Follow Canadian Immigration and Canadian Law: Canada is a vast country with a total land area of 9,976,000 square kilometers, or 3,851,000 square miles. With population growth and the expansion of commercial, industrial, residential, and recreational land, Canada has attracted significant foreign property investment. Foreign owners of real estate.
Under the federal Citizenship Act, non-residents of Canada are able to purchase, own, and sell real estate, subject to the same rules and conditions as Canadian residents or citizens. However, the law also grants provinces the power to restrict the acquisition of land by non-citizens and non-permanent residents, or by corporations and associations controlled by them.
In Ontario, the Aliens Real Property Act grants non-Canadian citizens the right to own or sell real estate. However, under the Extra-Provincial Corporations Act, companies incorporated in jurisdictions outside of Ontario must obtain a license before they can purchase, own, or transfer real estate in Ontario. Such licenses are, however, easily obtained.
In Quebec, under the Act Respecting the Acquisition of Farm Land by Non-Residents, non-residents may not purchase farmland in the province without the approval of the "Commission de protection du territoire agricole du Québec." This commission is responsible for the protection of agricultural land in Quebec. Several other provinces have similar restrictions to protect agricultural land.
Canadian provinces and territories may at any time provide real estate mortgage lenders and property owners with real estate insurance policies guaranteed by major U.S. title insurance companies, certified by the "American Land Title Association," and including standard endorsements and policy exclusions.
Land Use Planning
In Ontario, the Planning Act sets out the main principles for government control of land development and use. Land use planning is a provincial government authority and is supervised by the provincial government; however, significant planning functions have been delegated to local and municipal governments. Land use control is achieved through mechanisms such as Official Plans (a long-term master plan for a region or municipality) and zoning (i.e., regional planning) bylaws (which define the division and permitted uses of every parcel of land within a city, as well as other regulations, such as required parking and regulations regarding the type, size, height, and location of buildings and structures). For land purchasers, it is essential to understand the Official Plan and zoning bylaws. Most municipalities require that site plans be approved before construction on new development projects can begin. Site plans determine the details of a building development project (including the location of buildings and related facilities such as landscaping, services, driveways, and parking spaces). Most municipal authorities also require developers to sign agreements guaranteeing that construction work and future maintenance will comply with the site plan.
In Ontario, under the Planning Act, all land subdivisions must be approved by a local committee of adjustment or a regional subdivision control committee. This requirement also applies to mortgages or any other interest in land (such as leases) for a term of 21 years or more (including all renewals); the same applies to mortgages or other partial interests established in land. This approval procedure is mandatory; otherwise, it will result in the invalidity of all interests brought about by the transfer, mortgage, or lease of the real estate. Although there are many exemptions to this requirement, contracts for real estate purchases in Ontario must be signed with the consent of all parties, and the responsibility and costs associated with signing the deed of sale are usually borne by the seller. Anyone in the province who wishes to subdivide land or sell it in smaller parcels must obtain government permission and submit a draft plan of subdivision for approval as required. Typically, municipal authorities will require the developer to sign a development agreement in this regard. Under this agreement, the developer agrees to provide drainage systems, roads, and other services for the subdivided community, and portions of the land will be designated for public or other charitable uses.
In Quebec, under the Act Respecting Land Use Planning and Development, every municipality is responsible for managing the land under its jurisdiction. The development plan of a local regional county municipality is intended to coordinate the land under its jurisdiction to establish overall policies, while also considering general policies for the use of subdivided land. The aforementioned plans apply to all municipal governments and their regional county units. Municipal councils have the authority to determine zoning, land subdivision, and building regulations for all or any part of their jurisdiction, but these regulations must comply with the objectives of the development plan. Municipal councils may attach restrictive conditions to land subdivision, such as minimum area requirements for subdivided land, land area divisions, and the width of public roads.
Large urban communities in Quebec also formulate urban land use and development plans. These plans establish general policies, and individual local municipalities formulate general policies to implement these master plans based on local conditions in accordance with the Act Respecting Land Use Planning and Development; in this regard, the authority of local municipal governments is similar.
Residential Rent Control
The Tenant Protection Act, 1997, enacted in Ontario, established the principle of "vacancy decontrol." This provision means that if a rental unit is vacant, rent control rules no longer apply. Landlords and tenants are free to negotiate the rent and included services in the lease based on market conditions. Once the lease agreement signed by the tenant takes effect, the rent control rules stipulated by law begin to apply.
Rent control guidelines determine the percentage by which a landlord of a rental property can increase the rent amount for a tenant or their agent during the lease term. This percentage is determined annually for each calendar year by the provincial "Ministry of Municipal Affairs and Housing," based on a weighted average increase calculated from actual rent prices.
This legal rule allows landlords and tenants to negotiate and determine the rent when signing a lease agreement. Once a tenant has moved in, the rent cannot be increased within 12 months. Thereafter, if the rent is increased, it must be increased according to the percentage limit determined by the rent control guidelines for the following year.
Several exceptions include: 1. Landlords and tenants may agree to a higher increase due to specific project costs for the residential unit; 2. Landlords may successfully appeal to the "Ontario Rental Housing Tribunal" and be granted permission to increase rent above the guideline percentage due to certain additional expenses; 3. In certain circumstances, tenants may appeal to the tribunal and be granted a judgment allowing for a rent increase below the guideline percentage.
The tribunal hears all disputes regarding residential rentals, including issues related to rent control guidelines.
In Quebec, the Civil Code of Quebec and the Act Respecting the Administrative Housing Tribunal also provide for a rent regulation system. Residential landlords can increase rent by any percentage after the lease expires. However, if a tenant does not agree with the rent increase, they can request the "Administrative Housing Tribunal" to determine the rent amount based on regulations and rent increase guidelines. The tribunal calculates the rent increase amount based on expenses from the previous year (calendar year), such as property taxes, municipal services, insurance, electricity and fuel, maintenance and services, and corresponding cost expenditures, to verify whether the rent increase is reasonable.
Real Estate Broker Regulations
In Ontario, real estate brokers practice under the Real Estate and Business Brokers Act. This act is regulated and enforced by the Real Estate Council of Ontario (RECO).
The law requires that anyone intending to engage in the real estate industry and qualified to serve as a real estate broker or salesperson must be registered. A real estate salesperson is generally employed, appointed, or authorized by a brokerage firm to conduct real estate business. The law prohibits individuals from engaging in activities related to real estate transactions in the name of a company or partnership unless that person and the company or partnership are registered as a real estate broker. The term "trade" is broadly defined and includes the disposition of real estate, the purchase of real estate, or the closing of a transfer.
A registered real estate broker or salesperson must be a Canadian resident or a landed immigrant, and brokers with offices outside of Ontario are not permitted to conduct real estate transactions within the province.
Registration for a broker may be denied due to the applicant's past conduct or financial instability. Registration regulates the terms of the industry license and those determined by the appellate court, as well as those stipulated by relevant laws and agreed upon by the applicant. Registration is a prerequisite for a broker to receive a commission or remuneration for real estate transactions.
Brokers and salespersons must not only comply with the aforementioned laws and related regulations but also meet the membership conditions and requirements of RECO (Real Estate Council of Ontario), which include professional ethics. RECO also handles consumer complaints against its members.
In Quebec, there are similar regulations to govern the conduct of real estate brokers. Additionally, under the Real Estate Brokerage Act and the "Code of Ethics of Quebec Real Estate Brokers and Agencies," applicants for a broker or practice license must have at least one business establishment in the province, or in some cases, be employed by a brokerage firm within Quebec.
Mortgage Broker Regulations
In Ontario, personnel engaged in mortgage brokerage business must practice in accordance with the Mortgage Brokerages, Lenders and Administrators Act. A mortgage broker refers to a person who provides loans secured by real estate, regardless of whether the loaned funds belong to them or others. Such personnel also include those who describe themselves or engage in mortgage brokerage as an intermediary through advertising, or who operate a mortgage lending business. Insurance companies, trust companies, banks, credit unions, liquidators, and trustees are excluded from most of the provisions stipulated by this law, as these financial industries are subject to other regulations. In Quebec, persons engaged in real estate mortgage transactions fall under the jurisdiction of the Act Respecting the Distribution of Financial Products and Services.
