Under the land registration system used in Alberta (which is based on the Torrens System of land registration), instruments registered on title are guaranteed by the Government of Alberta. This means that anyone can rely on the validity and security of instruments registered at the Alberta Land Titles office. An instrument registered on title to a property will “run with the land”, which means it will remain on the title unless there is a specific mechanism in place to have it removed. When buying a home in Alberta, it’s important to understand which registered instruments to pay attention to when reviewing the property’s land title certificate. Here are the top ten Alberta Land Titles registrations to pay attention to (not an exhaustive list):
1) Restrictive Covenants
A restrictive covenant is a key document to understand BEFORE you sign a purchase contract, as it places restrictions on what can be done with a piece of land. The types of restrictions that can be placed on land vary greatly, and can include (and this is a very limited list): the type of business that can operate on land, whether livestock is allowed on the land, how close a home can be built to the street, the number of homes allowed per lot, if or where a garage can be built, the type of fence, roof, or roofing material of a home, outside colours, or design of a home, and much much more. If you see a restrictive covenant registered on title to a property, the only way to know what those restrictions are is to request a copy of the specific document.
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Caveat is the Latin word for “let him beware”. It is a warning “to the world” regarding something specific registered on title to a property. Caveats can be registered only if there is an agreement in writing that specifically charges the land. This can include debts (i.e. promissory notes or mortgages), dower interests, agreements for sale, vendor or purchaser liens, restrictions to the property (i.e. surface rights, restrictive covenants, right of ways, leasehold interests) and more. Due to the very wide range of rights that a caveat can protect, it is extremely important to review the actual document registered at the Alberta Land Titles Office. These registrations will impact the use of the property in the future and/or impact the ability of a property owner to sell the property.
3) Writs and Certificates Of Lis Pendens
Writs and certificates of lis pendens are registrations on title which are allowed for in the course of litigation. When someone is sued, they can protect the property (land) assets that they have an interest in by way of certificate of lis pendens. When you see this registration on a land title certificate, you know that the property owner has been sued, but that there has not been a judgment yet. Accordingly, the claim to the land has not been found by the courts. This registration still protects the plaintiff’s interest and impacts the ability of a seller to deal freely with the property. If the court rules in favour of the property owner, the plaintiff can then register a writ on title. A writ indicates that the plaintiff won the lawsuit and has an actual interest in the property. Unless a buyer is willing to accept these interests (and they should not in the normal course of buying land), a seller will need to be able to have these registrations discharged before, during or at the time of closing the sale of the land.
Whereas a caveat is registered on title pursuant to an agreement in writing, a lien is registered on title pursuant to legislation (i.e. the law). There are specific acts which allow for liens to be registered against title to a property, such as the Builders’ Lien Act. This is not only the most recognizable of such acts, but also the most common type of lien registered against residential real estate at the Alberta Land Titles Office. A lien on title means the owner of the property owes (or may owe if there is a dispute) money to someone. Whether or not a home owner owes the money, they need to have the ability to discharge the lien before agreeing to sell the home to ensure that the lien is removed on or before the possession day. If they are not able to do so, the sale may fall apart.
5) Utility Right of Way
A utility right of way is a strip of land under which utilities may be buried. A utility right of way may be located in a city for the utility lines running to a home or rural land where gas or electrical lines run across country. Utilities may be elsewhere (it is important to “call before you dig”) but this area is reserved for utilities. Due to the registration on title, a land owner may not build anything over the utility right of way. If anything is built on a utility right of way, the municipality may not grant municipal compliance, a home owner may be forced to remove any offending structure or, if work on the utility is required, the structure may be removed, damaged or destroyed with no compensation or requirement for it to be repaired / replaced.
6) Overland Water Drainage
Like a utility right of way, this is a strip of land that allows for water drainage. It is registered at the Alberta Land Titles office to protect the water drainage in a specific area. Typically, this is a strip along the back or side of a property containing a concrete swale, which allows the water to run to a street or sewer. While the swale is usually only a foot or two wide, overland water drainage allowances are usually a meter (when on city lots). This means that you are not permitted to build anything onto this reserved space or block the water drainage. If you do, you may be required to remove the structure or it may be removed or destroyed for you.
7) Easement / Right of Ways
An easement or a right of way is an agreement which, when registered on title to a property, allows someone other than the property owner to access to the property. These types of registrations are used for a variety of reasons, such as allowing for maintenance to adjoining properties, allowing for use of a shared road that is located on only one property, access to utility lines or shared wells, and so forth. These registrations on title “run with the land”, meaning that they are not discharged when a property is sold. These are normal registrations on title, but you should be aware of them if you are buying a home.
8) Encroachment Agreements
An encroachment agreement is an agreement that allows for an encroachment. An encroachment is a structure which is built on a property and which extends past the property line onto the neighbouring property. For example, if you build a garage on your property and the roof overhangs onto your neighbour’s property, the roof is said to encroach onto the neighbouring property. The encroachment agreement sets out the “rules” that allow the encroaching structure to remain in place. The agreement should deal with maintenance, liability and what happens if the structure needs to be rebuilt. Depending on how the agreement is worded, if you buy a property with an encroachment agreement registered on title, you may be limited in terms of having the encroaching structure removed. These are very common agreements on title and are not an immediate cause for concern. That said, you should be aware of them. Also, to note: asking the owner of the neighbouring property to remove part of the roof of their garage can lead to a poor relationship with your neighbour!
9) Municipal Reserves
A municipal reserve registration at the Alberta Land Titles Office is something that you usually do not see in a city. That said, they still exist on larger pieces of land in big cities like Calgary. The municipal reserve is an amount of land that must be reserved for municipalities when the land is subdivided. This is allowed for under the Municipal Government Act in Alberta. This land may be used for schools, parks, trails, roadways or community centers. If you plan on buying a piece of land that has a municipal reserve registration, then you may be required to transfer a portion of that land to the municipality.
10) Health Warnings
Health warnings are extremely important to pay attention to if you see them on title. These land title registrations make people aware that there is a serious health risk associated with a property. Health warning may be viewed on former grow ops, properties with contaminated water sources, the homes of hoarders or if there were rodent infestations. These are just a few examples; however a health warning registration on title will indicate that there is something seriously unsafe about the home. This may affect your ability to live in the home, get a mortgage or insure a property. In some cases you may be required to remove the home completely.
Understand The Alberta Land Titles Registrations On Title Before You Sign!
We're happy to help you understand the registrations registered on Title to a property before you sign a contract to buy that property. We're also happy to help you understand them on your existing property, if you plan to make changes. We believe that it is better for you to make an informed choice. Call us today! Call 403 396 7355 or Contact Us.