Pfanntastic Home Buyers Handbook Chapter 8 D. –
Working On “The Subject To” Clauses; Title Documentation
In our journey towards buying your 1st home, so far we have covered.
- A broad overview in buying your 1st. Home
- Location, is Everything
- Selecting a Realtor
- Preparing to View Homes
- Watching the Market
- Financing Options
- Finding A Lender
- Getting (Pre) Approved for a Mortgage
- Making and Offer
- Making an Offer in Different Conditions
- From Contract to Closing the Deal
- Working on the Subject to Financing Condition
- Woking on the Subject to Home Inspection Condition
Please review the previous chapters for more details in our Pfanntastic Home Buyer Handbook Series, and or contact Peter of Linda Pfann.
Today’s chapter of our Pfanntastic Home buyers Handbook covers a topic that for many is a reason to seek legal assistance right away, but not to worry, we hope that his outline, will assist you in explaining many of the more common terms and wording on a Title document.
We are talking about any and all items that can show up on a property title certificate and how these items can affect the benefits and limitations that may come from the various notations on a title document.
When we Realtors receive education about Title Registration and Title documents we are always told and assured that, “If it is Not on the Title, It is Not So” and although that is true in most cases, there are few situations in which the Title documentation will not be reliable as the one and only assurance that your new home purchase will be a smooth and simple transaction. We urge you to make sure that you work with an Experienced Realtor Couple Like Peter and Linda Pfann, and to also make sure that you ask your Lawyer any and all questions that you may have during the title review process..
A typical Title Certificate (or title search as they are commonly called) looks like a computer print out of the index of a book, which in fact is a good way to begin our review of property titles.
If the “Title” of the book was “my New Home At….. 123, Dream Home Ave”, We would open the book and see an index of the various chapters of the book.
So let’s review what you may find on the index of a typical title search.
• Property civic and legal description
• Owners description
• Ownership form
• Under surface rights and or limitations
• Mortgages and or “registered” loans
• Covenants and or building scheme’s
• Easements and or rights of way
• Short and Long term Leases
• Liens, charges and or claims against the title owner(s).
• Lis Pendens
• Other issues of Importance.
Before we review and discuss these various items that can show up on a title search that the information we provide should not be deemed as legal advice and or suggests to be complete and or accurate in all cases. Our best suggestion, is that when you are concerned about anything that you see on or attached to a title for any property, to seek proper legal advice and clarification. Our notes, are here to give you an overview and is strictly that an overview.
Let’s review the typical items one will find on a title search.
Title Searches property civic and legal descriptions.
The legal description may not look like anything your new mailing address, and is used to ensure the unique location of your property on the legal maps that identify any and all property in North America, in addition in BC we also use a PID number (Parcel Identification Description) and a Roll Number, which offer even further assurance that you are really dealing with the property in question (your new home)
This will identify the name of the owner on record, and the address of the owner at the time of registration (not always the address of the property). In the fast majority of cases whoever’s name is on the title should also be the person or entity that is named as the seller(s). There are a few exemptions to that rule in the case of common law relationships and or marriages, where one spouse is not registered on title, but still has a right to ownership benefits, Estate, probate, living Wills, powers of Attorney, signing authority given by a corporation.
The form of ownership
Outlines how the sellers ownership was registered at the time of their title registration and is unlikely to cause any issue at the time of sale.
Under surface rights and or limitations
In BC, most under surface and or mineral rights have been transferred to “The Crown” (either the Province or Federal Government) and a notice of this will show on most titles. If however these undersurface right have remained with the property your intend to buy, and you do happen to strike oil, it does not always mean that you own it either….. and Yes, you need some legal advice, if you strike oil…..
Mortgages and other Registered Loans
In your contract to purchase you will note that there is a clause that states something like “the seller to provide title free and clear of any and all financial encumbrances” and the clause carries on for a bit. The important part to remember that you purchase (and the monies involved) will be used to remove and pay out any mortgages and or loans at the time the sale completes, so again there is little if any worries about this (unless the sellers debt is larger than the sale price of the property, of which you as the buyer would have been notified at the time of making the offer.
Covenants and or building schemes
Covenants and or building schemes are notices on the title that will remain on the property title to notify owners and buyers that there are certain restrictions, and or limitations that not just affect you as an owner but that remain in effect to the property. These may have to do with things like house design and or finish, use of the land, fencing, hedges, creeks in the area, height of construction. Etc. etc. these covenants are typically affecting a number of properties in the same area and intend to “protect” the common good. In older areas, some of these covenants, may still remain on title but in some case have become redundant, in other areas have been incorporated in the living environment and are possibly monitored by a resident association. It is important to review any and all covenants and or building schemes, as they are different from area to area (if they exist at all. And once again if in doubt, check it out with your friendly lawyer.
Easements and Rights of Way
Easements and Rights of Way are typically more intrusive than covenants as an easement or right of way will allow someone (a direct neighbor) or for example a service provider like a utility company, the City, or Cable Company to enter your land and maintain, service and or install something (as outlined in the Easement or Right of Way Description and registered on title). Easements and rights of way may have a considerable impact on how you can use your property and what you can do on, in and or above the land, and as such should be carefully examined when you are considering a property with easements on them.
In older (50+ years old) it is not uncommon that there are actual services installed without easements or right of way being registered, and can take all kinds of forms, caution is the right way to proceed here, be sure to ask Peter and or Linda Pfann for the know areas where this may occur.
Short and Long term Leases
Leases and or rental agreements would in most cases already have been disclosed to you. However, by law lease for more than 3 years (relatively rare in residential cases) do need to be registered on the title of the property. Although the typical residential lease or rental agreement (even month to month) do not have to be registered. The Residential Tenancy Act of BC, and all its rules and implications, can very much affect your home purchase and plans, even if for instance you are buying a house owned by say the adult children, and they have mom and dad living in the basement paying a nominal rent (the mom and dad are protected by the tenancy act, and proper notice is required to have them vacate the property).
Liens, charges and or claims against the title owner(s).
Liens and or other charges are relatively rare, but when they occur, it is important to remember that it will be the sellers responsibility to pay out and liens, and or bills. In the case of a New home, and where trades people have a claim against the main contractor, there is a typical process that would add a Builders Lien hold Back clause to you contract to avoid the possibility that you as the buyer can become responsible for the contractors bills…
Other charges or claims that are possibly registered on title can include claims to receive proceeds from a sale in the cases of divorce, separation agreements, dissolving partnerships, and even Revenue Canada as an example.
In addition if a property owner is in foreclosure, the lender has to follow a very distinct process in order to protect their interest and claim for repayment, which will also show up as a charge against the property as a notice that potential buyer need to make sure that the loans are paid out etc.
Is Latin for “suite pending” as is often used to notify owners and or other interested parties to be aware and that a Court Action is pending but may not have been filed, and as a result ownership can’t be transferred until the issues outlined in the Lis Pendens have been satisfied.
Other issues of importance.
As indicated early on about title documents, Most people rely on a title document to give them a quick glance as to any and all issues that may affect the purchase, sale, use, limitations and benefits of a property. However that does not mean that other issues, that impact the use and or sale of a property may not always be registered on the Title.
Most of these are rare, and will be checked by your lawyer prior to ownership transfer. These could include things like
• A debt, and or claim against the property owner by the Federal, provincial and or local government
• Property Taxes, and or Local Improvement Taxes
• Unfinished or not finalized probate and or estate registrations
• Common Law and or Marriages with only one party registered on title
• And some of the other issues discussed in this review.
We hope that this outline of some of the typical issues and notification that you may come across on a property title document, have not caused you fear, stress or confusion, as mentioned, we encourage you to ask any and all questions that you need answers to in order to ensure that you are buying exactly the home and property you intended to buy in the first place.
It does not happen very often anymore that we come across a situation that we have not seen and or dealt with in the past, but we are never afraid to ask questions to the various experts that we work with to make sure that offer the best suggestions together with access to the resources you may need to. Between talking to Peter and Linda Pfann, and your lawyer, I am sure that we will provide you with the information and or resources for you being able to make informed decisions about your new home purchase (or to decide not to proceed if that is the result of your findings).
Peter and Linda Pfann are here to assist, guide and consult with you to ensure that your best interest are protected, please contact us with any and all questions or concerns so that we be able to avoid any nasty surprises for you.
As always, if you have any questions, concerns or would like to explore your options, be sure to Talk To Peter or Linda Pfann, we will ensure that our 25+ years of client focused results will benefit you.
Visit our Website for additional resources www.pfanntastic.com