Kelowna’s Alberta Connection

My mum’s family is from Edmonton and I had the fortune of going to the University of Alberta in Edmonton for 10 years. Although I enjoyed the great people I met in Alberta, I was always drawn to come back home to Kelowna.

Kelowna Real Estate has a special allure for many Alberta buyers for many good reasons, a few of them include:

  1. Kelowna is a days drive and a very quick flight for most Albertans;
  2. Kelowna has four wonderful seasons with an early spring and a late fall golf season;
  3. Kelowna’s vineyards are the perfect complement to Alberta beef;
  4. Kelowna’s beaches are hot in the summer and our mountains are powdery soft in the winter;
  5. Kelowna’s real estate is an affordable investment in Canadian real estate that Albertans can enjoy year round;

There are are few important differences between BC real estate and AB real estate that most Albertans should know when they are contemplating a quick hop over to Kelowna:

  1. Most of lands in British Columbia are untitled as Crown Lands, where as most Alberta has been surveyed into quarter sections;
  2. Real Property Reports or consolidated survey plans are not commonly done on a residential home purchase;
  3. Property Transfer Tax is payable on almost every home transaction (1% of the first 200k and 2% of the remainder);
  4. Principal residents get a reduction in property taxes, this does not apply to persons who do not reside in BC (or own revenue properties).
  5. Condominiums are called Strata Corporations here and Strata Depreciation Reports are very new to BC law (therefore not many strata corporations have done them yet)
  6. If you are planning on being a residential landlord, BC Residential Tenancy Act is very tenant friendly, and required that Landlords strictly comply with the legislation.
  7. Our land title system has had immediately electronic registration for many years now, and for residential real estate this means files close and money is transferred on the Closing Date with no escrow period.

photo

Written by Kelowna Real Estate Lawyer Peter Borszcz.

 

Understanding a Developer’s Disclosure Statement

When Homes Buyers enter a show suite for the first time, it can look very impressive and they are often shown marketing materials which can include the layout of some of the units and the amenities which will be present once the development is built. Often a contract is signed and a deposit is made before Buyers have had a chance to fully contemplate their decision.

By law in British Columbia, Purchasers of new development property have a 7 day rescission period to cancel their purchase agreement and have their deposit returned without penalty.

During this 7 day period purchasers should thoughtfully and carefully review their disclosure statement to ensure that the development property meets their expectations.

 

In British Columbia, all new developments which are comprised of five or more units are subject to the Real Estate Development and Marketing Act which governs how a developer can market and sell or lease these development properties. The Act is consumer protection legislation which facilitates disclosure about the development by requiring the Developer to provide a Disclosure Statement to the Buyer which discloses the following:
a) The Background and Experience of the Developer
b) The Purchaser’s Rights of Rescission
c) Permitted Uses of the Development
d) Phasing of the Development
e) Strata Information and Budgets
f) Parking Entitlements
g) Utilities and Services
h) Description of the Land Title
i) Construction and Warranties
j) Local Government Approvals and Finances
k) Handling of Purchaser’s Deposits

It is important that the Buyer’s ensure that their timeline and their intended use of the Property align with the Developer’s disclosure. Buyers should not simply rely on the verbal assertions of sale persons as Developer’s contracts will expressly state that only those representations and warranties made in writing in the contract are binding between the parties.

After a Buyer has had a chance to review the Disclosure Statement on their own, I often find that reviewing the following questions assists most Buyers in their thought processes:

1) Do you have any reservations that the Developer will not complete this project?
2) Is your quality of life going to be impacted if the project is delayed?
3) Why did you purchaser this unit, what made it special?
4) Was there any assurances that you were given by the sale centre staff which prompted you to purchase this unit?
5) If the project does not proceed, how will your life be impacted?
6) Are you aware of the Developer’s termination rights in the contract?
7) Are you aware of the limitations on assignment or covenants respecting the re-marketing of product after it has been purchased?
8) If a part of the project (or amenities) are phased, how will your perceived value of the unit be altered if subsequent phases do not proceed?

In short, a Developer’s Disclosure Statement is very much like a “specifications sheet” and are legally binding representations of the Developer about the nature of the property that you are intending to purchase.

Peter Borszcz is a Business and Real Estate Lawyer practising in Kelowna, British Columbia and a shareholder of Pihl Law Corporation.

Wildfire Covenants: What Okanagan Home Owners Need to Know.

The Peachland Wildfire highlighted the importance of good urban planning and the use of Wildfire Covenants to reduce the danger posed by wildfires in the Okanagan.  The Ponderosa Golf Course development by TreeGroup acted as an important firebreak to prevent the fires from spreading into the densely populated Princeton residential subdivision. (see news story here)

In many new subdivisions which have been developed since the large Okanagan Mountain Park fire of 2003, local municipalities have mandated that Wildfire Covenants be registered against title to the newly created lots. A Wildfire Covenant is a Section 219 Covenant by which municipalities impose obligations on the landowner to lower the wildfire risk.

A Wildfire Covenant legally requires landowners to:

a)      maintain a minimum distance of 3m between conifer trees (this may require a homeowner to thin existing trees as they naturally grow much denser than this requirement)

b)      do not plant conifer trees, only plant small shrubs and deciduous trees;

c)       prune all low branches (below 3m) on tall trees (over 9m) (this will likely require a homeowner to hire an arborist);

d)      remove all dead trees, woody debris, branches, and pines needles on the ground, roof and gutters (this is easy, keep the yard clean);

e)      use fire resistive materials for exteriors, roofs and  walls of all structures (no wooden shingles or shutters);

f)       ensure house address is visible (to assist emergency personnel);

g)      have an evacuation plan (know alternative routes);

h)      for ground cover use pea gravel, lava rock or other non-combustible material rather than combustible materials such as bark mulch;

i)        water your lawn and have a hose that can reach the roof(with a sprinkler) and around the house; and,

j)        do not store flammable materials near the house.

The Wildfire Covenant puts landowners on notice that they live in an interface area and there is a risk of wildfire. Under the terms of the covenant, the municipality will not be liable in the event of wildfire to the homeowner.

Wildfire Covenants can be found in most new subdivisions including Ponderosa, Wilden, Kettle Valley, South Ridge, Kirschner Mountain and the Ponds. These Wildfire Covenants assist the entire neighborhood in reducing the naturally occurring wildfire risks associated with living in the sunny Okanagan.

Peter Borszcz is a Kelowna Real Estate Lawyer and Kelowna Business Lawyer at Pihl Law Corporation. Have a legal question? Contact the firm at 250-762-5434

Marriage and Name Changes in the Land Title Office

I heard a wonderful story from a client this week who had decided to propose to his girlfriend after he carried her “over the threshold” in to the new home they had just bought together in Kelowna. The client asked me “When we get married, do we have to file that change with the Land Title Office?”

Steps to Name Changes in the Land Title Office:

  1. Obtain the  original certificate of change of name or marriage certificate from the BC Vital Statistics Agency.
  2. Inform your lender of the change of name, they may require your lawyer to prepare a declaration that you have changed your name.
  3. Once Step 1 & 2 are complete, bring the original document to your lawyer who will verify your identity and will file the legal name change in the Land Title Office.
Will the wrong name on title prevent me from selling or re-mortgaging the property?
It might, identity verification is taken very seriously by Realtors, Mortgage Brokers, and Lawyers in the Province of British Columbia and these professionals will require proof that you have the legal capacity to sell your property.

So, when you legally change your name, it is recommended that you file the change of name in the Land Title Office as set out above.

Written by Peter Borszcz, a Kelowna Real Estate Lawyer and Kelowna Business Lawyer. 

Real Estate Development: Preliminary Layout Review Letters

The filing of a subdivision plan in the Land Title Office cannot occur without the approval of an Approving Officer appointed by the local municipal authority (s.88 Land Title Act). It is common practice for most municipalities to issue a Preliminary Layout Review letter (PLR Letter) which sets out what the approving officer will “likely” require to grant approval to the subdivision.

Although the PLR Letter is not binding on the municipality, administratively it forms a very important checklist for developers. Careful and early review of the PLR letter with your real estate lawyer can be very helpful to streamline the real estate development process.

Some of key items discussed may include:

  1. Park Area Dedication and No Build Areas
  2. Performance Bonds
  3. Development Cost Charges
  4. MOTI (Highways) referrals and Traffic Impact Assessment requirements
  5. Geotechnical and Engineering Considerations
  6. Retaining Wall Requirements
  7. Zoning and Setback Requirements
  8. Utility and Servicing Right of Way Requirements
  9. Restrictive Covenant Requirements (ie; Wildfire Interface Covenants in the Okanagan)
Most, and often all, of these requirements will require the involvement of a real estate lawyer. Real Estate Development Lawyers can assist clients with the negotiation, drafting and registration throughout the process.
The time it takes for a Developer to go from “conception to subdivision to building” will vary greatly from project to project and will often depend on the unique third party requirements (ie; geotechnical, engineering, or provincial approvals). Most PLR Letters have a “sunset” clause and expire (usually within 1 year) from the date of issuance but can be often be extended.
Peter Borszcz is a Business and Real Estate Lawyer practising in Kelowna, British Columbia and a shareholder of Pihl Law Corporation.

Distressed Property: Judgements, Liens, and Certificates of Pending Litigation

Most transactions involve the discharge of at least one financial charge, being a Seller’s mortgage which is found on most titles. Where a seller has run into financial or legal trouble, often a Judgement, Builder’s Lien or Certificate of Pending Litigation are registered against title to the Lands.

Judgement – A judgement registered against the Land Title is an indication that the BC Court has awarded a judgment to the chargeholder against the land owner and that the amount of the judgment is payable by the land owner to the chargeholder. The amount of the judgement can be obtained by retrieving a copy of the charge from the Land Title Office.

Builder’s Lien – A Builder Lien can be registered by a contractor, architect, or material supplier that has supplied goods or services to the property, who have a 45 day period to register the lien. Although the mere registration of the lien does not “prove” the debt, the landowner must either a) pay the chargeholder, or b) pay the amount into court pending the resolution of the matter.

Certificate of Pending Litigation – Also called a CPL, is a declaration that a court action has been started by a litigant claim an “interest” in the land. A CPL cannot (and should not) be filed by a person merely claiming monetary damages. A CPL is often filed by a spouse where the landowner is involved in family law proceedings.

Unlike a bank (which is required to provide a discharge when full payment is made under the mortgage), the discharge of these charges will require the Seller’s lawyer to negotiate terms with the respective parties holding the charge. In some cases, for example a Judgement, this is can be as straightforward as paying the chargeholder and obtaining a release of the charge, in other cases, the for example where a CPL has been filed in a family law proceeding, this may require extensive preclosing discussion with the Seller’s family lawyers.

Building Schemes

Statutory Building Schemes (under s.220 of the Land Title Act) are charges on title that contain terms which limit what a home owner can do with his property and are placed upon the property by a developer at the time of subdivision.

Developers use a Statutory Building Scheme to ensure that the neighborhood has a certain “look and feel” and the nature of the restrictions contained can vary. For example a building scheme could easily restrict “farm animals”, restrict where you can store a boat, and define what types of “roofing materials” are acceptable.

By their very nature, Statutory Building Schemes will have the greatest effect on persons constructing a new home in a subdivision and will need to be carefully reviewed by both the home owner and the potential builder/ general contractor prior to the subject removal date on the lot purchase.

However, Statutory Building Schemes are also important for resale home owners. These documents will limit the nature of renovations (especially exterior changes) and the use of the property. In some cases these limitations are benign, obvious, or against municipal bylaws given the nature of the property (for example the “Glenrosa” building scheme restricts “swine, sheep, and large livestock” in a residential subdivision). In others these restrictions can adversely limit use of the property (for example limitations on secondary buildings on acreage homes or restricting RV or boat parking).

As the terms of the Statutory Building Scheme cannot be determined by merely looking at the Land Title summary report, it is important that a Buyer review these terms. In most cases the restrictions are written in plain language and can be easily understood.