Purrfect Properties Blog

The Mammoth Effect an RPR can have on your Home Sale in Edmonton!

You built a fence, bought a hot tub, added a solar panel, satellite dish or gazebo.  You’re thinking ‘great, extra value in my home’ and that you can sell it for more than your neighbour because your property has more to offer! There could be more value to those items than you realize, especially if you didn’t get the permits, because folks, sometimes what you’ve done, just doesn’t comply with the regulations of the area. In fact, these items can reduce the amount of money your home sells for.  You may have agreed with the Buyer on what they are going to pay, but the final amount you receive will come from the lawyers; along with a term that can become very long, drawn out and frustrating – ‘HOLD BACK’

Real Property Report in Edmonton Alberta

Yes, that’s right, even as your representative, your lawyer may hold back monies from you if your property doesn’t meet the city, county or town codes.  Right inside your listing agreement with your REALTORS brokerage, it reads that your responsibilities as the Seller include:

providing the brokerage ‘with a real property report showing the current state of improvements on the property according to the Alberta Land Surveyors Manual of Standard Practice, with evidence of municipal compliance or non-conformance, within 10 days of signing this agreement, unless the property is a conventional condominium.  Not having this real property report may result in problems upon closing or rescission of the purchase contract.’

So why within 10 days? Time and money is your answer.  It takes time to sort out the problems and fix them.  It takes time to fill out easement or encroachment agreements, it takes time to get approval from your neighbours, it takes time to go to the city and request inspectors to come out and look at the work you’ve done and when something isn’t acceptable or to code it takes even more time and money to solve the problems.

Recently I had the experience of representing a Seller, where her partner had built the fence nearly 30 years ago and her RPR came back saying the fence was non-compliant and it encroached City land on two sides. Nothing came up before the RPR, no one stopped by her house and told her it wasn’t compliant and it had to change; in fact she had no idea until the RPR. Whether it was compliant at the time it was built; I cannot say. After we got the RPR, I took her to the City of Edmonton Planning department to find out what it would cost her to get an encroachment agreement from the city.  Sometimes you can pay a few bucks and make everything right again with a Letter of Consent from the City of Edmonton.  I asked if we could get a ball park idea, just to know if we should take it out, pay for the encroachment agreement or figure out something else.

Now the City was helpful; as they always are and the public servant said “Yes, have a seat, we’ll get an idea and call you back up to the counter”

We sat down and waited…our number was called “B271” we went up and she said “$24,596 or there-abouts.”  Honestly, I was afraid my client was going to faint.  I thought I was going to faint.  Oh My God.

It doesn’t just happen with fences, it happens with pergolas, gazebos, solar panels, hot tubs, swimming pools, satellite dishes and more.

That being said, a lot of REALTORS will tell their Sellers to offer title insurance instead.  If I ask why they are doing so, the usual response is “to save money.”  Will Title Insurance work for you?  I’m not so sure.

Being a REALTOR and working with Sellers and Buyers over the years has taught me a few things, so what have I learned?  I called FCT, First Canadian Title Insurance just the other day to find out some of the finer details about Title Insurance.  Title Insurance is supposed to protect you the Buyer when you aren’t getting an RPR from the seller.  It is made to protect you against costs to remedy a non-compliant item  that may arise in the future.  Here’s what I found interesting, I talked about my seller and asked the following question:

“What is stopping a Seller from throwing out an RPR that is non-compliant and then switching to offer title insurance?”

“Well that would be lying and we wouldn’t offer title insurance on a known issue.”

“Yes it would, but how would you know if the RPR was never submitted?”

“Well the Lawyer would know and we ask at the time that the policy is created if there is an RPR available, and if the lawyer lied, we wouldn’t pay out on a policy like that.”

“Yes, but how would the Lawyer know if the client threw it out before hand and the buyer agreed to accept title insurance.  The lawyer won’t see the purchase contract until after they removed their conditions?”

“Our people would find it, before we pay out a claim we do significant research into it.”

So there you go, what’s meant to protect you, may not protect you.  If you’re buying or selling a property and you don’t want liabilities going across the table with your deal, get a Real Property Report.  It doesn’t have to be compliant – we can cross that bridge when we come to it.  I don’t suggest getting just title insurance.  Get your Real Property Report.  Get it ahead of time.  REALTORS, please prepare your Sellers to sell.

And that’s just another way in…

How you can save thousands on your next home.

Now that’s the Cats Meow.