Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m O C T O B E R 2 0 1 7 21 that Ottawa may just kill us in terms of putting up obstacles that are not really designed to deal with us. "It's a difficulty the federal govern- ment faces because they want those rules to be consistent across the country but they have different markets across the country, quite dramatically different markets," he adds. "It is a bit of a source of frustration here." As the area deals with "the new reality" of cheaper oil, the city's real estate market is seeing some sustained growth, with sales up 10 per cent over last year with modest price increases. They see no big oil boom on the horizon and there is no sense of an impending runaway market in Cal- gary, Pesta says. Restrictions on approvals and rule changes make it more difficult for people to qualify for mortgages and there are fears that may impact the area's recovery. In Halifax, there is also a feeling that the series of initiatives will slow down a market not in need of being slowed down. Persistently low interest rates and fewer controls meant that many first-time homebuyers could get more bang for their buck buying larger hous- es. Now, there are challenges as people try to upgrade, observes Allen Camp- bell, whose Halifax law practice with BOYNECLARKE LLP largely involves residential real estate. From the historical perspective, Campbell sees any interest rate of less than eight per cent as pretty good. So he asks his clients to look at the equity of the home to plan for an upward climb in interest rates. But he has noticed that, as restrictions are ushered in, there is an uptick in second mortgages, credit union work and more activity involving secondary lenders. That likely is directly related to the fact that obtaining a mortgage is becom- ing increasingly more challenging with the rule changes, says Toronto real estate lawyer Sarita Samaroo-Tsaktsiris, founder of SST Law Firm. In addition to the big banks and other lenders such as smaller banks and credit unions, private lenders are also playing a role, she says, often helping to finance short-term loans. So while banks typically give a loan-to-value ratio of 80 per cent, non-bank and private lenders are not subject to federal regula- tion and could extend loans that reflect up to 95 per cent of the value of the property. "Given now that the stress test has increased, people have to seek out other means of financing. There are not the stringent requirements that the institu- tions have or even the B-lenders have. Private lenders just simply require that there is equity in the property and they don't look as much at your income and your ability to pay as they do the equity that's available in the property," says Sam- aroo-Tsaktsiris, who often acts for those lenders. She says there are risks for lawyers because the legal insurer providing cover- age for lawyers in Ontario doesn't provide protection for claims or losses incurred by private lenders. So she's instituted a series of procedures and policies she expects her lender clients to follow. That includes having an information statement con- firming the first mortgage is in good standing and there are no arears. She *Insurance by FCT Insurance Company Ltd., with the exception of commercial policies, which are provided jointly by FCT Insurance Company Ltd. and First American Title Insurance Company. Services by First Canadian Title Company Limited. The services company does not provide insurance products.. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. ®Registered Trademark of First American Financial Corporation. FCT protects you before, during and after * a real-estate transaction. Get protected today. Residential Solutions 1.866.804.3122 Commercial Solutions 1.866.804.3112 Untitled-1 1 2017-01-18 10:35 AM

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