10 Essential Words For Every Canadian Home Buyer To Know

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span                            how you would own the home you
class="cap">It's        live in with your spouse, as it
fun to read stories about       has the right of survivorship
wins and losses in the real           which means if one of the owners
estate game. It's motivational        dies the other immediately is
and entertaining, but sometimes       given the other person's share of
it's more important to learn some     the home. Interest is undivided
very practical information every      but equal in this ownership
real estate investor (or even a       type.

home buyer) should know. Here are

4. TENANTS IN COMMON: This is
ten essential terms to know. how my husband, Dave, and I own
Types of Interest in Land

most of our properties together

1. FREEHOLD: Owning a freehold     as it allows us to specify the
property means you have the right     percentage amount of ownership,
to use the land for an indefinite     and it does not carry the
period of time and, subject to        automatic right of survivorship.
any bylaws or restrictive             For investment properties this
covenants, may do what you wish       makes a lot of sense because you
with that land.

may not want your partners to

2. LEASEHOLD INTEREST: Owning      automatically get your share of
a leasehold on a piece of land        the property if you pass away.
gives you the right to use the        For example, Dave and a partner
land for a certain period of          M.M. have bought properties
time. The owner of the leasehold      together as Tenants in Common. If
may sell the land, but the new        Dave passed away, he'd likely
land owner will be subject to the     want his share to pass on to me
terms and conditions of the           or his family, not necessarily to
original lease.

M.M.

Owning Property

If you are putting in unequal

3. JOINT TENANCY: Typically amounts of money into the

investment you may want the           WARRANTIES: A condition is a
ownership percentages to reflect      fundamental part of the contract.
this. For example, early on in        We always make our contracts for
our relationship, we bought           purchase and sale subject to at
property where Dave did 100% of       least one condition for at least
the work on the deal and put up       5 business days. In the tri-plex
most of the money. We own this        we almost bought, we struck out
property together as Tenants in       the subject to inspection
Common with him owning 60% of the     condition but had the deal
property and me owning 40%. At        subject to us being able to
tax time, he claims 60% of the        obtain satisfactory financing. A
income and expenses and I claim       breach of a condition within the
40%.

set time period stated in the

Terms you will see in a contract allows you to get out of
Purchase and Sale Agreement

the contract. We were able to

5 & 6. FIXTURES vs CHATTELS:       walk away from the contract
If an item is built in or             without losing any money during
attached to the property in a         that 5 day conditional period
permanent way, then it is             because of the financing clause.
considered a fixture and will be      A warranty, on the other hand, is
transferred with the property         a promise but it is not
unless it's otherwise stated in       fundamental to the contract. In a
the purchase and sale agreement.      breach of warranty you may sue
A chattel, on the other hand, is      for damages but it does not allow
something that is movable like a      you to neglect your contractual
fridge or a washer and dryer.         obligations. A warranty may apply
These are assumed to not be           to something like condominium
included unless otherwise stated      fees. A seller may warrant that
in the agreement.

his/her fees are $300 a month.

7. & 8. CONDITIONS and You may find out they are

actually $400. This is not a          estate by Douglas Grey, which I
fundamental breach of contract,       used to check some of my
but you could seek damages as it      definitions above. It's called:
will cost you $100 more per           Making Money in Real Estate: The
month.

Canadian Guide to Profitable

9. CONSIDERATION: In               Investment in Residential
contractual terms consideration       Property, Revised Edition. He
refers to something of value.         covers everything including
When you buy a property, the          insurance, tax, legal information
price you pay is the                  and provides additional
consideration. This is not always     resources. It's a solid book to
a dollar amount, as it could be       have in your library as a
another property or a promise of      Canadian real estate
value.

investor.

10. DAMAGES: Damages refer to      nd>About the
financial losses that have arisen     Authorfrom failure to complete the deal     id="authorbio"
as stated in the contract. You        class="membersnoticewhite">In
have to prove you have suffered       eight years my husband and I have
financially as a result of the        built a multi-million dollar real
other parties actions, and then       estate portfolio in our spare
you can sue for those damages.        time with minimal cash resources.
For example, you could sue for        We publish a free monthly
the $100/month difference in          newsletter to help other rookie
condo fees if you could prove         real estate investors achieve
you've suffered financially by        their real estate investment
the sellers misrepresentation of      goals. the condo fees.

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