Monday, June 18, 2018 / by Richard Kinnell
Real Property Reports
Sellers often ask what an RPR is, and why it is necessary when selling a home. This should help you understand RPR's better. This blog provides information regarding RPR's, but is not legal advice, and does not replace the need for proper consultation with a real estate lawyer or REALTOR®, regarding your specific circumstances.
What is an RPR?
A Real Property Report (RPR) is a survey of your property, showing the dimensions and placement of any improvements(the home, sheds, decks, etc) in relation to property lines. The purpose of the RPR is to make sure you are able to hold up your end of the deal, once a purchase contract is signed for your property. When selling your home, you are making certain "warranties and representations" to the buyer. You as the seller are representing to any buyer that all structures and improvements made on your property were completed with any required permits, that all is done in compliance with municipal or other bylaws or regulations, and that these improvements are all within the boundaries of your own property. Improvements to your property cannot encroach on any easement, right of way, or neighbouring property. Having a current RPR in hand allows you to say, with certainty, that these warranties and representations you are making, are in fact true.
Why do I need one?
Many buyers think they can walk around their property and be sure that everything is compliant. They say: my garage is within the fence line, so all is good. Or: my fence has been there for 10 years, and nobody has complained. Later it is determined that the fence line was built 5 inches over on the neighbours property. Which could also mean that your garage now is encroaching on their property. This is an awful situation, that, if not discovered and corrected, could cause a sale collapse, and could potentially open the seller up to legal liability. A fence could be expensive and time consuming to move, but moving or correcting the garage could very easily end up being a massive cost.
Another common issue that arises, is regarding easements and right-of-way's. Often properties will have an easement registered on title, or a "Utility Right of Way". An example of this would be those green electrical or cable boxes that you will find at the front or rear of certain homes. One client of mine built a fence at the back of their yard, and without knowing, built his fence on the utility right of way. He thought that the 12 inches of space behind the green box was fair and sufficient so as not to obstruct the utility companies access to the box. What he didn't know is that the actual boundaries of this utility right of way were larger than what he expected, and his fence was encroaching on a right of way. The fence had to be moved and corrected before a sale. This is a good example of an improvement made (fence being built), within the boundaries of the sellers property, but was not done properly, and was not done in compliance with the Right of Way that was registered on title.
It is important to understand that just because it looks like it has been built on your property, it doesn't necessarily mean that it actually is, or that it was built legally, and with any required permits.
How do RPR's help?
The survey company will pull the title for your property and look at any right of way, easement, encroachment or other registrations made on your title. They then complete a survey of your property to make sure that all improvements are made within the boundaries of the property, and confirm whether or not they encroach on any right of ways or easements.
When selling your home, the purchase contract stipulates that you must provide a current RPR, with evidence of municipal compliance. Once the survey is completed by the survey company, you must take (or pay a fee to the survey company to have them take) the RPR to the city for review. The city will review the RPR document to make sure that all of the improvements reflected on the RPR, are in compliance with municipal bylaws. They will also reference your property file to make sure that you obtained the correct permits for garages, decks or any other improvement that would require a permit. Once they determine that your RPR reflects a property with correct permits, and is in compliance with municipal bylaws, they will stamp the RPR with their compliance stamp. You now have a "current RPR, with evidence of municipal compliance".
- Remember, the seller has a legal obligation to disclose any known "Material Latent Defects" on the property. Material Latent Defects are issues with the property, that may not be discoverable upon inspection, but that may be expensive to fix, or render the property dangerous or inhabitable. The law has also determined that an improvement made without the required permits is deemed to be a Material Latent Defect, and therefore must be disclosed to the buyer. If you have questions or would like more information about Material Latent Defects, please contact your lawyer.
Is an RPR ALWAYS required?
In most cases, yes, an RPR will be required, however an RPR is not necessary or required for Conventional Condominium properties. An RPR would still be required for a Bare Land Condominium. In some cases, it may not be possible, or feasible to complete an RPR, such as when building a home with a builder. In some cases the seller may offer Title Insurance in lieu of an RPR. Your real estate lawyer, and us acting as your real estate agent, can help you determine what will best suit your specific case.