Canadian Money Forum banner

21 - 31 of 31 Posts

·
Registered
Joined
·
130 Posts
Discussion Starter #21
I’ve never heard of this from any of m lawyers. As for financing with a corporation you’re also getting bad advice, I’ve got a holdco for most of my properties and I get residential financing for my properties. You only get into corporate loans when you get too many properties.its the number of properties, not the name on the title that matters there. I think you need to seek better advisors
Hi thanks JaG, I know that you have a ton of knowledge about this so I appreciate you chiming in.

I'm not really questioning the existence or misrepresentation of the "merge" law. I'm confident that that is the case for the properties that I'm buying. fireseeker had the same experience, the RFD link also verifies that that law also applied to them. My RE agent and mortgage broker was also familiar with the rule. Although on the RFD link it also explained that it doesn't apply to all parcels. subdivisions or condos does not get affected. or maybe newer registered or recently land divided have circumvented that issue but may since this is an older part of town. I really do not understand it fully. it is lunatic as MP says. Old town city hall, maybe that is why can't tell you but I'm certain that that is indeed the situation. I do trust my lawyer.

NOW my mortgage broker on the other hand, about the holding company. It is possible that she is either hesitant or she is lazy to try to put my corp name or any numbered company. Nonetheless, time is not on my side. My revocable date is close approaching (past actually) I need to decide quickly. This post is more of a desperate cry to sway my decision one way or the other or a miraculous brilliant way to side step the issue. I would like to pick your brain on that notion when I have more time to execute a long term solution.
 

·
Registered
Joined
·
17,009 Posts
The financing is already approved solely on my name - I would have loved to have closed and go on my merry way. As a matter a fact adding anyone complicates the mortgage side of things.
. . .
Motivation is largely:
Convenience - managing properties that are near to each other is time, labor and financially efficient.
Control - Maintenance of roofs that are attached, driveway, fencing front yard, parking, pest control. landscaping again is time, labor and financially efficient. Imagine talking to your neighbor about repairing a shared driveway that you hardly use or a fence. Or your neighbor's garbage disposal habits invites pests etc.
Construction - This is a block of 3 century old town homes. With a large unused lot behind it and at a great location it leaves open to possibilities once you have gained control of all 3 houses in that parcel of land.
I see, that makes a lot of sense. I especially see the benefits of controlling attached physical resources (roof, fence) and how convenient it would be to manage those in one location.
 

·
Registered
Joined
·
870 Posts
Some info here...about 1/3 way down....search for “section 50 of the planning act”.


I’m super curious to understand this better.....seems highly unusual.

from another sight....”As set out in the Planning Act, when two adjoining lots are in the same ownership, they automatically merge in title, unless the lots are within a Plan of Subdivision. Once merged, it requires a planning application to separate them”
 

·
Registered
Joined
·
6,897 Posts
Hi thanks JaG, I know that you have a ton of knowledge about this so I appreciate you chiming in.

I'm not really questioning the existence or misrepresentation of the "merge" law. I'm confident that that is the case for the properties that I'm buying. fireseeker had the same experience, the RFD link also verifies that that law also applied to them. My RE agent and mortgage broker was also familiar with the rule. Although on the RFD link it also explained that it doesn't apply to all parcels. subdivisions or condos does not get affected. or maybe newer registered or recently land divided have circumvented that issue but may since this is an older part of town. I really do not understand it fully. it is lunatic as MP says. Old town city hall, maybe that is why can't tell you but I'm certain that that is indeed the situation. I do trust my lawyer.

NOW my mortgage broker on the other hand, about the holding company. It is possible that she is either hesitant or she is lazy to try to put my corp name or any numbered company. Nonetheless, time is not on my side. My revocable date is close approaching (past actually) I need to decide quickly. This post is more of a desperate cry to sway my decision one way or the other or a miraculous brilliant way to side step the issue. I would like to pick your brain on that notion when I have more time to execute a long term solution.
Well, I obviously don’t know as much as you think...I do know there’s a lot of brain dead laws in Ontario when it comes to tenants, but this merging law takes the cake. guess this is one more reason why I don’t buy in Ontario very often.

I wouldn’t worry too much about deadlines, the market is so dead people are thrilled to have anyone buy these days.

As for financing, I can see an issue if properties were merged, but the last time I financed a property it was from my holdings corporation and I got 2.05% for 4 years fixed, but the property also wasn’t in Ontario so I could be wrong about that too.
 

·
Registered
Joined
·
3,268 Posts
I suspect that what is missing from this discussion is the specifics of the property/ies in question. I suspect it is not a 'universal law' that applies to all adjacent properties in Ontario or even all adjacent 'townhouses' in Ontario. I suspect it is located in a municipality where they AUTOMATICALLY merge adjacent properties if there is one owner of both.

I get this impression from the MPAC website where they state, "Title to separately owned properties may in law “merge in title” and become one property for property assessment purposes when two or more abutting properties come under a single ownership. This may occur even if there is no Application to Consolidate Parcels registered at the land registry office. "

It sounds to me like this is for the convenience of the Municipality in assessing and collecting taxes.
 

·
Registered
Joined
·
130 Posts
Discussion Starter #27
Well I got the reply from my lawyer.

“With respect to placing the property ‘in trust’, unfortunately, that is no longer a possibility in the Land Titles System (ie. electronic system). It used to be common to put properties ‘in trust’ in the passed in the old Registry System (ie. paper system) however, the new system does not allow for deeds to be registered ‘in trust’. Furthermore, holding title in trust for another does not avoid the merger. Many lawyers are divided on this aspect of holding properties in trust however, the courts have since determined that it does not avoid the merging of parcels.”

Time to talk to Mom and Dad
 

·
Registered
Joined
·
2,815 Posts
I'd just fire the lawyer for this particular transaction. Get a new lawyer, don't tell them you own the place next door, and buy as per normal.

Leave it to the registry or city to figure out you own both, and then take it upon themselves to apply some crazy merger to their records (what would they even do? re-address and change the legal description of the property??)

Seems highly unlikely it would ever be detected, and even if it was, worse case scenario is you have to spend a few thousand on the severance process a decade from now. Instead of a few thousand on some crazy ownership scheme at the present that probably isn't even necessary...

Either that - Or buy some different unit that's a 30 second walk down the street.
 

·
Registered
Joined
·
6,897 Posts
I agree, a good lawyer should know how to get around this issue rather easily. A bad lawyer leaves you alone in a legal nightmare to try and figure it out for yourself. This has to be a fairly common situation with a workaround already figured out because most normal people would never want it done.
 

·
Registered
Joined
·
3,127 Posts
From the MPAC webpage (Ontario property assessment provider):
Mergers of Title
Title to separately owned properties may in law “merge in title” and become one property for property assessment purposes when two or more abutting properties come under a single ownership. This may occur even if there is no Application to Consolidate Parcels registered at the land registry office.

Interesting PDF discussing the legal issues around this:

And another webpage along the same lines:

Bizarre and interesting stuff.
 

·
Registered
Joined
·
130 Posts
Discussion Starter #31
Thanks Spudd, I read both links. Unfortunately no magic bullet to AVOID the stupid merger. I'm currently in negotiation with a property with the same disposition. My appetite for these types of transactions is starting to sour.
 
21 - 31 of 31 Posts
Top