By Brian Madigan LL.B.

Ottawa recorded the lowest overall office vacancy rate in Canada in the third quarter, increasing from 5 percent to 5.8 percent year-over-year, according to a new CB Richard Ellis Ltd. Report.

In its National Office and Industrial Trends Third-Quarter Report, though, CBRE noted that the slight increase in Ottawa’s vacancy rate may actually be a good thing. The study read: “[This] bodes well for many area tenants, offering more options in what is typically a limited office market.

Looking forward, the nation’s capital appears poised for growth, as industry experts are beginning to see increasing deal velocity in Ottawa’s commercial market.”

Overall, the research showed that limited white-collar job creation and the addition of new inventory in larger markets fuelled an overall vacancy increase throughout Canada.

Large markets as Calgary, Toronto and Vancouver all reported large year-over-year increases, with Calgary’s soaring from 4.7 percent to a whopping 13.1 percent. John O’Bryan, vice chairman of CBRE, concludes, “Canada’s downtown office market is doubly burdened by a surplus of space, with buildings currently under construction and a swell of inventory that will continue to be added to the market — a reality not fully reflected in this quarter’s vacancy numbers.”

It is noteworthy of course that the Ottawa office market is dominated by the federal government and federal government agencies. Obviously, if there is going to be a recovery, it will first occur in that sector.

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Royal LePage Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com

By Brian Madigan LL.B.

The basic common law rules utilized to determine if an item is a fixture were set out in the Ontario case, Stack v. Eaton (1902) 4 OLR 335 (O.C.A.) as follows:

“(1) That articles not otherwise attached to the land than by their own weight are not to be considered as part of the land, unless the circumstances are such as to shew that they were intended to be part of the land.

(2) That articles affixed to the land even slightly are to be considered part of the land unless the circumstances are such as to shew that they were intended to continue chattels.

(3) That the circumstances necessary to be shewn to alter the prima facie character of the articles are circumstances which shew the degree of annexation and object of such annexation, which are patent to all to see.

(4) That the intention of the person affixing the article to the soil is material only in so far as it can be presumed from the degree and object of the annexation.”

So, let’s have another quick look at these rules:

1) if the item is not attached, it is presumed to be a chattel,

2) if the item is attached, it is presumed to be a fixture,

3) the presumption of the item being either a chattel or a fixture can be rebutted, if on visible inspection it may be seen:

a) the degree of annexation, and
b) the object of annexation.

4) the intention of the affixing party is not material, unless such intention can be determined, presumed or inferred simply by examination of the item itself.

That means if it’s attached, it’s probably a fixture. If it’s not attached, it’s probably a chattel. If the party placing the item upon the property was doing so to improve the property, then this item is a fixture. If there were no intention to improve the property, but the item was indeed affixed, then this item is still a chattel. Intention is to be inferred from examination of the item. And, there are two factors here: the degree (or amount) of annexation, and the object or purpose of the annexation.

You are not permitted to call outside evidence of intention. The real intention of the party is not relevant. The determination is to be made objectively on the basis of examination of the item.

So, that’s it. Those are the actual common law rules. Beyond that, legal practitioners will have to apply those rules and arrive at a determination based upon the application of the rules to the facts in a particular case.

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Royal LePage Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com

By Brian Madigan LL.B.

Who cares?

Really, this is a more complicated question than it might appear at first blush.

Let’s assume you have ten 50 cent goldfish in a tank, does it really matter all that much? On the other hand, I recently came across a situation where a vendor had $15,000 worth of rather rare and exotic fish species in an outdoor pond. At least now, the answer to the rather simple question is worth $15,000.

In an agreement of purchase and sale, we also have to assume that nothing was said about the fish. Certainly, the agreement would prevail. If the contract said they stay with the house, then they stay, and if the contract said the vendor could take them when he left, then he would be able to remove them.

The problem only becomes “tricky” when the agreement is silent on this point. Do they go with the land? Are they considered to be a fixture in some way? Or, are they chattels, such that they might be relocated?

To analyse this issue, we must consider:

• Where they are
• Their relationship the land
• Whether they are fixtures
• Whether they are chattels
• Whether they “go with the land”
• Whether they are domesticated in some way

Fish swimming in a Fish Bowl in the house

This is rather straightforward. The bowl is moveable. The fish in the bowl are also moveable, and there would be little or no expectation that they remain with the house, any more than the buyer would think that the seller should leave behind his TV.

Fish swimming in an Aquarium, built into the wall in the recreation room

This situation is a little bit tougher. The built-in aquarium is precisely that, “built-in”. That makes it a fixture. So, we have the actual tank built into the wall as a fixture, what about the stones in the bottom, the water, the filtration system, the pump, the aerator and so on? Certainly anything which is not simply ornamental or décor is considered to be a fixture. And, automatically all fixtures go with the house, unless something is said to the contrary. The fish themselves however still remain chattels.

Fish swimming in a bowl, aquarium or tank, where the business is sold

This situation is a little more confusing, but the legal answer is clear. If the vendor sells a business, any business; it doesn’t have to be an exotic fish warehouse, any regular run of the mill business will do. It could be a barbershop, a hair salon, a restaurant or a dental office. If the business is sold, then every chattel that might even remotely be used in the business is “deemed” to be part of the business and sold as a chattel that is included in the sale price unless the seller specifically excludes that particular item. So, any kind of fish in a hair salon, will go with the business unless the seller writes something into the contract to the contrary.

In this regard, you might want to refer to the definition of “business”, and the definition of “real estate” in the Real Estate and Business Brokers Act, 2002 (Ontario).

Fish swimming in a natural stream on the property

These fish are not really owned by the owner of the real property. They are wildlife. They are still part of nature. Either they are not really owned by anyone, or they are owned by everyone (in a public sense). These fish are just swimming through the stream. They may or may not be there on the date of closing, and nothing arises one way or the other, in terms of their presence or lack of it.

Historically, there is a distinction at common law between domesticated animals and those in a state of nature. The test seems to be whether the animals might return to their owner’s residence in the sense that they were fed and would frequently return on a regular basis. In this regard, there are owners of properties who consistently feed the same fish, and in these circumstances, they may be said to have domesticated some of the regulars. If they are “wildlife” or “domesticated”, the purchaser will have to acquire his own.

Fish swimming in a blocked, contained pond on the property

In this situation, the more modern laws treat these fish as chattels. They could be subject to a chattel mortgage. However, this line of cases all deal with business operations, so by and large this approach makes sense.

Have a look at the the case of Canada (Attorney General) v. Canadian Sturgeon Conservation Center Ltd., 2005 (New Brunswick) where live fish were considered to be chattels for the purposes of bailment, liens, taxes and the enforcement of penalties.

Other issues

There are cases, although not in Ontario, where fish in stocked ponds were considered to be part of the property. In that regard, they were viewed as being somewhat less than “wildlife” and not quite “domesticated”, so the purchaser was entitled to have them in the pond on closing.

Conclusion

This is a situation which could become complicated. So, make sure it is addressed in the agreement. If you are buying the property and you want the fish in the stocked pond, put this in the agreement.

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Royal LePage Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com

By Brian Madigan LL.B.

A recent poll conducted by Ipsos Reid indicates that the approval rating for Mayor Miller has plummeted.

Generally, Miller has been well-liked and good-intentioned. He has had the problem of dealing with a very difficult left-leaning Council.
His Achilles heal has always been “leadership” or the lack of it.

He is a good man with a good vision for Toronto. Miller can visualize the future. But, his personal achievements appear to be somewhat lacking. Basically, he is a visionary without proper leadership skills. Or, he is a good leader, he just doesn’t have any followers anymore.

The little band of councillors at the City that he manages follow him like a flock of chickens let loose from the hen house.

That’s too bad, because whatever his skills may be, his reign has come to an end.

Miller’s “Waterloo” was the garbage strike. He handled it poorly. It was a complete exercise in mismanagement. While the union clearly won the battle, they may have lost the war. Their best ally would have been Miller. He alienated them, and they were his loyal supporters.

The public simply believe that he made a mess of the negotiations and then after a long strike simply caved in.

His public relations people and speech writers must have gone on strike, because within days of taking credit for a garbage strike victory, the public once they saw the details knew that he had folded in the negotiations.

Miller was a popular mayor. His approval rating had been 69% and it dropped to 29%. That’s 40 points or a 58% decline. According to the Ipsos Reid poll, 79% want someone else to be mayor.

Recently, there have been several unpopular issues which have plagued the Mayor’s office:

• Toronto’s land transfer tax
• Toronto’s vehicle tax
• Plastic bag tax
• St. Clair streetcar construction
• Failure of the City to request federal infrastructure funding
• Failure of the City to recycle its own waste

And, of course, the mismanagement of the garbage strike is the big one that puts his disapproval rating over the top.

Right now, there are many potential candidates jockeying for position.

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Royal LePage Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com

By Brian Madigan LL.B.

The Toronto real estate market is showing steady progress. Here’s the latest report from the Toronto Real Estate Board, oddly enough without any commentary in its headline.

Sales are up over the year and so is the average price on a year over year basis.

“GTA REALTORS® Report August Resale Market Figures TORONTO, September 2, 2009 –

In August 2009, Greater Toronto REALTORS® reported 8,035 sales, up 27% per cent from August 2008. The average price for August transactions was $387,921 – up by six per cent compared to the same month last year.

“The increase in demand for existing homes has been widespread across different housing types and price ranges,” said TREB President Tom Lebour.

“This suggests many categories of home buyers have chosen to make a long- term investment in housing, from first-time buyers to move-up buyers or buyers who are seeking a lifestyle change.”

Year-to-date sales, at 58,421 were up two per cent compared to the first eight months of 2008.

Average price, at $385,978 was up by less than one-half of one per cent. “We have heard more positive economic news lately. The improved housing market has played a key role,” explained Jason Mercer, TREB’s Senior Manager of Market Analysis. “Home sales have helped other sectors of the economy through home buyers’ spending on things like financial and legal services, moving, renovations and home furnishings.”

Summary Of August 2009 Sales and Average Prices
August 2009 is shown with the August 2008 numbers in brackets

City of Toronto (“416″)

Sales: 3,109 (2,437)

Average Price $402,246 ($377,990)

Rest of GTA (“905″)

Sales: 4,926 (3,881)

Average Price: $378,880 ($356,658)

GTA

Sales: 8,035 (6,318)

Average Price: $387,921 ($364,886)”

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Royal LePage Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com

Brian Madigan LL.B.

A real estate professional, that is, a brokerage, broker or sales representative is obligated to follow the Code of Ethics passed pursuant to the Real Estate and Business Brokers Act, 2002.

Those registrants who choose to join “organized real estate” are also subject to the CREA Code of Ethics as established by the Canadian Real Estate Association.

These standards are intended to impose an even higher standard of professionalism than required by law, that is, the statutory Code of Ethics set out in the Real Estate and Business Brokers Act, 2002.

Reproduced here is a copy of Definitions section in the Code of Ethics of the Canadian Real Estate Association:

DEFINITIONS

The following definitions are illustrative only and are intended simply to assist the reader’s understanding of the Code of Ethics and Standards of Business Practice. Throughout this document, words that are defined have been capitalized.

ADVERTISING means any marketing activity to promote the brokerage, the REALTOR® or a transaction and includes any verbal, written or graphic representation in any form, including electronic media.

APPRAISAL means an opinion of the value of specified interests in, or aspects of, identified real estate based on an analysis of relevant data and performed by persons who have the required training in the preparation of appraisals.

BOARD means a member local real estate Board/Association or provincial/territorial association and includes, where appropriate, a compliance body.

BUYER means a Person acquiring or attempting to acquire an interest in real estate through a Purchase.

CLIENT means a Buyer or a Seller whom a REALTOR® is representing as agent.

COMPENSATION means the payment to a REALTOR® for services related to a Purchase or Sale and includes commissions, fees and any other form of remuneration or reward for services rendered by a REALTOR®.

CONFIDENTIAL INFORMATION means any personal or business information relating to the individual that ought to be considered confidential by its nature.

CUSTOMER means a Buyer or Seller who is not a Client.

CREA’S TRADEMARKS include, but are not limited to, the words REALTOR® and REALTOR Link®, the REALTOR® and REALTOR Link® logos, Multiple Listing Service®, MLS® and
the related MLS® logos.

DUAL AGENCY means a relationship in which a brokerage or a REALTOR® represents, as agent, more than one party in the same Transaction.

IDX (“Internet Data Exchange”), refers to a reciprocal system whereby consenting brokerages agree to advertise on their Internet websites, each other’s active listings, either from the MLS® database of the board or from REALTOR.ca, subject to the rules of the applicable real estate board and the REALTOR®’s oversight, supervision and accountability.

IMMEDIATE FAMILY means a spouse, son, daughter, parent, brother or sister and includes persons who are in such categories because of marriage, common-law relationships, or adoption as well as entities in which such persons have any direct or indirect financial interest.

LISTING means an agreement between a brokerage and a Client granting the brokerage the authority to offer for sale the Client’s real property with defined terms and conditions. A listing on MLS® must involve agency and an offer of compensation to the selling office.

OPINION OF VALUE means an estimate of the value of specified interests in, or aspects of, identified real estate which may be based wholly or partly on comparative market analyses. An Opinion of Value may contain more or less analysis of relevant data than an appraisal and may be performed by a REALTOR®.

PERSON includes, where applicable, an individual, a partnership, a corporation and any other entity legally capable of buying and selling real estate.

PURCHASE includes an actual or proposed exchange, option, lease or other acquisition of an interest in real estate.

REALTOR® is a registered trademark of REALTOR® Canada Inc., a company owned equally by the Canadian Real Estate Association and the National Association of REALTORS® and refers to licensed real estate practitioners who are members of The Canadian Real Estate Association.

REGISTRANT means a person licensed by a jurisdiction to trade in real estate.

SALE includes an actual or proposed exchange, option, lease or other disposition of an interest in real estate.

SELLER means a Person disposing of or attempting to dispose of an interest in real estate by Sale.

SERVICE AGREEMENT means an agreement that establishes a relationship between a brokerage and a Person which identifies the responsibilities of each party and includes the services to be performed by the brokerage and any compensation payable.

VOW (“Virtual Office Website”) refers to a brokerage or REALTOR® Internet website, or a feature of a such Internet website, through which the REALTOR® provides real estate brokerage services to consumers with whom the REALTOR® has first established a broker-consumer relationship, where the consumer has the opportunity to search for MLS® data, either from the MLS® database of the board or from REALTOR.ca, subject to the rules of the applicable real estate board and the REALTOR®’s oversight, supervision and accountability.

COMMENT:

Definitions are always an extremely important part of any contract, by-law, regulation or other legal document.

Frequently, you will hear from a practising Ontario sales representative that there is no such thing as “dual agency”. That’s not quite true if the are realtors and obligated to follow the CREA Code of Ethics. It would be true, if they were simply registrants under the Real Estate and Business Brokers Act, 2002.

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Royal LePage Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com