Hidden Problems After Real Estate Purchase

Caveat Emptor: Buyer Beware.”

What can you do if you discover major problems with a property after buying real estate in Alberta? There are a number of legal and practical issues. First let me tell you about a situation that a client brought to me, and then I’ll explain what I advised. Continue reading

How to Avoid Mortgage Fraud

mortgage fraud

Podcast Episode 97:
“Mortgage Fraud.

The simplest way to avoid committing mortgage fraud is to fully disclose everything about a deal to your lender. If they are satisfied, then you’re probably okay. But what happens if someone else is defrauding you? In Tales from the Trenches, you usually hear second-hand accounts of the trials, tribulations, and successes of Canadian real estate investors. In this Tale, you’ll hear it from the “horse’s mouth.” Special guest Valden Palm tells us how he narrowly avoided getting sucked into a mortgage scam. An unscrupulous guy in Edmonton was buying houses, doing shoddy renovations, and then flipping them between shell companies to get more and more money in refinanced mortgages. Lucky for Valden, due diligence and a gut feeling saved his bacon!

 

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If you’re buying or selling real estate in Alberta, you need a lawyer.
Use the form below to contact Barry now!

“Mortgage Fraud” image courtesy of  http://www.cafecredit.com used under CC Attribution 2.0 Generic.

Due Diligence Fails

Podcast Episode 95:
“A Couple on Due Diligence

I talk a lot about due diligence because it is one of the most important aspects of achieving success with real estate. This is a two-part Tale, showing a couple different examples of problems to look out for when doing one’s due diligence. The first example is about what happened when someone bought a property that was scheduled for renovation, but didn’t look into the plans. The buyer thought everything was taken care of—until things went wrong with the contractor. The second example is about someone who bought a bunch of condo units. The buyer got hit with a special assessment shortly after closing, which was a surprise because there was no deferred reserve study available. In this podcast, I draw important lessons from these examples and make suggestions about how to avoid similar problems.


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For an experienced and reliable Alberta real estate lawyer in Edmonton, contact Barry now!

House/Home Inspection” image by Mark Moz used under CC Attribution 2.0 Generic.

Removing Conditions on Purchase Contract

Podcast Episode 94:
“Removing Conditions—Should I or Shouldn’t I?

Conditions on a real estate purchase contract should only be removed once the due diligence is complete. But what if the conditions are sort of met, but not completely? Should you still remove conditions if the property seems good, the numbers appear to work, and due diligence is more-or-less done? In this Tale, our investor removed conditions even though they only had verbal assurances about rent and utilities, rather than the written tenant information that was supposed to be part of the deal. As you can probably guess, things weren’t what they were supposed to be, but the deal was already done by the time our investor figured out what was really happening! Listen to the audio to get Barry’s take on strategies for dealing with this sort of situation.

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If you’re buying or selling a home in Alberta, you need an experienced lawyer that you can trust. Get in touch with Barry now!

“3D Realty Handshake” image courtesy of Scott Maxwell. Used under Creative Commons Attribution-Sharealike 2.0.

Property Inspections, Reports, and Permits

house outline with check mark

Podcast Episode 93:
“Inspection Reports & Multi-family Diligence.”

Under Alberta’s Residential Tenancies Act, an inspection report must be made whenever a tenant moves into, or out of, a rental property.  But what happens if you buy a property and can’t get the in/out report? Similarly, building permits for multi-family dwellings specify their maximum number of units. What happens if you buy a building that has illegal suites? This episode of Tales from the Trenches explains the legal issues of both inspection reports and occupancy permits in Alberta.

 

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Use the form below to contact Barry McGuire, veteran Edmonton real estate lawyer.

“3D Home Inspection Big Check” by http://www.ccpixs.com/ used under CC Attribution 2.0 Generic.

Joint Ventures, RRSP Mortgages, Due Diligence, & More!

Podcast Episode 92:
A Few Quick Tales.”

Here’s some great stories about people buying and selling real estate in Alberta. These five quick Tales from the Trenches are short, but they show a wide range of different issues, problems, and successes.

In a joint venture, it’s always nice when a more experienced investor can help out someone who’s just getting started, which is the subject of the first Tale. The second deals with rules surrounding RRSP mortgages. Did you know that the money needs to be at arm’s length from the person whose RRSP it is? The third Tale is about Alberta Health’s Minimum Housing & Health  Standards. I’d recommend anyone looking to buy real estate in Alberta take a look at these (available HERE), especially if they want to rent out the property. The second last Tale is about seller’s warranties. They can be hard to enforce, and so due diligence with things like fire safety searches is important before committing to buy. Finally, a real estate deal that is too good to be true can have hidden problems. It might still be a good deal, but it’s best to look a gift horse in the mouth by still doing your due diligence.

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If you’re buying or selling real estate in Alberta, get yourself an experienced Edmonton lawyer. Use the contact form below!

House/Home Inspection” image by Mark Moz used under CC Attribution 2.0 Generic.

Giving Keys to a Buyer & Fixed Cash Deals

Podcast Episode 91:
Keys & Cash.”

Here are two quick Tales from the Trenches: 1) tips on keeping a property buyer motivated and 2) contract language to fix the cash portion of a real estate deal.

Our first Tale shows one reason why a real estate deal can close late. Even when investors have good relationships with their buyers, I say hold onto the keys to the property until everything is finalized. That’s a “key” to motivating your buyer to hurry up!

In the second Tale, our investor had a great deal, with the seller agreeing to carry a second mortgage on the property. But when the assumption statement came back less than the first mortgage was supposed to be, our investor got caught paying the difference. You can fix the cash in a second mortgage or vendor take-back financing scenario, but this needs to be written into the contract.

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Barry McGuire is a real estate lawyer in Edmonton, Alberta. Use the form below to get in touch.

House and Keys” image by geralt on Pixabay used under CC0 1.0.

When to Remove Conditions on a Purchase Contract

Podcast Episode 90:
Diligence Pays Off.”

I’ve said it before and I’ll say it again: when you’re buying a property, never remove conditions on the purchase contract until you’ve done due diligence. A real estate lawyer like me can protect your interests and help you negotiate a better deal, but I can only work with the documents and evidence available. In this Tale, our investor was working on buying a multifamily rental property. Unfortunately, there were many discrepancies with the contents of units as well as with the estoppel certificates (aka rental confirmations forms). Good thing they didn’t remove conditions before they finished their diligence!

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Use the form below to contact Barry McGuire, real estate lawyer, Edmonton, Alberta.

Exercise That Diligence” image by Alan Levine used under CC Attribution 2.0 Generic.

Why Do I Need a Lawyer in a Real Estate Transaction?

Focus on Real Estate: Quick Tips.

In this video, Barry explains what a lawyer does for you when you buy or sell real estate. Below are two of the highlights. If you need an Edmonton real estate lawyer, get in touch with Barry at RMLO Law LLP.

  1. A buyer’s attorney prepares the mortgage documents that lenders won’t let borrowers prepare themselves.
  2. A seller’s lawyer manages the money in a transaction to make sure that all outstanding debts or taxes are paid, which mean the seller receives their cash with no strings attached.

This is the next instalment of Focus on Real Estate with Barry C. McGuire, a series of videos that provides bite-sized pieces of real estate knowledge.

If you’re buying or selling real estate in Alberta, contact Barry now!

Videos co-produced by the Real Estate Investment Network (REIN) as a Google Partner.

Personal Responsibility in Cooperative Investing

Podcast Episode 86:
Joint Venture Blues.”

Partnering up can be a good way to buy more property, but you still have to be careful. As with everything in real estate, due diligence is essential in joint ventures. In this Tale, you’ll hear about the all-too-common mistake of not getting an inspection. You’ll also hear about how not vetting the finder/manager properly cost an investor big time.

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Buying and/or selling Alberta real estate? Contact Barry now!

“3D Realty Handshake” image courtesy of Scott Maxwell. Used under Creative Commons Attribution-Sharealike 2.0.