Dealing with negative Google reviews through the court system

Recently I have had the displeasure of receiving negative reviews on Google.  You can read the review here:

Screen Shot 2016-08-02 at 3.43.51 PM

 

 

 

 

 

Screen Shot 2016-08-02 at 3.43.37 PM

 

 

 

 

 

 

 

Dealing with negative feedback is never easy.  There are a couple of issues that make these reviews even more challenging.

“Important client”

I received a review from someone called “Important client.”  The review was vague and written poorly.  I doubt very much that this review was legitimate as it was written poorly, mentioned no details of the client’s experience, and overall seemed bogus.

“Tedd Broeren”

This review was also vague – the user had only recently created a Google address and had only one thing attached to their Google account – this review.

If these reviews were written by people who weren’t clients of the firm then they would constitute a libel against my company and I would be able to recover damages against them.  There are several hurdles that have to be overcome in order for this to happen.  I’m going to outline them for anyone else out there who is dealing with this issue.

1.  Anonymity

“Important client” is posting using a pseudonym and has an anonymous account.  In order to figure out who this user is Google will require a court order in order to disclose any of their personal information.  With a court order I should be able to get the internet address and email attached to the account.  Once I have that I have to get the Internet Service Provider to provide me with any information attached to that account – for example the billing name and address.  Realistically though, this all may lead me nowhere.  The email address could have been setup in a public library using a fake name and I would be no farther ahead; in fact I would be way behind because the time associated with that wild goose chase is worth about $15,000.

2.  Judgement proof

Let’s assume that I get the name and billing address and am actually able to locate “important client.”  Let’s also assume that they weren’t so important and in fact never were a client of the firm. Going down the yellow brick road let’s finally assume I am successful in obtaining a judgement against them for the libel.  Just because I have a court order doesn’t mean that I will get paid on it.  If there are no assets to enforce against I will be out of luck.  Further to that a person can declare bankruptcy (or perhaps they have already) and the debt owing under the court order will be abolished.  Once I person has been stripped of their wealth and access to credit there isn’t much else you can (should?) do to them.

3.  Fair comment

Let’s go back and find out that either/both of the reviews were posted by former clients of the firm. In that instance they are allowed “fair comment” – meaning that they are entitled to leave a negative review so long as it is true and fair comment on the firm’s services.  In that case I am out the time/money it took to find out who they actually are.

4.  Jackpot

My only good outcome (!?) on this is for both of the reviews to have been posted by either competitors or people hired by my competitors, some or all of whom have deep pockets.  In that case I have a strong case for libel and can proceed with the litigation.  Once libel is proven Damages are assumed and courts are typically fair and generous when it comes to libel.

Typically I wouldn’t advise a client to proceed with this kind of litigation.  It’s expensive.  It’s high risk.  You are likely throwing your money away.  My recommendation would be to spend the money that you would pay into this kind of litigation on marketing strategies that would “drown out” the negative reviews and help to offset their negative impact.  But, like many lawyers, I’m not going to follow my own advise.  I am going to chase this “important client” to the ends of the earth and make him/her pay…

Stay tuned and I’ll try to post regularly on my progress so that others can learn how the legal system will deal with anonymous negative reviews on Google.

Why use a family lawyer in Ottawa?

Family lawyer v. Self Representation

family law lawyer

The number of self-represented family law litigants going through the court system has risen sharply in the past decade.  I would guess that the reason is similar to the number of for-sale-by-owner homes; people have access to much more information on the web and as a result are able to more effectively self-represent as an alternative to engaging a family lawyer.

So what are the circumstances where a family lawyer is appropriate, and when should try and go it alone?  I will canvass this issue briefly in this post.  There is one caveat: I am, to a certain extent, a family lawyer, and also employ two other family lawyers.  Conflict of interest disclosed and noted!

Use the free 30 minute consultations to your advantage

First of all many family lawyers will offer a free 30 minute consultation.  There is no reason why someone facing divorce or family law issues should not avail themselves of these opportunities.  You can cover a lot of ground in 30 minutes if both the client and the lawyer are prepared for the meeting.  There is further nothing stopping you from visiting a few different family law lawyers to get second and third opinions, and to see if there is a “fit” anywhere.  Ask the question: Do I really need a family lawyer?

After the initial consultation you will have to consider your options.   A typical family law retainer is going to be between $1,000 and $3,000.  Some lawyers will bill off this retainer from the start, others will hold the retainer in trust until the matter is resolved.  So under what circumstances should you law out the cash, and when should you try and go it alone?

Typically family law lawyers add the most value when there is either high conflict between the parties, or if the matter has multiple issues and is complex.  If the parties get along reasonably well and only have one or two issues to resolve this is an instance where you can self-represent and save on legal fees.

If you do decide to self-represent you will typically end up with a separation agreement.  It is always a good idea to take the agreement and have a lawyer review it and provide a certificate of independent legal advice.  This provides an extra layer of protection if one of the parties attempts to set aside the agreement down the road to make changes to it.  It is very difficult to set aside an agreement where someone has had the opportunity to receive legal advice.  There have also been situations where agreements have been patently unfair simply because the parties weren’t aware of how family law operates in Ontario.

If your matter involves children, complex financial matters, domestic violence, or if you simply want the peace of mind that something is being done right, then you should probably engage a family lawyer.  The reality is that if you are going through a separation there is likely already a significant amount of stress resulting from that change and that stress is detrimental to you overall well being.  You simply can’t replace the years of studying, experience, and continuing legal education that a lawyer receives by searching the internet.  I have also come across people who are their own worst enemy and sometimes having an agent can help expedite a resolution much more quickly and peacefully than would otherwise be the case.

Thanks for taking the time to read this post.  Please like and share, retweet, et cetera.

 

Custody and the Best Interests of the Child

Custody in family law

I am often consulted by parents who have separated and are in conflict about child custody.  In most cases parents don’t understand what custody actually means – they believe it has to do with where the child will live or who should pay child support.  Custody actually represents decision making authority.  One of the concerns that separated parents have in most cases is that the custodial parent will use their authority to the detriment of the non-custodial parent.  Conflict in marriages often has a “power/control” element to it – one parent has an issue, and they attempt to solve their issue by controlling the other.  At it’s heart it’s really a communication issue – the parents need to be able to communicate more effectively and solve problems mutually.

Custodial decisions are characterized as major decisions with respect the child.  They surround the “incidents of custody” – medical, education, religion.  The day-to-day decisions surrounding children are made by the parent who they are with at the time.  My advice to parents fighting over custody is to look at the particular incidents of custody and examine where the actual differences lie.  Most parents will have already made the major decisions – the child is baptized, or not, they are already attending a particular school, and so on.  If you build those decisions right into the agreement (ie. the child’s religion shall remain x unless both parties agree otherwise) you can resolve the conflict without spending a lot of money on lawyers.

Another alternative that I have had some success with is to divide up the incidents of custody based on the parents skill sets.  If one parent has traditionally worked with the child’s school administrators and teachers and has done well in that role, then assign that particular incident of custody to them.  In all of the cases – custody often deals with major decisions – and those decisions remain reviewable by a judge if a parent strongly disagrees.

Custody battles are expensive – expert evidence is required ($6,000 to $10,000), interim motions ($5,000 per), examinations for discovery ($5,000 per) – they all add up and the money spent would often fund a post-secondary education.  You have to weigh the cost-benefit of fighting over an uncertain decision that may not have any impact on the child’s best interests.

If you have a custody issue that is hampering your family’s ability to function happily and is creating conflict, please feel free to contact me.  I offer free 30 minute consultations for new clients and I may be able to help you work through your family law issues.  Children have significantly higher long term outcomes when their parents are able to manage their relationships effectively.  If you need help reaching that goal please contact my office and schedule a consultation.

Access during the Holidays: Who Gets the Kids?

Child Access following divorce

Deciding where the children will live following a separation or divorce can be one of the most contentious issues in family law cases. Determining where the children will spend holidays, vacations, and other special occasions can be particularly troubling.

Many court orders and separation agreements include a generic, unspecified term, such as: “The holidays to be divided between the parties equally, in accordance with the best interests of the child.” This can work where there is little conflict and good communication between the parents. It gives them flexibility to create a holiday access schedule that suits their needs. It also allows them to change the schedule from year to year, without having to create a new agreement or get a new court order.

However, if the parents do not communicate well, then including an unspecified holiday access provision assures a return to court (at worst) or lawyer-assisted negotiations (at best). It escalates the conflict between the parents. The parties are often in a time crunch to sort out access leading up to a major holiday or vacation. Added cost, time, and stress are guaranteed.

Therefore, lawyers and other family law professionals must be aware of the importance of drafting effective provisions relating to holiday access into their separation agreements and court orders. In order to do so, we must look at what the courts tend to order with regard to holiday access.

The test for determining access is: what access schedule is in the best interests of the child? (Divorce Act, RSC 1985, c. 3 (2nd Supp), s. 16(8).) Courts have found that having access to both parents during the holidays is generally in the best interests of the child. A review of the case law indicates that the following factors will influence a court’s determination of how much of a particular holiday will be spent with each parent:

  • The established pattern of traditions;
  • The age of the child;
  • The religious observances of each parent; and
  • The geographical distance between the parents.

The courts have found that it is in the best interests of the child to keep the “status quo” as much as possible when it comes to holiday traditions. Where a parent can show that they have an established holiday tradition, the Courts are likely to craft an access schedule that maintains that tradition (see, e.g., Arnott v. Arnott, 2012 ONSC 1822).

The age of the child relates to the established pattern of traditions as well. The older the child, the more established the traditions of the family.

Where the parents have different religious beliefs, the courts have found it is important for the child to be exposed to both sets of beliefs (see, e.g., S. (L.L.) v. G.(E.), 2002 ABPC 88). Where the parents share the same or similar religious beliefs, the courts have found it is in the best interests of the child to have access to both parents during the holidays (see, e.g., Arnott, supra, and Rosenberg v. Minster, 2011 ONSC 4758).

In Torbey v. Torbey, the court preferred the father’s proposal for Christmas holiday access, due to the 500km distance between the parents. This made the mother’s proposal of splitting the Christmas holiday impractical (2002 ABQB 192).

This post is based on the paper entitled “Who Gets the Kids?: A Review of the Case Law Regarding Access During the Holidays” by Eva I. DiGiammarino.” 

    If you have conflict in your family with respect to access issues you may wish to hire a professional to help resolve those issues.  Children whose parents are conflict-free are happier overall and will have better long term outcomes.  

Disclose! Disclose! Disclose!

The Importance of Disclosure in a Family Law Proceeding

“Never lie to your family lawyer.”

You should never lie to your lawyer. Your lawyer must have all of the information about you and your case to ensure they represent you to the best of their abilities. Anything you tell your lawyer remains confidential, with rare exceptions. Rare meaning someone is about to do something really, really stupid.

The same rule applies to disclosure. Always disclose all of the important financial information regarding your family law case. Rule 13 of the Ontario Family Law Rules is dedicated to the rules and requirements for financial disclosure in a family law proceeding.

The Ontario Court of Appeal in Roberts v. Roberts, 2015 ONCA 450 reminds us that serious consequences can arise if you are not forthcoming with all of your important information. In Roberts, the appellant husband’s pleadings were struck by the motions judge for failure to comply with orders requiring him to disclose financial information. The Ontario Court of Appeal upheld this decision.

Family law case on disclosure

The parties were married in 2001 and separated in 2012. Together they owned and operated five nursing homes. They had no children from their marriage.

The respondent wife commenced an application for divorce and an equalization payment in January 2013. She alleged in part that her former husband was using his companies to hide funds. The husband filed an Answer claiming a deduction for property owned at the date of marriage, an equitable interest in property owned by the respondent and spousal support for him. Based on the claims made by both parties, extensive documentary disclosure would be required.

A few weeks after the exchange of pleadings, the wife moved for disclosure. The motion judge ordered that the parties exchange requests for disclosure within 20 days and the documentation be produced within 60 days thereafter. This order was made on consent by both parties.

The Husband did not comply with the Order. The wife brought another motion which was granted on consent and each respective deadline was extended. The wife served a request for disclosure as required, but many of the documents were not produced by the husband. The wife then moved to strike the husband’s pleadings. The motion judge granted a further extension to produce the disclosure rather than strike the pleadings. The order also provided that failure to answer all of the requests for disclosure by the deadline would entitle the wife to renew her motion to strike the husband’s pleadings.

The appellant did not answer all of the requests for disclosure. The wife renewed her motion to strike the pleadings and it was granted on September 24, 2014.

The Court’s Analysis on Family Law Disclosure

The Ontario Court of Appeal reiterated that the most basic obligation in family law is the duty to disclose financial information. This requirement is immediate and ongoing. Failure to abide by this fundamental principle impedes the progress in the court case; it causes unnecessary delay and acts to the disadvantage of the other party. It also affects the administration of justice where unnecessary judicial time is spent on issues that should be easily resolved by the parties. Ultimately, the adjudication of the proceeding is stalled.

The Court of Appeal stated at paragraph 13 that “Financial disclosure is automatic. It should not require court orders – let alone three – to obtain production”. They stated that the power to strike pleadings should be used sparingly and only in exceptional cases. This case was considered an exceptional case. The Court of Appeal held that if the conduct of the party includes ignoring court orders and failing to follow the basic principles of family law litigation, it puts them in the “exceptional” category.

Ultimately the appeal was dismissed with costs fixed at $10,000.

Take away point – Disclose or face an angry judge!

The court does not look favourably on the parties when they do not provide full and frank financial disclosure. Each party has a positive obligation to provide all relevant financial information to the other side. As seen from this case, there can be significant and expensive repercussions if this fundamental rule is not followed.

However, it is important to be reasonable in the type and amount of disclosure requested. One party cannot go on a “fishing expedition” to find information that is irrelevant or unearth every single document that in any way might be connected to the proceeding.  All financial documents that pertain to determining the parties’ net family property or income can be requested and must be produced.

The Administration of Justice is in Disrepute

There is one thing that gets drilled into young lawyers’ brains; that is that your reputation is everything.  It takes a lifetime to build and only minutes to destroy.  It precedes you and follows you, opens and closes doors, and can make or break your career.

Judges and lawyers will often use the term “the administration of justice is in disrepute.”  It means that the reputation of the justice system would be lowered.  Typically the language is reserved for things that are unfair, unpalatable, or contrary to public policy.  I believe that the arrest of Laura Liscio has brought the administration of justice into disrepute.

For those of you unfamiliar with the situation a brief primer:  Ms. Liscio is a criminal defence lawyer with an excellent reputation.  Last week she attended at the courthouse in Brampton.  As is typical for criminal defence lawyers she brought her client a change of clothes to appear before the judge.  It is standard for the accused to change out of their orange prison outfits and into regular clothing for court appearances.  It is also standard that police search all items of clothing before they pass onto the accused.  As a criminal defence lawyer Ms. Liscio would have gone through this process hundreds of times.  On this particular day the police officer found marijuana in the back pocket of the prisoner’s pants.  Ms. Liscio was subsequently arrested, in her court attire, and walked through the courthouse in front of the public and her fellow practitioners while handcuffed and placed in the back of a patrol car.   The lawyers who witnessed the arrest were shocked in the manner in which Ms. Liscio was arrested and several organizations have issued statements denouncing the manner in which she was arrested.  The Toronto Lawyer’s Association’s statement is here.

The Peel Police immediately issued a statement that reported that she was not in her court attire.  The Star’s article on the event is here.

Why is the bar so up in arms?  Are they seeking special treatment for lawyers?  Quite the contrary.  As one lawyer pointed out in his blog, a police officer who shot nine bullets into a man (while captured on video) got to go home and wait for 24 days while his lawyer and the prosecutor worked out the terms of his release.

The real issue at stake here is the reputation of the justice system as a whole.  Ms. Liscio is an officer of the court.  She is a part of the criminal justice system; the part in fact that is charged with protecting our freedom.  How symbolic is it that four police officers just dragged the person responsible for protecting our rights out in cuffs?  

To make matters worse, the Police then issue a false statement with respect to the arrest.  The lawyers do what they do and request the video footage.  The Police then retract their initial statement, with the following apology:

Peel Regional Police sincerely regrets publishing the misinformation and the impact that it has had on members of the community, members of the media and Ms. Liscio.

Their most recent press release is here.

The problem now is that the Peel Police are refusing to apologize for the manner in which Ms. Liscio was arrested (They did apologize for the false press statement).  They have no justification for humiliating Ms. Liscio and the entire criminal defence bar.  The Chief’s ongoing refusal to issue a public apology with respect to the incident has senior defence counsel demanding an inquest into the matter.  Both sides are stuck in their positions and there is now a conflict between the Brampton Police and the local criminal defence bar.

This does not bode well for the reputation of the administration of justice.  It just doesn’t look good.  It’s the kind of thing that shakes the public’s confidence in the ability of the police, the lawyers, and the judiciary to provide the public a fair process.  It is the public, after all, that is footing the bill and they are the service recipient at the end of the day.

Where will it go from here?  I would suspect that the Peel Police will bury their heads and hope this goes away.  I would speculate that the Crown Prosecutor will have the charges withdrawn and this will quietly be put to bed, as it should.  I must admit, however, that there is a part of me that wants to see a statement of claim issued.  I want to see a Judge rip into the lawyer representing the Peel Police in a written and published civil judgment.  There is a part of me that wants to see Ms. Liscio to get awarded $500,000 in damages for loss of reputation as a result of police misconduct.  Why?  Because it would teach the Peel Police that Brampton defence lawyers deserve respect.  They are the soldiers on the ground protecting our Charter rights, after all.

 

Find me a giant unicorn and an insurance company that really cares.

For those three people that missed the Super Bowl – check out the Nationwide Insurance Company’s “Make safe happen” ad that ran:

When people reacted negatively to the ad Nationwide responded by reporting to the press that the ad was meant “to start a conversation, not sell insurance.”

Now you must realize that as a lawyer I have a built in lie detector that goes off when something doesn’t pass the sniff test.  This one just doesn’t.

Let’s assume for a second that Nationwide was being completely honest in their statement that they meant to start a dialogue.  Even in that case, the reason that they want to start a dialogue on child safety is to create a positive image of their company with their customer base.  Why?  Because they want to sell insurance.  Nationwide is a corporation designed and operated to sell insurance.  That’s what they do.  This commercial, and the revenue allocated to it, was meant to sell insurance.  Nothing more, nothing less.

I am certain that they anticipated the backlash that they are getting – because any press is good press.  Nationwide is on everyone’s lips.  Good, bad, whatever.  Nationwide.  Nationwide.  Nationwide.

I’d say it’s despicable to profit off tragedy through advertising, but I just realized that I am writing a blog to boost my social media presence and basically trying to profit by derivative, through commentary on Nationwide’s despicable behaviour.  doh!

I just want to call a spade a spade and say that I think that if Nationwide really wants to help prevent childhood accidents they should donate to a children’s charity that helps prevent accidents.  Let the non-profit organization run the ad.

Tomorrow I’m going to write about Giant Unicorns to avoid guilt by association.

Family law lawyers – Access disputes

Family Law Lawyers – Access

First off, family law lawyers come in different shapes and sizes, and the content in this blog is my personal viewpoint.  It is general observations that I have made.  I have had family law as one of my practice areas for ten years and use this as the basis for my perspective.  As a family law lawyer I have helped resolve a significant number of access disputes between parents.  Here are a few guidelines for those of you looking for information on how to resolve access disputes.

First off, relax – Access will change

Time sharing with the children is often at the forefront of many parents minds.  The trust in their relationship with their partner has broken down and they are acting defensively with respect to protecting their relationship with the child.   The two parents will often have a different idea about what time sharing schedule will work best, and will try to denigrate the other parent in the hope of getting what they feel will work best.  It is just so easy for parents to use “the best interest of the child” to criticize the other parent and try to prop themselves up in doing so.  Stereotypically I have seen mothers offer too little access and try to minimize the time that the children spend with their father.  Conversely I have seen fathers try for unrealistic access schedules that just don’t make sense in an effort to put themselves on “equal footing” with the mother, who is often, during the tender years, the child’s primary parent.

It is important to recognize that like your child’s development, access is always changing.  It is fluid.  It requires flexibility and understanding between the two parents.  In my experience the clients with the best success post-separation take a more relaxed approach to time sharing.  The mother’s offer generous and liberal access and don’t try to control the father’s time with the child.  They refrain from criticism and recognize that none of us are perfect parents.  The fathers will respect the mother’s input and be willing to try out different time sharing schedules.  Quality access (typically weekends) is better than quantity.  There is no point engaging in conflict to determine who brushes the children’s teeth on Tuesday nights.  The conflict causes more damage than the pros/cons of any routine.

In short – there are pros and cons with every access scenario and it is important not to get married to any position.  Furthermore the time sharing will change with the age of the child, their scheduled activities, and the parents’ own schedules.  So try something on, knowing that if it doesn’t work it will change shortly anyways.

Arizona access guidelines 

In the state of Arizona there are mandatory access guidelines for parents – standardized access arrangements to help reduce family conflict over access.  The link for the guidelines is here.   Take a look – they may be able to provide some guidance on what the professionals feel are the best time sharing structures for separated families.   Every family has a different set of circumstances, and the access schedule should reflect those circumstances.  If your proposal is way off what you see here, though, you may wish to consult a family lawyer and get an opinion.

Child support and access are not legally related.  Now get real.

The courts will not reduce a father’s access for failing to provide child support.  The relationship between a child and his/her father is too important for that.  Similarly you can’t buy additional time with your child – time sharing isn’t correlated to your income.

There are a couple of issues that I have seen over the years between child support and access.  The first and most common, is that the mother makes the argument that the only reason the father wants a 60%/40% time sharing arrangement is to move from a full table support regime to a shared custody regime where the parents pay a set-off amount.  This argument cuts both ways of coarse – father will allege that the mother is denying him access for financial reasons.

There are two things that I think are important to note here.  Firstly, full table child support amounts to about 10% of income.  It is not a lot of money.  Children cost a lot of money and the last time I looked single mothers were amongst the poorest people in the country.  Separated fathers seem to typically downplay the costs and imagine that the child support recipients are spending their hard earned money on themselves and not the children.  Father’s that do a good job of supporting the mother and the children will have a less stressed out mother to deal with in terms of access issues, and that is good thing.  Spend the money on child support.  It’s worth it.

The other pattern that I see from the mother’s side is that they feel that the child’s father is living la vida loca and makes a ton of money.  He’s not.  I have also seen mothers that throw up a million roadblocks in terms of access and time sharing and then wonder why the children’s father isn’t enthusiastic to cut that cheque at the end of the month.  Mother’s need to be supportive of the father’s relationship with the child, in all cases.

Again, legally speaking, child support and access aren’t related.  But in my experience they totally are.  Separated parents that are successful trust each other to pay the right amount of child support and offer flexibility and generous access time routinely.

Resentment

Resentment is a real relationship killer.  I see it in family clients every day.  They are full of resentment – “I am unhappy and it’s x’s fault.”  There are a million variations on that theme.  The parties feel used and being taken advantage of.  Their accomplishments go completely unrecognized.  They are defensive and under constant criticism.  They also provide constant criticism and are hugely judgmental.   I find that there is a real victim mentality – the notion that they have been wronged and an accompanying powerlessness to do anything about it.

Getting Help

I have handled access disputes in the past with some success, but realistically it’s better to have a less expensive and more specialized option in place.  Family law lawyers will deal with access disputes as part of the intial separation, but aren’t a good choice to deal with ongoing conflict with respect to access solely.  I recommend using a Parenting Co-ordinator to help smooth out ongoing disputes.  Recently a few of my recommended practitioners have formed a consulting group in Ottawa.  If you are struggling with conflict on an ongoing basis then give them a call.  Life is too short to carry that kind of emotional turmoil around with you all the time.

Here is their website:

www.familyconsultantsottawa.ca

These women have worked with families for decades helping them cope with family conflict.  They have tools and coping strategies to help parents develop the necessary skills to build a working relationship for the good of their children.  Children need parents that can get along and work together, even on a very basic level.  If parents fight children basically feel that it’s their fault, or that they are worth less than children whose parents get along.  Not a great feeling for a child to have, and if you don’t resolve your difficulties with your spouse you could find yourself having to deal with child-related issues in the future.

Summary

Access disputes take some time and experimentation to get right.  Both parents should be flexible in their approach and the regime should be reviewed and if necessary changed often.  Although child support and access are not legally related, they are often tied to each other in disputes.  Parents need to support each other both financially and in terms of the parent’s relationship with the child in order to be successful in a post-separation setting.  There are professionals that are available in order to assist parents in resolving their disputes over time sharing arrangements.

Brace yourselves for interest rate increases

As a real estate lawyer I have been following the interest rates closely.  I have three mortgages that are due to renew and I’ve been hoping to take advantage of continuously low interest rates in 2015.  I regularly follow the news related to interest rates and try to stay in tune with what’s going on.  I am no mortgage broker, but I am an interested party and would like to share my interest rate predictions for 2015.

I think we will get three more quarters before the interest rates go up in fall of 2015.  Typically the government will give a few warnings before the interest rates goes up.  When the interest rates do go up I would expect the following things to happen:

Housing prices will stagnate or drop

The condo market is already in the dumps and we’re seeing housing inventory stay on the market for longer.  There will eventually be a downturn in housing so prepare yourselves now.  Don’t get into a position where you have to sell, or it could cost you some big bucks.  The buyers won’t be out there when the interest rates go up.

More bankruptcies

A lot of people are going pay check to pay check right now and just making payments on the debt that they have.  When interest rates go up on lines of credit and variable mortgages people won’t be able to keep up.  The accompanying financial stress will have an impact on health and decision making and lead to disability and financial ruin.  Forced sale of homes, foreclosures and bankruptcies will increase and again build up inventory of housing on the market.  There will be a decline in net worth and less investment as a result.

Cost of living 

The good news is that gas prices should stay low for a few years and help ease the hit.  I think that the lower gas prices are actually what is driving the Bank of Canada’s decision to increase interest rates.  The lower cost of fuel will help Canadians to better absorb the increase in debt payments.

Brace yourselves

If you are in a variable mortgage, pay it down.  If you have lines of credit roll them into a fixed interest rate mortgage in the next couple of months and don’t hold any credit that relies on the prime rate.  Start a saving plan – cash will be king shortly and the name of the game is to reduce spending and weather the storm.  The reduction in consumer spending will negatively impact our overall economy and it’s time to pay the piper for years of excessive spending and increased debt levels.  Canadians won’t have Alberta’s oil revenues to help provide stability any more – it’s time that we cut everything back and just live with what we’ve got for the next few years.  Those that make it through will have some built up equity and savings and a market full of opportunity waiting for them.  Those that don’t – well it’s time to start fresh and take some chances.

Good luck in 2015 everyone!

 

 

Compliance Issues in buying a triplex

I recently acted for a client purchasing a triplex.  At least they thought they were buying a triplex.  The listing described the property’s current use as “a non-conforming triplex.”  I ordered a Report on Compliance from the City of Ottawa which revealed that the property’s current use could not be verified.  The report noted:

“A three-unit dwelling is a listed permitted use in the R4F[480] zone of By-law 2008-250 however there are no building permit records establishing a three-unit dwelling use at this location.  Our building permit records indicate a duplex dwelling with roomers at this location.”

Is this a significant issue?  Yes.  It appears as though at some point in the 80’s one of the previous owners converted this old garage into a bedroom for rent.   Essentially what the purchasers were buying is a duplex with an illegal unit. This becomes an issue because the lender – in this case CIBC – had completed their appraisal based on the property being a triplex.  The appraisal was based on other triplexes which increased it’s appraised value.  If only two of the units are legal the property is technically a duplex and this would affect the market value of the investment.

The other issue is that the City of Ottawa could intervene at some point (ie. a tree falls on the garage) and require the owners to bring the garage up to code.  In that case you have to get a new survey, hire an architect, get plans drawn, get a new building permits – tens of thousands of dollars.  While it is unlikely that the city would intervene, this is a risk that the purchasers didn’t bargain for when they negotiated an agreement of purchase and sale.

If you would like further information about this article’s subject please contact Delaney’s Law Firm at (613) 233-7000.