As of February 1, 2014 every new home in Alberta must have warranty coverage. As well, every new home must be registered in the Home Buyer Protection Public Registry. The Registry provides information about the home, the name and contact information for the builder and warranty provided. Minimum coverage required The minimum required warranty coverage terms are: One year labour and materials for finishes throughout the home; Two years for defects in labour and material related to heating, plumbing, and electrical systems; 10 years for major structural. Major structural includes the foundation and framing and parts of an underground parking structure. The frame includes the roof’s structural integrity; and Five years on building envelope, with a requirement for the warranty provider to offer the option to purchase additional years of coverage. The building envelope is the exterior shell of the home including the roof and the walls. Be sure to read your warranty policy carefully in order to find out what is covered, including any conditions, exclusions, expiry dates, or claim reporting cut-offs that you need to be aware of. There are currently 7 warranty providers in Alberta [...]
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If you are buying a condo in Edmonton, it is important that you make your offer to purchase the condo subject to review of the condominium documents. These documents will include the bylaws of the condo corporation, financial statements and budgets, reserve fund studies, meeting minutes, and an information statement. In these documents you may find information related to the condition of the building, any lawsuits by or against the condo corporation, and current or potential special assessments, and any special restrictions such as age or pet restrictions. There are companies that will review these documents for you. Not only should you be satisfied with the condominium documents but your mortgage lender should too. Disclose any issues to your mortgage lender It is necessary that you disclose any issues with the condo building to your mortgage lender even if you feel that they are minor issues or they do not affect you as part of your mortgage application/approval process. For example, anything related to the building structure (even if you think it is not relevant to you), any lawsuits against the corporation, and even special assessments that you [...]
If it is your first time buying a home, you may not know that there are other costs involved in purchasing a home besides the total purchase price. In order to be properly prepared, you should understand what is included in the total purchase price shown on your Purchase Agreement and what other costs you will be responsible for. The Purchase Price is the agreed upon price of your new home set out in your Purchase Agreement. This is the base Purchase Price. Here is a list of some additional costs you may be required to pay when you are buying a newly constructed home: Goods and Services Tax (G.S.T.) is payable on the construction or purchase of a newly constructed home. You may be able recover some of the GST paid for the new home through the federal government’s G.S.T. New Housing Rebate. Usually, the total Purchase Price indicated on your Purchase Agreement will include the net G.S.T – that is, your base purchase price, plus the full G.S.T. payable, less an amount equivalent to any applicable G.S.T. rebate. However, your Purchase Agreement may say you have [...]
B Before reading this article you may want to read: "What is Title Insurance?" "What is a Real Property Report?" Most Real Estate Purchase and Sale Agreements contain a clause requiring the Seller to provide the Buyer with a current Real Property Report with evidence of compliance with municipal zoning laws and bylaws municipality (for houses or bare land condominiums only). 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 evidence compliance. The Seller may do this because: it is less expensive to pay for the buyer's title insurance instead of a new RPR with compliance; or the seller is a aware of an issue that may be revealed on the RPR and therefore don't want to provide one (this may limit title insurance coverage); or there is not enough time to have a Real Property Report with compliance prepared prior to the Closing Date. Should a Buyer accept Title Insurance instead of a [...]
One of the first questions to your Builder is usually – When do I get to move in? What is the Possession Date? Simply put, the Possession Date is the day the Seller (the Builder) is paid and the keys to your new home are released to you. Depending on your purchase contract with your Builder, the Possession Date will be a fixed date that you know when you sign your purchase contract or, as is most often the case; your Builder will give you about 30-45 days written notice of the Possession Date. Can your Possession Date change? Your Possession Date could change even if your purchase contract refers to a fixed Possession Date and even after you have received written notification of the Possession Date. There are usually clauses in the purchase contract that will allow your Builder to change the Possession Date in the event of circumstances that are beyond the Builder’s control such as weather and the availability of building materials. I have seen instances where the Possession Date remains as scheduled, where is delayed for several months, and where the Possession Date [...]
Are you selling or buying your house without a Real Estate Agent? Here are some tips to consider when completing the purchase and sale contract. Although the benefits of using a real estate agent to help with your property sale are many, you may have decided to sell your property on your own. This means you will have to complete a purchase and sale contract. Here are some things to consider. The following is not a substitute for legal advice and is being provided as general information only. An agreement to sell a house/condo has to be in writing. This means that you need to have a written contract between you and the buyer that sets out the terms of the sale like the name of the buyer, the property address, the sale price, and the possession day. Everything you agree to has to be in in writing. So if there is anything that you agreed to that is not included in the contract, then it is not enforceable. For example, if you agree to repair a toilet then you must include this as a [...]
How can you determine if the condo is conventional or bare land? You need to review the Condominium Plan. What is a bare land condominium? In a bare land condominium project, units are created from the land. An owner owns everything that is built on the unit including all parts of the building, decks, patios, driveways, etc. The condominium plan registered at the Land Titles Office looks very similar to an ordinary single family subdivision plan but is registered as a Bare Land condominium plan under the Condominium Property Act. There are no buildings shown on a bare land condominium plan. Most resale condominium purchase contract will state that if the Property is a condominium unit that creates a lot (bare land condominium), as part of the normal closing documents, the Seller will provide the Buyer a real property report. For example, this Plan is for a certain condo-town home complex. Notice how the plan shows the units which were created look like lots rather than buildings. This would be a bare land condo and you would need a real property report. What is a conventional condo? [...]
Bridge /Interim Financing is a loan made to facilitate the purchase of your home prior to the sale of your existing home where you plan on using the sale proceeds from your existing home to complete the purchase of your new home. For example, the possession date for your new home is July 10 and the sale of your existing home does not close until July 15. Your new home needs to be paid for on July 10 but the funds from the sale of your existing home won't be available until July 15. So, your lender may give you a 5 day loan so that you can pay for your new house on July 10. The loan will be paid out on July 15 when you receive the sale proceeds from the sale of your existing home. If you are selling and buying a property and your purchase transaction closes before your sale you will need a Bridge Loan or Interim Financing. If Possession Date is the same date for both transactions, I would also recommend a Bridge Loan or Interim Financing. It is possible your sale may [...]
Title Insurance is an insurance policy that protects a residential or commercial property owner and their lenders against losses related to the property's title. For a one time fee, title insurance may provide protection from such losses as: Unknown title defects (title issues that prevent you from having clear ownership of the property); Existing liens against the property's title (e.g. the previous owner has unpaid debts from utilities, mortgages, property taxes, or condominium charges against the property); Encroachment issues (e.g. a structure on your property needs to be removed because it is on your neighbour's property); Title fraud; Errors in surveys and public records; Other title-related issues that can affect your ability to sell, mortgage, or lease your property in the future. Your title insurance policy may protect you as long as you own your property, and may cover losses up to the maximum coverage set out in the policy. It may also cover some legal expenses related to restoring your property's title. It is important to read the policy and ask questions to be aware of the coverage that is provided. You also need to be aware of [...]
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. RPRs are not prepared for condominium units. An RPR 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 an RPR 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 an RPR because: It may protect you from potential future legal liabilities resulting from problems related to property boundaries [...]
What is a Tenancy At Will? Tenancy at will is the situation where a buyer receives possession of the property prior to payment of the full purchase price to the seller. Sometimes, for a number of different reasons, the buyer may not be able to pay the purchase price to the seller on the possession date. One example is where the buyer's mortgage lender is late sending the mortgage funds to the buyer's lawyer which results in the buyer's lawyer not having the money to pay the seller the purchase price on the day of closing. Another example, is where the seller has not provided the buyer with a document required to close and therefore the payment of the purchase price must be delayed. The seller may still allow the buyer to move into the property on the possession date if (there may be other requirements): the buyer's lawyer has the down payment in trust; the buyer's lawyer has submitted the transfer of land to the land titles office for registration; the buyer has signed all their mortgage and purchase documents; the buyer has property insurance in place; [...]
There are so many reasons you need a lawyer to handle your house sale or purchase. Here are a few: Lawyers make sure the Seller gets paid the purchase price. Lawyers make sure the Buyer gets what they paid for. For example, lawyers make sure: That the property is transferred to the Buyer; There is nothing on the title that isn't supposed to be there. For example, mortgages, liens, caveats; and The house, garage, fence, etc. is where it is supposed to be on the lot. Lawyers make sure that (if applicable) property taxes, utilities, and condo fees are paid. Lawyers make sure that you are provided with the information that you need. Lawyer can make binding promises to each other to make sure things are completed. For example, it may be a condition of your purchase that the seller will clean out the garage. The seller's lawyer can promise to hold back money from the sale proceeds until such time as the garage is cleaned.
Or (Why do I have to sign a Transfer of Land transferring the property back to the Seller when I purchase a property?) Before answering this question, I need to give you a very simple and brief explanation of how regular real estate transactions work in Edmonton. The Seller's lawyer prepares a Transfer of Land which is signed by the Seller. The Transfer of Land is the document that will transfer the property from the Seller to the Buyer. The Seller's lawyer sends the Transfer of Land along with some other documents to the Buyer's lawyer. Now, think about this: The Seller's lawyer is sending the Transfer of Land to the Buyer's lawyer before the Seller is paid for the purchase price. This means that the Buyer's lawyer can register the Transfer of Land (transferring the property to the Buyer) without paying the Seller. So how does the Seller's lawyer make sure the Seller gets paid? The documents are sent to the Buyer's lawyer on explicit conditions called Trust Conditions. The Buyer's lawyer must follow those conditions (if they don't they are in big trouble!). I like to explain Trust [...]
Title Insurance is a form of insurance that protects the title to your property against financial losses incurred as a result of unknown title issues, issues related to municipal permits, and other issues like fraud, encroachments and builders liens. Title Insurance has been predominant in the United States for many years mainly as a result of some deficiencies with American land registration systems. In Alberta, we have a much more reliable system for land ownership and transfer of titles to property. It is called the Torrens land title system. The Alberta government is in charge of all original land titles and all original documents registered against the titles. Government staff examines land transfers and documents registered against them and issues a Certificate of Title for the property. The Certificate of Title will accurately reflect the current facts about the title with some exceptions – it will show if there are any claims registered against the property such as liens, caveats, mortgages, restrictive covenants, encumbrances, utility rights of way and more. Because of the reliability of the Torrens land title system and the requirement in standard real estate agreements for [...]
Building permit issues: Are your clients covered? The following was taken from First Canadian Title Insurance website on April 27, 2011 Building Permits. Encroachments. Survey Issues. Fraud. We've got your clients covered. It's a well known fact that title insurance can save your clients thousands of dollars if a claim arises. However, what you may not know is that the highest claims costs in Western Canada are due to building permit issues. Today, losses associated with open or non-existent building permits are becoming more and more prevalent. Having a title insurance policy can protect your clients against building permit issues and so much more. Consider the following real-life examples relating to building permit claims: Alberta claim example The insured homeowners received a letter from the city advising them that their deck, deck addition, and deck roof, as well as the basement development in their recently purchased home were constructed without building permits. As a result, the city demanded that the proper building permit be obtained for the basement development, and that the deck, its addition and roof, must be removed. The cost of implementing these requirements was $54,044.50. [...]