What are those charges on my title, and do I care?
By Tim Janzen
When you buy your new home, you will get a copy of your title search from your REALTOR® or your notary. Your REALTOR® might even build a clause into your Contract of Purchase and Sale that says your offer is subject to review of this title search with your notary.
A title search is a record from the Land Title Office that shows who owns the property, and the charges that are registered on title ‒ these charges show you who else might have rights to the property ‒ these people are called charge-holders.
Some, but not all, of these charges might be removed from the title when the property is transferred into your name. Your Contract of Purchase and Sale will tell you which charges are going to stay on title, and which charges are going to be removed. You care which charges are going to stay on title because they can affect how you use the property, or what it is worth.
There are many different kinds of charges that could be registered on your property. This is a short list of some of the more common charges you might see registered on title to the property (in no particular order) ‒ there are many other possible charges, some of which are very important for you to review:
- mortgage: a financial charge; usually the owner of the property has borrowed money from a lender, and the lender has various rights to sell the property if the owner is in default, even if that owner is you, not the original borrower
- right of way: this charge lets a person or company (most often a utility company) come onto the property; in some cases, the area that can be accessed is clearly defined, and in other cases, it isn’t; the charge may also involve a “no-build” zone ‒ eg. you can’t put a pool in your back yard because the utility company needs access to it. In many cases you will be responsible for any additional costs the charge holder may spend to do what he is allowed to do if you or the previous owner has not complied with the terms of the right of way agreement
- statutory building scheme: this is a set of rules about what you can and can’t do on or with the property; it might dictate the type or size of the home, or what you can do in the home; older building schemes might forbid chicken or cows on your property; some require you to use certain finishing materials, paint colours or landscaping materials ‒ eg. you must use a certain kind of tree in your front yard
- covenant: this is a promise ‒ you are promising that you will do whatever the terms of the covenant tell you to do; in some cases you are promising to let a government or other service provider access the property; in other cases, you might be promising to use the property in a certain way, or they could lead to surprise maintenance costs
- restrictive covenant: this is a promise that you will not do something; for example, you might not be able to build a shed in your back yard because the hydro company needs to access its cables
- undersurface rights: generally speaking, the Crown owns everything under the dirt in BC ‒ in other words, if you are digging around in your back yard and come across gold, too bad ‒ it belongs to the government, not you; this charge will show which rights are involved, and who the government may have given those undersurface rights
- easement: this indicates that you are sharing space with another property ‒ it might be something simple like a shared driveway or walkway, or it might be shared greenspace or lagoons ‒ it is very important to know whether someone else has rights to access your property, or whether you have access to someone else’s property, and whether you are required to pay for any special maintenance or other rights
- builders lien: this means that a builder, or someone who provided materials in an improvement to your property is claiming that they were not paid to their satisfaction, and you will want to ask questions about how that charge is going to be settled and removed prior to the property being transferred into your name
Please remember, this list is not exhaustive. Your notary can order copies of these or any other charges from the Land Title Office if you have any questions about what they are, or how they affect your specific property. There will be a charge for getting copies of these documents from the Land Title Office ‒ the older the charge, the more expensive the retrieval charge.
If you are in doubt about what a charge does, or why it is there, have your notary order a copy of the charge for you, and review it with you. You should do this before you remove the “subject to review of title” clause in your Contract of Purchase and Sale ‒ once you have signed your contract, it’s unlikely that you will be able to negotiate for it to be removed.
Contact us for help reviewing your title. Visit our website for contact information.