1. Be careful when the home has an illegal basement apartment or second unit.
There are thousands of illegal second units across Canada. Buyers still want to buy them for the income. However, buyers must also remember that if a neighbour complains, the City may force the tenant to be evicted, or may ask for thousands of dollars to upgrade the unit to meet applicable building code requirements. You cannot advertise the property as an “income property” if you know it is illegal. You can say that the seller does not warrant that the unit is properly retrofitted, as most Realtors prefer to say, to warn potential buyers of the issue. If you state that the property was a “potential income property,” it would depend on what would have to be done to make the unit legal to determine whether even that statement was misleading.
2. Be diligent but also use disclaimers when you are not sure
When describing lot sizes or square footage, do not rely on any expired listing. Conduct due diligence. However, since there is confusion as to whether the square footage is calculated to the inside or outside walls, or whether a loft is properly calculated, do not be afraid to insert a disclaimer when you are not sure. This will put the buyer on notice that if any measurement really matters to them, they will get the property measured themselves. It is not easy for buyers to cancel deals when they find errors in square footage, unless it was significant and the buyer can demonstrate that they were relying on the square footage as a key factor when they signed to buy the property in the first place.
3. If you run a contest, make sure you consult with your local regulator as well as the Competition Bureau.
Contests can generate a lot of interest and as such, they also generate a lot of attention, especially from your competitors. Perhaps a vacation prize awarded to one person out of everyone who signs a listing with your brokerage during the upcoming 3 month period. Do not mislead anyone about the prize or chances of winning or you could face sever monetary penalties. You must clearly disclose the number and approximate prize values, the geographical area or areas it relates to and any fact that may materially affect the odds of winning. Avoid charging money for tickets as it may be considered gambling. You may want to prepare a short version of all contest terms for general advertising and a long form available on your website. If you are not sure, check in advance with your Provincial regulator and contact the Competition Bureau for further information.
4. Be able to prove it if you say you are #1
There is nothing wrong in advertising that you are number 1, as long as you can answer the simple where, when and how. What time period is involved, example the calendar year 2015, what area, example Scarborough and how was it calculated, example number of units or dollar value. As long as it is true, it is generally ok. I remember someone once advertised they were the number 1 team in their brokerage. Turns out they were number 1, but they were also the ONLY team in the brokerage. Not a good plan.
5. If there is a history, suggest contacting listing broker before submitting any offer.
None will suggest that you advertise “murder house” or “recent flood”, but in many situations, it will be necessary to advise buyers about certain stigmas or damages prior to the buyer submitting any offer. It is always safer to disclose a stigma, to avoid potential lawsuits or disciplinary proceedings later. When you are not sure, ask for legal advice before putting the home on the market.
Mark Weisleder
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