Non-Financial Charges on a Real Estate Title

Charges Against Property

Property is often purchased with a particular purpose in mind and when this vision cannot be realized due to charges against the property, purchasers may end up disappointed. Charges are legal instruments registered against title to the property that indicate some sort of third-party interest in the property. At first glance of a title search, these charges offer little information as to their nature. When purchasing property, always seek the help of a prudent lawyer to review the title and the charge documents themselves. This could potentially save you thousands of dollars and a major headache. Check out the following examples of different charges that may be held against your property.

Easements

An easement is a specific interest in one property in favour of another property. These typically grant the right to do some positive act on another owner’s property. Examples include traveling through the property and running utilities through the property. Easements arise by express grant or by implication, such as when the only access to a landlocked property is through a neighbouring property. When purchasing property, it is crucial that any existing easements are identified as the existence of an easement can create significant difficulties for future use and development of the property. Easements must be read carefully to identify which specific rights are granted. Removal of an easement requires cooperation and consent from the owner of the property that holds the benefit of the easement.

Restrictive Covenants

A restrictive covenant typically imposes a restriction on the use an owner may make of his or her property. Examples include preventing construction that blocks light from a neighbour’s window or preventing a specific type of business activity. Potential purchasers of property should be made aware of all restrictive covenants that may limit their intended use of the property as removing or modifying restrictive covenants can be a time-consuming and expensive process with no guarantee of success. Disputes relating to restrictive covenants normally relate to whether the covenant “runs with the land”, meaning that the restriction survives the transfer of the property and is binding on the purchaser of the property.

Statutory Rights of Way

A statutory right of way allows the creation of an interest similar to an easement for the benefit of a specific group, generally government and its agencies. Government bodies typically acquire statutory rights of way for utilities or for public access. The key difference between an easement and a statutory right of way is that a statutory right of way need not benefit another parcel of land. A statutory right of way runs with the land and therefore burdens the subsequent owners of the property. Consequently, once a person ceases to be the owner of the property subject to the statutory right of way, they are no longer liable for breaches of the statutory right of way that may occur later on.

Building Schemes

A building scheme is a charge registered against a property that forms part of a community, often to ensure a continuity of the design of a neighbourhood or to provide guidance for future construction of the property. Building schemes allow owners or developers of property who wish to sell or lease at least two parcels of property to create restrictions consistent with a general plan of development on the property. Because building schemes are registered against the title to all of the affected properties and run with the land, all purchasers must comply with the restrictions. Building schemes can be enforced by the owner or developer of the property who can withhold approval of any development unless the proposed plans comply with the restrictions set out in the building scheme.

Whether you’re planning on purchasing a property or have already purchased one, you’ll want help identifying the nature of the charges on title and how your property is affected. Arora Zbar LLP can help. Don’t hesitate to get in touch.