Land, Structures and Real Estate Trading

History of Land Ownership Tenure - the holding of land without ownership. Estate - status or extent of rights associated with tenure. Types of estates:  Estate to Uses - title in the name of a registered owner who may hold title as a trustee or beneficial owner. Ownership was held for a future buyer and was used to avoid a dower right.  Fee Simple - the highest or absolute right in real property. Freehold ownership. Fee Simple with Conditions - terminates under certain conditions. Life Estate - an ownership right to an individual for a lifetime period. Future Estate - an interest in land that arises at the end of a life estate.  Leasehold Estate - an interest in land for a specified period of time. Concurrent Ownership When 2 or more have a right of ownership at the same time. (Joint tenancy or Tenants in Common) Joint Tenancy - ownership by 2 or more whereby on the death of one (the right of survivorship), the surviving tenant take the whole estate. All owners have the same size of interest. Four Unities (if these conditions are not satisfied - tenancy in common has been created): Title - all joint tenants must get a title from the same instrument (ex. deed or will). Time - the interest of each joint tenant must begin at the same time. Possession - If Jones and Smith own 2 acres as joint tenants - they both own 2 acres. Interest - the interest of each joint tenant must be identical in nature, extent, and duration. Termination - a joint tenant may destroy the right of survivorship before death without the consent of other joint tenants. If there are 2 or more other joint tenants, they still joint together but tenants in common with the severed person.  Tenants in Common - unlike joint tenancy, the interest of deceased person does not pass to the survivor.    Matrimonial Home - a special status given to selected properties pursuant to the Family Law Act. Family Law Act - Part 1 - equal division of property on divorce or death with stated exclusions. Part 2 - details the rights of the non-owner spouse to equal possession of the matrimonial home and sets out rights of possession of that home. According to the Law Family Act, there can be more than 1 matrimonial home.  Family Property - property acquired during the marriage is equally divided between the spouses. Each calculates the value of the own property, after deducting the net value of the property that he/she brought into the marriage, excluding matrimonial home. The spouse with the greater net value pays the other an amount to equalize their holdings.  Non-Owner Right to Possession - the Act confirms the right of the non-owner spouse to equal possession of a matrimonial home. The spouse has the right to be notified of any proceedings by a 3 rd party that could affect the possessory right.    Ownership Alternatives Condominium  - the fee simple ownership of a specified amount of space in the multi-occupancy building with tenancy in common. A unit owner can sell a unit, but the unit ownership and tenants in common ownership must be sold as a package.  Legal Structure - Condo is established through a declaration (Constitution of the Corporation) and the description(Presentation of Property). The unit owners are personally liable for all debts and obligations of the condo corp.  Co-operatives - provides a joint ownership alternative in which a property is owned by a corporation and members have a lease for a unit and may acquire a share in the corporation. Co-ops are managed by a board of directors.  Equity Co-operative (with share capital) - corporation that owners the land and buildings with members as shareholders in the corporation.  Non-Profit Co-operative (without share capital) - has the primary objective of providing housing for its members without the purpose of gain for those members.  Co-ownership - any situation in which 2 or more persons own property...

Land Description Methods Descriptive Fundamentals - Land is described for legal purposes that 1 piece of land cannot be mistaken for another. A description must include the most complete legal identification of the property. Township - division of a county into several areas for administrative purposes. Concession - strips of land making up a township, each separated by a road.  Single Front Township - the oldest township system. consisting of 200-acre lots.  Double Front Township - township consisting of 100-acre half-lots. Sectional System Township - township consisting of 1000-acre sections with divisions into lots. Land Measurement - based on the old chains and links system. A chain is 66 feet, 100 links make a chain and 80 chains = 1 mile. This system is still a basis for land descriptions in ON today.   Meets and Bounds - a system of written land description whereby all boundary lines are set forth by use of terminal points and angles.  Directions and Quadrantal Bearings - a method of expressing the direction of a line in terms of the acute angle it makes with the north-south line chosen as the reference line for that particular survey.  Analysing a Metes and Bounds Description:  Direction - the reference to degrees, minutes and seconds represents very accurate compass directions. The division of degrees into 60 parts called minutes. And minutes into 60 called seconds. Distance - the measurement is given in 100 of foot, the expression more or less  (погрешность) is still used.  Enclosing the Property - the line must reach the place of commencement.  Location - to indicate the perimeter of the parcel by setting out directions and distances.  Compass Bearings - the bearings are compass directions. The first direction is always true north or south. Surveys - is prepared by Ontario Land Surveyor, depicts accurate math measurements of land and improvements. Also involved in the preparation of the Description. Ontario Surveys - surveyors in ON are subject to Surveys Act and Surveyors Act. The Association of ON Land Surveyors determined that survey consists of: Research Measurements Monumentation Plan and/or Report Cadastral Surveying - refers to a division of land, visual presentation showing boundaries, dimensions etc.  Surveys Act - sets out requirements for the establishment of lines, boundaries, and corners. It consists of 11 parts that describe methods and procedures. Surveyors Act - the Association of ON Land Surveyors, as the governing body for land surveyors in the province, operates under the provision of the Surveyors Act, it sets out standards of practice concerning field surveys and plans:  Part I (Interpretation) - definitions relating to surveying. Part II (Field Survey Standards) - establishing accepted terminology for licensed members to engage in the cadastral surveying.  Part III (Plans) - applies to plans executed by a registered member while engaged in cadastral surveying.  Part IV (Report) - describes the components included in a surveyor's real property report. The report must consist of a plan of survey and a written report.  Surveyor's Real Property Report - plan of survey and a written report. It represents a full survey of the property, with the exception that complete monumentation is not required. Only the front angles of the property must be monumented. This survey does show everything that might affect the title of the property as well as the enjoyment of the property by the owner. Reference Plan - is not a plan of subdivision, but rather a plan of a survey that meets req. as set out in the Surveys Act. A reference plan normally describes more than 1 area with each identified as a part (ex. PART I, PART II...). Buildings may or may not be shown. Plan of Subdivision - a detailed survey indicating lots, blocks of land, road allowances etc. Subdivision Plans divide the land into...

Land Registration Systems - exist under Registry Act and the Land Titles Act. Administered by the Real Property Registration Branch, Ministry of Government Services. The process involves POLARIS (the mapping and property database of the ON gov.) and Teranet (respons. for implementation, operation and enhancement of POLARIS). The Recording Acts - Registry Act and Land Titles Act provide rules affecting interests with respect to any particular land and the priority of those interests. In ON land can't be registered under both acts.  The Registry Act - records property interests on a geographic basis. All land within counties is registered at registry offices. Land Titles Act - operates on the premise that the Land Titles Register is the sole information source for purchasers. Land titles is based on 3 principles: mirror principle, curtain principle, and insurance principle.  Land Titles - all Crown Patents, land subdivided by a registered plan of subdivision and condos must be registered under this Act. Land registered under Registry Act may be brought under land titles. While registry operates under geolocation system - land titles assign parcel numbers.  The Mirror Principle - the register of a title is a mirror that reflects the current facts that are material to a person's title.  The Curtain Principle - the register is the source of info for buyers, who need not concern with trusts and equities that lie behind this curtain of info. The Insurance Principle - the mirror (register) is deemed to give a correct reflection of title, but if a human error appears, anyone who suffers must be put in the same position. The Land Titles Assurance Fund - designed to provide financial compensation for persons wrongfully deprived of land. Tha claimant must apply to the Director of Titles.    Land Registry Offices (LRO's) - e-registration and paper-based systems co-exist in ON. Title Searching - refers to locating, organizing and considering facts about docs and other materials related to registered on title (normally involves a lawyer or a title searcher on behalf of the lawyer). Personal Property Security Registration (PPSR) - records and stores info about purchases of goods and other personal property used to secure loans regarding such purchases. Personal property filled with PPSR is referred to as a chattel.   Land Titles Conversion Project - involves the conversion of registry docs to land titles with a change to the POLARIS system. Land Titles Conversion Qualified - a pre-established search procedure verifies existing recommendation of the Ministry of Government Services. The title to the property is insured with claims being settled under the Land Titles Assurance Fund.    Automated Records and E-Registration POLARIS - this automated land registration system operates based on a title index (description of property ownership) and property mapping (surveys and plans) databases. POLARIS permits the user to find the property by individual parcel, name or street address within the title index.  Property Identification Number (PIN) - a PIN # is assigned when properties are converted to land titles and automated under the POLARIS system. Teranet - a land info services company offering land-related data access, technology and expertise to private and public clients. Automation of land registry offices.  Teraview - software operated by Teranet provides clients with online remote access to land info products and services, including POLARIS. It is designed to permit users to perform activities through online connections to land registry offices. Teraview accesses 3 databases within POLARIS:  Title Index db - indexes and parcel registers Property Index db - visual maps Image db - plans and imgs A successful search will produce the full description, the owner of the property and a list of all...

Planning Fundamentals - the planning system established in ON came about largely through the Planning Act and related legislation. Levels of Authority:  Federal - involvement concerning airport lands and ocean/fisher lands. Provincial - resp. for overall provincial planning. Planning policies while delegating responsibilities to municipalities. Municipal - resp. are set out in the Municipal Act.  Provincial and Municipal Perspectives - The Planning Act is administered by the Ministry of Municipal Affairs and Housing. The Act permits agencies to make decisions on patterns of land use, road networks, schools, recreational fac. and water supply. The Planning Act - establishes the framework for planning system throughout the ON. Planning involves 2 tired structure for municipalities:  Upper Tier (region, country or district) -preparation, adoption, and revision of the official plan, and the process of dividing and development land. Lower Tier (municipality) - preparation, adoption, and revision of the official plan, and the adoption of zoning by-laws, interim control by-laws and other by-laws. Provincial Perspective Provincial Policy Statement - concerns land use planning issue of province-wide interest, promotion of efficient, cost-effective development and land use patterns that stimulate economic growth, while protecting the environment and public health.  Officials and approval bodies engaged in the planning process must be consistent with these statements.  One Window Planning Service - provides a co-ordinated approach that reduces duplication effort, shortens approval times, and better service municipalities, developers, registrants and others involved in the planning process.   ON Municipal Board (OMB) - an administrative tribunal that operates similar to a court of law, but with less overall formality. OMB addresses the concerns of individuals, public orgs, and corps. that object to decisions of various public authorities. The board operates under the ON Municipal Board Act. Usually involves land use and planning issues.    Municipal Perspective - 10 spheres of influence over which municipal gov. has authority: Public utilities, waste management, animals, Economic development, highways & public roads, parking, transportation, structures, culture, food control. Impact on Listing/Selling Activities: restrictions on the placement of advertising, signs etc.  flood control that affects properties in flood-prone areas standards in control of noise, vibration, odour (smell) construction of fences regulation  the placing or removal of soil and grading energy conservation programs the authority to enter private lands to inspect the discharge of waste Official Plan - is designed to provide a framework for future decision making and to respond in an organized fashion of trends and influences currently experienced within that municipality.  Normally extends for a period of 10 - 15 years.  Approval - the plan typically req. approval by the Ministry of Municipal Affairs and Housing before becoming official. Certain plans may not req. approval. Official Plan Amendment - an official doc that alters the current plan due to changes in situations arisen in the municipality. Committee of Adjustment - charged with resp. for granting minor variances in keeping with planning principles and zoning by-laws.  Minor Variance - a small or insignificant variation concerning a particular property.    Land Division Applications - regulated under the subdivision control of the Planning Act. Land division applications can be viewed from 2 perspectives: severances and subdivision plans.  Subdivision - the process of taking a piece of land and separating it into parts. Land Severance vs. Subdivision: if a landowner wants to divide 1 parcel into 2 or 3 - the process begins with an...

Municipal Controls/Restrictions - zoning by-laws are enacted by municipalities setting out permitted uses, building structure standards. Zones are broken into classifications and sub-classifications. Owners may seek minor variances when property does not meet req. Owner may also fall under non-conforming use (structure that lawfully existed before current zoning by-law) status. Communities may have site-specific exemptions (properties that exempt under zoning by-law). Zoning By-Law - is a doc to regulate the use of land. It may restrict or prohibit the use of land, buildings, utilization of land or regulate the type of construction. Planning Act Provisions - details provisions that must be addressed by local municipalities in passing and enforcing zoning by-laws. The by-law normally divides the municipality into land use zones and specifies the permitted uses along with req. standards.  Zoning Classifications - residential, commercial, industrial, institutional, open space and agricultural. Each class further subdivided into sub-classes. Zoning Amendments - property owners may want to use property in a manner not permitted in the zoning by-law and must make an application to amend zoning by-law. Site Plan Control - this method of control is imposed during the planning and development process. Recreational properties and cottages on or near water are often subject to site plan control. Individuals making an application should contact the local planning department (site plan, landscape, grading, drawing etc.). Review/Approval Process - the site plan approval process allows the municipality to review the overall design of planned structures and assess developmental impact on surrounding uses. On completion the final drawings are stamped and recommended for approval. Once site plan is obtained, the applicant is resp. for development. Site Plan Control Agreement - setts out terms for property development.   Building and Fire Codes Building Codes - building code req. and minimum construction standards. National Building Code of Canada (NBC). ON Building Code - Building Code Act, that follows National Building Code of Canada. Sets out min standards for building design, safety, fire protection and structural sufficiency. Reviewed every 5 yrs. Amendments reflect changes in tech. and emerging public safety issues. Inspector - is permitted to enter onto the lands subject to a building permit at any reasonable time without a warrant. Occupancy Permit - is issued for the structure once all inspections are completed and ON Building Code req. are met. Fire Code - The National Fire Code of Canada (NFC) establishes levels of fire safety for both new and existing buildings. Each province has a fire code. ON Fire Code - the Fire Protection and Prevention Act sets out resp. for fire protection services, the duties and powers of the fire marshal and those appointed by the marshal, rights of entry, inspections, recovery costs, labour issues. Building Code vs. Fire Code - fire safety req. are regulated under one of 2 provincial regulations, the ON Building Code (applies to construction of new buildings) or the ON Fire Code (regulates fire safety in existing structures). Fire Classifications:  A - materials which burn easily B - involve grease or flammable liquids that burn rapidly C - start in energized electrical equip. D - start in combustible metals Watercourse Controls/Restrictions - 2 key areas involving flood plains and wetlands are highlighted. Flood Plains - municipalities include either one zone flood plain (entire are is a floodway) or a two zone flood plain within official plans and the ability to construct buildings are impacted by flood proofing (methods that minimize flooding) and related activities. Conservation Authority - established under the Conservation Authorities Act. The most visible activity - regulation of flood plains, to reduce risk to life and property from flooding and...

Residential Structures - Detached - a detached home is a residential structure on a specific plot of land. Attached range from semi-detached to townhomes and multi-unit. Bungalows - lack of stairways with the living area contained on 1 floor: Ranch Style - extensive space typically with an attached double garage. Extremely large basement and storage areas. Bi-Level/Split Entrance - has the front door located as a 'split level' between the upper main areas and the lower area. As such, the basement area is higher allowing for larger windows. One and One-Half Storey - 60% of the living area contained on the 1 floor. This style is more cost effective than the bungalow, by providing more sq. footage on the same building coverage on the land. Two-Storey - large living area combined with separate level for sleeping area. Split Level   Residential Structures - Attached Semi-Detached - gained popularity in Eng many yrs ago. Offer price advantages, particularly for young ppl. Town Houses - 3 or more units are joined together by common party walls. Each unit contains a full basement, main living area and upper bedrooms area. Townhouses are either offered as freehold or condominium. Multi-Family - range from low density units to mid (4 to 12 stories) and high rise (>12 stories).   Commercial/Industrial Office - can range from free-standing small offices to low and high rise complexes. Many commercial buildings are classified as mixed use. Industrial - can be grouped under 3 categories. General purpose (features for wide range operations), Special Purpose (offer selected features, but could be used for alt. purposes), Single purpose (Only 1 use). Retail and Agricultural   Structural Components Footing - widened section at the base or bottom of a foundation wall, pier or column. It transmits the weight of the structure to the soil, without allowing the structure to sink. Foundation - the base upon which the structure is built, has 3 basic functions: transmit the weight of the structure down to footings. resist lateral pressure of the soil on the outside of the basement and act as a retaining wall. carry the weight of the structure below the frost line to prevent frost heaving. Columns/Posts - structural component to carry the load of a beam vertically down to the footings. Should have a footing.   Basement Leakage - drainage (internal/external). Floor and Framing Systems - the floor system starts with sills providing a continuous pad between the foundation top and the bottom of the framing system. The joists, resting on the sills, provide the structure on which sub-flooring is attached.  Framing Components: Beam - is a long structural component designed to carry floor and wall loads horizontally to the foundation. Joist - one of a series of horizontal wood members used to support a floor, ceiling, or roof.  Bridging/Blocking - retain the joists from twisting and helps transmit loads from 1 joist to adjacent joists. Sill Subfloor - transmits live loads of ppl and furnishings to the floor joists. Roof - roof coverings are not intended to keep out the cold.  Flashings - designed to keep water out. Pitch - slope of the roof. Rise over Run. Sheathing - 2 functions: supporting the roof covering the load of this material as well as the snow, ice, wind etc.  Trusses - hold up the roof sheathing and shingles, transferring the roof loads to the outside or bearing walls. Rafter - roof joist. Supports the roof sheathing and transmits the roof loads to bearing walls and beams below.

Roofing 1) The most common type of asphalt shingle used today weights 210 pounds.  2) Most asphalt shingles are self-sealing and classified by weight.  3) The life expectancy of wood shingles can extend to 40 yrs, depending on quality. 4) Pitch (наклон) does have an effect on shingles life expectancy. The steeper (круче) the pitch, the longer the shingles are likely to last. 5) Roof leaks can be difficult to trace because water does not always appear on the interior immediately. 6) A window sash (оконная створка) is a frame that holds the pane of glass (оконное стекло).  7) Glazing - act of furnishing and/or fitting panels of glass in relation to doors and windows.  8) Brick masonry wall (кирпичная кладка). Solid brick walls in residential structures were commonplace historically, but now replaced with framing and exterior brick veneer. Wythe is a layer of brick. 9) Drywall is installed directly to wall framing studs and does not req. a base coat. 10) Low-e glass effectively reduces long wave radiation, which reduces the amount of heat entering the structure.  11) An ER -80 indicates a poor energy efficiency.  12) Volatile Organic Compounds (летучие соединения) can be toxic and lead to health problems.  13) A lintel (верхняя перемычка окна или двери) might be found above the door or window. It supports the load over the door.  14) A double hung window is constructed with two moving parts. 15) Copper eavestroughs  are considered the best, with life expectancy between 50 - 100 yrs.  16) A built up roof is commonly called a tar and gravel roof. 17) Roll roofing normally has life expectancy of 5 - 10 yrs.  18) A slider window typically travels in a wood or vinyl track. Casement window open inward and outward.  19) Eavestrough (водосток) is attached to the facia board.  20) A downspout should have a min discharge distance of 6 feet.   

Electrical -Electrical Service Size, from 60 amps in old homes to 200 amps in new, is dictated by the service entrance cable entering the property. As power enters the house, it travels into main disconnect with 2 fuses or 2 circuit breakers, sometimes connected together to look like 1 big breaker. The size of the service entrance cable determines how much electricity is available.  -The resistance of any material to electricity is measured in ohms. The power is measured in watts. -Distribution Panel distributes electricity through circuits into different parts of the house. -Electrical Current (ток) measured in amps. -Disconnect switch is used to provide or shut off all power in a structure. Can be in the panel or a separate box.  -Grounded outlets provide safety escape rout in case something goes wrong. Ground Fault Circuit Interrupters are normally used for bathroom circuits and exterior outlets, but could be utilized in various situations. -Knob and Tube wiring was used (pre1950s), derives its name from the ceramic knobs and tubes. Problems may arise from overloading.   Heating  -Furnaces and Boilers are central heating systems in that the heat is generated and distributed.  Electric Furnace Gas Furnace Gravity Furnace - relies on air convection rather having a fan. Oil Furnace  -Capacity refers to amount of heat the a system can generate. Rating are given through BTUs per hour. -Efficiency is about 55-65%. Mid-efficiency is 80% range. High-efficiency mid to high 90% range. -Hot water boilers consist of closed and open systems. -Heating, Ventilation and Air Conditioning (HVAC) regulate the even distribution of heating, cooling and fresh air throughout a building. -Fireplace, the air goes up the chimney (труба). Flue (дымоход) is a separate channel for the discharge of smoke, located above firebox and smoke shelf.  -Condensing furnace is the high efficiency furnace.   Plumbing (водопровод) -The supply of water for drinking, washing and cooking, disposal of water and waste.  -Wrapping the pipes with fibre glass insulation reduces noise. -Hot water tanks are insulated to provide higher energy efficiency.  -Water Wells legislated by the Ministry of Environment. Water testing - chemical analysis and microbiological analysis. Buyers and sellers must be fully informed regarding water test procedures.   Sewage Systems -Most houses are connected to municipal sewer system. -Class 4 Sewage System is the most common form of private onsite waste sewage. Consists of tank and leaching bed. Soil conditions must be done to establish the exact location. -Class 5 installs only under specific situations. Holding tanks are grouped under class 5.   Insulation -Thermal insulation is typically discussed in terms of R-Value: the higher the #, the greater the resistance to heat transfer. The RSI value is a metric equivalent of R-Value. RCI is metric and R is imperial. Conduction Convection Radiation Energy Efficiency -R-2000 is an energy efficiency program relating to new residential construction. Registration certificate is issued by Natural Resources Canada.  -Energy Audit is an analysis of energy loss in a structure, typically including recommendations.  air leakage and general condition of insulation. Humidity and moisture lvl that can result in mould. windows and other openings.  furnace and duct distribution systems. water heater system.

Appraisal 1) Purposes of an appraisal - ownership transfer, extension of credit.  2) Fee appraisers and other individuals with appropriate credentials or experience can complete form reports - widely used by financial institutions for residential mortgage financing value estimates. 3) Narrative reports tend to be lengthy. 4) A letter of opinion is best described as a brief estimate of value.  5) The effective date of an appraisal can differ from inspection date of an appraisal. Effective date is the date on which the appraisal applies. Step 1 -  Establishing an appraisal plan (Preliminary inspection and planning the work). Data collection and Analysis. 6) The age cycle of a neighbourhood consists of 3 phases - growth, stability  (time when area is built up and prices stabilize) and decline. The factors when analyzing a neighbourhood in relation to a single family home appraisal will differ from those for a retail or farm. 7) Site analysis involves assessing factors - locational, physical, legal/gov., economic.  8) Analysis of site improvements includes - improvements on the site and to the site.  9) Reconciliation is based on careful analysis and judgment, not only on math. Method of evaluating and selecting from 2 or more alternatives to arrive at a single estimate.  10) A comparative market analysis (CMA) is not an appraisal. It is a form to assist the seller in establishing a listing price.  11) The Residential Market Comparison Guide provides recommendations concerning - max list price and probable selling price.  12) Assessors use same approaches to estimate the value, but restricted.  13) The assessment notice doesn't include taxes. However municipality uses this assessment to calculate property taxes.  14) The appraisal report includes environmental conditions effect condition.  15) Stigmas involve perception. 16) Automated Valuation Model - a statistical method to establish value through computer. 17) MPAC - reconsiderations must be made through MPAC.  

Procedural Steps:  Obtain Info Analyze Data Compare with Subject Property  - make the necessary adjustments, can be dollar amounts or %.  Final Estimate/Reconcile  Sources of Information - best sources are the brokerage's files and board's MLS. Also, registry land titles offices can be used.  Comparability - the most important factor is a selection of truly comparable properties. Big adjustments illustrate poor comparability and vice versa.  Time - the time resale method is used, sales within a short period of time.    Significant Characteristics - location, lot size, and physical characteristics. Lot sizes are typically adjusted by the front foot/meter on a per lot basis.  -Adjustments are made on the value basis, not cost. -If comparable is better than the subject property - minus adjustment is made to the sale price of the comparable. If worse - a plus adjustment is req.  -Usually, the final estimate is rounded to the nearest 500$ Reconciliation - logical reasoning process used to narrow down the value range to a final estimate. Completed reconciliation will include a final estimate and written justification. 4 step approach:  Select Comparables - time/market conditions, market value  Make Adjustments - time, location, lot size, physical characteristics.  Establish Adjusted Sale Price Complete Reconciliation - the most recent sale is the best indicator of value. The sale req. min adjustments is the most comparable.

Cost Approach - focused on objective value. Is applicable when property involves new improvements for which there are no comparable on the market..  5 Steps:  Estimate the value of the site. Estimate the replacement cost on the effective date of the appraisal. Estimate depreciation suffered by the improvements. Estimate total depreciated cost. Estimate value of the property.  Reproduction vs. Replacement cost - historically, the cost approach relied on reproduction cost (the cost to produce an exact replica). Now, appraisers favour replacement cost (cost of construction at current prices). Replacement cost calculations are less complex. Step 1 - Estimate the Site Value Comparative Sales Method - this method is based on the most recent data sales available on similar sites.  Abstraction Method - separating the value of structure and other physical improvements from the total of the property to arrive at site value. This method is used when comparable sites cannot be found. Land Residual Method - based on principal of surplus productivity. Sets value through the capitalization process. Land Development Method - applied when comparative method can't be used due to lack of comparable. Method for specific properties.   Step 2 - Estimate Replacement Cost Comparative Square Metre/Foot Method - calculation the known cost per sq.m of a new building similar to the subject, and then multiplying this unit cost by the # of sq.m in the subject structure.  Cost Services Method - a method relies on dollar costs provided in a cost service manual. Unit-in-Place Method - determining the unit cost of component sections of the structure installed or in place. Includes both material and labour.  Quantity Survey Method - the most accurate and providable method, but time-consuming.   Depreciation - loss in value, measured as of the date of appraisal. Physical breakdown and functional loss of value.  Physical Deterioration - curable / incurable. Effective Age - the age of a structure based on its condition and utility. Various parts of structure may have different effective ages.    Step 3 - Estimate Accrued Depreciation Flat Depreciation Method - costing service companies provide flat annual depreciation rates. Economic Age-Life Depreciation Method - effective age / economic life .   Superadequancy - overimprovement.  Reproduction cost is more effective than the replacement cost. 

The Income Approach - 6 steps.  Direct Cap. - converting the income generated by a property into capital value (cap. rate). Based on a single year projected income and expenses.  Net operating income / overall capitalization rate = Value  Yield Cap. - conversion of projected income stream into an estimate of value by analyzing forecasted operations over a holding period.  The Reconstructed Operating Statement - 1 year analysis of income and expenses with adjustment. Adjustments made on comparable properties.  Excluded Items - business tax, depreciation, interest on mortgage and capital improvements. Step 1 - Estimate Potential Gross (rental) Income - multiplying the rental value per unit by the # of units. Step 2 - Calculate Effective Gross Income - potential gross (rental) income estimated in step 1 plus other income, less an allowance for vacancy and credit losses. Step 3 - Calculate Gross Operating Expenses - only expenses necessary to maintain the flow of rental income are included. Step 4 - Calculate Net Operating Income (NOI) - income after deducting all expenses from gross income. Step 5 - Select Capitalization Rate - rate of return on investment (discount rate) / rate of return of investment (recapture rate)

Mortgagor - borrower. Mortgagee - lender.  Equity of Redemption - the right of the mortgagor to reclaim clear title to the property upon full repayment of the debt. Types of Mortgages:  Legal Mortgage - a doc in which the direct conveyance of title is involved subject to the repayment of a debt. Equitable Mortgage - the most common form, mortgage of equity of redemption.  Chattel Mortgage - given on moveable possessions or personal property. Mortgage Priority - determined by the time of registration under the Registry Act and Land Titles Act. Subsequent Encumbrances: Right to prevent default / Right to be notified. Implied Covenants - obligations of a mortgagor: First Implied Covenant - usual covenants. Second Implied Covenant Third Implied Covenant Mortgagee Rights:  Right to assign the mortgage - the mortgage can be sold, transferred or assigned without the consent of the mortgagor. The mortgagor must be notified of the assignment.  Right to be paid - based on arrangements in the mortgage document. Failure will give rise to the power of sale and foreclosure. If all covenants are fulfilled - a discharge is provided.  Mortgagor Rights:  Right to quiet possession  Right to redeem the property free of the mortgage - the right to sell or mortgage his interest. Right to discharge the mortgage - when the loan is paid off. Discharge fee. Privileges: Prepayment  Renewal  Transfer  Postponement  Default - failure to fulfill covenants, to make payments.  Non-Legal Remedies - attempt is made through personal contact with a mortgagor.  Legal Remedies - legal action. Court, power of sale, possession etc.    Mortgage Funding  Money Market - sector of financial market dealing with short-term investments. Primary Market - consists of prime and sub-prime markets. Prime market is focused on borrowers who have A or A+ credit. Sub-prime - higher risk lenders, B and C levels.  Secondary Market - Trading of existing mortgages. Mortgages are pooled and converted into securities.  Canada Mortgage and Housing Corp. (CMHC) - has provide default insurance. Major supplier of mortgage insurance. 

Residential Underwriting (Mortgage Qualification) - application focuses both on property and applicant.  Pre-Approval - set out max amount that can be borrowed, interest rate and monthly payments. Subject on an appraisal of the property to be mortgaged.  Mortgage Application - the lender views it based on 5C's of credit, applies GDS / TDS and completes a credit report through a credit bureau. Credit Bureau - provides credit info that is updated on a 60-day basis. Credit report. Credit score - # between 300 - 900. The Property - the lender may refuse to finance specific property or seek a larger downpayment.  Lender Holdback - not advanced funds until spec conditions are met by the borrower. A time limit is set.  Mortgage Commitment - the lender, once the underwriting is done, preps a mortgage commitment setting out terms and conditions for acceptance. Fixed vs. Variable - variable rate fluctuate with the bank prime rate with limits on rate increases/decreases.   Commercial Underwriting  Mortgage Documentation Package - site description / improvements / financial profile / mortgage financing request. Loan-to-Value Ratio - property = $750k, lender considers a mortgage based on 75% of value: 750000 x .75 = 562500 (loan amount) . Debt Coverage Ratio - comparing net operating income to total debt service. Usually used to establish business or rental property.  ex. The Net Operating Income (NOI) = 28373. The borrower is seeking a loan with monthly payments = 1670 per month: 28373 / (12 x 1670) = 1.42. Safety Margin - when lending based on operating income.  Risk and Capitalization Rate - lenders may reduce risk by increasing the capitalization rate.    Specialized Products  Bridge Loan - form of financing when a buyer has to close 1 sale prior to receiving funds from another sale. Development Loan - loan for servicing and improving land prior to building construction.  Gap Loan - provides funding between construction advances and the placement of the permanent financing.  Interim Financing - short-term financing used to address immediate needs as distinguished from long-term debt structure.  Letter of Commitment - written commitment by a lender setting out terms under which a loan will be granted. Letter of Credit - authorize the person named to withdraw a spec. amount of money based on prearranged terms and conditions.   Letter of Intent - agreement between the parties and is not a formal contract.  Standby Loan - pre-construction loan commitment between developer and lender. 

REBBA Consists of statute and 6 regulations. REBBA doesn't refer to term - agency.  GEN - General, Ontario Regulation OTH - Education req., insurance, records and other matters, ON regulation. Trading Exemptions - auctioneer, full time salaried employee, solicitor, residential tenancies.  Agency Relationships - agent represents the principal in dealing with third party. Relationship is documented using the representation agreement.  The principal has 2 duties:  Indemnification - the principal is obligated to compensate the agent for liabilities. Remuneration - payment for services. Remuneration is set out in representation agreement.  Third party - individual who is not directly connected with a legal transaction, but may be affected by it.  Broker - middleman who acts for others in negotiating contracts. Synonymous to agent.  Relationship Key Elements:  the relationship is creation of law.  the relationship is consensual (parties are consent). the control of conduct rests within the principal. The agent must obey principal rules.  the relationship is fiduciary in nature. The agent becomes a fiduciary in the eyes of the law and must act at principal's best interests.  The agent may affect principal's legal position. Limits on Brokerage Authority: Contract - brokerage and reps can't sign contracts on behalf of the principal. Delegation - to use other brokerages in the marketing selling process is not permitted. Purchase Price - brokerages can only receive a deposit relating to the purchase.  Expense - cannot incur expenses on behalf of the principal.  Agent's Duties to Clients - a duty of care is owed to clients for everything that is done for clients. 8 general obligations applied to brokerages:  Exercise Care and Skill - posses skills and knowledge to perform services. Completeness and accuracy of information.  Negotiate Favourable Terms - assisting principal in negotiations and drafting terms and conditions for agreements.  Maintain Confidentiality - all info from the client must be kept confidential. Disclose Information  Ensure Honesty  Act in Person  Obey Instructions - instructions of the principal. Perform Mandate - as set out in representation agreement. Fiduciary Obligations - written agreement is not req. 5 obligations:  Maintain utmost loyalty - best achieved by representing interests of 1 party. Avoid conflicts of interest - multiple representation for example. Disclose conflicts - failure to openly disclose conflicts can give rise to registrant liability. Not make secret profit. Not misuse confidential information. Regulatory Obligations:  To Account - agent's resp. to account for and safeguard money, docs and property entrusted. Proper record keeping.  Remuneration Provisions.  Not to Induce, Breach or Make Certain Proimises - no promises unless they are written and signed. To Deliver Agreement, Offers and Statements. Agency relationships / Forms. Disclosure: representative capacity - brokerage and reps must provide info as early as possible and before entering in agreement. Principal Duties to Agent: Indemnify - reimbursement for expenses incurred. The principal must compensate the agent for loss or damage. Remunerate  Obligations in the agreement Agency relationship can be written or implied. 

Representation  Relationship between agent and principal can be grouped under 2 categories:  Single Representation - agent represents only the principal. Co-operative brokerage works with another party. Multiple Representation - brokerage represents 2 or more parties at the same transaction.  -Each person entering into a written representation agreement must immediately receive a copy. -Single representation agreement can be written, oral or implied. The Code of Ethics doesn't req. a signature, but registrants must be aware of risks. REBBA Compliance  -Registrants must not represent more than one client unless all parties gave informed, written consent. Brokerage must inform that it represents more than 1 client and outline difference in obligations compare to single representation. Concurrent representation - brokerage representing 2 clients at the same time. Sub-Agency - involves authorization by 1 brokerage to another brokerage to assist in advancing the interests of the principal, with the consent of the principal. The sub agent owes all of the same obligations to the principal as does the agent.