Understanding the Different Charges which may appear on Title / Title Search

As part of the due diligence process when purchasing a property, your conveyancer or real estate lawyer will complete a title search to identify the charges registered against the property. There are generally two types of charges: financial and non-financial charges.

It is important to understand how any charges registered on a property may affect it before finalizing your purchase.

Depending on the type of charge, it may or may not be possible to remove it from the title. It is important to consult with a real estate lawyer before you purchase a property to ensure that you understand the charges registered against it.

This blog serves as a brief introduction to the two different types of charges you can expect to find registered against a property.

What is a Title Search?

When you purchase a property, you are not only purchasing the physical land and structure, but also the rights associated with it. These rights are typically outlined in the title search.

A title search is a document ordered from the Land title Office which identifies the registered owner(s) of the property and lists any charges registered against the property.

What Charges Can Be Registered Against the Property?

Besides disclosing the name of the registered owner(s), a title search can identify two different types of charges against the title deed, namely: financial charges and non-financial charges.

Financial Charges

Financial charges claim a right to a portion of the value of the property via debt. Examples of these include mortgages, judgements, and builders liens. (This is not an exhaustive list).

Typically, financial charges are cleared from title by the seller before the property is transferred to a purchaser.

Mortgages are loans that must be repaid in full, with interest, over a period of time. If you default on your mortgage payments, the lender (the bank) may take steps towards selling the property to recoup the amount loaned and the associated costs with doing so.

A Judgment registered against the property is an indication that a BC Court has awarded a judgment to the chargeholder against the land owner(s), and the amount of the judgment is payable by the land owner to the chargeholder.

Builders Liens are charges most often registered by a contractor, subcontractor, or material supplier who has supplied goods or services to the property. Although registration of the lien does not prove the debt claimed as owing by the builders lien, the owner of the property must either pay the lien claimant or pay the amount claimed into court pending resolution of the matter.

Non-Financial Charges

Non-financial charges usually restrict how the property can be used. Unlike financial charges, non-financial charges are not typically cleared from title before the real estate transaction completes. So, it is important to be aware of them before entering into a contract to purchase property.

Examples of non-financial charges include covenants, easements, statutory rights of way, statutory building schemes, and undersurface rights. (This is not an exhaustive list).

Generally speaking, there are two types of covenants in BC. Restrictive Covenants impose negative obligations which restrict what an owner can do on the property. A restrictive covenant will be tied to another parcel of property which receives the benefit of the covenant. The second type, known as Section 219 Covenants, can impose both positive and negative covenants and may only be registered for the benefit of local or provincial governments.

Easements typically impose limitations on your rights to the area of the property covered by the easement. An easement will also be tied to another parcel of property which receives the benefit of the easement. For example, an easement may be registered to provide access to a property that is not adjacent to a road. It may provide another property owner with the right to cross a portion of your property to access their property.

A Statutory Right of Way will typically allow the provincial or local government, or a utilities provider to access the property to construct or maintain utilities or other services.

Statutory Buildings Schemes are rules that govern how buildings must be constructed in certain areas. The rules can relate to the size and height of buildings, building materials, landscaping, colour schemes, etc.

Undersurface rights refer to mineral rights, water rights, and other rights that extend below the surface of the property. Despite that ownership of the property may be transferred, the undersurface rights remain with the party who holds the charge.

Key Takeaways

When purchasing a property, it is essential to first understand any charges registered against the property. These charges are often in the form of liens, mortgages, or easements, and can have a major impact on the value of the property.

Consulting a real estate lawyer before making an offer on a property can help to avoid any unpleasant surprises down the road. The real estate lawyers at Solimano Law can complete a title search and identify any potential issues with the property and ensure that the transaction closes smoothly.

Disclaimer – The information contained herein is of a general nature. It is not intended to be legal advice and it is not intended to address the exact circumstances of any particular individual or entity. No one should rely on or act upon such information without receiving appropriate professional advice and without a thorough examination of their particular situation. Please contact our office if you have any questions with respect to the content of this entry, this website, or our Terms and Conditions .