Selling your house is an exciting time, however there is often quite a bit of paperwork to organize and provide to all parties. One of these documents is a Real Property Report, commonly referred to in Alberta as an RPR. A report which outlines your lot size, as well as the structures on your property, should be organized as soon as possible once you decide to sell your home.
Why? Unless you specifically contract out of providing an RPR, you will need to provide one to your buyer for their lawyer’s review for every sale of residential property in Alberta.
Standard RPR requirements
Required for every sale of a residential property in Alberta, your RPR must:
- Be completed by a duly qualified Alberta surveyor. The requirements for the RPR are outlined in the survey profession’s standard manual of practice
- Show where all of the structures sit on the property you are selling. If the RPR does not reflect the lot and structures as it currently is, a new RPR must be completed.
- Show evidence that the structures are in compliance with current municipal bylaws (or in some cases, past bylaws).
- Show compliance by way of a stamp on the RPR or letter from the relevant municipality to that effect (e.g. City of Calgary; MD Rocky View etc.).
There are only a few key exceptions to where you will not need to provide an RPR, including:
- The sale of a condominium property (unless the condo plan is a so-called “bare land” condominium, in which case you will have to provide an RPR);
- Any land with no structures on it.
How to arrange an RPR & associated costs
You can arrange obtaining an RPR directly with a survey company and also have the company get the required compliance. If this is how you proceed, you need to make sure that the survey company understands what your deadline is and that the RPR and compliance are available to you well before the closing date. The cost for this is usually around $800. You can also ask a real estate lawyer, such as Mainwood Legal, to arrange obtaining the survey and compliance for you. The cost for this will then be paid out of sale proceeds.
The good news is that you can use the RPR that you received when you purchased the property – even if it is many years old – so long as it is legible and accurately reflects where all structures currently are on the property and you have the evidence of compliance on it.
The bad news is that failure to provide an RPR with evidence of compliance well in advance of closing can create significant problems.
RPRs are not always straightforward
According to the standard contract:
- Closing documents sent to your buyer’s lawyer must include an RPR showing the current location of structures and compliance as stated above.
- If the RPR is not at the buyer’s lawyer’s office on the closing date showing those things, the buyer can elect to take possession of your house on the completion day and is not obligated to pay the funds owing to you for your house until his/her lawyer has had a chance to review that RPR and had time to register the house in the buyer’s name. This can be awkward if you had planned to use sale proceeds on or soon after the day of closing – for instance to purchase your new home. At the very least, if you have interim (sometimes called “bridge”) financing in place, you will be paying interest on that financing while the RPR is reviewed and a Certificate of Compliance is obtained from the municipality.
Even if you provide the RPR on time, if for some reason the RPR is defective, or if the proof of compliance has been denied by the municipality, this can lead to a holdback from your sale pending resolution to these problems. If these problems cannot be solved, that likely means that you are exposed to an action against you for damages for breaching one of the seller’s warranties in the sale contract, typically to the effect that structures do not encroach and that the structures comply with municipal bylaws. This can also have the effect of forcing you to negotiate a reduction in selling price from a position of weakness.
RPR Help
All of the above is meant to give you a heads up as to the desirability of obtaining an RPR as soon as humanly possible – and dealing with any problems well before the completion day for your sale. For further information on how to obtain an RPR with the least stress possible, or to best go about selling your house, contact Paramount Law LLP.