It’s a question almost every homebuyer asks. “When do I get my keys?” The legal answer is the keys are released when the seller’s lawyer receives the money and the buyer’s lawyer registers the deed.

Getting vacant possession, however, is sometimes another story. At the moment the buyer receives the keys and registers the deed, the home belongs to him or her, and it should be empty. Unfortunately, it doesn’t always work out that way.

London lawyer Merv Burgard recalled a 15-year-old court decision that answers the difficult question of whether the home has to be totally empty at the moment the buyer gets the keys.

A buyer moving was from Toronto to London. At 3:09 pm, his London lawyer closed the purchase. That purchase and sale was part of a chain reaction, which is typical when a series of buyers and sellers all want to close on the same day. When the sellers received the closing funds, their lawyer used the money to close their own purchase. Three hours after the transaction closed, the buyer’s movers arrived at the house with a truck full of household goods. Unfortunately, the sellers were still in the process of moving out.

The movers waited for the better part of three hours, but the house was still not empty. They returned to Toronto since they needed the truck there the following day.

Finally, on the following Monday, the movers were able to return with the buyer’s possessions and move him into the house. For the second trip, the movers billed him an additional $1,393.91. On top of that, the buyer incurred hotel and other expenses totaling $401.55. He sued the sellers for his losses, and the case came up for trial in Small Claims Court in London.

The judge succinctly set out the main issue of the case, which was when vacant possession is to be given to purchasers in residential real estate transactions.

Standard-form real estate agreements provide that vacant possession is to be given on closing. In other words, when the seller gets the money and the purchaser gets the keys, the house is supposed to be empty.
In court, the sellers’ representative argued that vacant possession did not have to be given on closing, and that the vendor was entitled to possession of the property until midnight.

She pointed to a 1985 case of the Ontario High Court, which ruled that if a vendor remained in possession for a few hours after the Land Registry Office closed, it was not a fundamental breach of contract. That ruling was found not to have any bearing on this case. The judge awarded the plaintiff damages, plus costs and interest.

In making the award, the judge wrote: “It is often that parties are moving in as others are moving out, and most of the time this is done in a co-operative spirit which recognizes the problems inherent (in) moving in and out, along with timing of transactions at the registry office. In almost all cases, the loss would be nil, except for inconvenience. Here, unfortunately, there was loss, and the sellers must pay the buyer’s losses.”

The case serves as a useful reminder that at the moment the seller’s lawyer receives the purchase money and hands over the keys, the sellers should be completely moved out of the house. If they aren’t out, and the purchaser’s movers are charging by the hour, the sellers are going to pick up the tab.

We know the importance of focusing on kitchens and bathrooms when undertaking renovations in our homes. These improvements usually pay for themselves in added market value. However, there’s a trend toward the ‘greening’ of homes that will increase market value and appeal to many buyers. Younger buyers are particularly ‘green’ conscious.

“Greening” refers to making our homes more energy efficient and reducing the impact our homes have on the environment.

Examples of ’green’ renovations include installing energy efficient furnaces and air conditioners, upgrading insulation especially in the attic, installing energy efficient windows and doors, buying energy efficient appliances and lighting, etc. You’ll find many more suggestions on the Internet.

Whether you just want to save money or increase the market value of your home, don’t forget to ‘green’ when contemplating renovations.

Baby boomers (circa 1947 to 1966) describe themselves as darn near perfect. Damn, we’re good… just ask us. Getting on in years? We don’t think so. Ten percent of us feel like we’re still in our 20’s. We’re friendly, generous, ambitious, (yet not materialistic). We exercise regularly. Our kids are our best friends. According to a recent Globe and Mail poll, boomers are either the most optimistic generation ever to walk the face of the Earth or the most self-deluded.

In truth, baby boomers are an unhealthy lot over all. Diabetes and obesity levels are rising. As for generosity, the number of Canadians giving to charities is declining. Forty-nine percent of boomers believe they enjoy better relationships with their kids than they had with their parents. Maybe it’s because the kids still live at home. Sixty-four percent of boomers still have at least some of their brood in the house. And even when the kids are gone, we’ll still be helping to pay some of their bills.

Half of boomers aged 50 to 59 think of ourselves as younger than we are. We travel and drink more than our parents did. “What’s wrong with a glass of wine now and then? Haven’t you read that studies suggest moderate drinking is actually good for you.” Most of us stopped smoking years ago.

The majority of us think we’ll live into our 70s and 80s and 15 percent believe we’ll make it to 90. It must be all that working out we do. Yet government figures indicate half of boomers are couch potatoes. Only 43 percent of the same age group lived a sedentary lifestyle 10 years ago.

Despite our optimism, the poll shows boomers are a stressed generation, struggling to balance needs of parents and children while worrying about retirement. Almost half of us work more hours than our parents did, and more than half are still paying off our mortgages.

One fifth of boomers have no savings or investments. Baby boomers, as the most privileged, self-assured generation in a century, scored lowest among all age groups when it comes to confidence that they will have enough money to retire on. Between financial concerns, demands from kids and aging parents, one might expect boomers to have turned gloomy. Indeed, more than half of all people 40 to 60 years old who visited the doctor in 2005 were diagnosed with some form of depression. Yet boomers are a sanguine bunch… almost all of us claim to be satisfied with your lives, and most think that things will get better from here.

Does the poll data affect the real estate buying decisions of baby boomers and their children? You bet! I’ll tell you how in coming articles.

According to Garth Turner, Canada’s economic guru, our eight-year lovefest with real estate is over. Does it mean housing prices are going to start spiraling lower? Should people who have concentrated most of their wealth in homes start panicking? Turner says he sees no economic storm clouds on the horizon, but neither does he see any weather conditions that would allow prices to keep rising.

However, Turner does cite one interesting factor he thinks should tell us real estate may be an overvalued commodity ripe for correction. Genworth Financial and CMHC are now insuring 30-year, 35-year, and perhaps 50-year mortgages in the near future. Why this trend? What does it mean?

Mortgages have always been very large debts for real estate buyers. To make mortgage more affordable, the payments have been spread over a long period of time - typically 25 years. The effect is that monthly payments are brought down but the amount you end up paying back goes up. At today’s interest rates, with a 25-year amortization, you actually pay the lender almost twice what you borrowed. Turner says the real estate market has peaked simply because housing prices have passed the ability of the average family to afford them.

We have seen lenders promote the unprecedented use of 5% down programs. Genworth and CMHC have insured tens of billions worth of high-ratio mortgages. Buyers putting down 5% of the price of a home and mortgaging 95% are like stock market junkies buying on margin, says Turner. This extreme leveraging pays off in a rising market, but if housing prices move downward even a little, their equity can evaporate very quickly. The next indicator that the market is out of oxygen is the trend toward 100% financing for people who have strong employment earnings but no savings.

Turner thinks the combination of longer-term mortgages, low down-payment programs and recent trends in interest rates are proof that the homes have reached unaffordable levels. When real estate becomes unaffordable, the boom is over.

P.S. I’m not an economist but recent activity in the London real estate market suggests the boom continues. Home sales last month were the second highest for a March in the history of the London & St. Thomas Real Estate Board.