With every purchase or sale of a home in Calgary, the realtor will pull title of the property. Title is a government certification of ownership of the property, and it shows any particulars registered on title. What can be registered on title? And how will title affect the buyer or seller? Here is an introduction to land title searching and pulling titles for Calgary homes.
What does a title show?
First and foremost, title shows the legal description of the property. For example: PLAN 7355JK – BLOCK 9 – LOT 14F. This gives the exact location of the property and the format is designed to prevent confusion. Alberta knows many Main Streets and First Avenues. The legal description makes sure you don’t buy or sell a property on Main Street in the wrong town or city. Each parcel of land, home or condo has a unique legal description.
Title also shows the names of the owner(s) of the property and the address(es) of the owner(s). In the case of a rental, the owner’s addresses is different from the address of the rental. If the property is owned by a company or corporation, it will show that name. If there is only one owner on title and the owner is married, the Dower Act may come into play.
Transfer of Land
Title also shows the amount that was paid for the property. This line will be shown as Transfer of Land and is followed by the amount. The only case the amount is not shown is if the property was inherited.
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Encumbrances on title
The title will also show any instruments or registrations. These are referred to as encumbrances on the title. Every encumbrance has a registration number, which can be pulled separately giving details. A very simple example is a zoning regulation, subject to Calgary International Airport Zoning. This instrument can be pulled to see what it contains.
Most often, title will show at least one financial item: the mortgage lender (which includes the name of the lender and the amount that was borrowed at the time of transfer of the title). That does not necessarily mean this amount is still currently owing. It could have been paid down in the meantime.
Another financial item could be the CRA when the current owner is in arrears on their taxes. Or when the owner still owes condo fees to the condo board. Or when the owner still owes property taxes. Foreclosures often show more liens that the owner has outstanding. Builder liens is another financial item that can be on title.
Architectural controls can be on title and may affect your decision to purchase
Examples of encumbrances
Besides the financials, title can also show non-financial items. These encumbrances include:
- Easements. The right to use land in common with others. A simple example is when an owner allows a neighbour to cross the owner’s land to get to their own property.
- Encroachments. An example is when the soffits and eaves overhang the neighbouring property. Or when a fence is slightly, but with permission, on the neighbouring property. Encroachment agreements are on title, when it is permitted by the neighbour.
- Caveats. When someone else is claiming an interest. Ceveats literally means ‘let him beware’ in Latin. Every line of a caveat shows a registration number from which details can be pulled.
- Right of way. Sometimes a green utility box may be on the front lawn. That would be a utility right of way where an owner allows the utility company on the lawn for its maintenance.
- Architectural controls. These could tell the owners that roofs can only be wood shakes and not asphalt shingles. Or owners can only use chain link fences and no wood fences. Architectural controls could also determine a certain minimum house size. These controls fall under the term restrictive covenants, which means contract, agreement or commitment. These restrictive covenants can be enforced. Developers created these covenants to maintain the value of homes in a community or a particular area of a community.
- Home owner’s association fee. A yearly contribution to the community association for upkeep of the community. Or in the case of a lake community, access to the lake. Most newer communities in Calgary implemented Home Owner Association fees that are registered on title.
- Lis Pendens. This is when a litigation is in process. A simple example of a Lis Pendens could be the Matrimonial Act in the case of a divorce.
How can title affect the purchase or sale of a property?
When you buy a home, you need to know what is on title
- As a home buyer you want to know if the fence between you and the neighbour is encroaching on your land.
- If a property has architectural controls on its title, a buyer wants to know what it contains before making the decision.
- If a Lis Pendens shows up, there may be a financial conflict that needs resolving first.
- Dower act: if only one owner is on title and the owner is married, the spouse must give permission to sell the property. That is, if the spouse has also has lived there. In these circumstances it could be that the seller on title cannot sell the property.
- The buyer needs to know if the seller does or does not owe money to the CRA, to builders, or condo fees to the board. Or anything else financial that jeopardizes the transfer. For example, the mortgage on title shows $400,000. The house sells for $360,000. That means there is a $40,000 gap. The seller needs to come up with $40,000 from his own funds to close that gap or the seller cannot sell. The home buyer needs to know if the seller is “under water.” However, as previously mentioned, this $400,000 mortgage may have been registered many years earlier and was paid down over the years. In that case, there are no problems transferring title to a new owner.
What items stay on title?
In the contract, a seller states that clear title will be issued. All financial encumbrances like mortgage, taxes, or builder’s liens need to be discharged. If a seller is not able to pay up these amounts, the seller cannot sell this property.
All financial encumbrances like mortgage, taxes, or builder’s liens need to be discharged
But many items stay on title when it is transferred to the new owner. In other words: “they run with the land.” A few examples are the architectural controls, other restrictive covenants, Home Owner Association fees and zoning regulations.
Any title is public record. Anyone can look into it after paying a nominal fee. The Registrar of Titles under the Land Titles Act issues titles to any property in Alberta.
This article is an introduction to pulling titles for Calgary homes. If you have any questions or need legal advice for selling or buying a Calgary home, seek professional council to get the best advice.