What is a Real Property Report?
A real property report (RPR) is a document that illustrates the location of visible improvements (for example, a house, garage, shed, deck, or fence) located on a property relative to the property boundaries. Click here to see what a Real Property Report looks like.
A Real Property Report includes the following:
- The legal description of the property;
- Dimensions and directions of all property boundaries;
- Designation of adjacent properties, roads, lanes;
- Location and description of all relevant improvements situated on the property including dimensions and distances from the property boundaries;
- Right-of-way or easements as noted on the title to the property at the date of the survey;
- Location and dimension of any visible encroachments onto, or off of the property; and
- A certificate and opinion by an Alberta Land Surveyor.
Because it includes a statement detailing the surveyor’s opinions or concerns, the RPR is often relied on by the buyer, seller, lender, and the municipality as an accurate representation of the improvements located on the property.
If you are a Seller, you need a Real Property Report because:
- It may protect you from potential future legal liabilities resulting from problems related to property boundaries and improvements.
If you are a Buyer or Owner of Property, you need a Real Property Report because:
- You will know the accurate locations and dimensions of buildings, improvements, rights-of-way, and encroachments relative to boundaries of your property.
- You will know the physical dimensions of the property.
- It shows the location of improvements within the property boundaries (example – Is your home too close to the property line?).
- It shows any encroachments from adjacent properties (example – is part of your garage on your neighbour’s property?).
- It shows whether the property complies with municipal bylaws and fire codes.
- It shows if there are any problems relating to property boundaries.
- Your Mortgage Lender will need to ensure the property complies with municipal bylaws.
The Canadian Bar Association Alberta Branch has published a report on the “Recommended Rules of Practice Respecting Real Property Reports”
A summary of the report’s suggestions are listed below:
- The Buyer’s Real Estate Lawyer should not have to proceed to registration until they have the opportunity to review an RPR. Interest should only be paid at the mortgage rate mortgage amount if the buyer wants to take possession or Possession shall be postponed until one is provided and no interest shall be payable.
- Original RPR’s are not required.
- Age of the RPR is not relevant so long as it reflects the current state of the property (exception: purchaser’s lender may have certain requirements)
- If an RPR is prepared before the date of final acceptance of the Purchase Contract, the Seller should sign a statutory declaration that there have been no changes
- RPRs do not need to include sidewalks, driveways, landings, or small sheds;
- A removal of an improvement does not require a new RPR; and
- All fences must be shown on the RPR.
For the full report, click here.
Visit The Alberta Land Surveyors Association Website for more information.
Click Here for my article“Should a Buyer Accept Title Insurance in Lieu of an RPR?”
Click here for my article “What is Title Insurance?”
Does title insurance replace the need for a Real Property Report?
No.
Most Real Estate Purchase and Sale Agreements contain a clause requiring the Seller to provide the Buyer with a Real Property Report with compliance.
Only a Real Property Reports that reflect the current state of the Property and that is marked with compliance by the municipality will satisfy the requirement of the Purchase and Sale Agreement.
Sometimes, the Seller does not have a current Real Property Report with compliance. In that case, the Seller may offer to purchase a Title Insurance Policy for the Buyer in lieu of providing the Buyer with a Real Property Report with compliance. The Seller may do this because it is cheaper to pay for the title insurance, they are aware of a problem with the property (this may prevent title insurance coverage), or there is not enough time to have a Real Property Report prepared.
Should a Buyer accept Title Insurance instead of a Real Property Report with Compliance?
Of course, this depends on each transaction. In most situations, I recommend the Buyer insist that the Seller provide them with a Real Property Report with compliance for these reasons:
- If you receive a Real Property Report with compliance at the time of purchase you will know what you are getting. You will know if your fence encroaches on your new neighbour’s property, you will know if your garage is too close to the property line, you will know if a permit has been issued for your deck.
- If problems are revealed by the Real Property Report during the transaction, it will usually be the Seller’s responsibility to fix them under the purchase contract. For example, the Seller will get a permit for their deck, or enter into an encroachment agreement with the municipality or the neighbour.
- If you get title insurance instead and problems with the property are revealed at a later date they are now the buyer’s responsibility. The Buyer may find out that there is an issue with their property and it is now their responsibility to fix. The Buyer can go to their title insurer but the title insurance policy may not cover the Buyer’s loss. The title insurer may cover the loss but the Buyer’s time will be inconvenienced dealing with the issue.
- It is very important to read the contents of your title insurance policy and be aware that you are making a claim on an insurance policy and your insurer may decide not to cover your loss.
- If the Seller or the Buyer is aware of a deficiency and decided to get title insurance instead of a real property report with compliance, the Buyer may not receive coverage under the title insurance policy. The title insurer and the Buyer can take legal action against the Seller if there evidence that the Seller was aware of problems with the property. Title insurance does offer some coverage for known defects.
- When it is time to sell the property, the seller will have to provide the new buyer with a real property report with compliance or pay for the new buyer’s title insurance.
