Sun

It’s hard to imagine someone stealing your home. How would the thief load it into the getaway van?

It’s easier than you might think — so easy, in fact, that the number of cases is climbing.

It happened recently to Norman Gettel. As Vancouver Sun reporter Gillian Shaw explained last week, Gettel learned he no longer owned his Richmond bungalow when his tax bill failed to show up as usual.

A call to the B.C. Assessment Authority confirmed that he was no longer the registered owner and, to make matters worse, the land titles office advised that the new owner had put a $400,000 mortgage on his paid-off home, assessed last July at more than $600,000.

The mortgage is in default and CIBC Mortgages Inc. has demanded payment in full — $403,034.95 plus interest of $53.18 a day and legal cost of $375 — or it will “enforce its security” on the property.

Gettel, who is in his 70s and suffers from lung disease, has paid his lawyer $10,000 and the case is not yet in court. If and when it gets there, a happy outcome is not guaranteed. A B.C. Supreme Court decision in an unrelated case restored fraudulently transferred title to the true owner but it allowed the fraudulently obtained mortgages to stand.

When we raised the alarm about real estate fraud in an editorial about this time last year, we were inundated with calls from lawyers and realtors extolling the virtues of B.C.’s Torrens System of Land Registration, its indefeasibility of title, and comprehensive registry, which purportedly protects homeowners from exactly the situation Gettel finds himself.

There’s nothing inherently wrong with the system, which processes 14 million applications a year and keeps track of owners and lenders efficiently enough. But it cannot detect fraud, a deficiency exacerbated by electronic filing.

It’s instructive to note that the Land Title Survey Authority has paid out through the Land Title Assurance Fund just $389,000 in the past 18 years to settle two claims arising from fraud. The Financial Institutions Commission of B.C. requires one of the leading title insurance underwriters to reserve $4 million for title insurance policies written in the province. Clearly, title insurance protects homeowners; just as clearly, the assurance fund does not.

The one-time premium for title insurance up to a principal of $500,000 with one mortgage is $229, with increments of $1 per $1,000 above that amount, according to a quote one insurance company calculated for us. For this insignificant sum, Gettel could not only have protected his title without the expense of a lawyer, but the outstanding mortgage would have become the insurance company’s problem, rather than his. The insurer either settles with the lender or takes over litigation at no cost or inconvenience to the insured.

Title insurance may even prevent crime. From 2004 to 2007, one title insurance company refused more than $8 million in transactions because it suspected fraud. So far this year, it has turned down $3.5 million worth of deals.

Many lawyers in B.C. actively discourage homebuyers from buying title insurance, but wouldn’t think of waiving fire, theft and liability insurance. Their motives are difficult to understand.

Title and mortgage fraud are easy crimes to commit. Title insurance is inexpensive piece of mind. It should be part of every homebuyer’s protection package.

© The Vancouver Sun 2008

Community needs more schools and childcare centres

Katie Mercer
Province

Larry Beasley discussed the results yesterday of a University of B.C. study of the False Creek North community that he designed while he was Vancouver’s city planner. Wayne Leidenfrost – The Province

Downtown living may be replacing the stand-alone home for Vancouver residents, but megaproject communities still have their kinks, according to a study of False Creek North released yesterday.

“Families do have their complaints,” said Larry Beasley, who spearheaded the study of the community he designed when he was Vancouver city planner.

“We’ve only been designing for families in high-density living in North America for 10 years. We still need to make more progress.”

The study, conducted by University of B.C. students, gauged the needs of residents living in the False Creek North community.

While more than 90 per cent of polled residents in the community expressed satisfaction with downtown urban living, the study suggests more needs to be done to accommodate families.

False Creek North was designed as a family oriented urban living community that nurtured suburban qualities not usually found in the inner city.

It’s partly because of this development that more families are returning from the suburbs to the downtown core, Beasley said.

Recent Statistics Canada figures show that of the more than 10,000 people living in False Creek North, 13 per cent are under 19 — that’s more children than in all of Point Grey. But raising children is a challenge in the community.

While the community boasts plenty of child-friendly green spaces for play, access to schooling and childcare facilities is a major roadblock.

Childcare centres are chock-full, with waiting lists close to 1,800 and up to two years long.

The only local elementary school, Elsie Roy, has been operating at full capacity since 2004, causing children to be bused to other neighbourhoods, some of which have reputations for lower-quality services.

Beasley said the city’s “unfinished business” could drive families away if more schools and childcare centres aren’t built downtown — and quickly.

Beasley warned the study is meant to identify the needs of residents, not solutions to problems it cites.

“This research is going to be useful to people in the community and to people in other cities who are going to be these inner-city communities.”

© The Vancouver Province 2008

Doug Ward
Sun

VANCOUVER – Alarm is growing among politicians and tenants in Vancouver‘s West End that the diverse downtown neighbourhood could lose its affordability and identity.

Lorne Mayencourt, the MLA for Vancouver-Burrard, said rental stock in the West End is being bought up by large developers intent on maximum profit. Mayencourt fears these property owners will convert their apartment buildings into condominiums that would be unaffordable to people now living there.

“We are looking at a significant part of the rental stock in the West End being at risk,” Mayencourt said last week.

“And once that balance is gone, you’ll see a real shift in who lives in the downtown core.”

The B.C. Liberal MLA said the City of Vancouver should consider bylaws that would penalize developers who convert rental units into condos.

Tenants rights activists in the West End say affordability is already an issue with existing rental units as landlords use loopholes in tenancy legislation to drive up apartment rents.

“I think the face of the West End could change if we don’t get a handle on this,” said Christine Ackermann, who lives in an apartment on Barclay Street.

Landlords are using two legal loopholes to jack up rents, said Ackermann.

Under the Residential Tenancy Act, landlords can only increase rents of continuing tenants by a certain amount each year — 3.7 per cent in 2008.

But one loophole allows landlords to evict tenants, do renovations and then increase the rent for the renovated units.

A B.C. Court of Appeal decision last year ruled that landlords can’t kick renters out for renovations without proving the vacancies are necessary.

But many landlords continue to evict tenants, perform some renovations and then raise the rents significantly, said Ackermann.

She cited her own experience of being told by her landlord, Hollyburn Group, that she had to vacate her apartment because of a suite renovation.

After negotiations, Ackermann agreed to pay an additional $65 a month rent, plus the regular annual increase, to avoid being evicted.

The renovation was never carried out, she added.

A group called Renters at Risk wants the provincial government to place a “right-of-first refusal” clause in the tenancy act, like one that exists in Ontario. The clause gives tenants who have an on-going lease the option of returning to their suite at the same rent once renovations are complete.

Another loophole being used by landlords is one that allows them to increase rents to the market level in their geographic area.

The problem in the West End, said Sharon Isaak, a member of Renters at Risk, is that a few landlords, including Hollyburn, own several apartment buildings and so can control the market rent for the area.

Hollyburn could not be reached for comment.

© The Vancouver Sun 2008

USA Today

NEW YORK (Reuters) — A closely watched index shows housing prices dropped in April from a year ago at the fastest rate ever, with prices tumbling to levels not seen in nearly four years, but the monthly pace of the decline showed some moderation.

The Standard & Poor’s/Case-Shiller home price index of 20 cities released Tuesday was down 15.3% in April from a year ago. That’s the largest drop since its inception in 2000. It was also the first time all 20 metro areas posted annual declines.

The index fell 1.4% in April from March.

The 20-city month-over-month decline was the smallest since August-September 2007.

The narrower 10-city index was down 16.3% in April from a year ago, biggest drop in its more than two-decade history. It slid 1.6% in April from March.

Prices nationwide are at levels not seen since August 2004.

The 10-city index has tumbled 19.1% since its June 2006 peak, and the 20-city index is down 17.8% from its peak in July 2006.

Meanwhile, a report from the Office of Federal Housing Enterprise Oversight said U.S. home prices fell 4.6% in April from the same month last year, when the index peaked.

The government index is calculated using mortgage loans of $417,000 or less.

While the government report has shown nationwide price declines, the Case-Shiller index has shown far greater drops because it focuses on larger cities where prices rose further during the boom years, and includes riskier loans.

Home prices in a dozen metro areas have fallen eight straight months.

“If there is anywhere to look for possible improvement, it would be that the pace of monthly declines has slowed down for most of the markets,” said David Blitzer, chairman of the Index Committee at S&P.

Still, 13 of the top 20 metro areas are posting record annual declines, and price losses are in double digits for half the areas, S&P said.

A slower pace of decline is encouraging, but “the bad news is that the price is still declining,” said Richard DeKaser, chief economist at National City in Cleveland.

“The potential is a vicious cycle, which we may already be experiencing. Falling home prices are leading to more foreclosures, which cause a further decline in prices,” he said.

Housing prices were weakest in Las Vegas and Miami, with prices down almost 27% over the year in each of those markets.

The losses reverse some of the largest gains registered during the housing boom, when house prices soared more than 53% in Las Vegas and 32% in Miami in 2004-2005, according to S&P.

In April, Miami and Phoenix were the worst performers, with prices falling more than 3%, S&P said.

House prices rose in eight of the 20 metro areas in April from March.

“There might be some regional pockets of improvement, but on an annual basis, the overall numbers continue to decline,” Blitzer said.

Charlotte and Dallas are the only two markets that have had two consecutive months of price gains.

“It’s going to be a slow process, but the less overblown markets will stabilize first and we’re getting a hint that that’s beginning to happen,” said Pierre Ellis, senior economist at Decision Economics. “Ultimately, with a very long lag, the serious bubble markets will settle down, too, but not in a time frame that is meaningful for markets now.”

Derrick Penner
Sun

Five luxury condominiums in Parksville sold at auction for prices ranging from $280,000 to $480,000, the auction firm said.

The units, in the 30-apartment Onyx building at Craig Bay, were the final five still in the developer’s hands. Though the developer got less than the initial listed prices for the units, Kim Schulz, with Ritchie Bros. Auctioneers, said he was still satisfied.

“He had sold 70 per cent [of the project],” said Schulz, Ritchie Bros.’ corporate communications manager.

“This was his method to finish the project. He knew that he wasn’t probably going to get the exact [Multiple Listing Service] listed price.”

No minimum reserve prices were set for the units, and Schulz said a market of about 200 potential bidders, spread between auction simulcast sites in Parksville, Richmond and Calgary, set the prices.

At the end of the day, Schulz added that the developer client “said that he was pleased to be moving on.”

The buyers, she added, “quite possibly got a good price. But that’s the market.”

One unit sold for $280,000, a one-bedroom-and-den apartment with 1,095-square-feet of space.

By comparison, the realtor-operated MLS website shows similar units in the Onyx building listed for resale at $499,500 and $489,900.

Two two-bedroom apartments with 1,250 square feet of space sold for $300,000 and $320,000 respectively. One 1,363-square-foot unit went for $480,000, and a 1,485-square-foot unit sold for $400,000.

Four other units in Onyx are listed for resale on the MLS site ranging from $619,900 to $699,000 for 1,400-square-foot apartments to almost $1.2 million for a 1,739-square-foot top-floor suite.

Harry Greenberg, a realtor with Royal LePage in Parksville, who has two of those resale listings, said he wasn’t “totally thrilled” with the outcome, but added that Ritchie Bros. can’t be faulted. There simply weren’t enough bidders to push the prices higher.

“This is a sign of the times,” Greenberg said. “Calgary, Edmonton, Vancouver and Victoria have slowed down, real estate wise, and that certainly showed.”

However, Greenberg doesn’t believe the low auction prices will affect resale values in the building over the short term. He said the last five units were the least desirable to begin with, and other units up for resale have more upgraded features.

As well, the reported auction prices don’t reflect commissions, GST and property transfer taxes that new buyers will have to pay.

© The Vancouver Sun 2008

Gillian Shaw
Sun

British Columbia homeowners are being warned to check their property title to ensure their property hasn’t been transferred to con artists who then register hundreds of thousands of dollars in mortgage debt against them.

This comes as B.C.’s land title authority is reviewing a system that could see someone fraudulently obtain title to a home and then resell it to an innocent third party, leaving the original homeowners with financial compensation but potentially driven out of their homes.

“We are currently looking at whether or not there are reforms that can be brought into play so at the end of the day the right thing occurs,” said Godfrey Archbold, president and chief executive officer of BC’s Land Title and Survey Authority.

While current fraudulent transfers uncovered in the province have been stopped before the property was resold, Archbold said as the law stands, if a property were to be resold, the new buyer would be entitled to take possession and the original owner would have to seek compensation from the land title assurance fund.

That happened in B.C. in a case where two people owned a home jointly, and one successfully sold it without the other’s knowledge. The victim was compensated from the assurance fund, but didn’t get the property back.

Archbold said the reforms are being looked at for cases in which the facts around the ownership of a property suggest a long-term relationship or a sentimental value.

“If you have only owned a home for six months, the prospect of financial compensation doesn’t bring the same burden,” he said.

The authority is also reviewing a recent B.C. Supreme Court decision that could leave the assurance fund on the hook for mortgages obtained on properties that were fraudulently transferred.

In a rec sent decision, the court ruled that a property be transferred back to the rightful owner, but it said the mortgages taken out by the fraud artist still stand and the owner had to seek compensation from the assurance fund.

Archbold said property owners can safeguard their titles by simply ordering a duplicate.

“You can apply, under the Land Title Act, and obtain a duplicate certificate of the title,” he said. “You get a paper copy of the title which you should hold in safekeeping, and we put a note on that title that a duplicate has been issued.

“That means any time anybody wanted to have any kind of change made to the title — whether we receive an application to transfer, or a mortgage — the duplicate has to be surrendered.

“That gives a person comfort that we are not going to do anything to that title until the duplicate is surrendered.”

A lawyer, notary or real estate agent can obtain such a duplicate, but this would cost homeowners about $50, in addition to any professional fees.

Property owners can also have their lawyers or notaries place an alert on their title so they are informed of any transaction, but that only comes after the transaction has occurred and so it wouldn’t block a fraudulent transfer.

In the wake of news that con artists operating in the province have successfully sold homes without the owners’ knowledge, BCAA Insurance advised consumers Monday to take steps to guard against losing money and the title to their homes.

There has been a dramatic rise in suspicious cases in B.C., according to First Canadian Title, underwriter for the title insurance sold by the BCAA.

Susan Leslie, vice-president of legal, claims and underwriting for First Canadian, said from 2004 to 2007, said the underwriter declined to insure $8.5 million in suspicious cases in B.C. So far this year it has declined almost half that, $3.5 million.

Title insurance with First Canadian comes with a one-time premium that varies with the price of the property. Even when the title transfer and mortgage are fraudulent, Leslie said the owner has to go to some trouble to get it reversed and there have been cases where financial institutions have tried to get the victim to pay off the fraudulently obtained mortgage.

“The owner still needs to hire a lawyer, needs to go to the land title survey authority. They still need to take the steps to rectify their title.

“If a lender has put a mortgage on the property, that lender is not going to walk away from their mortgage,” she said.

“[The victims] are right legally, but that doesn’t save them the cost of the fight.”

© The Vancouver Sun 2008

Think outside the trendy zones for homes you can afford

MARIA COOTAUCO
Province

Richmond is the hottest place to buy attached homes like these townhouses.

Mount Pleasant homes like these offer short commutes, but at lower prices than you can find in Kits and Yaletown.

Grandview Woodland, Mount Pleasant, Kitsilano, Yaletown and Coal Harbour are no longer the only words to set a real estate maven’s heart aflutter.

There’s life outside of the West End too, and these other areas are fast becoming hot spots for market activity.

Affordability is ruling the market right now, according to realtor Marty Pospischil of Dexter Realty-Kerrisdale.

In the two main categories of consumers — entry-level or first-time buyers and upper-end buyers — affordable housing is the hottest pocket.

According to Pospischil, this means one-bedrooms in the $350,000 range, two bedrooms under half a million dollars, and detached houses under $1,000,000.

“They’re out there,” Pospischil said with a laugh.

While the higher-end markets in places like Shaugnessy have quieted down, it’s the first-time buyers who are making an impact on the real estate market.

Some local realtors weigh in on areas that are looking hot to buyers right now: “A lot of people are switching to the east side,” Pospischil said. “We’ve been busy down there.”

“It’s more affordable and still relatively close to downtown,” Pospischil said. “You’ll get similar property for almost half the price.”

Richmond

“We are still priced very well here for young families to hop in,” Shafik Ladha of Re/Max West Coast said.

In May, according to MLS sales facts, Richmond was second only to east Vancouver in detached home sales, and first in attached home sales.

North Vancouver

According to Ozzie Jurock, of Jurock’s Real Estate Insider, North Vancouver might be the next Yaletown.

Lower Lonsdale is turning into Yaletown but with more affordable prices, he says.

The Pier Project will only do more to increase value.

Downtown

Is it any surprise? In May alone, there were 422 apartment sales in the area. That’s more than double any other area in Metro Vancouver.

Despite a median price of $458,500 for an apartment, buyers are still flocking to the core.

No matter what the area, Metro Vancouver is abuzz with real estate activity.

“Mortgage rates are low,” Pospischil said. “Money is cheap to borrow and there is a big selection of product to choose from right now.”