By: Pino Di Mascio
Prices are up and interest rates rising. With homes scarce and buyers plentiful, Canadians looking to buy a home in Canada's major cities face numerous challenges - particularly first-time purchasers. Straight Goods takes a four-part look at the often complicated home buying process. Pino Di Mascio and his wife Kelly O'Neill are searching for a home in downtown Toronto. In this series, the author shares insights and tips from his search for an affordable urban home. Previously, Straight Goods featured Part 1: Disentangling the home-buying process, Part 2: Immersed in the search for a perfect home, and Part 3: Biting the bullet: what you need to know to make an offer. Here is the fourth and final article.
Thomas and Anne live in Toronto. In 1993 they bought a home with a front-yard driveway but soon discovered the City actually owns part of the land on which the driveway is situated. As a result, they must pay $89.88 each year for a permit to park in their own driveway.
This example is typical of the kind of complications that can affect how you are permitted to use your property. While it is impossible to list all the possible legal landmines n one article, there are some general types of fine-print problems you should keep in mind when purchasing a home. A lack of attention to the following issues may disrupt your ability to enjoy your home, after the purchase agreement is inked:
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Be wary of any lawyer charging under $1,000, since you want to be sure you get a thorough title search |
Land Title
When you buy a house, what you are actually purchasing is the title to the property. In Canada land is the responsibility of the provinces, and through their power of eminent domain, the provinces retain ultimate ownership. Your title (or privilege) to use property, however, is a legal commodity that can be transferred or sold. Titles to land must be registered with the municipality in which it is located. One of the tasks of your lawyer is to ensure that the land title is properly transferred to your name and dutifully registered.
Liens and Mortgages
Liens and Mortgages are what are known as legal instruments that can be registered against the title. For example, when you take out a mortgage, the land title identifies the bank as the holder of the mortgage. The mortgage holder has the legal right to take title of the property if the conditions of the mortgage are not met. In addition to liens and mortgages, any legal agreement can be registered against the title of the property. When you buy the title, you are taking ownership of all the agreements registered against it. This is why you hire a reputable lawyer. Be wary of anyone charging below $1,000, since you want to make sure they do a thorough title search.
| Author Pino Di Mascio, his wife Kelly O'Neill and their dog Flynn, taking a break from the legal complexities of buying a house |
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Boundaries
Every property has legally defined boundaries. Boundaries are precise and they are illustrated in a land survey. When purchasing a home, the vendor should provide you with a registered survey. In your conditions, be sure to state that it is an up-to-date survey and not just current. The survey should contain the stamp of a registered land surveyor. Thomas and Anne's survey should have told them that part of their driveway was located outside of the land boundary.
Easements
In addition to the boundaries of your property, it is also possible to have legal title to the use of someone else's property (and vice versa). This is known as an easement and is quite common. If you have a shared driveway, there is an easement involved. Most likely you own half the driveway and your neighbor owns the other half. The easement grants you each the right to access the other's property. The survey, and your lawyer, should identify any easements.
Zoning
Land use is regulated through a system known as zoning. Municipalities have in place a zoning by-law that sets out the zoning codes that apply to each property. In general, zoning regulates: the specific uses permitted on the property; the amount of floor area that can be built; and, the physical dimensions of buildings. When you buy a house you are bound by the zoning by-law. Many people looking to undertake additions run into problems with zoning and find that what they are planning is not permitted. In such situations you will need the municipality to grant you a variance. This is a public process that is expensive and uncertain.
It is virtually impossible for someone outside the planning, architecture or legal professions to fully understand Zoning By-laws. Your lawyer will make sure the property is zoned for residential use, but will not give you any more detail. Your municipality's planning office, however, can help you out. Giving them a call before you purchase can be helpful, especially if you think you may want to build an addition. They won't give you details but they can describe to you the general points. Typical things you will want to know are: What is the maximum gross floor area permitted? How far must any building portion be set back from the property line? Is a separate apartment within the house permitted?
That's our primer on the legal intricacies of owning property. While you will need to rely upon professionals to explain the details, you will be much better prepared if you understand these general concepts.
Pino Di Mascio is an urban planner with Toronto-based international planning and design firm Urban Strategies Inc. He can be reached at pdimascio@urbanstrategies.com.
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