There are have recently been a number of stories in the news about how new buyers have just settled into their new home only to find out there is a serious, previously unknown, problem with the property. Recently, this story out of Nova Scotia about a man who had someone try and sell him his own backyard made headlines across the country. These frustrated homeowners often have to spend months or years dealing with these issues and often significant amounts of money to boot.
Unfortunately, it’s not always possible to catch every single issue as you go through a property purchase. There are ways to reduce the chances of these errors, as well as the harm they cause.
So how does TNG help you protect yourself against these kinds of surprises?
Due diligence searches
You wouldn’t just buy one of the biggest assets of your life without doing a little research first. This research is called “due diligence”. Your REALTOR® will do a few basic due diligence searches for you when you are making your offer on a property. We will do a number of additional due diligence searches for you when we get your file started.
For example, we will look to see whether there are any outstanding property taxes or utilities on the property, If your property is a strata or manufactured home, we will order confirmation that the strata and park fees are up to date. If you want special searches ordered (like seeing if there are any work orders pending against the property at your local municipality), let us know and we will do those for you as well.
Reviewing a property tax certificate
We will review the property’s tax certificate with you at your signing meeting. That will, depending on the community, often have additional information on it that can point to additional lots or other issues with the title (like a surprise manufactured home you weren’t aware of).
Reviewing local GIS maps
Most regions in BC now have interactive maps that can show you a lot of information about your property. These maps can clearly show you, for example, where the lot lines are for the property you are buying.
Here are some examples of useful interactive maps:
- Regional District of Okanagan-Similikameen
- Regional District of North Okanagan
- West Kelowna
- City of Penticton
This is a really good example of a due diligence search that you should do with your Realtor before you sign your contract (so you make sure you are getting all lots to the property properly described in your contract). Dealing with this issue after your contract is finalized can be a challenge.
Reviewing the title
A title search is a public record of the property’s registered owners, and shows any claims registered against the property.
Your Realtor will review the copy of the title you are buying with you at the start of your process, and we will also review the title with you when you come for your signing appointment.
Even though you have “approved title” by the time you get to us, we still want to make sure you are aware of the charges registered on title to the property that could affect the nature or use of the property. This is one of the last opportunities you will have to deal with any title problems before the title is registered in your name. You can order copies of any of the charges registered on title to your property at your signing meeting.
We look at the plan with you
- whether we are buying the right property for you
- whether we are getting ALL of the lots that go with the property you are buying
- whether the lot boundaries are as you expected them to be
For example, if you are buying in a duplex, are we transferring the title to the correct side of the duplex into your name? It may sound silly, but we end up having to fix problems like this for people every year. In one of the worst cases we came across, the owners had
been buying and selling the wrong sides of their duplex building for decades.
- the size of your lot, if you are buying a home on its own lot
- the location of buildings on that lot
- the location of strata units
- the location of common property, parking stalls and storage lockers in strata buildings
- in some cases, rights of way or other access rights
Debra van Beers covers the topic in her article called Do you have time for a quick survey?, but here’s the short version:
Imagine you’re buying a used car. It might look great in the photos and in person, and it drives well on your test drive, but you don’t really know how to tell if it’s sound. So you take it to a mechanic, who spends an hour going over it. This is a protective step that will potentially identify important issues, which can save you money later on. Even if it turns out that there is nothing wrong with the car, now you know that for sure. A survey is no different. It can point out important issues that you may need to investigate before you finalize your transaction.
We would be happy to refer you to a surveyor, or you can find one at the Association of BC Land Surveyors.
So what happens if you do all of the investigations you should, and something still goes wrong?
Title insurance might help with that.
Title insurance is a form of insurance that your lender may require you to have when you buy your home. It’s different than property or life insurance. You can also buy a homeowner policy yourself even if you don’t have a lender. Title insurance may pay to fix problems like:
- bylaw violations
- setback violations
- realty tax arrears
- existing work orders
- lack of legal access to the property
- certain kinds of fraud, forgery and false impersonation
The cost for title insurance is usually very reasonable, and you generally pay for it once, when you buy or refinance your home.
You can look here for more information on title insurance at Stewart Title Guaranty’s website.
Independent Legal Advice
Lastly, we always offer the opportunity to review your contract with you before you remove your subjects. A lawyer or notary can advise you on the legal risks in circumstances where there might be an increased chance of these title issues.
If you want to make sure your conveyance is done right, contact us to book an appointment or get an estimate, and we’ll ensure everything is to the standard you expect.
Thanks to Derrick Murphy for editorial assistance.Tags: first time homebuyer, fraud, land title, property, real estate, survey, title insurance
Categorised in: real property
This post was written by Linda Caisley