Happy Holidays to all of my subscribers. Thank you for all of your emails and good wishes throughout the year. I wish all of you and your families good health and continued success in 2014.
Today anyone can call themselves a home inspector in Ontario. That is a scary proposition since most consumers depend on the opinion of a home inspector before making one of the biggest purchases of their lives. There are over 1500 home inspectors operating in the Province yet there are no mandatory training or technical standards for them to meet. The results are often a leaky roof, cracked foundation or outdated electrical wiring or plumbing that was missed and which ends up costing unwary consumers thousands of dollars to repair after closing. In extreme situations, consumers have lost their homes. Many inspectors do not carry errors and liability insurance, meaning that if they make a mistake, even if you win a lawsuit, you may recover nothing later.
The Ontario Minister of Consumer Services formed a panel of industry experts to make recommendations to change the home inspection industry, which included home inspectors, educators, a Realtor, a lawyer, educators, engineers and an insurance broker.
Their report is aptly titled “A Closer Look: Qualifying Ontario’s Home Inspectors”.
The main goal of the recommendations is consumer protection. This is proposed to be achieved through the following main principles:
- Home inspectors should be regulated and called “Licensed Home Inspectors”;
- There will be minimum qualifications to become a licensed home inspector, including a written exam, a field test and experience requirements. Ongoing professional development and education will also be required so that home inspectors stay up to date;
- Increasing consumer awareness by providing information as to what service is or is not provided by a home inspector; for example, some inspectors may provide additional services such as energy audits, new home warranty inspections, chimneys, well, septic, mold, drainage or termite testing, while others may not. Home inspectors should not be required to enter any area of a home that is unsafe or not readily accessible.
- Access to a centralized registry of licensed home inspectors;
- A code of ethics that outlines expected behavior of home inspectors, including disclosure of any referral fees or incentive programs.
- Mandatory errors and omissions and general liability insurance to be carried by any licensed home inspector;
- A complaint and dispute resolution process for consumers; and
- A delegated administrative authority, similar to the Real Estate Council of Ontario that regulates real estate agents, overseen by the government, to license and regulate home inspectors; For example, the code of ethics referred to above would be written by the government, but the administrative authority would enforce it, with the power to penalize or suspend any home inspector who violates the code of ethics. This authority would pay for itself through the fees charged for licensing and education.
The goal is to move to this new regulatory environment within the next 18 months, to permit home inspectors to become licensed.
I spoke with Graham Clarke, an experienced home inspector with Carson Dunlop who was on the panel. As Graham indicated, almost everyone involved with the home building and selling business, from real estate agents, lawyers, mortgage brokers, lenders, builders and appraisers are all regulated by the government in some manner. It is time for the home inspection industry to become similarly licensed and regulated.
The government is also asking for feedback. If you go to the government website at www.ontariocanada.com then scroll down, you can get a copy of the form to complete.
If you have your own views on this important issue, send in your feedback to the government now. Change is coming to the home inspection industry, and the consumer should be the winner.
Click here to read the article: http://www.thestar.com/business/personal_finance/2013/12/22/meaningful_change_coming_to_home_inspection_industry_weisleder.html
You can still lose your land by adverse possession
Over 99% of the land in Ontario is now registered in the government protected system of land titles. However, that does not mean that your boundary lines are always protected. It is still possible to lose land based on the concept of adverse possession, or as we used to call it, squatter’s rights.
Here’s a recent example.
Leslie Truxa and Lydia Sani bought a home at 146 Humbercrest Drive in Toronto in 1989. Their driveway extends to the tip of the home to the north of theirs, at 148 Humbercrest Drive. Their side door opens into the driveway area. According to their evidence and the evidence of a predecessor of theirs on title, they had always used the entire driveway area, believing it to be their property. Morgan and Leslie Reiner bought 148 Humbercrest Drive in December of 2005. They later started to build a new house. In the course of building, they hired a surveyor to prepare a new survey for the property. The survey showed that Reiner’s title actually extended about one foot into the driveway used by Truxa and Sani. They demanded that the driveway be removed. They both ended up in court.
In a decision dated September 24, 2013, Judge Eva Frank confirmed the rules for claiming title by possession:
- There must be actual possession for the statutory period, in this case, ten years, by themselves or those through whom they claim;
- Such possession was with the intention of excluding from possession the owner or persons entitled to possession; and
- Discontinuance of possession for the statutory period by the owner and all others, if any entitled to possession.
Both of these homes were registered in the old Registry System until 2001, when they were moved by the government into the Land Titles System. About 65% of the homes in Ontario belong in this category, called Land Titles Conversion Qualified. To prove the claim, Truxa and Sani had to prove that they or their predecessor in title had used the land continuously for at least 10 years prior to 2001 and excluded the owners of 148 Humbercrest Drive for the entire period. This was proven from the evidence.
However, the possession was actually based on a mistake, as everyone just assumed the property line was the edge of the driveway. The judge confirmed other prior cases that held that “the law should protect good faith reliance on boundary errors of innocent adverse possessors who acted on the assumption that their occupation will not be disturbed. Conversely, the law has always been less generous when a knowing trespasser seeks its aid to dispossess the rightful owner.”
What this means is that if you know that you don’t own the land to the boundary line and are trying to take it by possession, the burden of your proof will be more strict than if it happened through honest error, as was the case here.
An interesting question is whether the owners of 146 Humbercrest Drive would have been compensated by title insurance if they lost the use of the one foot as a result of the survey. In my opinion, if they had no knowledge of the error when they took title, and the problem was discovered later, then they would be entitled to compensation, based on the loss of value to their lands in not having use of the extra foot. However, if the owners of 148 Humbercrest made a claim, then in my opinion they would not be successful as they probably thought that they did not own the extra land when they bought the property in the first place.
What are the lessons of this case:
- Have a survey prepared when you buy a home, to learn if there are any boundary issues before you close your deal, especially if you plan on demolishing the home to build something else;
- Don’t assume that you have “stolen” land, just based upon years of use. A lot will depend on where and when the land was registered in the land titles system. Always seek legal advice before making any claim.
Click here to read the article: http://www.thestar.com/business/personal_finance/2013/12/13/you_can_still_lose_land_through_squatters_rights.html
My Law Practice
I have received many inquiries about my law practice, providing legal services to real estate buyers, sellers and investors. Working with Real Property Transaction Centres, I am now able to close real estate transactions throughout the GTA. If you require any assistance on a transaction that you are working on, please email me at firstname.lastname@example.org
If you or your clients are looking for a written quote, please visit www.realproperty.ca and search under “How much does it cost” or contact Suzanne at 1-877- 219-9618, ext. 231.
About Mark Weisleder
Mark is a lawyer, author, instructor, Toronto Star columnist and keynote speaker for the real estate industry.