Bank of Canada Rate Announcement, December 5, 2018.
The Bank of Canada has released a new rate announcement today that has maintained its target for the overnight rate at 1 ¾ %. The Bank Rate is correspondingly 2% and the deposit rate is 1 ½%.
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“Canadians have been making spending adjustments in response to rate hikes and the arrival of stricter mortgage policies,” states The Huffington Post.
Learn more by visiting: https://www.huffingtonpost.ca/2018/11/14/canadians-mortgages-boc_a_23589592/
The times they are a changin.
In October of 2018, Canada became the second country in the world to legalize marijuana, causing for amendments to the Residential Tenancy Act. The new Cannabis Control and Licensing Act, (CCLA) now permits Canadian homeowners to grow up to 4 plants anywhere on their property for personal use.
However – Growing Cannabis in the Home has its Setbacks
It has been popular practice for lenders to not lend on a property that has been used for growth of cannabis. Generally in the past, even one plant grown on a property may have resulted in it becoming blacklisted, making the property very difficult to mortgage. Lenders are also required to inform CMHC and the insurance companies.
As of yet, most lenders and insurers have said that they are still against growing in the home and are not looking to change their policies. Additionally, lenders have been steadfast to say that if one plant was shown to be there before legalization, it would again be considered an illegal grow-op and be unmortgageable.
That said, it only make sense for some homeowners and renters to want to take advantage of the legality of growing their own pot.
Clarifying the The Cannabis Control and Licensing Act
The CCLA amends the Residential Tenancy Act by adding a section to clarify the effect that legalization will have on residential tenancy agreements as they relate to smoking and growing marijuana on rental properties. To reiterate, under federal legislation adults can now grow up to 4 plants per household from seeds bought from licensed cannabis retailers.
Based on the rules in rental agreements or condominium bylaws, Renters, condo-dwellers and those who live in multi-family dwellings may not be allowed to grow cannabis in their homes. The CCLA states that any lease entered into before October 17, 2018 already prohibits the growth of cannabis in a home. If a lease has been entered into after October 17, 2018, it must specifically state that the tenant cannot grow cannabis.
Landlords, renters and condo boards should make sure to educate themselves on the options available to them.
- Information for tenants (PDF, 388 KB)
- Information for landlords (PDF, 489 KB)
- Information for condo owners (PDF, 579 KB)
- Information for mobile home site renters (PDF, 396 KB)
Currently, it is probably best to hold off on the growth of any cannabis. It’s too soon to know what the effects of future financing will be and most likely several months before lenders will begin to change their policies. Landlords should remain vigilant and remind their tenants not to grow cannabis just yet.
Would you like to learn about how cannabis legalization may affect your mortgage? Connect with me anytime to a chat!
Global News claims Canada’s stricter mortgage rules are, “forcing more homeowners to borrow from so-called private or alternative lenders, often at sharply higher interest rates than would be available through a bank.”
Find out some of the risks Global News has outlined about borrowing from a private or alternative lender – Learn more by visiting: https://globalnews.ca/news/4616394/private-mortgage-lenders/
CBC states that the Canada Mortgage and Housing Corporation, (CMHC), says, “it expects economic indicators like income and employment to continue to help support demand for housing starts, but these fundamentals are anticipated to slow down to a more sustainable pace.”
Rising mortgage rates are also expected to affect the demand for housing and the resale market.
“By 2020, CMHC anticipates demand will continue to shift toward relatively less expensive housing options like apartment condominiums versus higher-end single-detached homes,” says CBC.
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