REAL ESTATE: Depending on the age and type of property, the following off title searches may be necessary!
Occupancy permits: For a newly built or renovated dwelling or an extension or addition thereto, it is necessary to find out whether or not the local municipality has issued an occupancy permit under its building by-law or property standards by-law or under the Ontario Building Code. However, there could be several reasons why an occupancy permit has not been issued. To start with, some municipalities do not issue these permits after a final inspection. Then, perhaps an inspection has not yet been made, the paperwork is not completed, or the permit is not required for the extension, renovation, or addition. If no inspection has been carried out, it is prudent to get an undertaking of the vendor to apply for an occupancy permit or a final inspection and to complete any deficiencies that can be ordered to the satisfaction of the purchaser. Generally, in most agreements of purchase and sale for newly constructed dwellings, it is stated that the vendor is not bound to provide an occupancy certificate or permit to the purchaser. It is wise to review the Agreement of Purchase and Sale prior to signing and delete this clause. If the vendor is unwilling to give the undertaking requested, the risk of closing the deal without an occupancy permit remains with the purchaser. Actually, it is contrary to building by-laws and the Ontario Building Code to occupy a newly built or a renovated premises without an occupancy permit or a final inspection having been made by a municipality’s building inspector. Should there be deficiencies, the client would be ordered to rectify them, in this case the Purchaser. Therefore, its very important to enquire about any open permits and if there is an existing Occupancy Certificate.
TARION: Every builder is required to register under this Program in Ontario, which has recently changed its name to TARION, and, in doing so, obtains an enrolment number. Besides, every builder is required to register every home that the builder constructs. When the client is buying a newly built home, the local TARION Office is to be requested for the enrolment number of the builder and the home. In case the property is a condominium unit, the enrolment number of the common elements is to be obtained as well. TARION gives, among other things, a warranty of the builder’s workmanship and certain deposit guarantees.
Unregistered hydro easements: Usually, easements relating to the transmission, distribution or use of electricity in Ontario are registered on title. Even so, there are instances when an easement document has not been registered and a right to such easement is claimed under the Electricity Act, or the predecessor legislation.
Bankruptcy: It is not uncommon for solicitors to search the records of the Registrar-in-Bankruptcy and the Official Receiver-in-Bankruptcy to ascertain any bankruptcies of a vendor, but these searches are not necessary until the trustee-in-bankruptcy registers an appropriate notice on title.
Waste disposal search: It is a relevant search when large tracts of land are purchased and then developed for commercial or residential purposes. Anyway, this is a rarely conducted search in a residential transaction, as the underlying assumption is that all required searches were conducted before the creation of a subdivision or condominium. However, the Environmental Protection Act provides that “no use shall be made of land or land covered by water which has been used for the disposal of waste within a period of 25 years from the year in which the land ceased to be so used unless approval of the Minister of the Environment for the proposed use has been given”.
Heritage buildings: When a property is designated under the Ontario Heritage Act to be of historic or architectural value or interest, a by-law is enacted by the municipality in which the property is located and registered on title, designating the property as a “designated property”. In such “designated properties”, any alteration or improvement to the property is subject to the provisions of the Act.
Corporate status: If the search of title shows that there are corporations that held the property in the chain of title, it should be checked whether or not these corporations were in existence during the period of ownership of the property. Under the federal and provincial corporate statutes, it is stipulated that, upon dissolution of a corporation, its property is escheated, or forfeited, to the Crown. As it constitutes a break in the chain of title, the subsequent grants are void. On application with a fee, the Ministry of Government Services or other service providers will give the details of the name of the corporation, its corporate number, its jurisdiction of incorporation, the date it was incorporated and, if applicable, the date it was dissolved.
Compliance with agreements: Under the Planning Act, municipal or other approval authorities are permitted to impose certain conditions on the developer and/or builder for the approval of a plan of subdivision. It is likely that they would ask the owner of the land to enter into one or more agreements with the municipality, referring to matters like provision of municipal services, letters of credit, installation of sidewalks, street lighting, drainage and other conditions that the authority could consider necessary. The municipality will have the right to correct the default and then create a lien on the land for the amount/cost. Such an agreement could be registered against the land to which it applies and the municipality or approval authority would be entitled to enforce its provisions against the owner and subsequent owners of the land, subject to the Land Titles Act and Registry Act. Should the title search reveal an agreement, which may be called a subdivision, development, or site-plan agreement, whether or not it has been complied with the terms of the agreement is to be ensured.
There are searches like the above for urban as well as farm properties. Everyone of those searches is to be reviewed and acted upon wherever necessary.
The biggest mistake a purchaser of real estate can do is bargain away their rights to know what they are buying. Much too many are the cases where the price paid for the property was not the total monetary obligation the purchaser got themselves into. Just because your lawyer is giving you a great deal on their closing fees doesn’t mean you should be too quick to assume that the quality of care taken is sufficient. Contact the lawyers at Levy Zavet PC before you sign any Purchase and Sale Agreement!