When Gordon Newman purchased his St. Albert home in 1979, the handout he received from the builder showed a deck attached on the back of the house.
Now 33 years later, Newman is thinking of selling that house, but to his dismay he's found that his builders' drawing is not a legal document and it's not good enough to prove his property complies with city records.
"The application for compliance was rejected because of a storage shed, which is too close to the property line, and because of the deck. They say no permit was ever issued for that deck and that it's not on the original blueprints," Newman said.
To Newman's way of thinking, he would not have bought the house without a deck because it is part of the back entranceway to his house.
"Without the deck, there would be a three-foot drop to the ground," Newman said.
In a letter to the editor, which he also sent to the City of St. Albert, Newman asked what he could have done in 1979 to avoid this situation.
The answer is probably nothing, because in 1987, long after Newman purchased his home, the way the Alberta Land Surveyors Association issued its reports changed.
Getting his property to comply with the city's records is not a legal necessity in Alberta. A person can live in their home, likely forever, without compliance.
"It becomes an issue when a property is sold because it says in the purchase agreement that the house is in compliance. It's also a bank requirement because before they give a mortgage, the lenders want to know there are no encroachments to the property," said Royal LePage realtor Don Cholak.
Standard report
Newman's builder was likely issued a surveyor's certificate that only showed the house and the property relative to the property boundaries.
In addition to property boundaries, a modern real property report will show all the structures including retaining walls, garages, sheds and decks.
The cost of a real property report varies according to the surveying company that provides it but the average cost is about $500. Once the owner has a real property report he can take it to the city for a compliance stamp. The catch may be that the old records will not show all the structures such as fences or decks, because at the time it wasn't a requirement. So when the city employee checks the newly issued surveyor's report, it will not match city records, unless somewhere along the line someone got a permit.
"My staff pull out the development permit and check for (additional) permits. If, for example, there is no fence permit, the property is not in compliance," said Curtis Cundy, city director of planning and development.
Cundy stressed that having compliance is not a city requirement. But when the property is sold, the new mortgage lenders will likely require a real property report, which may show that the property is not in compliance.
"The lawyer for the home buyer will likely say his client will not purchase the home because it is not in compliance," Cundy explained.
Hatfields and McCoys
Because there are no Alberta laws requiring a surveyor's report, home buyers and sellers may shrug off the compliance issue to save themselves money, but that could be false economy.
"Don't assume anything. It's natural when you are buying a home to look at a house and assume everything is in line. But when there are encroachments, a neighbouring landowner could say, 'Hey! That's my property. Get off!' Hopefully cooler heads will prevail before it becomes a Hatfields and McCoys style feud," said Brian Munday, executive director of Alberta Land Surveyors' Association.
Even when they are peacefully resolved, boundary squabbles could prove expensive if it requires a municipality to move surveyed property lines.
"None of that is cheap because it involves municipalities and surveyors," Munday said.
Munday recalled a recent instance where a homeowner had not paid for the survey or compliance and then ran into huge difficulties later when he tried to flip the property.
"When he tried to sell it, the next buyer insisted on a real property report. Lo and behold, there was a problem because the garage was built over a utility right of way," Munday said.
Title insurance
Newman could apply for title insurance, and the one-time purchase fee will likely be close to the $175 to $200 application for a city permit to prove his deck is in compliance. Title insurance is usually bought, through a lawyer, at the time a home is purchased but it is also available at any time.
Title insurance is mandatory in Ontario and has been available in Alberta for about five years. Many Alberta lending agencies now require title insurance. The insurance protects your rights if ownership is challenged. It provides coverage for the forced removal of renovations or construction completed without the required permit. It also provides protection in the case of someone claiming an interest in your land, for example for an easement for a driveway.
According to First Canadian Title Company literature "most lenders will accept a policy of title insurance as an alternative to an up-to-date survey (real property report) on a purchase or refinance mortgage."
The problem, once again, is that although the homeowner is insured against title challenges, his home still may not be in compliance because no one, not even the insurance company, will have checked.
"Title insurance is an option for buyers and many banks require it. The problem with it is it's good for the buyer until he sells his home and then the new buyer wants a real property report. Then there could be problems. A cautious buyer protects himself," said lawyer David McGreer.
