REVIEWING THE "TITLE"

          The review of the Title to the Property you are buying, including the Charges registered against the Title is very important, for you are really just buying the Title and everything good and bad that goes along with it.

           When your name becomes registered on the Title, you then own the land that is described on the Title as well as anything which is affixed to the land, such as the building, driveway and trees. 

           What you also get though, and some people don't fully appreciate this, is the benefit and burden of the Charges that are registered against the Title.

           This is the Title Search for a bare land condo property located in Canmore, Alberta, Lot 17.  A review thereof will show the many charges that were registered against the Title to Lot 17 as of April 12, 2007 at 01:28 P.M.  Please note that a Title Search is date and time sensitive.  A minute later it could be different if another charge were submitted for registration.

          Another Important Point:   This particular Property is a Bare Land Condominium.  Therefore, in addition to reviewing the Title, you should review the Condominiums section of my website and especially the Condominium Documents for this Property.

          A Closely Related Point:   A Real Property Report is normally required to be provided by the Seller.  It is important to review this document as well respecting precisely how the structures on the Property are located, i.e.. are they totally within the lot boundaries and in compliance with the Town of Canmore By-Laws?

          A good first step is to look at the Plan and find your specific lot.  In this instance the Property is set out in Plan 0313512 - Sheet 1 and Plan 0313512 - Sheet 2.  A review will show you the dimensions of this lot. Is this the lot you want to buy?

           This Title has 13 separate Charges registered against the Title.  Are they good, bad or of no consequence to you?  You should know before you buy.  You should also know that most Charges registered on a Title are fine and are of no real consequence to you.  If they were acceptable to the Seller, then they will likely be acceptable to you, however you should know what they are.

          For instance, I know of a case where the Owner constructed a brand new fence on either side of his Property up to the sidewalk, only to be told that it offended a provision of the design guidelines (which were registered on Title) for the Property.  The fence had to be removed!  Neither neighbour minded, however that didn't matter, it was contrary to the design guidelines for the whole development.

           I won't go through every Charge in detail, however they all affect the Property because they are registered against Property:

•  031309223 - Development Agreement with the Town of Canmore  This Charge is the main contract between the Developer of the area and the Town of Canmore.  In most instances, you will not need to be concerned with Development Agreements, for by the time you are buying the Property, the Developer would have had to comply with these requirements or the Developer wouldn't have received the necessary approvals from the Town of Canmore to sell the Property.
• 031431168 - Utility Right of Way  This is a Right of Way granted by the Developer to the Town of Canmore for the running of water lines over certain areas of the development, specifically those areas set out in Plan 0313513.  Easements and Rights of Way are strictly construed which means they are interpreted against the person in whose favour they are.  Bottomline, the Right of Way holder only has those rights set out in the document and no others.  Because this Charge is registered against this Title, we know that the Town of Canmore has rights to place a water line somewhere on our Property.  A review of the plan will indicate where.  A review of the Utility Right of Way will tell what those rights are.  What is important to note is that you, the Property Owner, generally CANNOT CONSTRUCT anything on or above the Right of Way area.  This is important to know, for in one instance, the building plans for the house had to be changed because the proposed deck was above the Right of Way area.
• 031431170 - Easement This is very similar to the above noted Utility Right of Way, except it deal with waste water and storm water and only certain areas of Plan 0313513.
• 031431172 - Drainage Easement and Restrictive Covenant  & 031431173 - Drainage Easement  Again, this is another easement registered against the Property which deals with overland drainage and is the area of the Property set out in Plan 0313514. The second Easement restricts the Town to only dealing with their rights during the "Off Season" as this Property is adjacent to a golf course.
• 031431175 - Curb and Maintenance Right of Way - grants rights to the Developer to maintain the curbs in those areas set out in Plan 0313516.
• 031431179 - Restrictive Covenant - Design Guidelines  This is one of the more important Charges on Title and is some 90 pages long.  I haven't reproduced the whole document here, however if the home has not been constructed on the Property, then you should review this document for it sets out all of the design guidelines which affect the Property, such as siding type and colour and many more details.  You may not be allowed to build your Tudor Castle on this Property.  Read this document now so you are not disappointed later.  Similarly, if you are planning any changes to your yard or exterior renovations of your home, review the design guidelines to ensure you comply.
• 031431180 Easement - is another easement which allows the Developer to construct retaining walls where the main subdivision abuts up to the roadway, which is common property in this development.
• 031432692 Easement is another easement of that portion of the Property set out in Plan 0313515. This particular easement deals with Lot 17 and Lot 18 and the common driveway to be constructed thereon.  This should be read as it sets out the rights and responsibilities of each to the other respecting the use, operating and maintenance of common driveway as well as deals with the utility right of way over which the common driveway is going to be constructed.
• 041405598 - Vendor's Caveat - is a Caveat filed by the Vendor.  Not may Vendors file these anymore. The main purpose was to protect a Vendor if for some reason the title was transferred, the new mortgage registered and then, for some reason the mortgage company didn't advance funds.  In today's era, with Title Insurance and Protocol Closings, they are rarely filed.  The only other time they are used by some Lawyers is to ensure that the interest that is due to the Seller for a late closing is paid, particularly if there is a dispute as to the amount owing.  It is then used as a "hammer"; pay me what I want or I won't remove the Vendor's Caveat.  IN THIS PARTICULAR CASE, there is an obligation on the Purchaser to grant to the Developer, an Option to Purchase as well as a Transfer back of the property as set out in the terms of Purchase Agreement.  This charge was registered concurrently with the Transfer of Land to the Purchaser.  When the Purchaser has satisfied the terms of the Purchase Agreement, which deals with building within a certain time frame, then the Purchaser can ask the Vendor to remove this charge.
• 041405599 - Caveat - this is an interesting one.  As mentioned, this property is adjacent to a golf course.  Basically what this document does is to prevent anyone on the Property from suing the golf course if they are ever hit with a golf ball!!  In granting this release, however, the Purchaser's received $1.00 on the Statement of Adjustments, for a Contract to be enforceable, there must be some consideration.

          The second to last Charge on title is the Seller's mortgage.  On a sale of this Property, all of the foregoing Charges will remain on Title excepting for the Seller's mortgage.  The Seller's mortgage will be discharged by the Seller's Lawyer and the Buyer's new mortgage (if any) will take it's place and is therefore of no consequence to us.

          The last Charge on Title is a Postponement Agreement.  Again, this is of no consequence to us as it merely changes the order of charges on Title.

LAWYER'S REVIEW OF TITLE, CHARGES AND CONDO DOCS:

          It is becoming common for Real Estate Contracts to have a "subject to" condition that the Buyer's Lawyer reviews the Title and Charges and, if a Condominium, the "Condo Docs".

          The issue here is what exactly does a "review" consist of?  The Title and Charge documents for this particular property are two inches thick!!  The Condo Docs are one inch thick!!

            In most cases, the Purchaser is not prepared to pay me my hourly rate to review, in detail, all three inches of materials and then discuss what I have found with them.  Part of the reason is that, in most cases, the Charges that are on Title will stay on Title and can't be removed, they were acceptable to the Seller and will, in 99% of the times, be acceptable to the Buyer.

A.        TITLE AND CHARGES:

          I first make sure that the Buyer knows the limits of what my "review" is comprised of.  What I do is review the Title and then order copies of the Charges that I don't know what they are.  I then review them and see if I think they are something that should be brought to the attention of the Buyer.  I would then normally advise the Buyer that these are "normal" charges found on titles and are acceptable.  On this Title, I would have told them there is a Major Right of Way on the Property and where it is located, as well as discussed the Restrictive Covenant - Design Guidelines and the two Caveats respecting the Option to Purchase and the "Golf Ball Release" Caveat. 

          The complexity of the Title and whether the Buyer wants me to review a specific issue will determine whether I charge extra for this review or include it in the conveyancing fee.

B.        "CONDO DOCS":

          Again, it is a similar process, basically looking for the "exceptions" to what one would normally expect.  To do this, I review mainly the Annual Budget, Financial Statements, By-Laws, Director's Meeting Minutes, AGM Minutes and the Reserve Fund Study.

          The complexity and completeness of the "Condo Docs" and whether the Buyer wants me to review a specific issue will determine whether I charge extra for this review or include it in the conveyancing fee.  For instance, I had a Buyer who wanted to install a Hot Tub outside his Unit.  A review of the By-Laws confirmed that he could not!!

BOTTOMLINE:

Everyone involved regarding this Property has some accountability and an obligation to deal with the Title and its Charges:

• The Seller - to disclose to the Seller's Agent what they know about the Property; good and bad.
• The Seller's Agent - to physically visit the Property, to ask for a copy of the Real Property Report, to conduct a Title Search, to review the Title and ensure the correct legal is used on the Contract as well as passing along any information to the Buyer's Agent which is relevant to the Property and what they know of the Charges.
• The Seller's Lawyer - will be responsible for obtaining the discharge of the Seller's Mortgage(s) and any other charges which are not acceptable to the Buyer and for which we have grounds to request they be removed.
• The Buyer's Agent - should review and discuss the Title Search, including the types of Charges registered thereon with the Buyer and if concerned, or unsure of a Charge, recommend a "subject to condition" be added to the Contract to have the Title and Charges reviewed by the Buyer's Lawyer.  If you are asked a specific question about the Property by the Buyer, DON'T GUESS OR ASSUME THE ANSWER, find out the facts or ask me to find out.
• The Buyer - must be shown the Title by the Buyer's Agent, questioned as to any concerns with it and be advised to read certain documents like the Condominium By-Laws or Design Guidelines for they will be the ones who will be living with them. 
• The Buyer's Lawyer - will always be reviewing the Title and Charges and advising the Buyer as set out above.  However, if the Buyer's Lawyer's review is not a condition and then something objectionable on Title is found, the Buyer will still be obliged to complete the Contract.

The beauty of your Dream Home is one thing; make sure you know all of it's Attributes??
 

REVIEW  & UNDERSTAND THE TITLE