Archive for July, 2013

BEWARE OF “RPR Not Current, Title Insurance Will Be Provided”

Monday, July 15th, 2013

Both Buyers and Sellers need to be vigilant in their understanding of Real Property Reports and their significance in a property sale as there are serious implications on both sides of the equation.

Lately is has been fairly common to see the following quotes on Realtor remarks for listings with a local discount brokerage:

  • “Sellers to provide copy of existing RPR which is not current, sellers will provide title insurance.”
  • “Seller providing RPR dated May 6, 2008 which does not show fence or concrete pad. Seller will provide title insurance.”

2 problems are immediately clear, first, the contractual obligation of providing a Real Property Report as outlined in several clauses of the Purchase Contract is being ignored by the seller and second, a third party cannot provide an insurance policy on behalf of someone else, they can only offer to provide reimbursement of associated costs and as well title insurance is not a straight forward remedy for problems that may be encountered by the new owner.

Let’s discuss these, both have serious implications for buyers and sellers. The Real Property Report shows all boundaries, buildings, and fences and also includes a stamp indicating that all is in compliance with local by-laws and boundary rules. This insures for the buyer that there will be no problems down the road with encroachments etc., problems that have a high cost. Here is what Real Estate Lawyer Lou Pesta says in reference to this problem specific to the two statements on listings noted above:

The problem with the first listing comment is that you don’t even know hold old the existing RPR is and what it is not showing. In both cases the buyer is taking an additional risk that should then be offset by a lower offer. For example, title insurance does not automatically cover fences. To get fence protection you need to pay an additional premium and with at least some title insurers the limit of liability for fences is $500. Hardly enough to pay for a relocation or reconstruction of a fence sitting off the property boundary. In both cases the buyer will either need to flog title insurance on resale (at additional cost) or pay for a new RPR with Compliance. My recommendation would be that the buyer always insist on an RPR with compliance in accordance with the terms of the contract. (LinkedIn Reply July 14, 2013 Legal Lou Talks Alberta Real Estate Law)

As can been seen in Lou Pesta’s response, the buyer is at risk and the seller ends up with lower offers on their property, so loss on both sides. As well he describes how Title Insurance is not enough to offset the risk.

We ask all of our listing clients to provide a current compliant RPR, this is at their cost and takes a few weeks,so in some cases, this prep happens before we even list the property or it is on order at time of listing. We do not put timing ahead of our responsibility to represent our sellers to achieve the highest value for their property.

We advise all of our buyers to ask the seller to provide our them with a current compliant RPR, noting that is a big risk for them not to have this document.

It is unknown why the discount brokerage seems to have so many of their listings stating that the RPR is outdated, perhaps working in volume, the time necessary before listing to obtain a current RPR is not taken, perhaps the advice that the sellers receive is different than what Lou Pesta recommends. The reasons why are irrelevant, buyers need to be aware of the implication and protect their interests.

For  more information on the difference between RPRs and Title Insurance here are 2 links for you from our profession’s regulatory body the Real Estate Council of Alberta (RECA):

Title Insurance


Media Release – CIR REALTY Red Deer

Friday, July 12th, 2013

Hot off the press, here is the media release announcing CIR REALTY Red Deer!

Media Release – Alberta’s Largest Real Estate Brokerage Expands into Red Deer

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Central Alberta REALTORS® Association. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.