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The Prohibition on the Purchase of Residential Property by Non-Canadians Act

prevents non-Canadians from buying residential property in Canada for 2 years starting on January 1, 2023.

The Government of Canada has passed a new law to help make homes more affordable for people living in Canada. The Prohibition on the Purchase of Residential Property by Non-Canadians Act prevents non-Canadians and corporations controlled by non-Canadians from purchasing residential property in Canada for 2 years, Ensuring the housing market remains available to Canadians

In developing the accompanying regulations, the Government reached out to Canadians for their feedback. A detailed consultation document containing specific policy proposals intended for the regulations was available for comment for 4 weeks in August and September 2022. The consultation process received approximately 200 written submissions from individuals and stakeholders.

The Regulations will also come into force on January 1, 2023. The Act and its regulations will be repealed after 2 years.

For more details, read the Regulations in the Canada Gazette.

Key Highlights

• The Prohibition on the Purchase of Residential Property by Non-Canadians Act prevents non-Canadians from buying residential property in Canada for 2 years starting on January 1, 2023.

• The Act defines residential property as buildings with 3 homes or fewer, as well as parts of buildings like semi-detached houses or condominium units. The law does not prohibit the purchase of larger buildings with multiple units.

• The Act has a $10,000 fine for any non-Canadian or anyone who knowingly assists a non-Canadian and is convicted of violating the Act. If a court finds that a non-Canadian has done this, they may order the sale of the house.

• Please note: This does not apply to non-Canadians who are looking to rent.

Disclaimer

The information contained on this site is for general guidance only and is not to be construed as legal or other professional advice. It should not be used as a substitute for consultation with legal or other competent advisers. Before making any decision or taking any action, you should consult a professional.

CMHC is not responsible for any errors or omissions in connection with the use of this information. All information on this site is provided "as is," with no guarantee of completeness or accuracy. 

CMHC won’t be liable to you or anyone else for any decision made or action taken in reliance on the information on this Site.

Older Calgary homes are being denied coverage by most (if not all) insurance companies.

Many buyers are not aware that they will be denied insurance coverage on their purchase if one or more of these items are found in the home. Therefore, your mortgage company will not fund your mortgage until these deficiencies are rectified. One of the major issues is electrical.

ELECTRICAL:

If your Calgary home purchase has one or more of the following, you will not be insurable. 60 AMP service panels have to be upgraded to a minimum of 100 AMP panels. Many of the newer Calgary homes are installing 200 AMP service panels due to today's demand for all the new electronics in the homes. Be aware as well, that when you upgrade the panel, you also have to upgrade the feed from the street to your home and the drop into your meter. This can be several thousands of dollars cost.

ALUMINUM WIRING:

If your new Calgary home purchase has aluminum wiring in it, you will also be denied bound coverage. Aluminum wiring was installed starting in the 1960s but was outlawed in Canada in the late 1970s because it contracts and expands more than copper wiring, which leads to loose connections, arcing, and ultimately fire.

COPPER WIRING:

Copper wiring has been used since the banning of aluminum. Some copper may "appear" to be aluminum but is only coated in nickel for specific applications. It increases copper's resistance to corrosion and enhances its strength. Calgary homes after the late 1970s have copper wiring but some still "may" have 60 AMP service panels, which will have to be upgraded to a minimum of 100 AMP.

KNOB & TUBING:

Here we are taking a step back in time. Calgary home insurance companies do not like this era. Knob & tube wiring was predominant from the early 1900s up to the late 1950s. This is a very dangerous type of wiring to have in a home as it has no grounding and all connections are in the open. This makes your home very prone to catching fire when the wiring shorts out. Unlike today's copper wire connections that must be in an accessible, sealed junction box.

PLUMBING:

Poly B is the water line that you most likely have in your Calgary home if it was built between the mid-1970s to 1998. If your home was built prior to 1975 it will not have Poly B. However, we have found some homes relocated onto new foundations that have been extensively upgraded and classified as "newer" homes still have some Poly B. This pipe is prone to a short life and may decay at connections and or just spring a leak. The government of Canada officially banned Poly B™™ in 2005. 

Upon the banning of Poly B in Calgary homes, insurance companies are looking for either older copper lines and/or the Pex lines that replaced Poly B. Pex is a plastic type of line that is easily installed with either crimp rings or shark bite fittings. It is estimated that approximately 148,000 homes in Alberta had Poly B installed in them. Ultimately, one way of usually detecting if the home has Poly B is to go to the utility room and look towards the ceiling. If you see light to mid-grey plastic piping, it probably is Poly B. It will most likely be stamped on it as well. Another area to inspect is under the sinks to see what is connected to the faucets.

In summary, I would caution all buyers to enlist the services of a "qualified" home inspector as part of your conditions on the Offer to Purchase. Upon request, I usually refer to Cliff Keveryga as one of Calgary's most qualified inspectors. I feel very confident that my 40 (+) years in and around the trades are a great comfort and asset to my clients when we are previewing properties. My background has consistently saved unnecessary headaches and frustration for my buyers as we are able to quickly eliminate these homes as an option.

How to turn your home into a short-term rental property

In these tough times, people are looking at new & different approaches to get through them. This is one temporary fix that may work for some. As the number of properties listed through short-term rental services like Airbnb and VRBO continues to grow, it’s natural for homeowners to wonder if they, too, can extract additional value from their homes. Have an extra bedroom, guesthouse or vacation property that sits vacant most of the time? Want to rent out your condo a few weekends a year to make a bit of extra cash? No matter your specific circumstances, here are some important dos and don’ts.

Do…

Understand the time commitment

This includes answering questions for potential guests, perfecting your listing, outfitting your property for guests, helping your guests check in and out, and troubleshooting for them during their stay.

Consider your neighbours

Whether you’re living in a downtown condo building or a quiet, suburban area, your neighbours can kill your listing if you’re not careful. Be considerate when it comes to points of contention like noise and parking, set clear house rules for your listing, and be selective about the types of guests you target and to whom you ultimately rent.

Determine your target guest

Make sure your listing appeals to the type of guests most likely to book with you, and least likely to cause headaches for you and your neighbours – business travellers in downtown areas, for example.

Have the right amenities

Make sure you have the essentials – including things like smoke alarms and CO detectors, a working TV with streaming capabilities, reliable Wi-Fi, and coffee – as well as amenities that will set your listing apart from the competition.

Set clear house rules

These should not be overly restrictive, but make sure you indicate what is not allowed. Things to address include smoking, off-limit areas, quiet hours, extra guests and pets.

Don’t…

Run out of toilet paper, napkins or paper towel
This is one of the easiest ways to ruin a guest’s experience and ensure a negative review for your listing.

Get the wrong insurance

Airbnb offers free host protection insurance of up to USD 1 million, but certain things – such as property damage from pollution or mould, and intentional damage or injury – are not covered under the policy. Talk to your home insurance company about options for additional coverage.

Have no spare key(s) available

People lose things, including keys, so make sure you’re ready with a backup plan. Lockboxes that guests can access that contain a spare key will go a long way towards improving your guests’ experience and making your life easier.

Drop in unannounced

People appreciate their privacy, so barging in on a guest is sure to sour their experience. Try to avoid visiting your listing during a booking unless there is an emergency.

Forget to provide towels
Just like any hotel room, clean bath towels and washcloths are a must to keep your guests happy.

Price your rental incorrectly

This requires regular monitoring and updating, as market conditions are constantly changing. Too high could mean extra vacant days, but too low could mean you’re not maximizing your earning potential. Third-party pricing companies, such as Wheelhouse, are also available for a small fee for hosts who want to eliminate most of the guesswork.

A well-chosen real estate lawyer

What do you know about Calgary real estate attorney fees?

Definitely, before committing to a lawyer as with any professional, you want to know how much they will charge for their services and do they have the required experience/knowledge. Only then you can make the crucial decision about whether or not this real estate lawyer is a good match for you. Here are a few tips for you about the disposition of real estate attorneys and their rates.

As a rule, lawyers in the real estate field charge flat rate fees for:

• Real estate purchases

• Real estate sales

• Land transfers

• Refinances

• Mortgages

Before you enter into an agreement with your real estate lawyer, make sure you know what their fees include. The full complex of services involves the following, and occasionally more: 1st – all regular disbursements; 2nd – file administration costs; 3rd – document fees; 4th – photocopies; 5th – fax; 6th – courier charges; 7th – land title fees to register title and mortgage; 8th – approximately 2 hours of consultation to help you resolve various issues related to your sale or purchase; You should also keep in mind that there may be some additional fees for out of town services.

It is always better to discuss such issues with your real estate lawyer beforehand. This way you will avoid uncomfortable situations, and unexpected costs and will know in advance exactly what you are paying for. Occasionally, specialized services may not be included in the standard price so it is always a good idea to double-check everything.

Paying less is not always an option in real estate

It is perfectly understandable that everyone wants to save money at any cost. People, contrary to all logical rules, start searching for excellent quality services with great discounts. Sometimes they get lucky, but usually, it doesn’t work that way. For small fees, you usually get the equivalent service. There are many cases where clients were over-charged for the initial quote. This is because the real estate lawyers were not qualified in the real estate field. Some purported real-estate lawyers have even prepared fraudulent documents, and at the end of the day, the client ended up with significant ramifications.

To be on the safe side and avoid such misfortunes, do not get fooled by cheap service fees. Check everything carefully and only then, make your choice. Many times the cheap way out ends up costing you double and more.

What will my lawyer do for me?

Real estate transactions can be quite stressful. For that reason, your real estate solicitor should be a seasoned real estate professional and be qualified to represent your best interests. When handling your residential or commercial transaction, he/she should;

1. Take control of and draft all documentation

2. Represent your best interests and always have your back

3. Consult and advise you on potential risks & obligations

4. Help and advise you on how to avoid any such risks

5. Closely collaborate with other professionals involved in the process of a real estate deal.

Throughout the entire process of your sale/purchase, you are going to encounter various professionals. The most relevant provision here is to make sure they are the people who understand and hear your preferences and demands. Only then will you have an agreeable encounter.

Peculiarities of residential purchase contracts

At first glance, domestic purchase contracts are merely a formality necessary to buy or sell real estate property. However, it is not as easy as it may appear. So, the residential purchase contract is one of the key documents that protect you and your rights when it comes to any legal dispute. Secondly, it sets the rules that govern how the dispute is resolved. So, even if you don’t hire a real estate agent to help you with selling/buying a house, you should consult a real estate lawyer and ask him to draft the contracts for you. Those who do decide to hire a professional real estate agent – don’t worry. Your Realtor will use the appropriate AREA (Alberta Real Estate Association) contracts which comply with all the legislation and protect “everyone.”

Litigation on real estate disputes

When it comes to the litigation process, ensure that a professional real estate lawyer in this field represents your interests. It is recommended to work with a litigator who has already had similar cases to yours. It will give you more confidence that together, you will win your case. Litigation in real estate disputes requires the full and immediate attention of your lawyer. The sooner he begins dealing with the matter, the better the results will be. A suitable research process can gain valuable information for you.

Why would there be litigation?

The litigation process can be started for various reasons. The most frequent are commission and deposit disputes. Also, there are many cases of “Breach of Contract”, improper measurements, etc. You are strongly advised to engage a professional lawyer to represent you as there also may be real estate disputes caused by hidden or builder defects. Such points should be examined and prevented beforehand, and a professional team consisting of your realtor, home inspector, and lawyer will help you. There are many other issues that real estate agents and lawyers can enlighten you on.

In fact, the real estate area of interest is a separate science and many educated people are being trained for years to become true professionals. Such real estate agents work for Calgary’s CIR Realty, like Ron Christensen. So, if you have any questions or are ready to proceed – contact, Ron and he will take the reigns for you, “From Sign Up to Sign Down”!

Alberta politicians take aim at the mortgage stress test

Alberta politicians at both the provincial and municipal levels have recently spoken out against Canada’s mortgage stress test.

First, United Conservative Party leader Jason Kenney told REALTORS® at CREB®’s annual forecast event on Jan. 30 that his party would call on Ottawa to eliminate the mortgage stress test if elected.

Then a notice of motion was brought forward by Ward 5 Coun. George Chahal, which called for the mayor to ask the federal government to review the stress test and how it is applied, was passed unanimously by the city council. Chahal says the federal government should tailor the policy to regional market conditions.

“I’M CONCERNED ABOUT THE DREAMS AND ASPIRATIONS OF HOMEBUYERS.” – GEORGE CHAHAL, WARD 5 COUNCILLOR

“Over the last year, we’ve seen a significant impact of the stress test on our local market and we’ve seen a significant decline in the local real estate market, (including) significant job losses and layoffs in the construction sector over the course of the year, and I think there’s more to come,” he said.

“I’m concerned about the dreams and aspirations of homebuyers. … There may be no better time to purchase a home in the marketplace than today, with low-interest rates and with housing prices that are quite affordable compared to many other major cities in Canada.”

The stress test was implemented over a year ago to ensure homebuyers could still afford to pay for their mortgage if interest rates rose. It was a measure designed to address high debt levels among Canadians, and many experts say its main targets were the hot real estate markets in Toronto and Vancouver. However, the effects have been felt across the country, with many economists and housing market experts agreeing that MLS® System sales have been impacted since the test came into effect.

“BILD Calgary Region wholeheartedly supports this motion and applauds Calgary city council on taking these steps to ensure our region is in the best competitive position to attract both investment and residents to our city while improving our tax base,” said Brian Hahn, CEO of BILD Calgary Region.

James Cuddy, a senior market analyst with Canada Mortgage and Housing Corp., said the mortgage stress test has had an impact on the housing market in Calgary but other factors have also played into lower demand here, such as continued uncertainty in the economy and higher interest rates.

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