A commonly asked question is “Are we provided with a Real Property Report for our new home?”.
In your Purchase Agreement you will note Section 12. TITLE INSURANCE which states: “The Builder, at its sole cost, shall provide the Purchaser with Title Insurance Policies for both the Lender and the Purchaser from First Canadian Title, issued and underwritten by FCT Title Insurance Company Ltd. The Builder will not provide the Purchaser with either a Real Property Report and/or a Certificate of Compliance.”
What is the Difference Between Title Insurance and a Real Property Report?
As the name implies, Title Insurance covers many of the risks associated with maintaining secure title to your property. Title Insurance is a great solution for new construction because it can cover homebuyers for the risks associated with all properties, risks introduced by subdividing land, and even title fraud. A Title Insurance policy protects the insured for as long as they have an interest in the property.
Some of the insured risks on residential properties include:
- Violations of municipal zoning bylaws
- Encroachments onto an adjoining property (other than fences/boundary walls)
- Setback violations
- Unknown or undisclosed realty tax arrears
- Errors in surveys and public records
- Lack of legal access to the property
- Someone else owns an interest in your title
- Existing liens against the title
- Hidden deficiencies such as underground storage tanks
- Unregistered utility easements
- Fraud, forgery, and false impersonation if they affect the validity of title
A Real Property Report is a legal document prepared by Alberta Land Surveyors which clearly illustrates the boundaries of a property and the location of improvements, such as buildings, garages, sheds, and fences, relative to property boundaries. A Real Property Report with a stamp of municipal compliance shows a home buyer what they are buying and that it complies with municipal regulations.
A benefit to getting Title Insurance over a Real Property Report is that if changes are made after purchase there is no need to update your Title Insurance whereas the Real Property Report becomes obsolete if an owner puts up a new exterior structure, like a fence or a deck. The Real Property Report would then have to be updated at the homeowner’s expense. A Real Property Report is a useful document, but it has a limited scope and doesn’t offer owners any recourse if an issue comes up.
Last updated on Oct. 4, 2023