My RPR Is Outdated or Non-Compliant — What Happens When I Sell My House in Alberta?

My RPR Is Outdated or Non-Compliant — What Happens When I Sell My House in Alberta?

Short answer: an outdated or non-compliant Real Property Report can delay closing, create negotiation issues or require the seller to fix the problem before possession.

It does not automatically mean the sale will fall apart.

But it should not be ignored.

In Alberta, a seller is often required by the purchase contract to provide a current Real Property Report, usually called an RPR, together with evidence of municipal compliance. If the RPR is outdated, inaccurate or shows a compliance problem, the parties need to decide how the issue will be resolved before closing.

The important point is simple:

An RPR problem is usually easier to fix before listing or early in the sale than during closing week.

What Is an RPR?

A Real Property Report is a survey document prepared by an Alberta Land Surveyor.

It shows the location of visible improvements on the property in relation to the legal boundaries, easements and rights-of-way.

An RPR may show:

• the house;

• garage;

• deck;

• shed;

• fence;

• retaining wall;

• driveway;

• sidewalks;

• eaves and overhangs;

• utility rights-of-way;

• easements;

• encroachments;

• distances to property lines; and

• other visible improvements.

The RPR helps confirm whether the physical property matches the legal property.

That matters because a deck, fence, shed or garage may look ordinary but still create a boundary, setback, easement or municipal compliance issue.

What Does It Mean for an RPR to Be Outdated?

An RPR may be outdated if it no longer accurately shows the property as it exists today.

This often happens when improvements were added after the RPR was prepared.

Examples include:

• a new deck;

• a garage;

• a shed;

• a fence;

• a hot tub pad;

• a pergola;

• a retaining wall;

• exterior stairs;

• an addition;

• a basement walkout;

• an air conditioning unit;

• concrete work;

• driveway changes;

• landscaping structures; or

• changes to eaves or overhangs.

An old RPR is not necessarily useless.

But if the property has changed since the RPR was prepared, the buyer, lender or lawyer may not accept it.

The practical rule is simple:

An old RPR may only work if it still accurately reflects the current property.

What Does “Non-Compliant” Mean?

A non-compliant RPR usually means the municipality has identified an issue with the location of buildings or improvements shown on the RPR.

Examples may include:

• a structure built too close to a property line;

• a deck that does not meet setback requirements;

• a garage located partly in the wrong area;

• a shed on a utility right-of-way;

• eaves extending into an easement;

• a fence or retaining wall encroaching onto municipal land;

• missing permits or approvals;

• improvements that do not match municipal records; or

• structures that require further approval or removal.

Municipal compliance does not necessarily approve every issue on the property.

For example, the City of Calgary explains that a compliance stamp deals with building-location requirements under the Land Use Bylaw and is not the same thing as approval of encroachments shown on the RPR: Existing encroachments – The City of Calgary.

The practical point is this:

Municipal compliance and encroachment approval are related, but they are not always the same thing.

Does an Outdated RPR Mean You Cannot Sell?

No.

You can still sell a house with an outdated RPR, but the issue must be dealt with properly.

Possible solutions may include:

• ordering a new RPR;

• updating the existing RPR;

• obtaining municipal compliance;

• negotiating title insurance;

• agreeing to a holdback;

• extending the closing date;

• removing or altering a non-compliant improvement;

• obtaining an encroachment agreement;

• adjusting the purchase price; or

• amending the purchase contract.

The right solution depends on the contract, the buyer, the lender and the nature of the issue.

The practical rule is simple:

An outdated RPR is not always fatal, but it can become a closing problem if the contract requires a current one.

Does a Non-Compliant RPR Mean the Deal Is Over?

Not necessarily.

Some compliance issues are minor and can be resolved.

Others are more serious.

A minor issue might involve a small setback deficiency or a structure that can be approved, insured or addressed with a holdback.

A serious issue may involve:

• a structure that must be removed;

• a major encroachment onto neighbouring or municipal land;

• a lender refusing to fund;

• the municipality refusing approval;

• a buyer refusing title insurance;

• a structure interfering with a utility right-of-way;

• inability to provide the documents promised in the contract; or

• a defect that materially affects the use or value of the property.

In Healey v. Slobogan, 2008 ABPC 5, a technical side-yard deficiency did not justify refusing to close where a reasonable holdback was offered.

The practical point is simple:

Not every RPR issue lets a buyer walk away, but serious unresolved issues can affect closing.

Start With the Purchase Contract

The purchase contract controls the seller’s obligations.

It may require the seller to provide:

• a current RPR;

• municipal compliance;

• an updated RPR;

• disclosure of non-compliance;

• title free from certain defects;

• documents before a specific deadline;

• or another agreed alternative.

If the seller promised a current RPR with compliance, then an outdated or non-compliant RPR may put the seller in breach unless the issue is fixed or the contract is amended.

The question is not only:

“Do I have an RPR?”

The better question is:

“Does the RPR satisfy what I agreed to provide?”

What If the Buyer Accepts an Old RPR?

A buyer can agree to accept an old RPR.

But that agreement should be clear and in writing.

The buyer may want confirmation that:

• no improvements have changed since the RPR was prepared;

• the seller is not aware of encroachments;

• the old municipal compliance remains meaningful;

• title insurance will be provided, if applicable;

• the lender accepts the arrangement;

• the buyer accepts the risk; and

• the seller is released from further RPR obligations, if that is the deal.

A verbal understanding is risky.

The practical rule is simple:

If the buyer agrees to accept an old RPR, document that agreement clearly.

What If the Buyer Refuses the Old RPR?

If the contract requires a current RPR and the buyer refuses to accept an old one, the seller may need to deal with the problem.

Possible options include:

• ordering a new RPR;

• asking the buyer for an extension;

• offering title insurance;

• offering a holdback;

• negotiating a price adjustment;

• removing or fixing the non-compliant improvement;

• obtaining municipal compliance; or

• amending the contract.

The buyer does not necessarily have to accept title insurance or an old RPR if the contract requires something else.

The practical point is this:

If the seller promised a current RPR, the buyer may insist on that promise unless the deal is amended.

Can Title Insurance Replace an RPR?

Sometimes, but not automatically.

Title insurance may help address certain title or compliance risks, depending on the policy and the lender’s requirements.

But title insurance is not the same thing as an RPR.

An RPR shows the physical location of improvements in relation to boundaries, easements and rights-of-way. Title insurance does not physically show those details.

Whether title insurance is acceptable depends on:

• the purchase contract;

• the buyer’s agreement;

• the lender’s requirements;

• the nature of the RPR issue;

• the title insurance policy;

• whether there is an actual encroachment or merely missing documentation; and

• whether the parties are comfortable closing without an updated RPR.

The practical rule is simple:

Title insurance may solve some RPR problems, but it is not automatically a substitute for the document the seller agreed to provide.

What If the RPR Shows an Encroachment?

An encroachment happens when a structure or improvement extends onto someone else’s land or into a legal interest such as an easement or right-of-way.

Examples include:

• a fence crossing the property line;

• eaves extending into a utility right-of-way;

• a shed on an easement;

• a retaining wall on municipal land;

• a garage too close to a boundary;

• a driveway crossing onto another parcel; or

• landscaping structures extending beyond the property.

An encroachment does not automatically end the sale.

But it must be addressed.

Possible solutions include:

• an encroachment agreement;

• municipal approval;

• neighbour consent;

• removal of the improvement;

• title insurance;

• a holdback;

• a price adjustment;

• an extension; or

• buyer acceptance in writing.

Alberta Land Titles materials describe an encroachment agreement as an agreement allowing an improvement on one parcel to encroach onto an adjoining parcel, and once registered, it can run with the land in a similar way to an easement: EAS 1 – Easement / Encroachment / Party Wall Agreement.

The practical point is simple:

If your RPR shows an encroachment, deal with it before closing.

What If the Encroachment Is Onto Municipal Land?

Municipal encroachments can be more complicated.

A municipality may require:

• an encroachment agreement;

• a licence;

• approval;

• fees;

• conditions on the improvement;

• future removal rights;

• modification of the structure; or

• complete removal.

The City of Calgary describes encroachments as including buildings, fences, driveways, retaining walls or other structures extending onto City lands or interests: Encroachments – The City of Calgary.

Municipal approval is not guaranteed.

The practical rule is simple:

Do not assume a municipality will approve an encroachment just because it has existed for years.

What If a Fence, Deck or Shed Is the Problem?

Fences, decks and sheds are common RPR issues.

A seller may have installed something years earlier without realizing it created a compliance problem.

Common issues include:

• a deck too close to a property line;

• a shed on a utility right-of-way;

• a fence crossing a boundary;

• a retaining wall on municipal land;

• a pergola not shown on the RPR;

• a garage eave extending into an easement;

• exterior stairs not shown on the RPR; or

• a structure added without required approval.

The fix depends on the issue.

The seller may need to:

• update the RPR;

• apply for compliance;

• remove the structure;

• move the structure;

• obtain a permit;

• obtain an encroachment agreement;

• provide title insurance;

• negotiate a holdback; or

• amend the sale contract.

The practical point is this:

Small improvements can create large closing headaches if they were never added to the RPR.

What If the RPR Is Not Ready Before Closing?

If a new or updated RPR will not be ready before closing, the parties need a written solution.

Options may include:

• extending the closing date;

• closing with title insurance;

• closing with a holdback;

• closing with an undertaking to provide the RPR later;

• negotiating a price adjustment;

• delaying possession;

• or terminating if the issue is serious and the contract allows it.

A holdback can work, but it must be carefully drafted.

It should address:

• how much money is held back;

• who holds it;

• what document must be provided;

• who pays for the RPR;

• who pays for compliance;

• what happens if the RPR reveals a new problem;

• who pays to fix the problem;

• when funds are released;

• and what happens if the parties disagree.

The practical rule is simple:

A vague promise to “provide the RPR later” can create an after-closing dispute.

Can the Buyer Delay Closing Because of the RPR?

Possibly.

If the seller has not provided a contractually required RPR or compliance document, the buyer may have grounds to delay closing or request a solution.

But the buyer should be careful.

A minor RPR issue may not justify refusing to close if a reasonable solution is offered.

A serious RPR issue may be different.

In 1613185 Alberta Ltd v 837757 Alberta Ltd, 2015 ABQB 224, the seller could not rely on the buyer’s failure to tender funds where the seller had not provided documents required under the agreement.

The case is not simply about RPRs, but the broader point matters:

A seller who has not provided required closing documents may have difficulty blaming the buyer for not closing.

Can the Buyer Walk Away?

Sometimes, but not always.

Whether the buyer can terminate depends on:

• the purchase contract;

• whether the RPR was required;

• whether the seller failed to provide it;

• whether the issue is minor or material;

• whether the seller offered a reasonable cure;

• whether a holdback would solve the problem;

• whether title insurance is acceptable;

• whether the lender will fund;

• whether the issue affects use or value;

• and whether the seller can deliver what was promised.

A technical deficiency may not justify termination.

A serious unresolved title, encroachment or compliance problem may support a stronger buyer position.

The practical point is simple:

Do not assume every RPR issue is a deal-breaker — but do not assume every RPR issue can be ignored.

What If the Seller Refuses to Fix the RPR Problem?

If the seller refuses to fix an RPR problem despite the contract requiring it, the buyer may have options.

Depending on the circumstances, the buyer may seek:

• compliance with the contract;

• a holdback;

• an extension;

• a price reduction;

• return of the deposit;

• damages;

• termination;

• or specific performance with compensation or conditions.

The buyer’s position is stronger if the seller clearly promised the RPR or compliance documents and failed to provide them.

The seller’s position may be stronger if the buyer agreed to accept an alternative, such as title insurance, or if the issue is minor and curable.

What If the Buyer’s Lender Refuses to Fund?

An RPR problem may also become a financing problem.

A lender may refuse to fund if:

• the RPR is missing;

• the RPR is too old;

• improvements are not shown;

• compliance is missing;

• a significant encroachment exists;

• title insurance is not acceptable;

• a structure appears to violate municipal requirements;

• or the property risk is not adequately addressed.

This can put the buyer in a difficult position if conditions have been removed.

It can also create pressure on the seller if the seller promised documents that the lender requires.

The practical rule is simple:

RPR problems should be resolved early enough that they do not become last-minute mortgage funding problems.

What Should Sellers Do Before Listing?

Sellers should check the RPR early.

Before listing, ask:

• Do I have an RPR?

• How old is it?

• Does it show all current improvements?

• Have I added a deck, fence, shed, garage or retaining wall?

• Did a previous owner add something not shown?

• Does the RPR have municipal compliance?

• Is there an encroachment?

• Are improvements on an easement or utility right-of-way?

• Is there a permit or approval issue?

• Would a buyer or lender accept the current document?

If the RPR is outdated, update it before it becomes a closing problem.

The practical point is this:

The best time to find an RPR problem is before you have a buyer waiting to close.

What Should Buyers Do Before Closing?

Buyers should review the RPR carefully.

Important questions include:

• Is the RPR current?

• Does it match the property as viewed?

• Are all structures shown?

• Is municipal compliance attached?

• Are there encroachments?

• Are improvements on easements or rights-of-way?

• Is title insurance being offered instead?

• Does the lender accept the arrangement?

• Is a holdback needed?

• Does the issue affect future resale or renovations?

• Is the buyer comfortable accepting the risk?

The practical rule is simple:

Do not treat the RPR as just another closing document. It can reveal real property issues that affect ownership and use.

Common Mistakes to Avoid

There are several common mistakes sellers and buyers make with outdated or non-compliant RPRs.

Do not assume an old RPR is good enough. It may not show current improvements.

Do not assume municipal compliance approves everything. Encroachments may require separate approval.

Do not wait until closing week. New RPRs, compliance reviews and encroachment agreements take time.

Do not assume title insurance always solves the issue. It depends on the contract, buyer, lender and policy.

Do not ignore small structures. Fences, sheds, decks and retaining walls often cause RPR problems.

Do not rely on verbal agreements. RPR alternatives, extensions and holdbacks should be in writing.

Do not assume every defect lets the buyer walk away. The seriousness of the issue and the contract both matter.

What This Means Practically

Three rules are worth remembering.

An outdated RPR can delay closing. If it does not show current improvements, the buyer or lender may reject it.

A non-compliant RPR must be addressed. The solution may be compliance, removal, approval, title insurance, a holdback or a contract amendment.

The purchase contract controls the seller’s obligation. If the seller agreed to provide a current RPR with compliance, the seller should not assume an old or non-compliant document will be accepted.

Speak With an Alberta Real Estate Lawyer

If your RPR is outdated or non-compliant when selling your house in Alberta, deal with the issue as early as possible.

A proper review should consider:

• the purchase contract;

• whether an RPR is required;

• whether the existing RPR is current;

• whether improvements have changed;

• whether municipal compliance exists;

• whether there are encroachments;

• whether permits or approvals are missing;

• whether title insurance is acceptable;

• whether a holdback is appropriate;

• whether closing should be extended; and

• whether the buyer or lender may object.

This article provides general information about outdated and non-compliant RPRs in Alberta real estate transactions. The seller’s obligations depend on the purchase contract, the condition of the property and the documents the parties agree to use for closing.

Berjak Law

10080 Jasper Avenue, Suite 301
Edmonton, Alberta

780-879-0200