Month: June 2020

A restrictive covenant is an agreement between the owners of the affected properties, which places limitations on what can be done on such property.

In newer community developments, a restrictive covenant may be put in place by developers to maintain the value of the properties located in a given subdivision by ensuring uniformity in the architectural and landscaping controls. These restrictions may include the material type or colour of the roof, or the exterior wall material or fences. Another example may be a restrictive covenant limiting the minimum distance to be maintained between the street and a house, or a restrictive covenant preventing the storage of any boats or trucks in the driveways, or prohibiting the installment of satellite dishes or clothes lines, or there may be a restriction placed on whether a business may be run from the property or not.

Once registered, the restrictive covenant runs with the land and will remain on the property title, also binding the subsequent owners of the land.

Restrictive covenants do not have an expiration date unless there is intentionally an end date included within the covenant – this is rarely ever so. Because there is no expiration date some covenants from as far back as the 1800’s will still run with the land and remain in force on the property title. Some older restrictive covenants quite often may be more complex, such as the ones that include restrictions on use (such as only a single family dwelling being permitted) and on the location of buildings (such as the setback from the street). It is possible that a home is built in compliance with current municipal regulations, but it may contravene a restrictive covenant on the title. The property could even have a real property report with a compliance certificate from the municipality and yet there might still be a defect on title if it is not consistent with the restrictive covenant.

It is possible to remove or amend restrictive covenants on title. However, in order to remove a restrictive covenant completely it may be a lengthy process, a court application and a requirement to address potential community concerns. In certain instances, it may be possible to amend a current restrictive covenant rather than to remove it entirely, but the viability of this is determined on a case by case basis and is particular to the nature of the restrictive covenant.

TAKE AWAY

If you have a restrictive covenant registered on title, it is vital to understand what this document entails before signing the purchase contract. There is no guarantee it can be removed or amended, and it is a restriction as to what the buyer can or cannot do with the subject property.

Questions about interpreting your restrictive covenant? Contact our team today. We’re here to help!

WHAT IS A PARTY WALL?

A party wall is a common wall shared between owners of adjoining properties. Examples of this include semi-detached townhouses, adjoining condominium units or duplexes.

WHAT IS A PARTY WALL AGREEMENT?

A party wall agreement details the rights, obligations, and ownership with respect to the common wall (the party wall). The agreement will provide specific details such as: maintenance obligations, encroachments of the wall on to the neighboring property and restrictions on renovations or alterations. The agreement must be signed by all parties that share the party wall. 

WHEN DO YOU NEED A PARTY WALL AGREEMENT?

A party wall agreement is always recommended. If you purchase a property without such an agreement in place, speak to your lawyer about creating a proper agreement between yourself and the other party, and having it registered on title to avoid any potential disputes in the future.

WILL MY LAWYER EXPLAIN THE EXISTING PARTY WALL AGREEMENT TO ME?

Yes. In the instance of a home purchase, your lawyer will review the existing party wall agreement registered on the title of the home. They will explain your rights, ownership and obligations as agreed to in the existing party wall agreement and advise you if there is anything that may be of concern. It is important to understand what you and your neighbors can / cannot do in respect to your property and any shared common wall(s) (party wall).

With a new build home, it is entirely possible that construction flaws may reveal themselves immediately upon purchase, or a few months or even a few years after purchasing the newly built home.

As of February 1, 2014, every new build home in Alberta is protected under warranty. Alberta’s New Home Buyer Protection Act (“NHBPA”) advocates for very high-quality standards in order to make sure that every new home stands the test of time. This applies to all new homes constructed by builders ranging from condominiums, recreational properties, manufactured homes, multi-family homes, duplexes to single-family homes.

A new home warranty is an insurance product that protects your home from material, labour and structural defects that may arise after construction. The warranty stays with the home, whether you are the original owner or subsequent buyer and typically lasts for 10 years.

Before you sign a contract with a builder, it is essential to verify that your chosen home builder is registered with a warranty provider, and for you to understand what is covered, for how long it is covered and what potential defects may not be covered.

WHAT IS THE ALBERTA NEW HOME WARRANTY PROGRAM?

While there are a number of warranty providers in Alberta, the one that is the most popular amongst builders is the Alberta New Home Warranty Program. Founded in 1974, the Program is currently Alberta’s largest home warranty provider with over 700 Builder Members.

MANDATORY WARRANTY

According to the Alberta’s New Home Buyer Protection Act (NHBPA) legislation, at a minimum the warranty on each new home will provide “1-2-5-10” coverage.

1 Year – Labour and Materials

Mandatory warranty includes one year’s coverage for defects in materials and labour. This addresses issues with the way your home was built or the materials it was built with. It includes such items as flooring, trim and fixtures.

2 Year – Distribution Systems

New home warranty must cover defects in labour and materials related to heating, electrical and plumbing systems for two years from the warranty commencement date.

5 Year – Building Envelope

Homebuilders in Alberta must provide five years’ coverage for defects in the building envelope and must offer an optional two-year extension on building envelope coverage for a total of seven years’ coverage.

10 Year – Structural Integrity

Mandatory warranty covers the key structural components (for example, the frame and foundation) of single-family homes and multi-family dwellings for 10 years from the warranty commencement date.

Should the home become uninhabitable as a result of a defect or while warranty work is underway, programs such as the Alberta New Home Warranty Program will pay a daily rate up to a maximum amount for reasonable living expenses incurred by the insured.

It is important to understand that as with any coverage, a new home warranty will come with coverage limits. These limits differ based on the type of dwelling: Single-family, multi-family registered under a condominium plan, warrantable common property, or a non-condominium multi-family unit (Ex. A duplex, or row townhouse.)

PRE-POSSESSION AND DEPOSIT INSURANCE

The Alberta New Home Warranty Program offers pre-possession insurance for single-family homes, which is a combination of deposit insurance and home completion insurance. The Government of Alberta does not mandate the inclusion of pre-possession and deposit insurance coverage in every new home warranty, and it is an entirely optional product that the Alberta New Home Warranty Program chooses to offer to its members. Additions like this are important to understand and look for when it comes to reviewing the inclusiveness of the offered warranty through your chosen builder.

RENOVATION WARRANTY

The Alberta New Home Warranty Program also offers the Alberta Renovation Warranty Program via their members. The Program imposes strict standards for membership thus giving the homeowners complete confidence in their chosen renovators.

The Alberta Renovation Warranty Program combines deposit protection insurance up to $100,000.00 with Warranty Insurance that covers materials and labor up to $100,000.00 and provides comprehensive protection from the moment a homeowner engages with the renovation company until two years after the work is substantially completed.

Questions about purchasing a new construction home? Questions about your New Home Warranty or the Builder’s contract? Contact our real estate lawyers Here.