What are legal notations?
Legal Notations are special notes written on the title of BC properties. They appear on title to the property just beneath the legal description.
Legal notations can be good for a property. But they can also indicate issues that could cost owners significant amounts of money.
You must review these notations to see which ones will stay on title. If you are buying property, you might want some of them cleared from the title.
An example of a “good” notation
A common legal notation reads “hereto is annexed easement …”. This means the property has easement rights over another property.
Accessing the beach
Imagine, for example, that you want to buy a beautiful home from George. George’s home overlooks the lake, but there is another home – Anna’s home – in between his property and the beach. You can only access that beach (and the lake) by crossing over Anna’s home to get to it.
Anna might have agreed to give George an easement. This lets George (and soon, you) cross over her property to get to the beach. George might have paid her for this right, or they might have negotiated other terms. For example, maybe George agreed to mow Anna’s lawn every two weeks in exchange for the right to cross her property.
So George gets to cross over Anna’s property, and he’s happy. But what happens when Anna sells her property? Will the new owners still honour this agreement? Yes, if Anna has registered the easement in the Land Title Office. So George and Anna agree to register this easement with the Land Title Office. Then George knows he’ll be protected if Anna sells her property.
How do others know the easement is there?
The Registrar of the Land Titles Office registers the easement as a charge on Anna’s property. A charge is something that takes away one of Anna’s ownership rights. In this case, Anna has agreed to give up the right of exclusive possession to that part of the property used for the easement.
Anyone buying Anna’s property will now look at her title, see that easement, and know that they need to ask questions about it. This is part of a buyer’s due diligence process.
But how do we document something on George’s title to show that his property has this right to cross over Anna’s property?
We can’t add a charge on George’s title, because George hasn’t given up any rights to his own property. In fact, George’s property has gained a right over Anna’s property.
So the Land Title Registrar puts a note on George’s title that identifies the fact that his property has an easement right over a neighbouring lot.
Ordering a copy of the easement
This is a good notation, but you should still order a copy of it from the Land Title Office, so you can make sure that there aren’t any surprise terms that you will need to comply with once you buy George’s home (like having to mow Anna’s lawn every two weeks).
Some examples of confusing notations
Sometimes you simply can’t tell what the notation on the title is all about. The wording of the notation doesn’t give you enough information. In order to find out what the notation is for, you need to order a copy of it from the Land Title Office.
Permit Notations
Another common legal notation says “This title may be affected by a permit ….”.
Governmental authorities issue Permits for all kinds of reasons, including:
- building or renovating permits
- permits to create new developments, or to vary existing developments
- variations of permits allowing different kinds of land uses
- temporary use permits
Always order permit notations. It’s important to know exactly how it will affect the title to your property.
Covenants
Covenants also require more investigation. A covenant is a promise that the owner has made. Property owners must honour covenants.
Sometimes the covenant might be promising that you will comply with the terms of a Building Scheme, or that you won’t build on a particular area of the property (often due to soil instability or flood plain issues).
Phased Strata Plans
A notation on the title showing a Phased Strata Plan Declaration indicates that the strata property you are looking at has been built in phases, or is currently in the process of being built in phases.
Why do you care about this? Because you could:
- end up with construction noise and mess
- have unfinished buildings if the builder goes bankrupt in the middle of their work
- become responsible for costs for unfinished phases
- incur costs for shared buildings, parking lots and other structures
Any time you see a phased strata plan declaration, you should start to ask a lot more questions about how far along the building process is, and what it means for you if the phases stall.
An example of a bad notation
Some notations indicate things that will negatively affect the title to your property.
The most common example of notations that will negatively affect the title to your property are Security Agreements, or PPR notations. These are notations that tell you that someone has used something on the property as collateral for a loan.
For example:
- a security agreement documenting a loan to pay for the manufactured home on the property
- a notation documenting a loan agreement to pay for major equipment over time – such as geothermal equipment
- a notation indicating an agreement about who gets the value of the crops on the property
Anytime you see one of these notations on title, you should order it immediately to see what it is for (and what it will cost you to get rid of it).
How do you order these notations?
If you are just at the start of your due diligence process, your REALTOR® can order copies of these notations for you from the Land Title Office. Alternatively, we can order them for you as well.
Don’t “yeah, yeah” your way past legal notations! If your contract of purchase and sale says you have ordered and reviewed the charges and notations showing on the title to your property, and you didn’t actually review them, you can be stuck for some significant costs to deal with these notations.
In some worst case scenarios, you might have to go to court to have the notation removed.
If you are selling your property, ask your Realtor® to point out any legal notations that are on the title, and if you have any questions about what those notations are for, ask us for an appointment to come in and review them with you. Paying for an hour’s worth of our time could save you thousands.
Questions?
Let us know – we’d be happy to set an appointment for you to come in and review your title with us.