Happily, it’s been a busy spring in Lethbridge real estate. Not so happily, I’ve been reminded over (and over) of the vital role real property reports play in buying and selling homes. Homeowners are supposed to provide them. Buyers want to see them. Lawyers fight over them. And REALTORS® have nightmares about them.
But isn’t the RPR just a piece of paper showing property improvements and boundaries?
Indeed it is a piece of paper showing just that, which is precisely why RPRs—and the accompanying City of Lethbridge Compliance letter—are mission-critical to a real estate transaction.
When you buy a flat-screen TV at Costco, do you keep the receipt? What if the TV stops working a week after you buy it? Might you need that receipt for warranty purposes? Or, when you buy a piece of equipment for your business, how are you able to claim the tax write-off or show the asset on the Balance Sheet? Might your accountant want to know what you bought, where you bought it and when?
The RPR and compliance are all the buyer and his lawyer have to show what is being paid for.
While nothing in life can be 100% certain 100% of the time, lack of certainty on paperwork is the kiss of death in real estate. Buyers have a right to know if an improvement does not comply or could otherwise incur major expense (or headache) to remedy in the future. For example, if a deck was added but proper permits were not taken out, the City may (or may not!) have granted non-conforming status. A buyer needs to know that. (A non-conforming structure can generally remain until such time that the property owner alters it.)
When a homeowner lists his house for sale, he signs a listing agreement which states that, within 10 days, he will provide:
…a real property report reflecting 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 […] Please note: Not having a current real property report with compliance may result in complications on closing or rescission of the purchase contract.
If you don’t have this paperwork when you list your home, get it. A full survey with compliance costs about $750 (~ 0.2% of the price of the average single-family home in Lethbridge). An update to an existing RPR with compliance costs less, if you use the surveyor who provided the original report. If you have RPR and compliance paperwork on hand but you’re not sure if it needs updating, discuss this with your REALTOR®. Immediately.
Further to the above, the real estate purchase contract obligates the seller to provide an accurate RPR as part of “normal closing documents.” This must be done far enough in advance to give the buyer and other parties to the transaction adequate time to do their jobs properly. If you choose not to do your due diligence here, you are jeopardizing the sale of your home and could even find yourself in a legal tangle with the buyer at Closing.
Two Common Questions About Lethbridge RPRs:
1) What if the RPR pre-dates the fence?
As it stands at the time of this writing, the City of Lethbridge does not “certify” fences in their Compliance letters. However, if the fence encroaches on municipal property, the City will make a statement about this in the letter and, depending on the nature and size of the encroachment, may ask for an encroachment agreement or for the encroachment to be removed.
Because the City treats fences this way, the practice by most Lethbridge lawyers is to NOT request an updated RPR when only the fence is missing. This is despite that the real estate purchase contract indicates structures such as fences must be shown. The lawyers here have, on the balance, decided that fences are one instance where practicality overrides the fine print.
2) Why isn’t the shed on the RPR?
The location of a shed can impact both your homeowner’s insurance policy and closing costs down the road, should you re-sell the home. At the time of this writing, Alberta surveyors only include moveable sheds in the RPR if they do not comply with municipal bylaws. If you’re unsure about a shed on your property or on a property you’re buying, talk with your lawyer.
Regardless of the current bylaws and surveyor standards of practice, know that when you sell your home in Lethbridge the buyer’s lawyer will ask for an accurate RPR and letter of compliance. Different folks will accept different documentation, but if yours is up-to-date, it’s one less thing to worry about when all you want to do is move on.
Lecture over. 🙂
- City of Lethbridge Fence Requirements
- City of Lethbridge Detached Garage and Shed Permits Page
- City of Lethbridge Real Property Reports and Compliance Information Page
- Alberta Land Surveyors’ Association
Hat tip to local lawyers, Michael Dimnik, Dimnik & Company and Ian Zadeiks, Alger Zadeiks, for their help (and patience) in advising on RPR and compliance matters! Thank you also to Pam Colling at the City of Lethbridge Development Office for generously sharing her knowledge of municipal compliance matters.
*This article is for general information purposes only and is not intended as legal counsel or advice on property-specific matters of municipal compliance. Every situation is unique! Please consult with your lawyer, real estate agent and/or the City of Lethbridge for assistance.