The CNN anchor and syndicated radio host suggested that his family had been singled out because of his views on illegal immigration and border security.

By Brian Madigan LL.B.

Many entrepreneurs and small business owners frequently search for the key to success. The answer is often quite simple: get the right business partners.

There are two types of partners:

1) external, outside partners, and
2) internal, inside partners.

The first type is easy. Most people get this. These are arrangements with suppliers, creditors and customers. These are merchandising groups, franchisors, and even competitors. Here, the advantage is to structure a business alliance to your advantage.

The second type of partner is a true partner. This is someone on the inside who shares in the risks and rewards in the business with you. This is someone who is just as worried as you about “meeting payroll”.

The advantage with a good partner is not only that you allocate the risks, you can strategically improve the business because each of you will have different skill sets. You will concentrate and specialize in some aspect of the business you enjoy. Similarly, the partner will have other and different interests.

The essential component is the ability to delegate and specialize that makes partnerships attractive. However, you can appreciate that the wrong partner could be a disaster. In the vast majority of cases, good partners will make a valuable and beneficial contribution to the business.

Actually, finding the right partners in any small business is the key to success, and allows a small business to grow into a medium sized business.

Most small businesses can divide their operations into three separate activities:

1) sales,
2) production, and
3) administration.

It’s difficult to find someone who is equally good at all three. Typically, the salesman will be a disaster when it comes to administration. And, the person who loves accounting, human resources and dealing with government agencies will not likely be good at sales.

Production is exactly what your particular business is all about. So, whether you are a lawyer, accountant, doctor, hairdresser, baker, travel consultant, or manufacturer, something in your organization needs to be produced so that you can make money. It’s not sales, and it’s not administration, that is important here.

However, let’s not underestimate the significant contribution of sales and administration to the overall success of the business. There are lawyers in law firms that do nothing more than bring in work. There are others that handle the files, and still others who oversee the entire law firm.

So, some advice for a small business that wants to grow: find some good partners, delegate, and specialize.

And, you will soon find that your small business has become a big business.

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 Surveyor’s Real Property Report is a graphical representation demonstrating the location of all visible public and private improvements in relationship to the boundaries of the property.

It is a plan or illustration of the various physical features of the property together with a written report outlining the surveyor’s opinion.

Usually, page 1 of the document is the plan and page 2 is the opinion.

The Surveyor’s Real Property Report can be relied upon by the purchaser, the seller, the lending institution, and anyone else as an accurate representation of the property.

What is Included in a Surveyors Real Property Report (SRPR)?

• the legal description of the property.

• the address of the property.

• the dimensions and locations of property boundaries.

• the location of all buildings relative to property boundaries.

• the location of adjacent properties, roads, lanes, etc.

• the location and description of all pertinent improvements located on the property, along with the setbacks to the property boundaries. The projections of overhangs and eaves may also be noted.

• the type and location of any land-related encumbrances or interests on the property title including utility rights-of-way, roadways, neighbour’s rights-of-access, etc.

• the location of survey bars marking the property corners.

• a note indicating for whom the plan is prepared.

• certification by an Ontario Land Surveyor.

• the Association of Ontario Land Surveyors’ Plan Submission Form.

In a real estate transaction everyone is looking for a survey. But, the actual survey is the surveyor’s opinion and that is “time sensitive”.

A current survey means NOW.

An up to date survey means any old survey where there have been no changes. The problem here is how would you know that unless a surveyor expressed a current opinion.

So, what is a survey worth? Twelve hundred dollars is the standard cost for an uncomplicated survey of a reasonably sized residential lot. Or, ten cents is the cost of photocopying an old one.

However, you should remember that you might not be able to simply photocopy an old survey. Do you have permission? Is this an improper conversion and use of the survey contrary to the provision of the Copyright Act?

And, what was contained in the agreement? Did you ask the vendor to provide a survey of the property. That’s available from the Registry Office for one dollar if the property is contained within a registered plan of subdivision.

Maybe you asked for a building location survey? That’s better, but it could be old? Also, the vendor better have an actual survey. That means one signed by and sealed by an Ontario Land Surveyor. Forget about the ten cent photocopy! That’s not good enough. Would you accept a photocopy of a twenty dollar bill as payment?

The up to date, or current building location survey is really what you are looking for. This is the Surveyors Real Property Report, two pages, the plan and the opinion, signed and sealed.

Yet many transaction are completed without such a document.

Please be careful and if you are a buyer know what you are asking for, and if you are a seller, know what you have in your possession.

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

Demonstrators, newly inspired by CNN’s extended look at Hispanics, said the cable channel has tried to keep anti-Lou Dobbs comments off the air.

By Brian Madigan LL.B.

True common law marriages are just like every other marriage. However, they are very rare.

Oddly, the expression “to live common law” refers to a marriage of presumption in England. If two people (definitely opposite sex at the time) lived together continuously for a period of 7 years, it was then assumed that they had gone through a legal marriage (and had lost the documents), unless it could be proven that this was not the case. So, a common law spouse was a legal spouse for all purposes; the only difficulty was proving it.

Actual proper proof would be a Court Order, but that could be an expensive remedy. That’s going to cost $10,000, so, if they are alive they go to City Hall, and if one, or both are dead then they (the estate) are stuck with the Court Order.

You will appreciate that under the circumstances, there would be a “need” to prove that perhaps grandma and grandpa were married. And, a common law marriage will suffice for the purposes of succession in an estate.

The presumption is that they were truly married, and they just lost their marriage certificate. However, it’s a rebuttable presumption. So, if someone else knows the truth, for example another close elderly relative then that person’s evidence may rebut the Court’s assumption that they must have been married. So too, would be actual evidence from one of the living parties to the marriage. If grandma wants to inherit grandpa’s estate because, as she says, they were “married”, then she will have to testify to that fact in Court. The Court would be free to draw an adverse assumption from her failure to testify.

You will notice that the rules become somewhat complex, and it’s more preferable to have certainty.

Let’s move on to the usual category.

The term “common law” usually does not mean a “common law marriage” in the vernacular. It simply refers to a loose arrangement of parties living together.

These parties may be protected under the support provisions of the Family Law Act, but they do not share in property.

Only true spouses have the possessory rights with respect to matrimonial homes and certain other rights that may involve the entitlement to a division of the property upon the breakdown of the marriage.

However, the rights of people simply living together are not to be discounted in their entirety. They may have certain rights that accrue in their favour otherwise at common law. So, to immediately draw the conclusion that they get nothing upon dissolution of the marriage or upon the death of the other party would be incorrect. They simply don’t get anything under the Family Law Act. But, not everyone does! Business partners have certain rights, and they are not spelled out in the Family Law Act. They might be entitled to damages by contract, tort, unjust enrichment, or trust law. Obviously, if they have a case, it’s going to be more difficult to prove, but it’s not impossible.

Quickly to summarize:

• A true common law marriage is a true marriage for all purposes

• Parties living together, have certain support rights under the Family Law Act

• Married spouses (those who have a certificate or Court Order) have possessory rights under the FLA with respect to the matrimonial home

• Other spouses do not

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.
Here is the latest report from the Toronto Real Estate Board:

Summary Of Mid October Sales Volumes and Average Prices

Note: October 2009 are shown with October 2008 in brackets

City of Toronto(“416″)

Sales: 1,489 (1,140)

Prices: $455,001 ($375,804)

Rest of GTA (“905″)

Sales: 2,142 (1,560)

Prices: $386,311 ($337,671)

GTA

Sales: 3,631 (2,700)

Prices: $414,479 ($353,772)

That was the full TREB report. But remember, TREB compares statistics annually, while the actual factual information is available bi-monthly.

So, which way is the market going? Up or down?

For a correct answer to that question we have to look at the average price of a single family home in the GTA. As of 15 June 2009, three months ago, that number stood at $407,716. Until now, that had been the height of the market.

Let’s have look at the average prices over the last few months:

$406,877…..30 September
$393,818…..15 September
$385,978…..30 August
$383,796…..15 August
$395,414…..30 July
$394,750…..15 July
$403,972…..30 June
$407,716…..15 June
$395,609…..31 May
$385,601…..30 April

The average price now exceeds the previous June 15th high. This is now the highest average price ever reached in the history of the Toronto Real Estate Board.

What does this mean? Maybe nothing! Remember that TREB compares results annually, so that smoothes out the bumps over the long haul. The market is “up” from last year. But, this year, the market had been rising until June 15th, then it tipped over and had then been in slight decline until mid August. Since then, there has been a modest recovery.

It is also important to remember that average sale prices do not have the same meaning as the price of a stock traded on a public stock exchange. Each common share in a company is absolutely identical, so you can track the prices accurately over time. However when it comes to real estate transactions, we are simply talking about averages. No two properties are the same. Every property is different. So, the averages become more and more accurate with larger volumes. A yearly number might average out almost 100,000 properties, but a two week period may report only a few thousand. So, be careful in terms of over analyzing!

It is noteworthy that the overall sales volumes are now slightly ahead of last year. That means that deals are being done, and the demand is being satisfied. Going forward, there will be fewer buyers in the market. This, of course, means that there may be some excellent opportunities out there.

The annual highs are usually reached in May each year. Then there are cyclical declines in the summer months and a resurgence in the Fall. The October figures frequently match the Spring high. This may simply be in motion again.

At the moment, there is upward pressure on prices since there is a limited supply of listings. You have to remember that a lot of prospective sellers heard that the market was “bad” so they changed their plans. Decreased supply have turned the situation into a sellers’ market.

Interest rates have never been more attractive. A full 1 per cent rise is about a 33% increase in the mortgage rates. That would have a significant impact on rising prices.

Longer term, real estate has always proven to be a good investment.

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 case under review is rather straightforward. An elderly gentleman was evicted from his bachelor apartment because he was behind in his rent.

The Toronto Housing Authority is the agency charged with the responsibility of looking after the poor and managing subsidized housing on behalf of the City.

Al Gosling was 82 years of age. He lived in subsidized housing for years. He didn’t have any family to help him out, so he fell somewhat behind in his paperwork.
You know how much bureaucrats love paperwork. Well, Al was not sending them any. So what did they do?

Very simple, they evicted him. He came home one day in June, and the locks were changed. He had nowhere to go, so he slept in the stairway. His food was in his apartment, so he went without, and grew tired and weary. He was taken to a homeless shelter, but he became gravely ill. He was 97 pounds.

Finally, Al was taken to the hospital in October. He was there for a few days, then he died.

What was the great piece of paper that led to Al’s death? It was a form that said he didn’t have any other sources of income. Therefore, he qualified for the subsidy.

Without that piece of paper the Toronto Community Housing Centre decided to fight. They wanted that piece of paper and he didn’t provide it. So, let’s take him to Court and evict him.

Fortunately, the Coroner believes that something went wrong here. Right now the Coroner is undertaking an investigation. Hopefully, this will lead to a decision to hold an inquest.

Yes, I do have a word of advice:

• Don’t get old
• Don’t get sick
• Don’t be poor

And, the number one thing to remember: fill out your paperwork. They don’t take any excuses!

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.

Sometimes it’s difficult to detremine what Judges think about ordinary and customary practices in the real estate industry.

Recently, Judge Cozens offered a comment upon the use of the disclosure statement, at times in various jurisdictions referred to as:

1) Seller Property Information Statement (SPIS),

2) Property Disclosure Statement (PDS), and

3) Property Condition Statement (PCS).

This is a document that is in common usuage throughout Canada and in many States in the United States. It was intially designed to limit liability, by protecting agents and obligating sellers to tell what they knew about the property. In some jurisdictions the document is mandatory and in others it is optional.

The difficulty is that the document is oftentimes difficult to interpret. What do the questions really mean, and is the answer a sufficient response? Although intending to protect agents, now sellers are suing their own agents for improper advice, improper direction and negligent advice concerning the completion of the Form. So, while it was intended to reduce litigation, in fact, it seems to be a source of litigation.

Have a look at the comments made by Judge Cozens:

“Recommendations

[3] While there may be a concern among real estate agents that a PDS with numerous warnings and cautions may have the effect of delaying or possibly even preventing the completion of a purchase and sale, thus potentially becoming a “deal-breaker”, any such concern is far outweighed by the potential legal issues that could arise in cases such as the one before me.”

So, all in all, this particular Judge would be quite cautious.

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.

Did you ever wonder what the Real Estate Council of Ontario (RECO) has to say about Seller Property Information Statements?

Here is the official comment:

“The Code of Ethics, a regulation under the Real Estate and Business Brokers Act, 2002, contains specific provisions related to the Seller Property Information Statement (SPIS).

However, it does not oblige a seller to complete one. The SPIS will provide information related to defects, renovations and other pertinent property information, based on the seller’s knowledge and experience.

If a broker or salesperson has a seller as client and knows that the seller has completed the SPIS, the broker or salesperson is required to disclose its existence to every buyer interested in the property. They are also required to make the SPIS available to any interested buyer upon request, unless the seller has directed them not to.

Brokers and salespersons are also required to disclose material facts. This means they have an obligation to disclose any fact they are aware of that, with respect to the real estate transaction, that might reasonably affect a person’s decision to buy or sell a property.”

You will notice several points:

1) RECO is neutral on the completion of the Form,

2) RECO does not refer to any particular Form,

3) RECO does not deal with any disclosure obligations on the part of the seller,

4) RECO indicates that if a registrant has a listing, and the seller has completed a SPIS, then the existence of the Form must be disclosed to every interested buyer,

5) Copies of the SPIS Form must be made available, unless directed by the seller to the contrary,

6) The obligation does not arise if the prospective seller is a customer (rather than a client),

7) RECO reminds registrants that they have a duty to disclose material facts.

RECO deals specifically with the duties and obligations of a registrant. It does not deal with the question as to the advisability of the seller completing the document in the first place.

The SPIS Form is controversial. It is both complicated and complex. It is both detailed and vague, in parts. Many real estate boards prefer the use of the SPIS Form because it is their belief that the liability imposed upon sales representatives and brokers is lessened if the document is signed.

Many lawyers, particularly those who practise litigation believe that the document substantially increases the liability of the seller, beyond that imposed by the common law. Consequently, they counsel against the execution of the SPIS form.

In all the controversy, many registrants overlook the fact that they are providing advice and guidance to their sellers in respect to the completion of the SPIS Form. This role increases their liability. Once the lawyers catch on, any seller will likely add his or her own sales representative to the lawsuit, claiming “improper advice” was given concerning the document.

So, be cautious! If you decide to sign one as a seller, first consult your lawyer.

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.

Here is the “ORES REAL ESTATE INDEX” which tracks the average resale prices of single family homes and condominiums in the Greater Toronto Area (GTA). It also tracks certain benchmark comparisons such as the price of oil and gold, as well as the Consumer Price Index.

In addition, the stock market indices for Toronto, and the three largest US markets are also compared.

For ease of comparison, everything we look at is worth 100 points on the Index as of 1 January 2005. That time period compares favourably with the four year average used as a standard benchmark comparison in the mutual fund industry. Actually, it runs for 57 months or four years and nine months.

As of 31 September 2009, [the last two months] and (the highs):

Real Estate

125.91…..[120.05/122.37] (125.91) GTA single family homes (average prices)
126.80…..[126.11/128.51] (128.51) All condos in GTA (average prices)
128.50…..[121.40/131.64] (149.83) Downtown Toronto Central Condos
126.82…..[131.09/119.49] (131.09) East condos
119.17……[130.60/133.97] (134.70) North condos
132.18…..[124.13/125.47] (132.18) West condos

Other market comparisons

232.79…..[223.38/219.52] (232.17) gold (price per ounce)
160.28…..[159.17/157.55] (320.88) oil (price per barrel)
125.91……[120.05/122.37] (125.91) ORES Index single family homes
123.80…..[118.08/117.20] (158.90) TSX index
102.91……[97.41/95.93] (130.99) NASDAQ index
92.59……..[90.53/87.43] (132.47) Dow Jones index
89.49…….[86.40/83.59] (131.16) S&P Index

Using the Index

Just a quick note on reading the information. Have a look at the ORES Index for Real Estate (single family homes). As of the end of September, the index stood at 125.91. That’s a 25.91% increase in 57 months. That means the increase is 0.4546% monthly, or it could also be expressed as 5.4552% annually. The performance here is shown without annual compounding for the sake of simplicity.

The same index was 120.05 at the end of August and 122.37 at the end of July. The next number, in square brackets is the all-time high since 1 January 2005. That number is 125.91, so the September figure is in fact the all time high. Actually, the market peaked on June 15th, but this Index only uses month end statistics. If we were to have shown a June 15th figure, it would have been somewhat in excess of the current 125.91.

The other statistics are reported in a similar fashion for the ease of comparison.

Observations (on the Index)

As we use index, there are several notable comments:

• Commodity prices are just commodity prices

• There is no other “extra return” for commodities

• The same is true for the CPI

• The CPI is a benchmark to see whether you are keeping pace with inflation

• For a realistic performance goal, you should aim for CPI plus 3.5% annually

• Stocks provide dividends in cash or extra stock. This return is additional to that shown in the stock market indices

• The stock market Indexes only measure the survivors. So, this year both GM and Chrysler would have been dropped due to the bankruptcies

• If you held GM and Chrysler, you lost everything, but two new companies moved in to replace them in the Indexes

• Real estate offers a return in terms of occupancy. You can rent out the property and receive income, or occupy the property and enjoy it yourself

• Actually, I should have mentioned that if you held gold bullion, you could sit in a room, count it, and enjoy that experience too. I’m not quite sure how to measure that. You’ll have to ask King Midas or Goldfinger!

Comparative Observations Using the New Index

• Gold was the best performer

• Oil was the most volatile, (yes it dropped in half)

• Real estate was the most stable, with condos outperforming single family homes

• Only North condos show a performance less than single family homes

• Downtown condos are beginning to return some performance, but they are substantially off their highs

• Our own stock market posted reasonable gains, and is close to single family homes

• Two of the three US stock market indicators show negative numbers, with the NASDAQ just returning to positive territory

Conclusion

For steady, predictable, measured gains pick real estate. It’s a solid performer with lower risk (less volatility) and generally moving in a positive direction.

And remember, when it comes to real estate, it’s never “wiped out” completely, like GM or Chrysler stock. So, unless you’re sitting on the edge of a tsunami, you’ll still own something when the storm is over.

For a benchmark of success, there’s 1,000 years of history to point to a rate of return in real estate being about the equivalent of 5% per annum, simple interest (non-compounded). That means that real estate doubles in value every 20 years. There are a lot of companies (now bankrupt) that would have been happy with that return.

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