What are land titles registrations and how do I interpret them?

Land titles are integral to the real estate transaction, however often a REALTOR® misses out on the great advantage that having a current land title before listing or writing an offer can be. Let’s review some of the common registrations and what they could mean to the transaction. Obviously, this list is not exhaustive and anytime you come across something you don’t understand on a title you should always consult a real estate broker or lawyer to get clarity.

Utility right of way

Nearly every home in Alberta has some kind of utility services such as water, natural gas, or electricity. To ensure the utility providers have access to repair and maintain the lines they register a registration on the title giving them that ‘right’. This will stay on the title and the buyer agrees to continue to allow this when purchasing the property and generally nothing significant can be built or placed over the right-of-way itself, otherwise, the utility provider has the right to move damage or destroy it without recourse in order to access the utility.

Restrictive Covenant

Restrictive covenants are by definition restricting the ownership rights of the titleholder, and the titleholder covenants(contracts) abide by those restrictions. This also will stay on the title and the buyer agrees to this restriction by purchasing the property. Restrictive covenants can vary widely from the relatively cosmetic such as the color of fences or types/colors of roofing to the more serious such as the size of buildings on the lot, or the ability to have livestock. Because these items restrict usage rights, they are always important and should be obtained and provided to the buyer for review.

Mortgage

This registration will show if there are any mortgages borrowed against the property. The amount of the mortgage registration does not necessarily equal the amount owing but it can be a good indicator of possible equity issues. For example, if the property is listed for $400,000 but the mortgage registration shows $422,500 and its date is only 6 months ago, you may want to inquire of the seller’s REALTOR® if they verified the mortgage payout balance with the seller to avoid any issues with the seller being able to close. Sometimes the lender registers the maximum value of a line of credit but only a small portion of that is actually owed, but it is worth asking the question.

Certificate of Lis pendens

Lis Pendens is a Latin term in law meaning ‘pending suit’ so when you see it on a title you want to take notice. It could be related to several different litigation issues such as divorce, unpaid debts, or foreclosure proceedings but whatever it is it will need to be investigated before listing or writing an offer to purchase on a property.

Writ

A writ means that someone actually won their lawsuit against the property owner and serves as registration of that judgment upon the property itself for the sake of security. The seller cannot sell without dealing with it so it could seriously complicate a transaction and should be dealt with very early in the transaction to ensure the seller can actually sell.

Caveat

Here is another Latin term which is broader, simply and concerningly means “beware”! If it was written in English on a title in capital letters BEWARE, do you think it would be important to discover what you need to beware of? Of course, that is the case and any mention of a caveat on the title should have a similar effect on professional REALTORS® practice.

Easement

This is another type of right-of-way which essentially is an agreement registered on the title to use a portion of another adjacent property. This is normally to allow for things like maintenance to the property when access is only viable from an adjoining property, allowing for use of a shared on an adjacent property to access this property, use of shared wells, and other such issues. Easements will remain on the title after closing so once again a professional REALTOR® should be obtaining the easement information and providing it to the buyer.

Zoning Regulations

This is most common around airports in places like Edmonton or Calgary, or military bases elsewhere which also have an airstrip. The main purpose is to ensure a buyer knows they cannot build any structure or improvement higher than a certain height because it interferes with flight approaches or other operations. That should tell you that it is not unlikely that the new buyer may hear airplanes overhead or in the area from time to time as well!

Alberta Health orders

This is much rarer but extremely important in the sale of a property. It means that a significant health risk event has been discovered on the property and the provincial health authority requires the owner to remediate it and warn all potential purchasers of the issues involved. These could be grow ops, rodent infestations, hoarders, or cat houses, all of which a buyer will be keenly interested in knowing about BEFORE writing an offer.

BONUS

One additional option in the land titles system for Alberta is the ability to obtain a historical title. The historical title shows all previous registrations in the history of the property which, if it’s important to the buyer client, could help a REALTOR® determine past issues registered on the title which have been subsequently removed or remediated. Anything not on a current title is no longer binding upon the property owner, however, the historical information can help tell the story of the property.