RPR with Compliance – Why is it important when buying a house in Alberta?
Written by: Roshan Kalra
In the Alberta real estate market, a Real Property Report (RPR) with compliance is a cornerstone document that ensures transparency and security in property transactions. An RPR is a detailed drawing prepared by an Alberta Land Surveyor, showing the property's boundaries, structures, and any encroachments relative to those boundaries.
Why is this important?
For buyers, an RPR with compliance offers peace of mind. It confirms that the property they are purchasing adheres to municipal bylaws and that there are no hidden liabilities like encroachments or easements that could lead to costly disputes or legal issues down the line.
For sellers, providing an RPR with compliance is often a requirement of sale contracts, and it demonstrates due diligence, helping to expedite the sale process.
Lenders often require an RPR with compliance to protect their investment, ensuring that the property's legal description matches the physical layout and that there are no legal complications that could affect the property's value.
In short, an RPR with compliance is not just a legal formality; it's a critical tool that safeguards the interests of all parties involved in a real estate transaction in Alberta. It's a clear illustration of the property's legal standing, providing assurance that the property is free of potential disputes and is compliant with local regulations.
When selling your house, you may hear the comment, “the seller will give me a credit for title insurance instead of an RPR with compliance”. Title insurance is a policy that protects property buyers and lenders against losses related to the property's title or ownership. In Alberta, it's often used as an alternative to an RPR in real estate transactions. While title insurance covers a range of issues, including unknown title defects and existing liens, it lacks the physical detail provided by an RPR. This means that while title insurance can protect against past issues, it cannot prevent or highlight potential future disputes or legal complications arising from non-compliance with property regulations.
For example, if a fence encroaches on municipal property, an RPR would reveal this, and the seller would be responsible for resolving the issue before the sale. With title insurance, such an encroachment might only come to light after the purchase, leaving the buyer to address it, potentially without coverage from the policy.
Importantly for a buyer, when it comes time to sell the property, the next buyer may insist on an RPR with compliance. If issues are then discovered, the current owner will bear the cost and responsibility of resolving them, as title insurance does not typically cover known defects.
To summarize, while title insurance is a valuable tool in real estate transactions, it does not fully replace the assurance and detailed physical assessment provided by an RPR with compliance. Buyers and sellers should consider the benefits and limitations of both to make informed decisions when buying or selling a house in Alberta
*This article is not intended to provide legal advice. If you have specific questions related to your transaction, please feel free to contact the writer, Roshan Kalra, or any other practitioner in our real estate department.