Daniel Bernstein, Toronto Wills & Real Estate Lawyer

05/11/2022

New HST Rules for flipping.

The 2022 Federal Budget introduced two important changes governing the HST on the Assignment of a New Home and New Condominium Agr...

11/29/2020

Looking for a real estate assistant with a law clerk designation. If you have at least 2 years' experience working as a real estate law clerk and are interested, send me a message.

04/28/2020

A recent decision highlights the duty of care owed by real estate agents to homebuyers, says Toronto real estate lawyer Daniel Bernstein. In the case, a judge ordered an agent to pay her former clients $35,000 after finding her 25 per-cent liable for damages incurred as a result of water leakage and

04/25/2020

People selling a property must ensure they describe the land accurately or the buyer has a valid reason to back out of the sale, says Toronto real estate lawyer Daniel Bernstein. He cites a recent Ontario Court of Appeal decision where a woman agreed to sell her house — advertised as having a rece...

04/25/2020

A 2016 Court of Appeal ruling in the Spence Estate case reinstated a testator’s will and is a good decision in favour of testamentary freedom. The lower court’s decision was troubling in the sense that it created uncertainty for lawyers drafting wills and possibly opened the ‘floodgates’ for...

04/25/2020

New condo purchases can bring closing day surprises Hiring a lawyer can help buyers of newly constructed condos avoid surprises when closing day arrives, says Toronto real estate lawyer Daniel Bernstein. Purchasing a new build is a “completely different transaction” from a resale and involves nu...

04/25/2020

New condo purchases can bring closing day surprises ...

Hiring a lawyer can help buyers of newly constructed condos avoid surprises when closing day arrives, says Toronto real estate lawyer Daniel Bernstein.

Purchasing a new build is a “completely different transaction” from a resale and involves numerous extra steps and adjustments that many ordinary consumers may simply be unaware of, says Bernstein, a lawyer with Weltman Bernstein.
“All these extras and adjustments need to be pointed out to purchasers,” he tells AdvocateDaily.

The most potentially irritating difference comes on closing day, when the final price may not match the amount on the first page of the purchase agreement with the builder.
While resale purchase agreements tend to match the closing price — barring some small changes to account for prepaid items such as property taxes and maintenance fees — Bernstein explains that new units include numerous price adjustments to pay for things like utility connections, development levies, and Tarion fees.

“These charges could be as high as $10,000 or more,” Bernstein says. “These extras are set out in the schedule to the purchase agreement but unless purchasers read all the schedules they will be shocked on final closing when all the adjustments are added to the price.”

The good news for buyers is that many of the added costs are negotiable.

“Depending on the demand for the project and the identity of the builder, some of them can be deleted, but more likely capped. Purchasers can choose to negotiate directly with the builder or through their lawyers,” Bernstein says.
He says some people can also be tripped up by the fact that these deals have an extra closing date compared with resales. The first, known as the interim closing date, is when the purchaser takes possession of the unit. The second, or final closing date, is when the actual money changes hands. During the period between the two dates, a monthly occupancy rent is paid to the builder, which covers the estimated property tax, condo fees and interest on the purchase price.

Unlike resale closing dates, both the interim and final closing dates for new builds can be extended without the consent of either party due to the delays and uncertainty that come with construction deadlines.

Bernstein says prospective buyers also need to be told about HST, which is payable for new condos but not resales.
“The purchase price almost always includes the HST,” he says, noting that it is charged at a lower rate than the usual 13 per cent “because the builder assumes the buyer qualifies for the HST rebate for new residential homes.”

Those who don’t qualify, including anyone planning to rent or flip, will have to reimburse the builder for the rebate amount, which depends on the final purchase price, Bernstein says.
Luckily for consumers these transactions are conditional for 10 days, according to provincial legislation.

“That gives purchasers time to reconsider or have the agreement reviewed by a lawyer,” Bernstein says. “Resale transactions have no such legislated automatic review. If a purchaser wants to make his or her deal conditional then it must be written into the contract.”

09/03/2019

I’ve drafted several of these “pet friendly wills”.

A small, but growing percentage of pet owners express interest in making provisions for their pets, said the managing partner of Hull & Hull LLP, a Toronto-based law firm that specializes in estate litigation and planning.

01/26/2019

Supreme Court says Henson Trust not to be included in asset disclosure.

As the in-trust inheritance was not accessible, it was ruled inadmissible for housing asset calculation

11/25/2018

06/25/2018

Watch your language...
'Language is critical' when drafting real estate contracts

An Ontario Court of Appeal decision that questioned the interpretation of an illegal substances clause illustrates that language is critical in drafting Agreements of Purchase and Sale (APS), Toronto real estate lawyer Daniel Bernstein tells AdvocateDaily.

Bernstein, a founding member of Weltman Bernstein, says he thinks the decision by the province’s top court is the right one and comes as a relief for real estate lawyers.

“If you want a warranty and representation to speak of the period up to closing, make sure you draft accordingly,” he says.

The case dealt with parties who had entered into a standard form Ontario Real Estate Association/Toronto Real Estate Board APS. The respondent purchaser put down a $30,000 deposit on the appellant’s residential property. Prior to closing, the purchaser independently discovered that the house had been used as a ma*****na grow-op before the sellers acquired it.

“At issue is the second part of the clause where the seller represents and warrants that ‘to the best of the seller’s knowledge and belief, the use of the property and the buildings and structures thereon has never been for the growth or manufacture of illegal substances,’” the ruling states.
In allowing the appeal and overturning the trial judge’s decision, Justice David Brown concluded that the sellers’ representation and warranty in the illegal substances clause was limited to their knowledge and belief as it existed when they executed the APS.

“At that time, they did not know about the property’s prior use as a grow-op. In those circumstances, I conclude the application judge erred in finding the sellers breached the clause. They did not.”
Bernstein, who was not involved in the matter and comments generally, says based on the language used, sellers need to spell out the exact time that they give a representation to the best of their knowledge.
“If the representation is true, they shouldn’t have to worry about facts coming to a third party that may contradict their representation if it was given truthfully,” he says.

However, if, for example, a clause contained qualifying language such as: “As of the date of closing, to the best of the seller’s knowledge and belief, the property and the buildings and structures thereon have never been used for the growth or manufacture of illegal substances” then the language goes to the seller’s knowledge up until closing.

“The seller would be caught in a misrepresentation if contrary information was discovered by a purchaser,” Bernstein says.