Vancouver Real Estate Blog

Buyers Obligation To Exercise Due Diligence When Purchasing A Property - Buyers Do Your Homework

Here is a true story that has been republished(thanks to BCREA) and talks about a Buyers obligation to exercise due diligence in investigating properties

 

There have been a number of recent articles on a
seller's obligation to make full and complete disclosure of all issues
respecting property offered for sale. What about a buyer's obligation when
purchasing property?

Most licensees are familiar with the doctrine of caveat emptor or 'buyer beware.' That maxim holds that a seller has no obligation to disclose patent defects: those discoverable upon a reasonable inspection. However, a seller does have an obligation to disclose latent defects – those not discoverable upon a reasonable inspection – which make the premises dangerous or unfit for habitation. Courts have balanced a seller's duty to disclose certain facts and to avoid misrepresentation with the buyer's duty to protect their own interests. Characterizing a defect as patent or latent is a question of fact requiring consideration of the defect's nature, its importance to the buyer, and the extent of the inspection and inquiry that would be reasonable in the circumstances to reveal the defect. In determining the applicable standard of care, the court will consider the investigative actions that a reasonably prudent buyer would take in the circumstances. The buyer's level of sophistication is relevant in determining the standard. Our courts consider that buyers have the primary responsibility for investigating a property they propose to purchase, and a duty to carefully review all information provided to them regarding the property. Consider the facts in Creswell Investments Inc. v. Pavone1: a sophisticated commercial buyer purchased a commercial strata unit that had a removable mezzanine installed without the necessary building permit. The buyer's offer was non-subject and specified that the mezzanine was included. While the seller had completed a Property Disclosure Statement (PDS), which indicated the seller was aware of alterations or additions done without a required permit and referred to the mezzanine, the buyer did not ask for the PDS and thus it was not provided. Prior to completion, and at his request, the buyer received authorization from the seller to review the property's city file and received the contact information for the mezzanine manufacturer. The buyer did not follow up in reviewing the file or contacting the manufacturer. After the sale completed, the buyer discovered the mezzanine did not comply with the building code. The buyer sued the seller for failing to disclose the mezzanine's status. After dismissing the claims for misrepresentation against the seller, the ultimate issue for the court was whether the mezzanine's status constituted a latent defect, which the seller was obliged to disclose, or a patent defect. The court found that the mezzanine did not comply with the fire safety provisions of the building code and this was a latent defect as the premises were potentially dangerous. However, the court concluded that, as the mezzanine's status could have been discovered by a reasonable investigation by the buyer, the defect was patent. The court held that a reasonably prudent buyer in the buyer's position would have made enquiries about the property at the time of his offer and made the agreement subject to being satisfied with the results of those enquiries. The court held that at the very least, the buyer should have requested a copy of the PDS. Had those steps been taken, the buyer would have discovered the mezzanine's status. The decision serves as a reminder that while sellers are obliged to make full and complete disclosure of defects not readily discoverable, making the property dangerous or unfit for habitation, buyers are equally obliged to exercise due diligence in investigating properties they propose to purchase. The standard of inquiry will be that of a reasonably prudent buyer in the circumstances. Jennifer A. Clee B.A., LL.B. 1. Creswell Investments Inc. v. Pavone, 2011 B.C.S.C. 1069 (S.C.). "Copyright British Columbia Real Estate Association. Reprinted with permission." BCREA makes no guarantees as to the accuracy or completeness of this information. Copyright © British Columbia Real Estate Association 1420 – 701 Georgia Street West PO Box 10123, Pacific Centre Vancouver, BC V7Y 1C6 Phone 604.683.7702 Fax 604.683.8601 www.bcrea.bc.ca bcrea@bcrea.bc.ca

Open House - Saturday Feb 25th 2012 - 1-3pm 1695 Marine Drive - Meet Mitchell Mingie

Great location at the corner of Wiltshire and S.W. Marine Drive. Big 57 by 120
ft. lot. This 1960's bungalow (3100 sq.ft.) with full basement has been
recently upgraded with new kitchen and bathroom cabinets, granite countertops,
refinished oak hardwood floors, broadloom in main floor family room, double
glazed windows and roof. This is a great family home ready to move into and a
great property for future development. OPEN SAT, FEB 25, 1-3 PM.

Finance Minister Kevin Falcon Scraps HST And Returns PST

B.C. will scrap the HST and return to the PST on April 1 2013, Finance Minister Kevin Falcon announced on Friday in Victoria.

Until that time new home buyers will be able to take advantage of expanded rebate program and a transitional tax designed to ensure that there is no tax difference whenever they choose to buy their home — provided it costs $850,000 or less.

"The B.C. new housing rebate threshold will be increased to $850,000, meaning more than 90 per cent of newly built homes will now be eligible for a provincial HST rebate of up to $42,500," said a statement issued by the Ministry of Finance on Friday.

"The housing transition rules help ensure when people buy a newly constructed home under the PST, whether built entirely under the HST, entirely under the PST, or partly under HST and partly under the PST, they will all pay a consistent and equitable amount of tax."

The government also rolled out a new grant designed to encourage people to buy vacation homes outside of Metro Vancouver and Victoria.

"In addition...purchasers of new secondary vacation or recreational homes outside the Greater Vancouver and Capital regional districts priced up to $850,000 will now be eligible to claim a provincial grant of up to $42,500 effective April 1, 2012."

Falcon said he expects the new rules will bring certainty to new home buyers and the building industry.

"The relief measures announced today are a boost to home buyers purchasing either a new primary residence or a secondary home. At the same time, they help an important job-creator in all parts of the province."

The move was welcomed by the homebuilding industry on Friday.

More details on how the transition back to the PST will affect other goods and services will be rolled out later this spring.

"For goods and services that will be subject to PST, PST will generally apply where tax becomes payable on or after April 1, 2013."

Open House Sunday February 26th 2012 from 1-3pm $259,000 1st Time Buyer Alert!! -#207- 1065 East 8th Ave. Meet Mitchell Mingie Of Re/Max

This large 1 bdrm is ready to move in. Recent renovation includes new nut brown
maple hardwood floors, new kitchen cabinets and countertops, new bathroom
vanity, crown moulding and base boards. Ultra quiet location with partial
mountain views. There is a large balcony ideal for bbq. Complete replumb of
building. Heat is included in monthly strata fee. 1 cat permitted. 1
underground parking #26 and 1 storage locker #207 included. The parking and storage is common property assigned to the strata lot. Rentals not allowed. Building decks were re-surfaced in 2011. Copper plumbing done 2004.

New Home Rebates By The BC Government Effective April 1st 2012 As A Transitional Start Date

Government announces new HST/PST housing transitional rules

The government today announced the HST/PST transitional rules on new homes.

As the province transitions back to the PST, which will replace the HST effective April 1, 2013, measures to ease the HST burden on new home buyers include:

• The BC New Housing Rebate threshold will increase to $850,000 from $525,000, so that more than 90% of newly built homes will now be eligible for a provincial HST rebate effective April 1, 2012.
• The maximum rebate will increase to $42,500 from $26,250 effective April 1, 2012.
• Buyers of new secondary vacation or recreational homes outside the Greater Vancouver and Capital Regional Districts priced up to $850,000 will now be eligible to claim a provincial grant of up to $42,500 effective April 1, 2012.
• For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the 7% provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of 2% on the full house price.

HST/PST transition rules will help ensure that whenever purchasers buy a new home they will all pay a consistent and equitable amount of tax, whether the home is built:

• entirely under the HST;
• entirely under the PST; or
• partly under HST and partly under the PST.

The temporary housing transition measures will be in place until March 31, 2015. The tax only applies to homes where construction begins before the transition date and ownership and possession occur after.

REBGV successfully advocated for the following:

• An increase in the threshold value of homes to be covered by the rebate;
• An increase in the rebate amount;
• An announcement of the transition rules for new homes as early as possible.

The BC Real Estate Association plans to provide Boards with a list of FAQs and draft contract language that REALTORS® can use in their listing agreements and contracts of purchase of sales contracts. We will post these on www.realtorlink.ca and in REALTORLink News.

For more information, visit the BC Ministry of Finance at: www.pstinbc.ca

To read the Ministry of Finance announcement: www.newsroom.gov.bc.ca/2012/02/transition-measures-support-new-home-buyers-builders.html

Kitchens - Real Estate Advice - Understanding The Most Important Aspect Of A Home Sale - By Mitchell Mingie

Professionals know it's importance. Real Estate agents, home stagers, developers, renovators and even house flippers know it's importance in selling. So what aspect of a house is this. A kitchen of course.

Have you ever asked yourself why a social gathering or a party at your home ends up in the kitchen? Or why one gravitates to the kitchen? Or why home designs have changed so much over the last decade. It is quite simple. Our kitchens are becoming the focal point of the house. This is why home designs have encompassed the open kitchen design. The new form has been developed to be the focal point of the home. It's like saying the nucleus of the cell is like the kitchen to the home. The kitchen is where we are spending more and more time in and at.

The kitchen is the focal point. To make this point very clear, think of your fridge. Today manufacturers are adding flat screen tv's as part of their product line as more and more people spend and encompass the kitchen as the integral part of their daily lives. As I mentioned above, the design of a kitchen has opened up to let the freedom flow in and out thus becoming a fundamental aspect of our daily lives. It's because of this that kitchens play such an important role in the buying and selling process.

Since I have been selling and buying homes for clients for 18 years now, the comment I always hear from my buyers is "Has the kitchen been updated or totally renovated" If the answer is no, 60% of the clients do not want to see the home. The simple reason is the cost and more likely the time it takes to re-do a kitchen. So if you are selling, please think twice about not adding that sparkle to a new or updated kitchen. This however does not mean you have to go wild. Far from that, one can add a new counter for example, maybe granite, or caesar stone. While other kitchens may need new appliances and still others could use a new work station added to the end of the kitchen or a bar/counter that could house a few chairs tucked up underneath the counter to create that perfect space, to finish off the kitchen.

While contemplating a renovation keep in mind what your property is worth and what is selling in your neighbourhood. Make use of open houses to see what your competition is up to. Also if your home is worth $500,000 compared to $3 million the choices you make will either put you in the market or shoot you way above the home price of similar homes in the market place. Therefore a home worth $500,000 could have a kitchen renovation of $10,000 - $25,000. This would keep your home within its market range with a large likability factor. Going to an extreme renovation simple means that you will not recover the money spent on the renovation. So be careful. Why spend when you do not need to.

So in conclusion spend your money wisely where it counts the most, the kitchen. If your kitchen renovation is practical and within budget the new or updated kitchen will sell itself and in turn cause your home to sell faster and at a better price.

 

Open House - Meet Mitchell Mingie At His Open House - 2528 York Ave. Saturday February 4th 1-3pm

Truely an inspiration. Elevated high above the Pacific Ocean in Kitsilano, this home has panoramic water, city and mountain views from EVERY room! Perched regally above the street on York Ave in a magical location - just one block to the beach, 4 blocks to shops and restaurants on 4th Ave! This superbly crafted residence features a wide open plan on the main with incredible attention to detail. Features include H/W floors, heritage mouldings & baseboards, hot water radiant heat, 3 gas fireplaces, extensive millwork and trim throughout. Chef's gourmet kitchen with a large island, stainless steel appliances. The gorgeous ensuite takes up the entire top floor! Bonus of a private 2 car garage. This is truly special! OPEN SAT, FEB 4, 1-3 PM.