Like A Bos — Beyond The Sale
Welcome to Like A Bos, the podcast that dives deeper than the deal. Brought to you by Bosley Real Estate, we go beyond the deal to uncover the people, stories, and insights shaping how we live, work, and connect.
Real estate is more than just buying and selling; it’s about relationships, purpose, and the communities we build along the way. In each episode, we sit down with top agents and industry voices to explore the moments and strategies that shape how we live and work.
Whether you're navigating your next move, staying tuned into the market, or looking for a fresh take on the business. Like A Bos brings you real conversations from the people doing the work, with honesty, integrity, and heart.
Like A Bos — Beyond The Sale
Risk, Fraud, and Fine Print: What Buyers and Sellers Must Know in 2025 with Mitch Korman from Korman and Company
To demystify the legal risks facing buyers, sellers, and agents in today’s real estate market by sharing real-life examples, warning signs, and preventative strategies from an experienced real estate lawyer. Listeners will gain the knowledge to protect their interests, avoid costly mistakes, and approach transactions with greater confidence.
Equip consumers with insights on how to spot and prevent fraud, understand the fine print, and safeguard their investment — while giving agents the tools they need to better guide and protect their clients in the current market.
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Welcome to Like a Bos. On today's episode, we are featuring Mr. Mitch Korman from Korman and Company. It is an episode you absolutely will not want to miss as we are talking about all of the legal perils that can come into play in a real estate transaction that are often not considered until it's simply too late. For nearly a century, Bosley has been helping to shape the landscape of Canadian real estate. This podcast is an extension of that legacy, our way of staying connected to what matters most to you. Join us as we sit down with leading voices from across the industry and beyond to explore the ideas, trends and stories that move real estate forward. Whether you're an agent, investor, homeowner or just curious about the market, there's something here for you. Hello, everyone, and welcome to Like a Boz, the podcast where we bring you real conversations with people shaping the real estate industry. I'm your host, Christan Bosley, President and Broker of Record of Bosley Real Estate. Welcome, Mitch.
Mitch Korman:Thanks, Christan Happy to be here.
Christan Bosley:Thank you so much for joining us today. So we're just going to have a chat, all things legal. But I do want to start off by getting to know you a little bit. So do you mind if I ask a few deep and personal questions?
Mitch Korman:Fire away.
Christan Bosley:Amazing. How did you end up where you are today?
Mitch Korman:Good question. I graduated from law school and decided that I wanted to open up my own practice, basically. I didn't have any clients. So I started, you know, I thought I was good in real estate and I was good with business and Those are the courses I took in law school, but you can't just generate those clients overnight. So I started doing refugees. There were wars going on in the world, and I started an immigration practice, but at the same time trying to get real estate deals, corporate deals, whatever I could find that was really in my wheelhouse. And over time, I guess the tipping point was I ran into a broker at another firm. And he was very successful with his team. And he said, what's your proposition? I said, well, you know what? I would give every agent that you send me my cell phone number. And I'll be available to them 24 hours a day, seven days a week for problems that they have, for real problems. And he said, that's a good proposition. Because at the time, and this is going back a number of years ago, like too many to count, real estate lawyers were not accessible. And they were more or less 9 to 5, maybe 9 to 6. But when realtors have a deal happening, it's usually on the weekend or at nights. The realtors practice in the evenings. Where do you get a lawyer in the evening? So that was really the tipping point for my career. That broker ended up sending me a ton of agents. And because I was accessible, people weren't calling me at 8 o'clock at night on a Saturday. But it was just because I gave that commitment and I stuck by it, that was what sprung board me and got me away from doing the refugee cases with legal aid and actually practicing the area of law that I wanted to practice, which was real estate.
Christan Bosley:Did you always know you wanted to go into law?
Mitch Korman:No, my dad was in the clothing business. And I thought it would be nice to take over my dad's clothing stores and things like that. But My parents always instilled that I had to be a lawyer or a doctor or an accountant. And that was better than being in retail. My dad was in retail because he didn't have the opportunity to go for higher education. But I loved clothing and I loved retail. And my dad was good at it. And I learned my people skills from hanging out at his store, learning from him. And law was more because... I liked law, but I saw it as a springboard to anything in life. And with a law degree, it opens doors and you can do many, many things. You don't have to practice law. I was a people person, and that's what led me to real estate law, because that's the best area of law if you want to connect with clients, agents, just regular people.
Christan Bosley:Well, I mean, this explains why you're so well-dressed, right? So good on you. And yeah, I agree. Every lawyer I talk to says at some point in the conversation, well, law opens up many doors, right? So that's great. And then just one of my personal questions that I'd like to add, what brings you joy in your day?
Mitch Korman:Joy is brought for me in helping people. The types of stuff we do in law, in real estate law, is kind of boring because it's very transactional. But with the volume that you're doing, every once in a while you get a situation or an agent that really needs to be helped and you end up being the hero, saving the day. That's actually what brought me to, in the beginning, to refugee law was because you were the champion of whoever you were trying to help. Criminal law was not for me, but real estate, by fixing a deal that's in trouble, by creating Finding the financing that you can't otherwise find by giving an agent a clause that makes the deal happen when otherwise it wouldn't happen and gives the client peace of mind. Those are things that are great. And going along with that is the ability to educate, being able to help people in learning and bettering themselves in their skills, primarily the agents. That's what keeps me going.
Christan Bosley:I think that explains clearly why we work together because there's a lot of alignment there. So thank you. We've set the stage for the fact that we're going to talk about all of the legal perils in today's market, right? So the market is shifting. We know that in any shifting market, and certainly in my experience in the real estate side, things tend to get a bit litigious. So there's a lot more complexity, a lot more caution, and a lot more risk. So can you tell me from your perspective why you feel that more issues are showing up, more legal issues, and if there's anything we can do to get ahead of them?
Mitch Korman:We've had... a strong market for over 20 years. The market just seemed to keep rising and rising and rising. And when you have a strong seller's market like that, you know, someone would buy a house or buy a condo and then by the time they close six weeks later, it's worth more money. So the buyers weren't looking for problems with that. They were just happy. They think that they're just making money while they sleep. Now it's different. Now in this marketplace, it's a buyer's market and buyers are looking for perfection. They're looking for perfection in the property itself, in the deal that they craft, in their agents, in their mortgage brokers, in their lawyers. And that is very tough on everybody in the marketplace. I'm not saying it's bad. I think it's good that people are more careful and more willing to ask questions. A couple years ago, it was almost insulting that you would ask a question about a property if you wanted to buy that property because what if the sellers don't like you? They're going to go to the next person that's offering the same amount of money. It's not like that anymore. Now, buyers are... much more aggressive and especially with all the professionals around them. So I'm finding that that's a lot more challenging in our marketplace.
Christan Bosley:Yeah, we're certainly seeing that. I mean, for the first time ever, we have clients calling to, you know, have light bulbs fixed before closing, things that we really have not seen before. We're also, from the real estate side, experiencing, I would say, more litigation than ever around, you know, agreements and listing agreements and contracts and schedules where clients have agreed to very Yes and no. We're not seeing a
Mitch Korman:high volume of deals not closing. And part of that could be because our mindset as lawyers in my office, and there's 18 of us in my office, and I instill in everyone, deals have to close.
Christan Bosley:Right.
Mitch Korman:Like we have to, like, we have to close. You know, somebody says no, don't take no as an answer. We have to figure out a solution to make the deals close. Last thing in the world that I want is any form of litigation. You know, if something was promised and not delivered, there is an equitable remedy for that, not just forget it, the deal's off. And that equitable remedy could be, you know, monetary, could be delaying a closing until things get fixed. There's a... 1001 tools in our toolboxes as lawyers. And my team is our seasoned pros, and we're able to use all those tools in the toolbox. Sometimes I find that, you know, similar to realtors that aren't full time realtors, that there's no, there's a lot of them out there, there's a lot of lawyers out there that get a law degree, and they think, okay, I can practice real estate law, it's it's pretty easy, it's transactional. And they don't take the time and spend the time and effort to fix the problems. Right. So that the deals close.
Christan Bosley:Yeah. Unfortunately, we're seeing that in our business too. Okay. So, I mean, we have a lot of experience these days with buyers who have a sentiment that, you know, they just don't need to close. Have you had an experience like this? We have buyers who, for some strange reason, they've been told they're signing under seal, they've signed a BRA, they've been through the process, they've delivered the check, and for whatever reason, they're saying, oh no, I'm not going to close. And they, for some reason, don't seem to understand that there are some very real legal ramifications to that choice, right? So what typically happens in that scenario?
Mitch Korman:A couple of years ago, nobody ever said that. Because they were thinking, well, the property is worth more money. Now, we do have buyers that say, well, I'm just not going to close. And then I say, well, how much is your deposit? And they say $100,000. So you're willing to walk away from $100,000? What do you mean walk away? Like if you don't close and you don't have a real good solid reason, like something that goes to the root of title, it can't be– you know, fridge that's not working. It can't be, you know, you've discovered a little bit of a smell in the house. It can't be something minor. It has to be a major item that makes the house unlivable or a major item that makes it, you know, uninsurable or title can't be transferred. Then you can walk away from a deal. If you try to walk away from a deal and you don't have one of those major things, you're going to lose your deposit and first and foremost, and you're going to get sued for, you know, the people are going to resell that house. And we're not in a rising market right now. They might resell that house for $100,000 less. Then you'll lose your deposit, $100,000, and they'll sue you for $100,000.
Christan Bosley:They'll sue you
Mitch Korman:for the difference, right? And sometimes that means referring the client to a litigation lawyer that specializes in real estate as well. So they don't just hear it from us. They hear it from somebody because it's not just, you know, my scenario, it's not just the $200,000. It's also their own legal fees and the legal fees of the other side when you lose.
Christan Bosley:Well, and let's not forget that their buyer's agent also has the right to sue them for their commission.
Mitch Korman:Absolutely. Yeah. Now it's not $200,000 anymore. Now it's $300,000. So what they're thinking might be a $100,000 loss or they might be thinking, well, it's something that can be negotiated. You're running the risk of losing all that money. And there's tons of case law where people have lost all that money. So once we discuss all this with the client, usually that talks them down from the edge and they say, well, what's the real problem here? Why is it that you don't want to close? And it's usually because some things that they were promised. I said, you know what? You're much better off just closing. And yeah, you are in the right. You were promised a working fridge. You were promised whatever else. And you should sue them after you close. We'll close under protest. And then you'll go to small claims court, which, you know, has a high enough jurisdiction. You can sue them in small claims court. And chances are you'll win in small claims court. Or you'll settle quickly. You know, the other side usually just needs to know that you're serious about it. And then... Well,
Christan Bosley:and in small claims, correct me if I'm wrong, but in my experience, which seems to have been plentiful these days, the adjudicator, the judge in that experience really pushes settlement, like very hard.
Mitch Korman:100%.
Christan Bosley:Yeah. They don't want to take it through the whole process. So it usually is quite successful in one way or another.
Mitch Korman:Yeah.
Christan Bosley:So the legal pitfalls, buyers and sellers, I'm sure you see some commonalities and threads in your transactions. What do you find typically is something that gets overlooked that will end up in an issue?
Mitch Korman:It's about managing expectations.
Christan Bosley:Yes.
Mitch Korman:Trying to understand what's important to the client on both sides. I had one recently, it was a sale, an estate sale, and the The seller is managing this estate, and it was adamant that the property was a double lot. Why? Because her father always said, this is a double lot. Her father actually had two tax bills on this lot. And a municipal tax bill doesn't mean it's a double lot. It could be for a myriad of different reasons. In this case, when I actually did some research, You know, there was a garage at the back of the property and it was separately assessed because at some point it was vacant land. And so they didn't want to have it assessed along with the house. And it didn't matter. It didn't make the house into a double lot. You can't build two houses. It's one lot. You only have one house on it. But they were adamant that this is a double lot. And they were telling the agent, you got to list this as a double lot. My father always said this is a double lot. And like, You can't, the agent can't do that. You have to look at land registry. Right, right. So, which we did. And then we told the client, this is the way it is. And just because you have two tax bills doesn't make it a double lot. But it was just, it took a long time to convince the client that this is how it should be listed. And then, and also, the pitfalls would be listed incorrectly. Not only do you run the chance of getting sued, if you list it as a double lot where you can build two houses on it and the buyer can't, the buyer may not close or worse, the buyer will come back two years later and say, hey, you know, if the market's gone down, hey, you told me that this is a double lot, you know, I can only build one house on it or I can only have one house on it. I want my money back.
Christan Bosley:Right.
Mitch Korman:At the same time, the agent is being pressured by the client. The agent runs the risk of getting not only sued, but also getting fined by RICO because, you know, the agent can't just listen to the client. The agent has to do their due diligence and list it correctly. If it's listed incorrectly, agents in this day and age of Tressa, they're being held accountable for everything they put in a listing.
Christan Bosley:Well, and I think this is one of the parts of confusion that a lot of agents struggle with, and particularly part-time agents that, to your point, don't necessarily understand. TRUSA, for those of you that don't know, is the Trust in Real Estate Services Act, which replaced our previous code of conduct. So it's an entirely new overhaul of transparency with the consumer in what's required, right? And so where we really see things go off the rails in terms of managing those expectations is in fiduciary duties, right? So, you know, one of the fiduciary duties is following your client's instruction. Well, it's actually following your client's lawful instruction. And if you are being instructed to misrepresent a property, it's a really serious problem for all parties, right?
Mitch Korman:Yeah, you can't do it. As an agent, if you do do it, you're not gonna be an agent for very long.
Christan Bosley:Right.
Mitch Korman:You'll get fined, and then you'll get fined again. And the fines increase so much over time, like, Yeah,
Christan Bosley:as
Mitch Korman:they should. many agents, not your agents. I'm talking to the agents that are the part-timers.
Christan Bosley:Thank you, Mitch. No, because there's a big difference out there. Huge difference. There are a
Mitch Korman:lot of brokerages that have a ton of part-time agents. And when you look at the list of who sold what, you know, of the 70,000 agents that are in Treb, you know, Almost half of them probably did one deal or less last year.
Christan Bosley:Only 1% of realtors does more than three deals a year, right? Like the stat is astounding.
Mitch Korman:Right. So to my point, I mean, we want to work with seasoned pros. We want to work with full-time dedicated agents because they understand the rules, they follow the rules, and they give us deals that are easy to close because they've explained everything to their clients and set their clients' expectations.
Christan Bosley:Yeah. And I think that you can be 100% confident that those expectations have been managed and that everything's been done clearly and with transparency, right? Okay, so I mean, managing expectations is key. I talk about this with our agents all the time, having a very clear understanding and documentation of the fact that you have gone over and above to make sure that your clients understand that you're signing under seal, that it's a contract that you can't just walk away. So I mean, sometimes there's only so much you can do, but certainly, you know, with TRASA, it's becoming more and more significant to make sure that you're documenting those conversations. So I know that managing those expectations is critical for ensuring that we don't have legal issues. But if we're going to turn to the condo market, am I wrong in assuming that perhaps we're seeing more legal issues in the condo market today than we are in the freehold segment?
Mitch Korman:Condo market is a market that's Very different from the house market.
Christan Bosley:Right.
Mitch Korman:Let's start with the new condo market.
Christan Bosley:Yeah, because there's a distinct difference between resale and pre-con, right? Yeah,
Mitch Korman:the pre-construction condo market is, you know, it seems like it's in tatters. Every day we're having clients that just don't want to close, that can't close. You know, they put lots of money down on a property four, five, six years ago, and now they don't, some of them don't have the ability to close, some of them just don't want to close. And keep in mind, a lot of our clients that are in this game, and I call it a game because it's, It's a very speculative thing.
Christan Bosley:So,
Mitch Korman:you know, my heart sometimes bleeds for them and sometimes not because some of these clients have been doing this for 20 years and have bought pre-construction and assigned it and made good money and did it again and again and again. You know, it's like musical chairs. And then they forgot it was a market. Right. And the music has stopped and now they're seeing that their deal is underwater and they– are going to lose a lot of money. There's an answer for those people, and the answer still might be to assign it and just take the loss. And a lot of people that are investors, if you're a real investor, you will just take the loss because when you think about it, it offsets all the other gains that you've had over the past. It's hard to swallow, but it's a necessary thing to do. Other people are just saying, well, I just won't close. That's a riskier thing to do. Because if they just don't close, you don't know what the builder's reaction is on the other side. And, you know, what the builder's reaction could be is, you know, the property gets sold to somebody else, but it doesn't have to be sold right at this moment. It could be sold a year from now to someone else. And the builder's going to sue you, not just for, you know, going to keep your deposit, that's a given, but sue for the occupancy expense. Occupancy expenses are huge. Massive. you're paying at interest rates that are prime plus two or something like that until the property is ultimately sold. So when these people bought, interest rates were, prime was almost zero, and now prime is 4.95. So if you're paying occupancy expenses like the balance due on closing at 6.95 for an unlimited amount of time, plus all the other occupancy expenses, the taxes, the common expenses, That loss can double and triple by the time that unit's actually sold. Because don't forget, the builder is not going to try to sell that unit ahead of other units he has. The builder's going to try to sell that, you know, sell the units that he's got that he never sold the first go around. So it'll be put down on the list of things to sell
Christan Bosley:and
Mitch Korman:time will go by immediately. And unfortunately, the lawsuit is going to be huge when it actually comes
Christan Bosley:to pass. And I mean, in fairness, that's assuming that the developer's in good standing, right? We're seeing tons of developers go bust in this market. So if you were to switch the sides, what happens when you're a buyer that's purchased into a pre-con development and the developer goes bust and the development never gets built?
Mitch Korman:You get your money back. That's the good news. Maybe. Because... No, no, no, you do. You do. Because... Well, I shouldn't say 100% of the time, but deposits are insured by Tarion and up to a certain amount. And if you go over that amount, then the funds should be insured by a life insurance company or that has a bond on it, like the funds that are in that lawyer's trust account. So in theory, you should get, in the absence of a fraud, you should get all your money back. Will you get interest on it? Yes, there is some interest. But again, when interest rates were nothing, the interest is almost nothing. But you lose your opportunity cost. So you could have had, you know, your $100,000 deposit could have been tied up for five years. And had you invested that money in T-bills or in the stock market or anything else or another property that actually did close, you might do better. But the money is predominantly... secure and safe in that scenario.
Christan Bosley:I mean, the media is full of everything going on with the pre-construction world right now, right? I think I read an article in The Globe the other day about Tarion suing one of its own developers, right? It's getting very aggressive out there in the pre-con market.
Mitch Korman:But with every unfortunate situation, there is a fortunate situation.
Christan Bosley:But we never hear about those.
Mitch Korman:No, you don't hear about those. But the savvy investor that wants a great condo in Yorkville to rent out, to have a pita tear, for whatever reason, and didn't want to spend $1,600 a square foot, can now get that condo for $1,000 a square foot. And rest assured, when the market turns and becomes positive again, and it will.
Christan Bosley:Quickly.
Mitch Korman:Quickly. Yeah. That unit's going to be worth $1,600 a foot. I saw it with the Ritz-Carlton years and years ago. I remember there was a bunch of leftover units, and when the Ritz-Carlton was built, there was a soft time in the marketplace. I don't remember how long ago it was, probably about 15 years ago. And I remember that the developer had some units and he said, you know, buy anything you want, $600 a foot. And everybody that bought those within 24 months, they made a ton of money because, yeah.
Christan Bosley:Yeah, laughing. I say this to people all the time, you know, I get one of the most frequent questions that I get asked by people in my network is, you know, should we invest in the condo market? Should I buy my child a condo? Should I, you know, first-time buyers or like, is now the time? Are we at the bottom? My response is always the same, right? Like, it doesn't matter if you're at the bottom. The reality is, is that we've been flat for some time and developers aren't building right now because they can't afford to build. So you know when the market turns around those condo prices are going to skyrocket overnight, like very easily. So even if you buy now and lose $100,000 over the next year, you can bet in three to five years, you're going to be laughing your way up to your next purchase,
Mitch Korman:right? Yeah. Builders were coming out with 25,000 new units, 40,000 new units like this in the last few years. Now, they're selling nothing.
Christan Bosley:Nothing.
Mitch Korman:So what's going to happen? And still, there'll still be, I don't know what the number is, but let's say... you know, a few hundred thousand immigrants who are going to come to Toronto. Yeah. This year and next year and the year after, like these people all need places to live.
Christan Bosley:Absolutely.
Mitch Korman:And if the builders have a pause, like for two years where they're not building new projects, then, In three years' time, in four years' time, it's only going to come back. There's going to be huge demand. And with huge demand come increase in prices.
Christan Bosley:I couldn't agree more. I think it's a great time to invest in the condo market myself. So speaking of investing in the condo market, you can invest pre-con or you can invest resale. There's tons of great resale options out there. With resale, thinking back to the days when I was in sales, obviously, whenever possible, we did our best to have a status certificate condition in the offer. So really, can you speak to a little bit about what the significance of the status certificate is and what things you would find in a status that might warrant your recommendation to your client to perhaps not firm up on that deal.
Mitch Korman:Yeah. A status certificate is like a health checkup. So if you were going to go get a life insurance policy, chances are the life insurer would want you to go and get a checkup so that they know that they're insuring a healthy person. Same thing when you buy a house. You do a thorough inspection because you want to know what you're getting into. With a condo, you can't do your own inspection because a condo, the building's just too big. But fortunately, there's legislation, Condominium Act. It requires condominiums to do their own health checkups. They have to have audited financial statements. They have to have... reviews of everything in that condo every four years. They have to have a review done by an engineer top to bottom of the entire structure. And then they create a reserve fund and a reserve fund study that tells you the health of that condo. So the status certificate has all this information in it. And they're typically like three, 400 pages long. And you need somebody to go through that. And of the three or 400 pages, there might be 20 pages that are really, really relevant and important. Just like when you get your checkup, your EKG is probably the most important thing that you're getting checked because you need to know your heart is healthy. Same thing with the status certificate. We focus on the financial statements. That's first and foremost, but also the reserve fund study that's done so we can see what's going to need to be replaced, what is prematurely aging, what is the budget for the next 20 years in terms of Mm-hmm. So that's...
Christan Bosley:Yeah, and critical. And I think really significant that you explained what a reserve fund study is because I don't think a lot of people understand, you know, when you buy into a condo, you're not just buying that unit, right? You have to buy everything that comes along with that building, including sometimes the condo board.
Mitch Korman:Yeah. And going along with the reserve fund study is the reserves of the actual unit. That's actually an asset that you're buying into because it's cash that's sitting in the condominium. There's no allocation to you. Like you were buying and you're getting the benefit of part of that cash. But you want to know that that, you know, bag of money is enough to fix everything that's going to go wrong in the next year and the next year and the next year. Absolutely. And that's what we're looking for. So we have a full-time team that all they do is review status certificates because we're big and busy enough to do that. So we have people that that's
Christan Bosley:their job. That must be riveting. Yeah.
Mitch Korman:It's interesting because it's almost like some of it is forensic accounting. So they're looking at it and they're trying to find what's wrong. And it's often really, really fascinating.
Christan Bosley:Lots of problem solving, critical thinking, which is a skill that's on my mind these days. And some condo
Mitch Korman:boards try to hide things.
Christan Bosley:Oh, yeah. And we flush it out. A lot of condo boards do. We recommend to our agents that we request the minutes of the meetings. Because oftentimes they'll have issues that come up in the minutes that haven't quite made it into the status yet.
Mitch Korman:Yeah. Don't get me started with minutes. I've got a story to tell you. Everything leads to another story.
Christan Bosley:Right?
Mitch Korman:So let's go back a bit. I want to tell you about generational type of wealth.
Christan Bosley:Okay.
Mitch Korman:So like my kids are, like your kids, my kids are school age kids. And I'm thinking to myself, how are my kids going to afford real estate? They're like, you know, the average salary now, it's really tough for, you know, somebody with a new job to actually buy real estate in Toronto, let's say. Maybe they'll be able to afford it in Winnipeg, but not in Toronto. So what did I do? My wife and I went out and we have two condos that we bought for our kids. Not thinking our kids are ever going to live in these particular condos, but we thought we should get into real estate. And if they choose to live somewhere else, that's fine. But we have to, you know, we're fortunate enough to be able to save enough money to be able to think ahead so that our kids, we want our kids to own real estate. So we buy condos in a building and we checked out the reserve fund. Everything's fine from that perspective, but the building itself has had many floods. And that's something we discovered in the reserve fund studies and the history of the building. And lo and behold, like they said, don't worry about this because we have, the floods are from heat pumps. In the summertime, you know, condensation happens. And if the drains are clogged in those heat pumps, they will overflow and flood units below them and below them, below them, even a small
Christan Bosley:flood. But let's not worry about that.
Mitch Korman:Right. So this is, you know, I had a flood in one of my units last week and I'm very disappointed about it. Why? Because in the minutes of The condo board, this is getting back to the minutes. The condo board had minutes from February where they approved that they were going to have a company come in and inspect every heat pump in the whole building, as they have for the last 10 years. Every year they do it. It's all approved. They've set aside the money. The management didn't hire a company to do it.
Christan Bosley:Mhmm
Mitch Korman:got notified that the company's coming in at the end of June. Well, end of June is too late.
Christan Bosley:Mhm
Mitch Korman:company has to come in in April before it gets warm out.
Christan Bosley:Yeah.
Mitch Korman:So I had a flood in my unit and there were some other floods in the building because everyone was expecting these heat pumps to be inspected and drains to be unclogged. Like they go in with compressed air and they give a shot in the drain and everything's fine. But it's interesting what you learn from looking at the minutes
Christan Bosley:at the minutes. Yeah, we recommend it all the time. And then the other thing that the consumer doesn't typically know in the condo market is that when you have a situation like that, you're not always insured through the building, right? So your common element payment, you're paying into building insurance, but that building insurance only covers the envelope. So if you have any upgraded flooring or anything of that nature, you're going back to your own insurance company, right? It becomes much more challenging.
Mitch Korman:So it's called a standard unit bylaw. So a lot of buildings got smart years ago. They figured, okay, we don't want to insure the flooring and the kitchens and everything. We're going to create a standard unit bylaw that says every unit in the building is just the concrete floor and the drywall and the windows and that's it. So bare bones. So that's all they're insuring in the building. Why do they do this? Because it brings down the building's own insurance policies. So when they're getting insurance, they're not insuring everything in those units. just the bare bones of the building. Yeah. So, you know, somebody thought this up years and years ago, and it sounded like a good idea. But, you know, with every benefit to the building comes a pitfall for the owner. So we explain this to every person. If there's a standard unit bylaw in your building, we have to explain to our buyers, they have to insure for everything in their unit. And it's a little bit more expensive, but They have to do that.
Christan Bosley:But please do it. Exactly. Right. So listen, we could sit here and banter back and forth all day about all these different kind of ins and outs that lead to issues. But I think what interests me are like some real world examples of like title fraud and deals collapsing and stuff like that that you've seen. So, I mean, fraud in particular has been in the news quite a bit lately, especially as it relates to title. So can you walk us through like what you've seen in that respect and how that would typically happen?
Mitch Korman:First of all, fraud is not rampant in our world, but it did make the headlines a number of times in the last couple of years because, you know, it's just somebody owns a property and all of a sudden somebody else is living in that property or it was a vacant piece of land and somebody else fraudulently conveyed it. Lots of different ways. Or somebody has a new mortgage on their property that they never knew existed and it's a real mortgage. So these are the types of things that are happening in our marketplace. And it's also foremost fraud. in front of us because, you know, I watch CNBC every day, which is like the stock market channel in the U.S., and one of the main sponsors is Title Lock, some company in the U.S. that, and all they talk about is title fraud and people losing their homes. So, you know, stuff like that, when it's in the media, it becomes on your mind. We have great title insurers in the And for all of Canada, for that matter, most of them are based in the U.S. and they're very, very well capitalized. They're the ones that have to deal with the frauds. But it doesn't mean that whoever fraud is perpetrated against isn't having lots of sleepless nights and headaches. The worst frauds are the ones against the elderly. Elderly are really, really easy targets for fraud. The person that's already paid off all their mortgage, their financing, so their home is free and clear, and they're older. The fraudsters will impersonate that person. They find out about that person. They do a title search. They can see they have no mortgage. They can get the birth date of that person. They can create fake ID. They can go into a bank. and put a mortgage on that property that they don't even own.
Christan Bosley:And AI is helping a little bit with that, don't you think?
Mitch Korman:Yeah.
Christan Bosley:Yeah.
Mitch Korman:Yeah. With AI, it's amazing because you can impersonate a person's voice.
Christan Bosley:It's wild.
Mitch Korman:Yeah. Yeah. So that type of fraud is out there. There's a fraud– there was a big fraud in the paper or the news about somebody that left Canada. They moved overseas for a job and– They gave their property to a realtor to lease and the realtor leased it. And then all of a sudden, a few months later, the rent stopped coming in. What happened is the people that leased the property impersonated the actual owner and then sold the property to somebody else. And, you know, so fortunately, that property changed hands recently enough where there was title insurance. Keep in mind, title insurance only existed in Ontario, I think it's for the last 24 years.
Christan Bosley:Okay.
Mitch Korman:So if an elderly person, another reason they look for elderly people, the elderly person owns a property for more than 24 years, they didn't, they for sure didn't have title insurance. Right. So they're not protected for fraud. Anybody that's bought in the last 24 years, if they used when a half-decent lawyer has title insurance and doesn't really have to worry.
Christan Bosley:So that's kind of interesting. If you're an elderly person, as you say, and you've paid off your mortgage, is there an opportunity for you to go to a lawyer and purchase title insurance separately?
Mitch Korman:Absolutely. Okay. And it's not just for the person that didn't have the title
Christan Bosley:insurance. A
Mitch Korman:lot of people are underinsured with their title insurance. So if you bought a property 20 years ago and got title insurance, back then title insurance would only cover half... Two times, sorry, two times the value of the property. Right. So you buy a property for $500,000, they'll cover up to a million dollars of loss. Well, in 20 years, that $500,000 property, if it's in this neighborhood, is now worth $2 million. So, you know, even if a fraudster happened, the coverage would max out at a million bucks.
Christan Bosley:Right.
Mitch Korman:So for those people, for anybody that doesn't have title insurance, I tell them, get title insurance. And they call us up. We get them a policy. It's not expensive. Right. And for anybody that, if they're not sure, they tell us when they bought the property, we do some research, we find out how insured they are, and then we'll get a top-up policy for them.
Christan Bosley:And
Mitch Korman:some of the policies now that you get title insurance on are unlimited coverage. Because at the time, 24 years ago, the title insurers thought, oh, if we give them double the coverage, it should be enough. But no. Time has shown that real estate has risen way faster than anybody was anticipating, and it's not enough. So now they've adjusted policies. One title insurer does five times what your property is worth. Another one does unlimited coverage.
Christan Bosley:Okay. But title doesn't just cover you for fraud, right? It also covers you for boundary disputes and all sorts of other issues.
Mitch Korman:Tax arrears. Okay. Sometimes people lie about the taxes that they pay. or say they paid their taxes and then they didn't pay their taxes, title insurance covers you for that too.
Christan Bosley:Okay, interesting. So are you seeing in today's market a lot of, I don't know, boundary issues with any of your clients with properties that require title insurance or illegal renovations is something that we see fairly often, renos that were not done with permits. What does that look like?
Mitch Korman:We had one not too long ago where a client buys a house and the house is... You know, a typical house, but it has a laneway in the back. And people are often thinking now about laneway houses and things like that. Garden suites. Garden suites. So the client starts investigating whether he can put– the neighbor next door has a two-car garage. And this is on a 25-foot lot, basically. So the garage pretty much uses up the entire back of the house for his neighbor's house. And so our client is investigating what can he do with his house. Can he build a two-car garage like his neighbor? Can he build a laneway house? And lo and behold, he does some measuring, has a survey done. Turns out that two-car garage is built two feet onto his property. So now it's worse than just the two feet because now he's got a much narrower lot. that he has to work with, can't build a two-car garage, or he's got to build a smaller than two-car garage, can't build the laneway house that he would like to build because there's rules about the size of property you have, and it's a big problem. So we go to title insurance. And at the end of the day, title insurance basically paid him for the value of the two feet. And it was significant. It was $80,000 for that two feet. Not that two feet is necessarily worth $80,000. But in that scenario, it is worth $80,000 because that two feet was prohibiting him from building a two-car garage, which is very valuable to anybody that's buying a house. Two-car garage is much more valuable than one-car garage. So title insurance paid not only for the decrease in value, but also paid for his legal costs. And title insurance also covered the neighbor's legal costs. Because the neighbor didn't build that garage. It was the previous owner that built that garage. Ah. Another resolution could have been the garage gets torn down
Christan Bosley:and rebuilt. Yeah, we see that a lot with renos. But so the moral of the story really is you buy title insurance. It's like the number one insurance policy you should have.
Mitch Korman:Yes. Okay. The most common thing with title insurance is tax arrears and, you know, and then next to that might be building or zoning infractions or something. The frauds are the least common, right? But if you have a fraud happen to you, it's the biggest detriment.
Christan Bosley:Right.
Mitch Korman:Because the frauds are in the hundreds of thousands of dollars, sometimes millions of dollars. So that's what– you get title insurance on every deal.
Christan Bosley:Okay. I have a couple of rapid-fire questions just to close this out if you don't mind. Okay. Okay. So if you were to do a TED Talk, what would you do a TED Talk on? You have a lot of knowledge.
Mitch Korman:My TED Talk would be on– you know, a lot of people talk about following your dream in terms of your work life. And it wouldn't be about following your dream. It would be about putting yourself in a position to achieve the dreams that you want. So, like, I went to law school because my parents thought I should be a doctor or a lawyer or an accountant or, you know, something like that. It wasn't that I dreamed about being a lawyer. But I recognized early on that if I have a law degree, it would open up a lot of doors for me.
Christan Bosley:And
Mitch Korman:it has. And I think that You know, I would like to talk to young people about it's not about what you are or what your profession is or what you're graduated as. It's what you choose to do that enables you to have the life that you want. Yeah. Sometimes that job that you don't think about can lead to a lot of other great things. And, you know, so the lesson is just don't worry about the profession or the job because one thing will lead to another. And it can... Lots of different things can lead to a great life.
Christan Bosley:Amazing. Mitch, thank you so much for your time with us here today. It was a true privilege. And I really appreciate the stories and insights shared with us. Until next time, I'm Christan Bosley, and this has been Like a Bos. Thanks so much for tuning in. If you enjoyed today's episode, be sure to subscribe, leave a review, and share it with someone who might find it valuable. We've got more conversations coming your way with incredible guests across design, finance, wellness, tech, and more, all through the lens of real estate. A special thank you to our set design sponsors, StageRite.
