant steps can be taken to get the property ready for sale, list the property with a realtor and entertain and accept offers. The authorized legal representative of the estate (commonly referred to as the Executor(trix) and now referred to as the Personal Representative), has the authority, responsibility and the duty to care for and manage the property until it can be transferred. These duties extend to ensuring the property is secure, utilities and other expenses paid, and insurance is maintained. If the property is vacant, it is essential the Personal Representative contact the insurance company to request and obtain a vacancy endorsement or you may have no valid insurance.

Once the property is ready for sale, it can be listed with your realtor, provided all necessary consents are in place. This includes the consent of the Public Trustee where there are minor beneficiaries and the consent of all other beneficiaries in certain circumstances. Please note the Public Trustee will not consent to any actual sale until a Grant is issued by the Court.

If an offer is received and accepted before the official Court Order is obtained to allow the transfer, then special considerations apply. Special wording can be inserted in the Real Estate Purchase Contract that acknowledges this is an estate sale and that title can only be transferred once the Court Order is obtained. The parties can then either agree to delay completion and possession until the Court Order is issued, or agree to tenancy possession so the buyers can occupy the property right away and then transfer the title once the Court Order is obtained. Typically, if the tenancy is granted, the buyer will pay some form of “rent”; often by paying the amount they would pay on a new mortgage. In special cases, at an added cost, it is possible to obtain an interim Court Order allowing the actual transfer of the land to take place before the Grant is issued.

From the buyer’s perspective, when buying property from an estate, make sure you ask many questions regarding the status of the Court application. It can sometimes take several months before the actual Court Order is issued. During that time, your mortgage commitment may expire and you will be subject to the prevailing mortgage rates at the time the commitment expires. Generally speaking, if the application for a Court Order has actually been submitted to the Courts, the typical time required for a Grant is 8 weeks or less. However, even this can be prolonged if there are errors in the application.

This article is meant as a general discussion of topics in this area. It is not meant to offer specific legal advice to anyone as individual circumstances can have an impact on each and every situation.

While owning investment property has its share of benefits, including stable income to pay your mortgage, some aspects of being a landlord can be challenging, especially when you encounter problems with a tenant.

Whether the tenant has breached the tenancy agreement, or conducted illegal activity on the premises—you may be confronted with a situation where you need to evict them from the property.

Before proceeding with eviction, it’s important to familiarize yourself with the Residential Tenancies Act to ensure that you are following the proper eviction process in Alberta.

Landlord and Tenant Responsibilities

When a landlord and tenant enter a residential tenancy agreement, both parties agree that the tenant will lease property from the landlord for a specific period of time.

Additionally, each party will take on certain responsibilities and obligations during the tenancy.

General covenants (agreements) for a landlord include:

• The leased premises must be available to the tenant on the day the tenancy is set to begin
• The landlord agrees not to interfere with the tenant’s peaceful enjoyment of the premises;
• And the property (house, apartment, townhouse etc.) must meet the minimum health requirements under the Public Health Act, Housing Regulation, and Minimum Housing and Health Standards

A tenant must adhere to the following covenants:

• They must pay rent when it is due
• The tenant cannot interfere with the landlord’s rights or that of their neighbours
• They cannot carry out illegal activity on the premises
• They cannot endanger those who share in the property
• They cannot cause severe damage to the property, and must keep the property in clean condition
• The tenant will vacate upon the expiration or termination of the tenancy

These are the basic obligations of a landlord and tenant as governed by the Residential Tenancies Act.

Additional responsibilities also apply to each party and may vary according to your tenancy agreement or unique rental situation.

Determining Cause for Eviction

In order to evict a tenant, there must be just cause to do so. This means they must have substantially breached the lease agreement, or violated one of the covenants listed above.

A landlord may send a 24-hour eviction notice if a tenant has:

• Caused severe damage to the property
• Committed physical assault or threatened violence

A 14-day notice is required for all other breaches to the lease agreement, including:

• Continued failure to pay rent when it is due
• Performing illegal acts on the premises
• Endangering others in the building

Serving an Eviction Notice

A landlord can serve a written eviction notice in person or by mail.

The notice should include:

• Reason for eviction
• The date that the tenant is expected to vacate
• The address of the premises
• Signature of the landlord or agent
• The amount of rent that is due when the notice is served and any other rent that may come due during the notice period, if any.

When serving the eviction notice in person, it’s recommended that you have a neutral third party with you to witness that the tenant received it.

Sending the notice by mail can pose a risk if the tenant does not pick it up or chooses to ignore it, in which case they could claim they did not receive the notice. Hand-delivering the notice ensures that the tenant received it and leaves no room for discrepancies at a later date.

In a 14-day notice, the tenant has 14 clear days to vacate the premises. For instance, if you deliver the notice on the 1st of the month, the tenant has until the 16th of the same month to move out. The day the eviction notice is served and the day the tenancy ends are not included as part of the 14 days.

When a Tenant Refuses to Leave the Property or Pay Damages

If you have provided sufficient notice to your tenant and you have evidence to support the lease violation, yet the tenant has not complied or objects the eviction, you may pursue other options.

A landlord can apply to the Residential Tenancy Dispute Resolution Service (RTDRS) or the Alberta court within 10 days after the termination date for a court order to confirm the termination and/or seek rent arrears or damages from a tenant.

In Conclusion

When a tenant substantially breaches your rental agreement, you may have grounds to evict them. If you follow proper eviction procedures, you may be fortunate enough for a tenant to comply and provide you with compensation for damages, or to vacate the property without hassle.

However, if your tenant ignores or objects your notice, you may want to consider applying to the RTDRS or provincial court for further resolution.

The Real Estate Council of Ontario (RECO, similar to RECA in Alberta & regulates the real estate industry) recently surveyed Ontario homeowners and found some surprising results; the average homeowner doesn’t know very much about the process of buying and selling a home. Ok, maybe it’s not that surprising, but there are definitely some basic points that you should understand before buying or selling a home.

Over 40% of the people surveyed wished they’d done something differently when they bought or sold their home including:

• having a better grasp of the process
• seeing more houses before buying
• having a home inspection
• spending more time researching
• interviewing real estate professionals before selecting one
• understanding the contracts involved better

When it comes to buying or selling a home, as with many things in life, a little extra preparation goes a long way.

So what are the most common misconceptions about buying and selling real estate?

1. The terms and conditions in contracts are standardized. Over half of the people surveyed believed buyer and seller representation agreements have standard terms like the length of the contract or the services offered. In Alberta, it is now mandatory to sign a buyer representation agreement when being represented by a real estate agent. There is certainly a lot of confusion about these agreements in Alberta, mostly because the requirement to sign one is so new. They have actually been around for a long time, and there are different types of agreements (exclusive and non-exclusive). It’s important to understand that there is no standard length of time, fee, or set of services that is included in a representation agreement whether it be for buying or selling a home.

2. After a contract is signed, there is a trial period where the contract can be cancelled. There is most certainly no trial period when it comes to contracts; once you’ve signed a contract you’ve agreed to everything that is written in the contract. Purchase contracts frequently have conditions that must be met in order for the deal to proceed, but you can’t back out just because you feel like it. For example, you’ve agreed to purchase home A, and have a condition subject to a home inspection. Another home comes on the market that you like better. You decide to make an offer on the new home, and just tell the owners of home A you didn’t like the results of the home inspection. That’s “not acting in good faith,” and if the sellers decided to sue you they would have a very good case. Don’t sign a contract you don’t intend to follow through on.

3. If you place a conditional offer on a home, and don’t proceed, you automatically get your deposit back. Many buyers don’t know there is a deposit required when buying a home – in most cases an initial deposit is given with the offer, or within a few days of the offer being accepted, and an additional deposit is given when conditions are removed. In most cases if you don’t remove your conditions, you get your deposit back, but that’s not always the case (see point 2 for one example). The holding and releasing of deposits has a complex and ever-changing set of rules, so make sure you ask before giving a deposit.

4. Signing an agreement with one agent doesn’t limit you to working with that agent. This one really depends what you’ve signed. For example, if you’ve signed a non-exclusive buyer representation agreement, you have the option of working with other agents under non-exclusive agreements. If you’ve signed an exclusive agreement and chose to work with other agents, you’re at risk of owing more than one agent a commission when you decide to buy.

How do you avoid making these mistakes when buying or selling a home?

1. Do your homework. Reading this blog post is a great start, but there is certainly more to know. Check out the tips and tools on the RECA web site, and make sure you read this Consumer Relationships Guide. You’ll notice the very first sentence in the guide states: “Real estate professionals have a regulatory requirement to present and discuss this Guide with you.”

2. Find an agent you trust. Don’t just work with the first person you meet – interview agents, ask friends and family for recommendations. Check customer satisfaction ratings, don’t just read testimonials. If you’re thinking of working with a particular agent, Google their name and see what you find, have they been sanctioned or disciplined by RECA or other regulatory bodies? Also remember, everybody makes mistakes, if you find complaints about an agent or brokerage, ask them about them. The way an agent handles problems will tell you more about them than any testimonial.

3. Understand the contracts you’re signing. Most people think finding the right home, or the right buyer for their home, is the most complicated and difficult part of buying or selling real estate. Trust me, things get a lot more complicated when you don’t understand what you agreed to when you signed on the dotted line. Many agents will offer free consultations or seminars to explain what you’re going to need to know, before you need to know it. Contact us today to schedule a no obligation, one-on-one, “buying a home” consultation or “getting ready to sell” consultation with one of our awesome agents.

A little preparation goes a long way. Get prepared, find awesome representation, and the whole process of buying and selling real estate can actually be fun!

With Edmonton having the lowest tax rate in Canada and a steady increase in wages, it is no wonder investors are looking toward Edmonton’s lucrative real estate market. Unfortunately being a landlord is not as easy as one may think. Many actions have to be followed in accordance to the Residential Tenancies Act. Failure to act in regards to this law can have dire consequences.

We have put together a list of 4 legal documents that every landlord should have and when they should be appropriately used.

1. Residential Rental Application

A Residential Rental Application is used by landlords to collect information on potential renters. This document is very important as it helps screen possible tenants. Landlords can see the renter’s employment history, income, references and get written consent to do a credit and criminal background check. Some skip this step since it requires extra time and money; however not doing these screenings can result in getting the wrong tenant that is late on their payments or cause costly damages to the property.

*Tip: Many people put their friends as references so that they will give them a good word. Instead, try to get references from the renters past landlord. This will allow you to get a real glimpse of what type of tenant they are and if they are right for your property.

2. Residential Rental Agreement

Once you have found the right tenant, the next step is having both parties sign a Residential Rental Agreement. This contract clarifies the expectations for both parties during a residential tenancy and lowers the likelihood of any disputes or misunderstanding at a later date.

A Rental Agreement should include:

• Landlord, Tenant and Property Information: Contact information for both parties, as well as a description of the rental property.
• Lease Length: How long the tenancy will be, including whether it will automatically renew or if it is a fixed term, and notice details.
• Rent Price: How much the rent price will be per month, and if utilities are included. Also, if there is a fee for late payments and if the landlord requires a damage deposit.
• Permissions: This includes whether the landlord will permit certain things, such as smoking, pets, home businesses, or improvements to the rental property.
• Rules and Responsibilities: The responsibilities for the tenant and landlord, such as care and maintenance of the property, and overall expectations from both parties during the course of the lease period.

*Tip: Go through the lease with your tenant to ensure that they understand the terms and to answer any question they may have. Once signed by both parties give your tenant a copy of the agreement.

3. Rental Inspection Report

After the Residential Rental Agreement has been signed by both parties, landlords should do a walk-through of the residence with the tenant. This allows you to record the condition of the rented residence before the tenant moves in. When the tenant moves out you will have a reference of how the place looked and if any new damages have occurred you can deduct it from their damage deposit.

*Tip: Make sure you do the walk through with the tenant and have them sign the report. This will make the Tenant responsible if they caused any damage.

4. Eviction Notice

Even after doing your due diligence you may still be faced with a bad tenant that you have to evict. In cases where the tenant has severely damaged your property or physically assaulted you, you can give them a 24 Eviction Notice to vacate your property. In other cases such as late payment, the eviction process becomes more complex. In this case you will have to give the tenant a 14 day notice. When filling out the Eviction Notice for late payment ensure that you list how much rent was due, when it was due and property information.

*Tip: Evicting a tenant can be costly from the $75 filing fee for a hearing to hiring a bailiff to escort your tenant off your property. Plan ahead in case this happens to you by setting aside some extra money to cover these expenses.

Getting Started

Investing always has some risk to it, but being prepared by having these 4 legal documents will alleviate some of this risk. There are many resources that can get you started such as LawDepot the leading publisher of online legal documents. Whichever resource you choose, ensure you have these legal forms handy as you never know when you might need them.

As of October 3, 2016, the Government of Canada announced an administrative change to Canada Revenue Agency’s (CRA) reporting requirements for the sale of a principal residence.

When you sell your principal residence, usually you do not have to report the sale on your income tax and benefit return and you do not have to pay tax on any gain from the sale. This is the case if you are eligible for the full income tax exemption (principal residence exemption) because the property was your principal residence for every year you owned it.

Starting with the 2016 tax year, generally due by late April 2017, you will be required to report basic information (date of acquisition, proceeds of disposition and description of the property) on your income tax and benefit return when you sell your principal residence to claim the full principal residence exemption.

The principal residence exemption is an income tax benefit that generally provides you an exemption from tax on the capital gain realized when you sell the property that is your principal residence. Generally, the exemption applies for each year the property is designated as your principal residence.

If you have further questions about this change, visit the CRA website.