A Real Property Report (RPR) is a legal document an Alberta Land Surveyor prepares. It’s basically a high-level drawing of the property, the boundaries, and the buildings and structures on it including homes, garages, large sheds, decks, pools, fences, etc. An RPR will also show relevant land facts such as utility rights of way, easements, and overland water drainage restrictions, so buyers know exactly what they’re buying. 
The Compliance Stamp is issued once the RPR has been reviewed by the municipality or the city confirms that all structures and buildings on the lot meet the regulatory standards set by the zoning Bylaws of the municipality or city.
Why is an RPR required when a property is sold?
In the real estate purchase contract term 6. REPRESENTATIONS AND WARRANTIES
6.1 The seller represents and warrants to the buyer that:
(e) the location of the buildings and land improvements:
(i) is on the land and not on any easement, right-of-way or neighbouring lands unless there is a registered agreement on title or, in the case of an encroachment into municipal lands or a municipal easement or right of way, the municipality has approved the encroachment in writing; and
(ii) complies with any restrictive covenant on title and municipal bylaws, regulations and relaxations, or the buildings and improvements are “non-conforming buildings” as defined in the Municipal Government Act (Alberta)
This means that the seller is promising that the property complies and the document used to prove that the property complies is the Real Property Report with the Compliance Stamp.
Pro Tip for Sellers – order or update the Real Property Report and ensure it has a Compliance Stamp well in advance of listing your property.
It can take several weeks for the surveyor to prepare the report and if there is an issue with compliance it can take several weeks to remedy the issue.
If you purchased your home from a builder, you may have received an RPR from the builder without a Compliance Stamp so you will need to get the Compliance Stamp. If you have constructed a fence or a deck or installed a concrete pad or patio or a retaining wall or a garage you will need to update the RPR.
What could go wrong if you don’t have the RPR when you list your property or when you accept an offer?
- It could delay the removal of conditions. Many buyers request a review of the RPR during the conditional period.
- It could impede the buyer from getting financing. If a company or bank is lending money secured against the title to a property, then they must ensure that their investment is safe and will often ask to review the Real Property Report to confirm compliance.
- It could delay the closing or create the need for a holdback. If there is not sufficient time for the seller to ensure compliance the closing could be delayed or the buyer may ask for an amount of money to be held back from the proceeds of sale until compliance is confirmed.
- It could be costly to the seller. If there is a serious issue where the only remedy is removal of a structure the buyer may require a reduction of the purchase price or the rebuilding of the structure in a different location on the property where it would comply.
Pro Tip for Buyers – Make sure that you review the Real Property Report during the conditional period.
If the seller or the listing REALTOR® has not provided a current RPR with the listing make sure that your offer has a condition to review the RPR.
What could go wrong if you don’t review the RPR during the conditional period?
- The property may have an issue which requires a remedy which may affect your use and enjoyment of the property. The seller has committed in the purchase contract to ensure that the property complies but what if that means that garage needs to be removed? Or the beautiful wrap around deck that you love needs to be taken down?
- There may be a restriction on the lot right in the location you wanted to build a garage or a patio which will not allow you to do so.
- There might be the need for an encroachment agreement with your neighbour and the neighbour may not agree.
Pro Tip About Title Insurance – Title insurance will not cover all problems with a property.
Some sellers will offer title insurance instead of a compliant property. If there is a known defect, a buyer is better off having the seller fix it. Title insurance will not insure a known defect. Also, the insurance is not transferrable to the next owner so you would have to either buy new title insurance when you sell or if the buyer refuses to accept title insurance you will need to ensure that the property complies.
If you have any questions about the importance of Real Property Reports, ask your trusted real estate professional or a trusted real estate lawyer.
Send us your questions here: https://www.cbcompleterealestate.com/contact
Thanks for reading!
Susanita
