Dealing with adjoining property issues?
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We purchased an investment property a number of years ago, a small bungalow that we have rented out successfully for several years. We eventually bought the house beside it. We now have it rented, but are finding that the pressure and ongoing maintenance for both properties is increasingly taxing on our time and energy as seniors. We want to sell the houses but our lawyer has informed us that the properties have merged under the Planning Act of Ontario and we have to apply for a severance through the Committee of Adjustments. Can we avoid this?
One of the things people don't realize is that if they own adjoining properties that form part of a lot (a legal definition), then under the Planning Act of Ontario, the properties are deemed to have become one property and cannot be sold separately. You will need city approval to separate them legally before you can sell them individually. A method to avoid this is to own the properties under different names. So, for example, your spouse owns one of the properties while you own the other one. Or perhaps you incorporate a company to purchase one of the properties, which will allow you to take advantage of the $750,000.00 capital gains exemption.
â€“ Jeffrey D. Cowan is the principal of Cowan & Taylor, Barristers & Solicitors, email@example.com. The information contained in this article should not be relied upon as legal advice.