06/09/2026
Good afternoon folks. The market is heating up and one of the main issues I deal with on a daily basis on real estate files dealing with single family homes, duplexes (that are not condos), and townhouses that are 'bareland' condos are real property reports and compliance letters.
A real property report is survey/drawing done by a surveyor/engineer showing the exterior of the property and all the improvements aka house, shed, fence, deck, garage, retaining wall, eaves, and so on. The report is then sent to the municipality/county for approval that all is in order (no permit issues, no lack of inspections, no encroachments or other violations)
It is so very important for a seller and buyer client, realtor, and lawyer to see a real property report and compliance before a deal goes firm or at minimum to have it well in advance of closing, not a day or two before.
Under a standard contract, a seller must give a current and accurate RPR that shows all exterior structures on the property, which is then sent to the City for evidence of compliance.
When acting as a buyer's lawyer, if we don't have any RPR w/ Compliance at the Closing date, or a previous one that shows everything is fine except for perhaps a deck or fence, we usually don't recommend our clients moving in at all, which is an option they have under the contract. If something like a garage was added and there's no Compliance report, we usually recommend the same thing unless the seller agrees to a sizeable holdback worth at least the value of the garage.
If they really want to move in, they are allowed to move in and pay the interest to the seller that they would otherwise be paying their lender. If the Compliance is taking an eternity to come back from the City or the seller doesn't get the work done to make it comply, then their mortgage commitment could expire. From a seller's perspective, the seller may need the full monies for a new place they are buying or to pay off debts and also the fact they are paying their lender interest as well each day they don't pay off their mortgages.
If we do have an old report with Compliance and something minor has been added but not shown, we can negotiate a holdback e.g. paying all the monies but holding back a dollar amount until we get the compliance, which sometimes results in the seller having to apply for permits and inspections after the fact and spending more time, more delays and not getting their monies.
There is no set amount or guideline for items to be held back and some lawyers, such is life may be more challenging than others, despite the fact that the whole purchase price could in theory be held back, and so a lot of work goes into these negotiations, that could otherwise be averted if real property reports and Compliances were ordered immediately upon a home being listed.
Moral of the story is that not having a real property report and Compliance affects a seller and a buyer both, despite the fact that it is the sellers responsibility in most scenarios to order a compliance can ensue over what the seller is to holdback or how they are to get Compliance and so on, and so it's always advisable to review the RPR and Compliance before waiving conditions, upon listing a home, and getting a seller to order it as soon as possible to ensure a smooth transaction.
Any questions, as always feel free to let me know.
Cheers!
