Readers’ letters | The Press

Personal finances, investments, consumption, retirement… Our columnist Marie-Eve Fournier goes around the small and big questions that concern readers of The Press.

Money that legally expires

Why is Canadian Tire no longer refunding our merchandise returns, but giving us a card applicable on a purchase in its stores? This card is good for one year. Is this legal?
– Jacques M.

Nothing obliges a merchant to take back a good if the consumer simply does not want it anymore.

Companies that allow exchanges, returns and refunds do so voluntarily, mainly for marketing reasons, to differentiate themselves from the competition or to have a good reputation. And they are not even obliged to disclose their policy before the purchase or to display it, except in the case of a contract concluded at a distance, explains the spokesperson for the Consumer Protection Office, Charles Tanguay .

However, while merchants are free to create the policy of their choice, they are nevertheless required by law to respect it.

When a retailer accepts merchandise returns, they also decide how they will do so. Often, the refund is made in the same way as the payment (credit card, debit, cash).

Other companies instead reimburse their customers by depositing the sum on a gift card, which guarantees them to see the person again one day.

This type of card, which has not been paid for directly by the customer, is not subject to the Consumer Protection Act. As a result, the card may carry an expiration date, unlike purchased gift cards. Something to remember: “The law lays down the rules governing prepaid cards. The rules therefore only apply if someone has paid for the card,” says Charles Tanguay.

Thus, cards given as a reward, in the context of a contest, a promotion, as compensation for a previous purchase or for another reason, are therefore not subject to the rules on prepaid cards.

Let’s go back to the specific case of Canadian Tire. The media relations officer did not answer my questions directly. But employees at two stores explained to me that returns are still refunded in cash, to the credit or debit card, depending on the original method of payment, if the person has their invoice in hand and the good is resalable (box in good condition).

In other cases (no invoice, box in poor condition, purchase made using a gift card), the amount is remitted on “a refund card valid for one year”.

Also, if you buy something that goes on sale the following week, you can claim the difference. Which you will then be given on this type of card.

Joint accounts upon death

In fact, the rules surrounding joint accounts are not the same in Quebec and in the rest of the country.

“In the other provinces, the common law provides that the surviving co-holder retains the balance of the account and continues to manage it, because it is presumed that the co-holders pursue a common goal”, explains the spokesman of the National Bank, Jean-François Cadieux.

Thus, on the death of one of the co-holders, the survivor can still make withdrawals, and automatic withdrawals (electricity, insurance, telecommunications) are carried out without problem.

In Quebec, where the Civil Code dictates the rules, it’s different.

Joint bank accounts are subject to the principle of joint ownership. This means that it is not possible to determine the share held by each of the co-holders.

To protect the estate, the accounts of a deceased are therefore temporarily frozen.

But financial institutions enjoy a little leeway. “Requests relating to subsistence and funeral expenses are allowed to pass. So there is an analysis that is done on a case-by-case basis, depending on the client’s situation. […] There is always a question of judgment,” summarizes Timia Di Pietro, Senior Director, Legal Affairs, at National Bank.

A joint holder who needs cash must go to a branch to request it, with the will in hand. If he is the sole heir of the deceased, this will obviously make things easier and faster.

Direct debits, however, no longer work. “So we open another account for the co-holder,” says Timia Di Pietro.

Things are about to change, however.

Quebec adopted, in early June, Bill 2 which creates a new law relating specifically to joint accounts upon death.

Financial institutions will have to assume that the sums held in a joint account belong equally (50-50) to the two people, “unless the co-holders have specified different percentages to their bank”, underlines Jean-François Cadieux.

Thus, a co-holder will be able to withdraw the funds due to him after a death and deposit them in another account, in particular for automatic withdrawals. The other portion will remain frozen until the estate is settled.

Financial institutions have six months to comply with the provisions of the new Quebec law.

A main residence outside Canada?

When it comes to taxes, the basic principle is as follows: Canadians who live in Canada are taxed on all their income, regardless of where they come from in the world. Thus, when selling a condo in Florida, for example, the profit (capital gain) will be taxed at 50%.

Réjean could avoid this tax: a residence outside Canada is indeed eligible as a taxpayer’s principal residence. Thus, during the sale, the gain will not be taxed, as if the property were in Canadian territory.

However, during the transaction, 15% of the sale price will have to be withheld and sent to the US tax authorities. “It’s his security,” explains David Truong, advisor at the National Bank Private Banking Center of Expertise 1859. For example, if the property is sold for US$500,000, the sum of US$75,000 will be withheld… even if this is greater than the profit made.

Depending on the rather complex American tax rules, it will then be necessary to determine whether a tax must be paid in the United States by consulting a tax specialist who is familiar with the local legislation. The holdback of US$75,000 may then be recovered in whole or in part, as the case may be. Note that if the buyer acquires the property for residential purposes, no holdback is required if the sale price is less than US$300,000.

Remember that a married couple or de facto spouses can only have one principal residence.

Moreover, the number of days in a year when one lives in a property has no impact on its status (main or secondary). The taxman will not ask you to make calculations with a timetable or to provide proof.

To determine which of its properties is its main one, we rather use the average annual gain, specifies David Truong.

For example, if one has owned a house in the country for 20 years whose price has appreciated by $200,000 ($10,000/year) and a condo in town for 10 years whose price has increased by $150,000 $ ($15,000/year), it is more tax-efficient to declare the condo as your principal residence. Even if we only live there three months a year.

Be careful, a main residence must however be “normally inhabited” by its owner, notes David Truong. A condo intended for rental on Airbnb, for example, could therefore not qualify.

Aluminum spinning

Before you let your house go for a pittance, let’s first see what impact aluminum spinning has on its price.

Chartered appraiser Simon Beauchemin, of the Montreal firm PCG Carmon, assures that he does not automatically reduce the value of properties whose walls hide aluminum, “if everything is functional and the house is insurable”. And above all, “we don’t put a house down for spinning! “, he insists.

To have peace of mind before putting his property up for sale, he suggests having the wiring checked by a master electrician. The latter will be able to determine whether corrective action must be taken and estimate the possible cost of such an operation. Once the quotes are in hand, we can start the work, which could be an advantage at the time of the sale. Otherwise, the price of the work can be deducted from the sale price.

When it comes to insurance, there is no industry motto for not insuring homes with aluminum wiring. Each company is free to assume the risks it wishes.

But it turns out that these properties present “increased fire risks which cause significant damage,” says Anne Morin, public affairs manager at the Insurance Bureau of Canada (IBC)..

This reduces the number of companies that agree to insure these properties, confirms Louis-Thomas Labbé, chairman of the board of the independent brokerage firm Gallagher GPL. “There are three, as far as we know, and they only accept if a master electrician has done an inspection. These are Intact, Economical and Definity.

“An insurer has no obligation to insure a home or renew a contract. He could decide to stop insuring aluminum-threaded houses. Depending on their claims experience and the risk assessment they make, insurers revise their underwriting and pricing policies,” continued Ms.^me Morin.

If a property owner is struggling to find an insurer despite all his efforts, he can seek the help of an independent broker. Or the intervention of the BAC. To do this, you must fill out a form available online. The BAC will ensure access to insurance, but will not intervene in terms of pricing.

That said, difficulty insuring a home could theoretically have some impact on the property’s appeal. Because during the sale, the Seller’s Declaration, a mandatory form, contains the following question: “Has an insurance company ever refused to insure the building in whole or in part?” It remains to be seen whether a positive response will dampen the enthusiasm of a potential buyer in the current market environment.

Furthermore, this document does not contain any precise question on the type of spinning. But if an electrician has told us about potential problems, it is better not to risk hiding the information, of course.