What is a Real Property Report?

A Real Property Report (RPR) is a legal document prepared by an Alberta Land Surveyor that clearly illustrates the boundaries of a property and the location of visible improvements relative to property boundaries. It includes detailed measurements of buildings, fences, driveways, and other permanent structures on the property.

Why are Real Property Reports Important?

In Alberta real estate transactions, RPRs serve several critical functions:

• Compliance verification: They confirm whether the property complies with municipal bylaws and regulations regarding setbacks, height restrictions, and permitted uses.
• Disclosure obligations: Sellers have a legal obligation to disclose accurate property information to potential buyers, and an RPR helps fulfill this requirement.
• Preventing future disputes: By clearly defining property boundaries and improvements, RPRs help prevent neighbor disputes over property lines.
• Municipal compliance: Most municipalities in Alberta require an RPR with municipal compliance stamp when transferring property ownership.

Alberta law places the responsibility on the seller to provide a current RPR with municipal compliance, though the standard purchase contract allows for negotiation of this requirement.

What are Representations and Warranties?

In Alberta real estate transactions, representations and warranties are statements of fact and promises made by the seller regarding the condition and status of the property. These statements form part of the legally binding contract and provide the buyer with certain assurances about their purchase.

Standard Representations and Warranties in AREA Contracts

The Alberta Real Estate Association (AREA) standard residential purchase contract typically includes the following key representations and warranties:

• Property condition: The seller warrants that the property will be in substantially the same condition at possession as when the contract was accepted.
• Workability of systems: All heating, plumbing, ventilating, electrical and air conditioning systems, and any included appliances/equipment will be in proper working order on the possession date.
• Urea Formaldehyde Insulation: The seller warrants the property does not contain this type of insulation.
• Underground storage tanks: The seller represents there are no underground storage tanks on the property (unless otherwise disclosed).
• No unauthorized improvements: All improvements on the land comply with municipal bylaws or have required permits.
• No encroachments: There are no encroachments affecting the property (except as disclosed).
• No legal actions: There are no outstanding legal actions pertaining to the property.
• No moisture/environmental issues: The seller is not aware of moisture or environmental issues such as mold (except as disclosed).
• Good title: The seller has the legal right to sell the property with clear title (subject to stated encumbrances).

Property Tax Assessment in Edmonton, Alberta

Property taxes in Edmonton are calculated based on the assessed value of your property as determined by the City of Edmonton Assessment and Taxation department. The assessment reflects the market value of your property as of July 1 of the previous year.

How Property Taxes Are Calculated

Your property tax amount is determined by multiplying your property's assessed value by the tax rate (mill rate) set annually by Edmonton City Council. The property tax is used to fund municipal services, education, and in some cases, other provincial requisitions.

Payment Options

Edmonton property owners have several options for paying their property taxes:

1. Monthly Payment Plan (TIPP): The Tax Installment Payment Plan allows property owners to pay taxes in monthly installments throughout the year rather than a single annual payment.
2. Annual lump sum payment: Pay the full amount by the annual due date.
3. Online banking: Through most major financial institutions.
4. By mail: Send a cheque to the City of Edmonton.
5. In person: At City Hall or any participating financial institution.

Important Due Date

The annual property tax payment deadline in Edmonton is June 30 each year. Failure to pay by this date will result in penalties:

• A 5% penalty is applied on July 1 on any current outstanding balance
• An additional 5% penalty is applied on September 1 on any current outstanding balance

What is an Estoppel Certificate?

An Estoppel Certificate (sometimes called a Status Certificate in condominium transactions) is a legal document that verifies important financial and legal information about a condominium unit. In Alberta, this document is issued by the condominium corporation and provides crucial information about the unit's standing within the condominium community.

Content of an Estoppel Certificate

An Estoppel Certificate typically includes information about:

• Current condominium fee amounts and payment status
• Any special assessments that have been levied or are pending
• Reserve fund status and balances
• Any arrears or liens against the specific unit
• Confirmation of the unit owner's voting rights
• Rules and regulations of the condominium corporation
• Information about pending lawsuits involving the condominium corporation

Why Estoppel Certificates Are Important

Estoppel Certificates serve several critical functions in Alberta real estate transactions:

• Financial protection: They protect buyers from inheriting unknown financial obligations, such as unpaid condominium fees or pending special assessments.
• Legal certainty: The certificate "estops" (legally prevents) the condominium corporation from later contradicting the information provided in the certificate.
• Due diligence: They form an essential part of the buyer's due diligence process when purchasing a condominium unit.
• Mortgage approval: Lenders often require an Estoppel Certificate before approving financing for a condominium purchase.

Required Condominium Documents in Alberta

The Alberta Real Estate Association (AREA) standard condominium resale purchase contract requires the seller to provide the buyer with specific condominium documents. According to the Condominium Property Act and AREA's standard contract, these typically include:

• Condominium plan: The registered plan showing unit boundaries, common property, and unit factors
• Current bylaws: The governing rules of the condominium corporation
• Current budget: The operating budget for the current fiscal year
• Financial statements: Recent financial statements of the condominium corporation
• Reserve fund study and plan: Documentation of the corporation's reserve fund status and future capital replacement planning
• Minutes of board and general meetings: Usually for the past 12 months
• Management agreements: Contracts with property management companies
• Estoppel/Status Certificate: Document verifying financial status of the unit
• Insurance certificate: Proof of the corporation's master insurance policy
• Post-tensioned cables statement: Information about post-tensioned cables if applicable
• Special assessment notices: Documentation of any levied or pending special assessments
• Recreational agreements: Any agreements relating to shared recreational facilities
• Parking and storage details: Documentation of parking and storage assignments

Importance of Document Review

Reviewing condominium documents before waiving conditions is crucial for several reasons:

• Financial health assessment: The documents reveal the financial stability of the condominium corporation, potential fee increases, and adequacy of the reserve fund.
• Detecting special assessments: You can identify any pending or recently approved special assessments that could cost thousands of dollars.
• Understanding restrictions: Bylaws may contain restrictions on rentals, pets, renovations, or other factors important to your intended use.
• Evaluating management: Meeting minutes can reveal ongoing issues, disputes, or how effectively the condominium is managed.
• Insurance coverage: Reviewing the insurance certificate helps ensure adequate coverage is in place.

What is Title Insurance?

Title insurance is a specialized insurance policy that protects property owners and lenders against financial loss due to defects in a property's title. In Alberta, title insurance is offered by several insurance companies and has become increasingly common in real estate transactions.

Primary Functions of Title Insurance

Title insurance in Alberta serves several key functions:

• Protection against title defects: It insures against issues like fraud, forgery, undisclosed heirs, errors in public records, or improper registration of documents.
• Coverage for survey issues: It protects against undiscovered encroachments, boundary disputes, and other issues that would normally be identified by a Real Property Report.
• Defense costs: If your title is challenged, the policy typically covers legal expenses to defend your ownership rights.
• Gap coverage: Protection during the period between closing and when documents are officially registered at the Land Titles Office.
• Protection against zoning violations: Coverage for certain existing violations of municipal zoning and building permit requirements.

Title Insurance as an Alternative to Real Property Reports

In Alberta real estate transactions, title insurance is often used as an alternative to obtaining a current Real Property Report (RPR) with municipal compliance. This approach has several important implications:

• Expedited closings: When an RPR cannot be obtained in time for closing, title insurance can facilitate the completion of the transaction.
• Cost considerations: A title insurance policy is often less expensive than obtaining a new RPR, particularly for older properties where significant changes may have occurred.
• Lender requirements: Many Alberta lenders will accept title insurance in lieu of an RPR as part of their mortgage requirements.
• Ongoing protection: Unlike an RPR, which is a snapshot in time, title insurance provides ongoing protection against covered risks for as long as you own the property.

Important Considerations for Alberta Homebuyers

When considering title insurance in Alberta, keep these points in mind:

• Most policies are paid with a one-time premium at closing and remain in effect for as long as you own the property.
• Coverage typically does not extend to issues you knew about before purchasing the property.
• Title insurance does not replace the need for a real estate lawyer to conduct proper searches and due diligence.
• The standard AREA purchase contract requires the seller to provide an RPR unless the parties agree otherwise, so using title insurance instead should be explicitly negotiated.
• An owner's policy protects you, while a lender's policy protects only your mortgage lender. It's advisable to have both.

In Alberta, title insurance has become widely accepted by lenders, lawyers, and real estate professionals as a valuable tool for managing risk in property transactions and addressing compliance issues that might otherwise delay closings.