Bare Land Condos + RPRs
In our last email, we discussed bare land condos. Here's an example of why it's important to determine if a property is a bare land condo.
My client was selling his condominium. I saw that he was selling a bare land condo, so I gave him a call.
Me: "I need to review your RPR and compliance. Would you mind scanning to me?"
Him: “What RPR?"
Uh-oh!
Me: "Bare land condos need a..."
Him: What's a bare land condo?"
Double uh-oh!
After further discussions with my client and their Realtor, it became clear that my client was completely unaware that they were selling a bare land condo. His brand new Realtor didn't know either.
Neither of them was aware of the requirement in 10.2 of the standard AREA contract that states: "If the Property is a bare land unit, closing documents will include an RPR…" NOTE: High-rises/any kind of stacked condominiums are never bare land.
This was hugely upsetting because the deal was closing quickly, surveyors were busy, and the client did not like the estimated $750-$900 cost of getting a new RPR and compliance. The buyer's lawyer agreed to close with title insurance but demanded the seller's commitment to fix any compliance issues.
So, as a Realtor, what should you do?
- Is it a condo? The title will give you that information. If you see a unit number and a plan number rather than a lot, block and plan number, then you have a condo. But the title doesn't tell you if it's a bare land condo.
- Order a copy of the survey plan using the plan number on the title. It costs the same as a title. Sometimes surveyors note right on the plan whether it’s bare land, but not always.
- Examine the survey plan. If the plan shows only condo units usually as simple rectangular lots, (although they could be any shape), with no other detail you have a bare land condominium. A normal condominium would show much more detail of the defined space in the condo complex. This includes the outline of buildings, floor levels and more. If you don't see any of that, again, you have a bare land condo.
Lessons Learned
Always pull title to confirm a property is a condominium.
Listing Realtors: Ask your seller if it is a bare land condo. If yes, ask them for their RPR and compliance. If no, order the survey plan anyway to confirm if it is a bare land condo or a normal condo?
If the highlight sheet says a property is bare land, buyer's Realtors should ask the listing Realtor for the RPR and compliance. Do that early in the process in case seller needs to get an RPR and compliance. If there’s no highlight sheet mention, then carry on to get a title and then examine the survey plan as set out above. If it is bare land, again, get back to the listing Realtor to make sure they have an RPR and compliance. Don't let this problem show up close to closing.
Protect yourself.
Cheers,
Barry
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