Success Story – Part 1

One of my favourite things is to meet “young” people who are either successful or well on their way to becoming successful. Well, I just met one of these people today. His name is Lee and he hails from Edmonton, Alberta. We met randomly and I asked if he would be willing to share some of his story. Here it is, in his words. I hope you enjoy!

Hi Karim,sure! Well lets see. As Inigo would say “Let me explain. No there ees too much. Let me sum up.”

My name’s Lee, I’m a computing scientist by education, and a beach volleyball player at heart. And here is the story.

Well back in 2002 I was working at Nortel and our site got shut down, so I had two choices: either find a new job in Montreal, or fly back home to Edmonton and look into real estate while trying to find a job. I like a challenge, so I went for option B. I also knew there was a game company back home that I wanted to work for called Bioware, so I figured hey, might as well apply, and see what happens right? So lo and behold after 3 months of hard work applying I got the job. so this is May 2002 approximately.

I knew my brother had been doing well in real estate, so I figured I’d buy my first house, and try and find a rental property. By that Christmas I had enough money saved up to put my first 10k onto my first house (yes the one I would live in silly). The first night I slept on the floor because it was so cool to own my first house. And by the end of the month, I had rented out all 3 rooms in the house to students because I lived near the university, and I wanted to treat my house like a rental property: i.e. the house should pay for itself.

Also at the outset I joined an investment group called REIN, and I got my first joint venture partner from there and we bought a duplex together in february of the next year. Now, this is the part where I almost got crushed: by the time we got keys on the place, someone had broken in, the pipes burst on the main kitchen floor on one side and did about 15,000 dollars damage to the place. I was thinking at this point “I’m screwed!” Well luckily, with the help of my Dad and few friends we got the place all torn out, I borrowed some money to get it fixed up, and we rented it out. It took about 3 months to fix the place up, working 9 to 6 at the day job and 7 to 11 at night and weekends doing renos, but we got it done. The duplex was mostly break even in the first year, but I made enough in equity to buy out my investor because she was moving to the states, so I refinanced the place, and paid her out.

Then two years passed… I did diddly except work at my job for 80 hour work weeks. Don’t get me wrong, I loved it, but I could see that this was not the way to get out of the rat race. At the time we got a really big payout from work so I had enough money to live off of for a year as long as I kept my tenants, which was awesome. So in Christmas of 2005 I decided to quit my job, and buy some houses. Now don’t get me wrong… this is probably insane, and if you knew me, well, its probably par for the course. Anyway, in the next 7-8 months I put offers in on places and closed on investors and bought 10 places. Of course, its very motivating when you know the only money you have left is slowly dwindling away in your savings account because it costs money to live (oy! whats up with that anyway?!).

Now I’m sitting on 11 properties, 2 more of which I’m managing, and I have enough partners now to purchase my first apartment building. Who knew? The equity is doing quite well in all of them, but I’ve got minimal cashflow… thus why I’m moving into the bigger leagues.

For anyone interested in learning more about me, I’ll put more details on my website in the next week: Come say hi, and pass on my contact info if you know anyone who is interested k? I’ve got 3 houses right now at 90k down that will return the same in the following year. Who likes 50-80% returns on their money in a year?! Sign me up!

I hope this is what you had in mind Karim, if you need anything else, don’t hesitate to call or email me k?Ciao for now,~Lee

Do you know of any other success stories? Let me know at

Have a great day!

Karim Kanji

Mother’s Day is coming up…..

….so before I get crazy busy let me share with you some thoughts……

Mother’s Day.

It’s the day when, as a society, we purchase red roses, boxes of chocolate and Hallmark cards in our attempts to thank Mom for putting up with us.

I think we should thank our mother’s everyday. Thanks for changing our diapers many years ago. Thanks for driving me to soccer practice and those out of town hockey tournaments. Thanks for letting me cry on your shoulder when my best friend moved out of town. Thank you for babysitting our first child. Thanks for everything you’ve done and continue to do.
So, on Mother’s Day, take some time in between listing appointments to call your mom and tell her how much you love her. If she’s in town, go and visit her. If she has left this world, close your eyes and thank her in your heart.

And then after Mother’s Day, remember to take some time as often as possible to tell Mom, “I love you.”

Happy Mother’s Day to you and your Mom!


Karim Kanji

Deposit or Downpayment….

Many times I hear the age old debate about the use of a Real Estate Professional. “I can sell my own house! I don’t need a real estate agent.” I’m sure many of you have heard this arguement. However, there are so many clauses, laws, by-laws, and other waiver and amendment type stuff. It’s enough to make a civilian go nuts!

So, it comforts me when I come across information that attempt to clear the muddy world of real estate. Carolyne Lederer ( has written a very detailed and comprehensive piece on Deposits and Downpayments. Please take a read. I’m sure you’ll like it!

Who’s liable for house defects? – Bob Aaron

April 28, 2007

Who’s liable for house defects?

When a builder wants to construct a new house, he or she applies to the local municipality and obtains a building permit. Construction begins and municipal inspectors regularly visit the house to monitor progress with the foundations, framing, roof, walls, plumbing, electrical and all the other important components of the home.

At least, that’s how it’s supposed to work. Unfortunately, it didn’t turn out that way for Joe and Joanne West, who bought a new home on Lanza Court in Hamilton.

The city didn’t issue a building permit for the house until May 17, 2005 – after it was finished. Nor did it issue any stop-work orders during construction. As a result, some of the necessary inspections, such as heating, ventilation, framing and plumbing have still not been completed some 20 months after the couple moved in.

The Wests have identified dozens of defects with their home, some of them major and some minor.

Despite the fact that the West home is registered with Tarion Warranty Corporation, the owners have not yet received any money at all and are taking some of their complaints to the Licence Appeal Tribunal.

As detailed on its website, Tarion says it “is responsible for administering the Ontario New Home Warranties Plan Act, which outlines the warranty protection new home and condominium builders must provide by law to their customers. The primary purpose of Tarion is to ensure that builders abide by this legislation, and to step in to protect consumers when builders fail to fulfill their warranty obligations.”

Earlier this month, Tarion spokesperson Janice Mandel wrote me saying she “can’t publicly discuss the specifics of the homeowner’s file,” although she did admit that Tarion is in regular contact with the Wests and “the builder has made some repairs in their home both on his own and under the direction of the City of Hamilton.”

However, Rob Mitchell, another Tarion spokesperson, had no hesitation in discussing the West case with the Hamilton Spectator.

He revealed that Tarion is prepared to cover some of the deficiencies claimed by the Wests, but only in the form of a cash payout and not by repairing the builder’s mistakes.

“Because the relationship between the builder and the homeowner has deteriorated, we decided to settle directly with the homeowner,” Mitchell told the Spectator.

I spoke to Joe West earlier this week and he told me that he had yet to receive any money from Tarion.

In the face of what they perceived as Tarion’s unsatisfactory response to their claims, the Wests have decided to bypass the Tarion Warranty Corporation and have commenced a lawsuit against the builder and the City of Hamilton claiming damages of $1.5 million.

Their case against the city for negligent inspection will be based on the law established in a 2000 decision of the Supreme Court of Canada in the case of Ingles v. Tutkaluk.

James Ingles and his wife Valerie Webb owned a 1910 Annex house on MacPherson Ave. They hired a contractor to lower the basement by 18 inches for $46,000.

The City of Toronto issued a building permit for underpinning the existing foundations. It required that the work had to be inspected and the underpinning had to be at least as wide as the existing foundations.

Two inspectors visited the site during the construction of the foundations, but were unable to measure the depth and width of the footings properly.

Within weeks of completion of the job, the basement began to flood. It turned out that the underpinning was only six inches wide instead of the required 24 inches, and they weren’t dug deep enough.

Ingles sued the city and the contractor, winning at trial and losing at the Court of Appeal.
In March 2000 the Supreme Court of Canada handed down the final word in Ingles v. Tutkaluk. A seven-judge panel ordered the city and contractor to pay Ingles $49,368 plus 10 years’ interest at 12.9 per cent and costs of the trial and appeals. In all, the city got hit for a bill of $185,000.

The Supreme Court of Canada has clearly stated that a municipality owes a duty of care to all who might be injured by negligently carrying out its statutory duties. To avoid liability, a city must exercise the standard of care that would be expected of an ordinary, reasonable and prudent inspector in the same circumstances.

Of course, the century house in the Ingles case was not covered by the new home warranty program, but the Wests will no doubt be citing it as precedent if their case gets to trial.
Unfortunately, with the Tarion warranty program not responding to their satisfaction, the Webbs must resort to a potentially long and expensive court case, and a hearing before the Licence Appeal Tribunal, to get the house they expected.

In a telephone interview last month, government services minister Gerry Phillips discussed the Tarion warranty program with me.

“We’ve got almost 500,000 homes enrolled (in the program),” Phillips said. “Just because not everybody’s happy doesn’t mean it’s not working.”

I wonder if Joe and Joanne West would agree.

What do you think? Should unhappy new homeowners have to resort to the courts to get the house they expected? I look forward to your written responses by fax or email, or by snail mail to 10 King St. E., #1400, Toronto M5C 1C3.

Bob Aaron is a Toronto real estate lawyer.He can be reached by email at, phone 416-364-9366 or fax 416-364-3818.Visit the column archives at

Pick your niche and market it – Stan Albert

Stan Albert: Pick your niche and market it

Apr 27, 2007

“In the field of observation, chance favours only the prepared mind.” – Louis Pasteur 1822-1895

Ever heard of The Long Tail? It’s the name of a book that you should read, written by Wired Magazine’s editor-in-chief, Chris Anderson.

This article was partially gleaned from the website Prof-IT, The Technology and Marketing Newsletter for Real Estate Professionals. (Issue 42). Quoting from the article: “If you’ve got any plans to see your real estate business succeed online, especially with the aid of search engines, then you better read on.”

The basic premise of TheLong Tail is that the market at large is starting to evaporate and is being replaced by dozens, if not hundreds or thousands, of “mini-markets” or “niche markets.” I’ve written and preached to agents over the years about niche markets and yet few of the registrants have heeded this call.

The book describes this trend as the “tail of a comet”. There are relatively few large players who market to the mainstream, pursued by an almost endless trail of individuals who can get almost anything they want.

Let’s illustrate this with what is happening in the computer business. Companies like Intel, Microsoft and Dell face sluggish computer sales. All are under siege from free open-source software, which uses the Net rather than the P.C., and a vast number of free unnecessary upgrades on the Internet.

Look what is happening to one of the largest icons in the computer industry. Dell is restructuring its business units and slashing costs. They’re spending $150 million on customer service, and will forge partnerships with retailers to stock its computers and open stores of their own.

So, what should we take from this example in the real estate industry? It’s about being unique. In every market, consumers will be surfing the Net to find a home that suits their wants and needs – and then they will be looking for an agent who is knowledge-specific.

In the media, the area of specialization happened shortly after Ted Turner’s CNN, 24-hour news appeared on the scene in 1980. Now look what’s happening – Google Earth, YouTube, Itunes and I could go on and on. From only a few companies in the area of Internet marketing a few years ago, we now have search engine experts, pay/click experts, article marketing, blogs and so forth. It’s as Anderson describes in his book, a niche within a niche.

So, again, I pose the question, what has this got to do with you as an agent?

Almost everything.

If you look at most Realtor’s websites, even successful ones, they get less than 50 per cent of the traffic from main keywords. If your main keywords are “Brampton Real Estate,” and you somehow managed to get to a top ranking, it would only be attracting a fraction of the loads of traffic that you should be attracting.

If I were looking to move to Brampton, but really wanted to move to a specific area like Milton, where my friends or business would be located, why would I just choose a site that was marked Brampton?

The obvious answer is that I would choose an agent who specialized in a specific area because, like a normal consumer, I would want true expertise. Maybe you’ll choose to specialize in “I sell only bungalows” or “I sell only waterfront views,” or “I specialize in large family homes.”

I think that you get the idea by now!

In Anderson’s book, he says: “The whole Long Tail thing is a big topic with BIG potential for your real estate business on the Internet.”

There is no real quick fix, but you must address this in your present and future marketing if you are to survive. Pick a niche, no matter how small, and you will rise quickly and will surpass your competition.

We are advancing so fast that it makes my head spin. I read just the other day that the technology university and college graduates are studying today will be out of date next year!

As a Realtor, you have to adapt quickly to the changes around us and use it to your advantage. Ask yourself: “How can I be more of a specialist? Where can I dominate? What niche can I completely dominate?”

Most brokerages have a decent website, but is it time for a makeover? There are many excellent web providers out there. My suggestion is to contact your current provider and go over what will make you “The Niche Marketer” in your area. See for some great ideas.

Now, let me remind those who are becoming involved with their websites that one guiding principal remains: You must continue to expand your spheres of influence daily in order to maintain your business. As stated in my last column, a successful Realtor will treat this business as a business and not one that is transaction-based.

And that’s the way I see it from my desk this month.

Thought for the month: “Change your thoughts and you change the world.” – Norman Vincent Peale

Stan Albert is celebrating his 36th year in active real estate. He serves on the Complaints, Compliance and Discipline Committee at RECO, and on two committees at the Toronto Real Estate Board. He is an established trainer and business consultant and can be reached at

Housing Boom threatens Jobs?!? – What the @#!$%

Are you kidding me?!? Apparantly Mr. Mayor David Miller thinks so. What he forgot to tell you is that the Housing Boom in Toronto threatens the tax base of Toronto. What the political pundits of Toronto, and the Mayor as well, don’t want to happen is that Toronto becomes a residential community. With more businesses in Toronto it lowers the tax burden on residents. Anyways, that’s the way I see it!

Read for yourself HERE.

Green Living

As many of you know, the environmental movement is attaching itself to all sectors of the economy including real estate. Yesterday I attended the Toronto Real Estate Board’s Realtor Quest Trade Show. Realtor Quest bills itself as Canada’s largest Realtor trade show. Well, at the trade show there was an exhibition titled “The Sustainable Condo – Using Less, Enjoying More.” It was a very interesting display of technology and nature working together to provide a healthy environment to live in.

Keep your eyes here next week as I will post pictures and a write up on this fantastic vision. In the meantime, here is a very interesting article I came across today…..

New York City Aims to Make Affordable Housing Sustainable

EDC Magazine

NEW YORK, April 12, 2007 — The Arker Companies, The Domain Companies and Neighborhood Housing Services of Staten Island announced the closing of financing for the rental component of the $60 million redevelopment of Markham Gardens, an affordable housing complex located in the West Brighton neighborhood on Staten Island’s north shore.

The redevelopment initiative — a participant in the LEED for Homes pilot program — will create a total of 290 new affordable residential units comprising 240 rental apartments and 25 two-family homes. The rebuilding of Markham Gardens is part of Mayor Michael R. Bloomberg’s 10-year New Housing Marketplace Plan to build and preserve 165,000 affordable housing units for 500,000 New Yorkers; the largest municipal affordable housing plan in the nation’s history.

Designed with environmentally sustainable, energy-efficient and green building techniques, 150 of the 240 mixed-income rental units will be reserved for Section 8 voucher recipients referred by the New York City Housing Authority, including former Markham Garden tenants wishing to return. The remaining 90 units will be affordable to residents with incomes between $30,082 to $85,080 for a family of four.

The redevelopment also includes 50 units in 25 for-sale two-family homes for moderate-income families, as well as a park, outdoor seating areas with extensive landscaping, and a 6,000-square-foot recreational center consisting of an indoor basketball court, exercise facility, computer center and classrooms.

THE Destination for Real Estate Information that MATTERS introduces…

Bob Aaron!

Bob Aaron was called to the Ontario Bar in 1972 and is a sole practitioner in the areas of real estate, corporate and commercial law, estates and wills and landlord/tenant law.

Bob was first elected a Bencher of the Law Society in 1995 and is now in his third term after being re-elected in 1999 and 2003.

He has served on a number of Law Society Committees. He is vice-chair of the Law Society Foundation and served as Vice-Chair of the Lawyers Fund for Client Compensation. In 1993 he founded the Ontario Real Estate Lawyers Association.

Bob has been a speaker at a number of continuing education programs for the Law Society, the Ontario Bar Association, the Real Estate Institute of Canada, and the Continuing Legal Education Society of Nova Scotia. He often writes legal opinions on real estate issues for other lawyers to use in litigation matters.

He writes the Title Page column every Saturday in the New in Homes section of the Toronto Star.

Bob can be reached at and

Paralegal licensing is good news – Bob Aaron

Paralegal licensing is good news

For the first time in Ontario, paralegals are about to become a regulated profession

For the first time in Ontario history, independent paralegals will become a regulated profession when new legislation comes into effect on May 1.

On that day, the Law Society of Upper Canada becomes the regulator of those paralegals who provide a limited range of legal services directly to the public and who do not work under the supervision of a lawyer or other business employer.

Regulated paralegals will continue to be able to practise in cases before the Small Claims Court, provincial boards and agencies (such as the new Landlord and Tenant Board), and provincial offences before the Ontario Court of Justice.

As at present, they will not be able to practise in areas such as real estate law and cases before the Superior Court of Justice.

The new legislation will lead to the creation of standards of conduct and other regulatory requirements, providing better protection and recourse for consumers of all legal services.
Over the next six months, the Law Society will issue licences to paralegals who qualify for registration under the new scheme. Once the licensing regime is fully operational, the public will have access to paralegals who are regulated, educated, licensed and insured.

In recent years, the need for regulating paralegals has been the subject of considerable comment by Ontario judges and in two Ontario government reports. The most recent comment occurred in a Superior Court decision of Justice Deena Baltman last October. It was published last month in the Ontario Reports.

In December 2002, Pamela Elliot received an eviction notice from her landlord claiming rent arrears of $2,700. Shortly afterward, the Ontario Rental Housing Tribunal issued an eviction order against her.

Elliot contacted Vince Chiarelli, a paralegal, to stop the landlord’s eviction. He promised her in writing that for a fee of $1,200 plus expenses he could file an appeal to Divisional Court and obtain a stay which would “prevent or significantly delay the eviction proceedings.”
Chiarelli confirmed his retainer in a letter which said, “leave when you want to, not when they want you to leave.” He confirmed Elliot’s request for “an injunction to stop this very unfortunate and unjust eviction.”

Elliot borrowed money from her mother and paid $1,790.45 in fees and expenses to Chiarelli in two installments. He spent a total of two hours working on the tenant’s court application.
Shortly after Chiarelli filed his application to stay the eviction, the landlord applied to the court to set aside the certificate staying the proceedings. The request was successful and the tenant was evicted on March 20, 2003. She ended up living in her car after she and her children were thrown out of their apartment.

Eventually, Elliot sued Chiarelli in Small Claims Court to recover the money she paid him, based on professional negligence, breach of contract and alleged violations of the Business Practices Act.

When her suit was tossed out in Small Claims Court, Elliot appealed to the Superior Court of Justice, where she succeeded in getting an order against Chiarelli for $1,790.45 plus interest and costs.

“As a legal service provider,” Justice Baltman wrote in her decision, “Mr. Chiarelli had a duty to provide good advice. Instead, Mr. Chiarelli advised Ms. Elliot to pay him nearly $1,800 so that he could postpone her eviction by what he knew could only be a matter of weeks. That was bad advice.

“A competent legal service provider would have recommended that she use that same money for first and last month’s rent in a new apartment.”

“It doesn’t take a lawyer – or even a paralegal – to figure out that spending $1,800 to buy five weeks’ worth of time is throwing good money after bad,” the judge added. She noted that the flat fee of $1,200 for two hours’ work was “an unconscionable amount of money” for a paralegal to charge.

She also commented that some of the statements in the letter Chiarelli wrote to Elliot to confirm his retainer were “misrepresentations” or “the most blatant falsehood.”

Finally, the judge referred to a long-standing gap in the law, “as there is currently no legislation that specifically governs the behaviour of paralegals.” She expressed the hope that the then-pending paralegal legislation would close the gap in consumer protection for individuals choosing to use paralegal services for basic legal matters.

Over the next six months, paralegals will apply to the Law Society for licences to provide limited legal services to the public. These will be issued subject to proof of experience, education and good character.

Once the licences are issued, paralegals will be subject to a regulatory scheme that will require minimum standards of conduct, education, and insurance.

Hopefully, in future it will not be necessary for consumers like Pamela Elliot to resort to two court hearings to enforce minimum standards of paralegal conduct.

Bob Aaron is a Toronto real estate lawyer. He can be reached by e-mail at, phone 416-364-9366 or fax 416-364-3818. Visit the column archives at

New Tax Bill Codifies Tax Treatment of Canadian REITs

Thank you to KPMG for the following information:

New Tax Bill Codifies Tax Treatment of Canadian REITs

The federal government tabled a bill in the House of Commons on March 29, 2007 to implement the new tax on distributions from publicly listed or traded trusts and partnerships. For real estate investment trusts (REIT), the new bill changes some of the previously announced conditions for exemption from the new tax. Some of these changes add clarity and flexibility for existing REITs regarding their eligibility for the exemption, while others will put more REITs at risk of being offside.

For more information, read TaxNewsFlash-Canada 2007-17, available on the KPMG website at:

Taxation of Real Estate Investment Trusts

Also available is a new publication from KPMG International titled “Taxation of Real Estate Investment Trusts”, which offers a high level summary of the REIT regimes in Europe, Asia, the United States and Canada.

For a copy of this publication, visit our website at:

By Karim Kanji