Tales from the Trenches

The Public Health Act in Alberta also includes statutes regarding Minimum Housing and Health Standards. Investors and landlords need to be aware of their obligations. This is especially important because there is no grandfathering clause for older properties.

https://barrymcguire.ca/wp-content/uploads/2015/07/minimum-housing-health-standards.mp3

Download the audio file HERE and the text/handout HERE.

Alberta Health Services is now the umbrella organization for regional health districts. Nothing has changed but the name. There are still those diligence issues that you have to know about. Alberta Health Services administers not only the Public Health Act, but also Minimum Housing and Health Standards. Here’s a quote from their website:

Public health inspectors follow-up on complaints received by tenants or other agencies about housing conditions such as no heat, water problems, structural problems and pests problems from mice, other rodents, bed bugs and other insects. If the housing conditions could be dangerous to the tenants, public health inspectors work with landlords to repair or remove these conditions or require tenants to move out, (emphasis mine).

One of the key items in the above quotation is that Alberta Health Services acts on complaints received from tenants. Following are a couple of excerpts from client e-mails (used with permission).

We are having a situation at this condo. We are in the process of evicting the tenant there—we have a judgment against her and the bailiff is dealing with her this weekend. However, in the meantime she phoned Alberta Health Services and had them come out to the place in the hopes of stalling her eviction. Well, it didn’t stall her eviction—but Alberta Health Services now has us on notice for a couple of items.

The first one is for mice.

The second is more serious. She measured the windows in the two bedrooms and found that they only have an opening of 12 inches. Alberta safety law says they need to have openings of at least 15 inches. She said that they need to be changed out or that the rooms could not be used as bedrooms. She said that she will be monitoring the situation even once the current tenant is gone to make sure that no future people are using them as bedrooms either unless the windows get changed. So, this is a big issue as it is a condo and the owner is not allowed to change windows on her own. Please give me a call at your earliest convenience so we can discuss what can be done.

And here is another e-mail from a different client:

We received a letter from Alberta Health Services (attached) regarding a safety issue in a condo complex where I have three rental units. The issue is one of the bedrooms not having a proper egress window. Their recommendation in the letter is: ‘All owners utilizing the affected condominium units as rental property are to immediately discontinue the use of the affected rooms for the purposes of sleeping.’

We talked to the Environmental Health Officer this morning to know our options, as owners, to comply with their regulations. Basically she said that, as owners, there are NO options. We could remove the wall from one bedroom to the room in question. This way, we would comply with Alberta Health Services and safety code. However, in my case as well as the other owners, we bought properties with 3 bedrooms that suddenly are converted into 2 bedrooms, or we can leave things the way they are and have 2 bedrooms and den.

We made some suggestions, such as having a pocket door between the two bedrooms. But they cannot accept that because people will put locks on the doors or otherwise obstruct them. Digging into the subject, she told that she has been working in this assignment for four months and the building should NOT have been approved by the City of Edmonton. There were other health inspectors in there and nobody mentioned the problem. The building was built in 1977!!! It has been over 30 years that people are sleeping in that bedroom.

She said that the Condo Board should hire a Structural Engineer and have an assessment, present some solutions to Alberta Health and they can analyse and see what we can do.

So, what is the result of not understanding your obligations under the Minimum Housing and Health Standards?

Alberta Health Services points us to a fatal basement suite fire in a rental property. The landlords were convicted of numerous charges under the Public Health Act and received heavy, heavy fines.

If you’re dealing with Alberta Health Services regarding a rental property, get an experienced real estate lawyer on your side. Contact Barry now!

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“Public Health” image from Franklin D. Roosevelt Presidential Library and Museum via Wikipedia used under Public Domain.

A ‘fourplex’ is not a legal term, and so we’ve done some digging through bylaws to show how this idea is actually expressed in the law. Many duplexes have illegal basement suites, and so you need to do your diligence before purchasing a so-called fourplex. Always confirm that the zoning allows it and that all building/development permits are correct.

https://barrymcguire.ca/wp-content/uploads/2015/07/fourplex-diligence.mp3

Download the audio file HERE and the text/handout HERE.

I got a call from one of my favourite realtors. His client was looking at a building that contained four suites. The City of Edmonton website described it as a side-by-side duplex with two basement suites. The selling realtor’s highlight sheet described it as a fourplex. It looked good, was well located, had great cash flow, and so they prepared an offer to purchase.

Now, the prospective buyer was a very cautious person and his biggest concern was that he was getting four legal suites. He didn’t really care if it was a side-by-side duplex with two suites in the basement or a fourplex (these are common—but not legal—terms). The important thing was that all the suites were legal. So, they put together an offer to purchase and added a clause that says, “Seller warrants this property is a legal fourplex.” The seller crossed out this clause when he signed the offer. Questions of the seller’s realtor didn’t get any firm answers.

However, the property was attractive enough that the realtor and his client decided to do a little more digging. In fact, they did lots of diligence. They searched and sent me copies of the title, historical titles, all the encumbrances on title, the offer to purchase, the other realtor’s highlight sheet, zoning information, and other zoning comments from the city as well as tax assessment information.

I reviewed all that information and this was my response: “By way of preliminary comment, there is no legal category of, ‘fourplex’ in the zoning bylaw. The zoning for this property is RF3 so let’s take a look at what is allowed under RF3 zoning.”

Following is an excerpt from the City of Edmonton zoning bylaw:

Bylaw 14750: December 12, 2007

The purpose of this Zone is to provide primarily for Single Detached and Semi-detached Housing while allowing small-scale conversion and infill redevelopment to housing forms containing up to four Dwellings per building, and including Secondary Suites under certain conditions.

1. Apartment Housing or Stacked Row Housing, provided that each building contain not more than four Dwellings”

In understanding the terms, the permitted uses allow a ‘duplex,’ which means a suite upstairs and another downstairs, as well as ‘semi-detached,’ which means two suites side-by-side. Both of these uses are commonly referred to as ‘a duplex.’ Therefore, since we are looking at four suites, the question is, can we get any help from the discretionary portion of the bylaw? The answer is yes, because under discretionary uses it indicates that you can have ‘apartment housing or stacked row housing’ as long as neither category contains more than four dwellings. So, when anybody refers to a fourplex they’re really talking about either apartment housing or stacked row housing.

Now getting back to the offer to purchase, if the seller crossed out the clause about it being a legal fourplex, then there is a good chance it is a side by side duplex with two illegal suites in the basement. That’s what my review of the attachments focused on.

After review of the attached documentation I commented again: “A review of the attached documentation does not definitively answer the question as to whether the fourplex is legal or illegal.” I note that the legal description includes lots four and five and the westerly 6 feet of lot six which may mean there was an agreement between neighbours to provide an extra 6 feet of property from Lot 6 that may or may not be required to build a duplex or a fourplex.

The bottom line is that the only way to tell for sure if the fourplex is legal is to go in to the City of Edmonton and check with them in order to confirm that the zoning allows for a fourplex. When the building was built, did they apply for their development and building permits to build a fourplex or a duplex? For certainty, you have to check further. But, it’s worth checking.

One of the things that made our realtor want to check further was that the picture of the property on the realtors highlight sheet showed the building style to be semi-detached (side-by-side) with a single, apartment style entrance allowing access to all four suites. Typical semi-detached buildings with illegal suites in the basement all have separate entrances. So, this was a good sign.

The happy ending to this Tale is that further investigation by our realtor found that building and development permits had been issued under the discretionary category of RF3 zoning for an apartment building of four units or less. It was in fact a legal fourplex! Perhaps the seller crossed out the warranty regarding four legal suites because he didn’t really check when he bought.

Alberta zoning bylaws can be tricky, so you’d better have a good real estate lawyer! Contact Barry now.

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Due diligence is one of the most important aspects of success with real estate. In this third part of our series on Real Property Reports, we look at three more examples of how a Survey Certificate can save you a lot of time, trouble, and money.

https://barrymcguire.ca/wp-content/uploads/2015/07/real-property-reports-3.mp3

Download the audio file HERE and the text/handout HERE.

A big part of my role as a real estate investor coach is to get the message out on due diligence. Different kinds of diligence, how much diligence, and when should you perform diligence. Real Property Reports are a key diligence tool and deserve extra emphasis. This is the third Tale From The Trenches discussing many aspects of RPRs. To get the most from this Tale, you might want to review the previous two parts (#1, #2).

One of the top questions clients always ask me is, “Do I need to get a Real Property Report?” Let’s look at that question using some real life examples that people have brought to me.

Get help with Real Property Reports from a veteran Alberta real estate lawyer. Contact Barry now!

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Continuing from our previous Tale, we have another example of what can happen in a real estate deal without getting a proper survey done first. In Alberta, the seller is supposed to provide a Real Property Report and written confirmation that the property complies with municipal bylaws. No matter where you are, insist on this before you agree to purchase!

https://barrymcguire.ca/wp-content/uploads/2015/07/real-property-reports-2.mp3

Download the audio file HERE and the text/handout HERE.

In the previous part of this mini-series, the facts were that a developer bought an old, small property in my neighbourhood. He knocked it down and poured a new foundation. As I’m going for my evening walk and observing the new construction, I take a look at the West side of the property. This is one of the long sides of the lot and the length is about 130 feet. There is a 4-foot frost fence along the whole West side of the lot. It actually looks really good, various vines and vegetation growing in the fence are pleasing to my gardener’s eye. But wait, what’s that jog in the fence that I couldn’t see before the demolition occurred?

Snoopy guy that I am, and with tape measure in hand, I take a closer look. Coming from the front of the lot about two thirds of the way towards the alley all of a sudden the fence takes a right angle turn into the lot where the new home is being built. Then the fence carries on to the alley. What the heck?! And then I see why. The neighbour house is at least 75 years old and was built when the city was much more relaxed about where on a lot you could build a home. This neighbouring house is built two feet from the alley.

It’s the first house I’ve ever seen built like this and it certainly would not be allowed under today’s city bylaws. Their back door is really not a backdoor because it comes out the side of their house facing the new construction lot. As you exit the side door, you have a tiny landing and steps. The frost fence is right up against the landing. “Ah,” I say to myself, “that’s why there’s a 4 foot jog in the fence.” Without that jog, the fence would have gone right through the landing and made the backdoor useless because there wouldn’t have been enough room to get out.

Now, I’m a real estate lawyer and, as I said, a snoopy guy. First we had the obvious problem on the other side of the lot with the diminished side yards. Now I’m wondering if the fence line with its 4-foot jog is the property line or if something else has occurred. What is the exact legal situation here?

There is a lady raking leaves so I stop, introduce myself, tell her I’m a real estate lawyer in the neighbourhood and ask about the fence and the property line. It turns out she is the owner and thinks that she has a written agreement with the previous neighbour that allowed the fence to be placed where it is. “That’s good,” I say. “With the new construction next door to you, this is a good time and I recommend that you review that agreement to make sure you are covered. I’ll take a look at your agreement if you want, no charge, I think it’s really important.”

She agrees and the next night on my walk around the neighbourhood she stops me and says that after searching her files, she can’t find any agreement, it was a handshake deal. She has her brown envelope with paperwork and gives it to me. I pull out the Real Property Report that was done when she refinanced her home… and guess what the RPR shows? Yes, there is the fence with the 4-foot jog. But, the actual legal property line is as straight as an arrow. The front two thirds of the frost fence is a couple of feet into her yard. The back third of the fence is about 2 feet into the neighbour’s yard.

I explain that the legal way to look at this situation is that the front two thirds of the fence encroaches 2 feet into her yard. For the back one third of the lot, the fence encroaches 2 feet into the neighbour’s yard.

Here’s the way it works with encroachments. Each party has the right to have the encroaching fence removed from their property. If the new construction homeowner insisted on moving the fence to the property line, my neighbour would lose about 2 feet of her 4 foot side yard for the back 1/3 of the lot and it would be very difficult for her to use her back door. The front 2/3 of the fence would move 2 feet the other way and my neighbour would regain some of her front yard. That wouldn’t really have any effect on the new construction lot because the surveyor properly located the foundation and therefore the new home is properly placed with adequate side yards.

I suggest to her that now is the time to try and solve this problem; most likely by an encroachment agreement between the two owners rather than by re-subdividing the land, which would make the fence line the property line. I tell her I will call the developer. When I make that call and explain who I am and suggest that now is the time to solve the problem, the developer is very defensive. He insists he’s doing everything right and that his new home is properly placed. I agree that is probably true but it could be an issue. He then tells me that he is only the builder and not the owner of the lot. I ask him if the owner knows about the fence/property line issue. He says, “No!” I asked him if he is going to advise the owner and he doesn’t have a straight answer. Unbelievable!

So, that’s where it stands at the current time. What does it mean for us buying investment properties or, really, any kind of property?

When you have issues with encroachments and real property reports in Alberta, get yourself an experienced real estate lawyer. Contact Barry now!

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Before buying a piece of real estate, make sure to get an up-to-date survey of the property done by a professional. This report will help you to insure that there are no encroachments and that everything complies with municipal bylaws. This Tale illustrates the kind of problems that can occur if you don’t get a Real Property Report or Survey Certificate.

https://barrymcguire.ca/wp-content/uploads/2015/07/real-property-reports-1.mp3

Download the audio file HERE and the text/handout HERE.

Let’s do a quick review of this thing called the Real Property Report.

A Real Property Report or RPR is more commonly known as a Land Survey or Survey Certificate. It is a two-dimensional drawing of your property prepared by a professional land surveyor. This drawing precisely measures all of the improvements on your property including but not limited to house, garage, decks, hot tubs and fences. The size of each improvement is shown and how that improvement relates to your property lines. For example, how close is your house to the property line? What is the height of the deck and the deck railings, if any?

In Alberta, (but not Ontario or British Columbia), the standard Multiple Listing Service (MLS) or Alberta Real Estate Association (AREA) real estate purchase contract says that the seller must provide the buyer with a current real property report and written evidence of municipal compliance. Sellers often don’t have Real Property Reports. If they do have them, they are often unreadable or do not show the improvements on the property the way they are today. I often get calls where clients ask me, “the seller doesn’t have an RPR, do I really need one?” The answer is, “it depends” but, like lots of things in real estate, you have to analyze it further and do a little more diligence.

I was reminded of the importance of the Real Property Report when a small house in my neighbourhood was recently demolished and foundations poured for a new home. I love looking at new construction. So as soon as the foundation went in, I made sure my evening walk took me by the property. The first thing I noticed was that the foundation of the new home seemed to be awfully close to the neighbour’s property. The next night, I took my tape measure with me and measured from the new foundation to the wall of the neighbouring home.

The distance was 5’2″. City bylaws say that each home has to have a 4-foot side yard. In other words, there has to be 4 feet from the foundation wall to the property line. Therefore, the total between two homes should be 4 feet +4 feet equals 8 feet and we only had 5’2″. Uh oh, something’s not right. Surveyors had marked where the new foundation should be placed and I believe that the new foundation is properly placed with its 4-foot side yard.

The neighbour property is a revenue property and I’m sure the upstairs and downstairs tenants were shocked to come home one day and find that their sidewalk between the two houses had been torn up by the backhoe and deposited in the backyard. That’s not surprising since if the total distance between the two properties is 5’2″ and the new property is accurately located with its 4 foot side yard then the neighbouring property only has a 14 inch side yard. 14 inches! The eaves of the new property will actually overhang the neighbouring property. The eavestrough of the neighbouring property currently empty into the side yard and will have to be rerouted and the sidewalk will have to be relocated on the opposite side of the property.

I talked to the investor who owns the neighbouring property and asked him if he ever had a Real Property Report. He said no because he didn’t think he needed one. With a looming bill for new sidewalks, new eavestroughes, concern about a giant house very close to his property that takes away light and the ability to do further development on his existing property, he now understands why a real property report would have been of great assistance when he was purchasing this investment property. This Tale illustrates just one of the many aspects and issues surrounding RPRs and we haven’t even touched on municipal compliance.

If you’re dealing with Real Property Reports in Alberta, get an experienced real estate lawyer on your side. Contact Barry now!

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