BC Real Estate Trading Services Course Title Registration and Land Use Questions and Answers — Questions and Answers
Question 1: A prospective buyer is reviewing a title search for a property in British Columbia and notes a restrictive covenant registered in 1995 that prohibits the construction of any secondary suites. The local municipal zoning bylaw was updated last year and now permits secondary suites in this area. Which of the following statements is most accurate?
- The municipal zoning bylaw overrides the restrictive covenant, allowing the construction of a secondary suite.
- The restrictive covenant is automatically void because it conflicts with current zoning.
- The restrictive covenant is a private contractual agreement that runs with the land and remains enforceable despite the change in zoning. (Correct answer)
- The buyer can apply to the Land Title Office to have the restrictive covenant removed based on the new zoning bylaw.
Correct answer: The restrictive covenant is a private contractual agreement that runs with the land and remains enforceable despite the change in zoning.
Restrictive covenants are private agreements that are registered on title and 'run with the land,' binding subsequent owners. They operate independently of, and in addition to, municipal zoning bylaws. A change in zoning does not automatically invalidate a more restrictive private covenant. While there are legal processes to modify or discharge a covenant, it is not automatic and remains enforceable by the parties who benefit from it.
Question 2: In British Columbia's Torrens land title system, what is the primary significance of the principle of 'indefeasibility'?
- It guarantees that the property boundaries as described are absolutely correct and cannot be challenged.
- It ensures that all historical deeds and transfers related to the property are valid.
- It means that the registered owner's title is conclusive evidence of ownership, subject only to certain statutory exceptions. (Correct answer)
- It confirms that the property is free and clear of all financial charges and liens.
Correct answer: It means that the registered owner's title is conclusive evidence of ownership, subject only to certain statutory exceptions.
The core principle of indefeasibility in the BC Torrens system is that the person named on a Certificate of Indefeasible Title is the true owner, and their title is conclusive evidence of ownership. This guarantee by the province allows parties in a transaction to rely on the accuracy of the Land Title Register. The title is subject to certain exceptions listed in the Land Title Act, such as fraud in which the owner participated, certain taxes, and other specific statutory charges.
Question 3: A buyer is purchasing a strata townhouse in Kelowna. The REALTOR® points out that the unit's parking stall and private backyard are designated as 'Limited Common Property' (LCP) on the strata plan. What does this designation imply for the buyer?
- The buyer will own the parking stall and backyard as part of their strata lot's fee simple title.
- The strata corporation can reassign the use of the parking stall and backyard to another owner at any time.
- The buyer has the exclusive right to use these areas, but they are still owned collectively by all strata members. (Correct answer)
- The buyer is solely responsible for all major structural repairs and replacement costs for the parking stall and backyard.
Correct answer: The buyer has the exclusive right to use these areas, but they are still owned collectively by all strata members.
Limited Common Property (LCP) is part of the common property that is designated for the exclusive use of one or more specific strata lots. While the buyer gets exclusive use rights, the ownership of LCP areas remains with the strata corporation on behalf of all owners collectively. Typically, the owner is responsible for routine maintenance, while the strata corporation handles major repairs, although bylaws can modify these responsibilities.
Question 4: Which of the following is a non-financial charge that a buyer would typically expect to 'run with the land' and remain on the title after purchasing a property in BC?
- The seller's existing first mortgage.
- A builder's lien filed by an unpaid contractor.
- A judgment registered against the seller for an unpaid debt.
- A statutory right-of-way in favour of a utility company. (Correct answer)
Correct answer: A statutory right-of-way in favour of a utility company.
Non-financial charges typically relate to the use of the property and remain on title after a sale. A statutory right-of-way is a common example, granting a utility company the right to access a portion of the property. Financial charges, such as mortgages, builder's liens, and judgments, are debts of the seller and are required to be paid out and discharged from the title by the seller on or before the completion date so the buyer receives clear title.
Question 5: A client is interested in purchasing a 10-hectare property located within British Columbia's Agricultural Land Reserve (ALR). They want to build a large primary residence and a separate cottage for their parents. What should a real estate licensee advise them?
- There are no provincial restrictions on the size or number of residences that can be built on ALR land.
- They must apply to the Agricultural Land Commission (ALC) for permission to build any residence.
- Provincial regulations limit the size of a principal residence and may permit an additional, smaller residence, subject to local government bylaws. (Correct answer)
- Building more than one residence on ALR land is strictly prohibited under all circumstances.
Correct answer: Provincial regulations limit the size of a principal residence and may permit an additional, smaller residence, subject to local government bylaws.
The Agricultural Land Reserve (ALR) has specific rules regarding residential use to prioritize agriculture. There is a maximum size for a principal residence (currently 500 square metres) without needing special ALC approval. Regulations also permit one additional residence on the property, with its size depending on the overall parcel size, provided it also complies with local government or First Nation government laws.
Question 6: During a title search, a 'legal notation' is found on a property's title. How does a legal notation differ from a 'charge'?
- A legal notation always represents a financial claim against the property, whereas a charge does not.
- A legal notation and a charge are identical in effect and the terms are used interchangeably.
- A legal notation is an informational entry that does not affect the property's use or transferability.
- A legal notation provides information about an interest or restriction but is not an encumbrance like a charge, though it can still significantly affect the title. (Correct answer)
Correct answer: A legal notation provides information about an interest or restriction but is not an encumbrance like a charge, though it can still significantly affect the title.
Legal notations are distinct from charges on a BC land title. They are informational endorsements that document interests, legislative matters, or restrictions affecting the title, but they are not considered encumbrances in the same way as a charge (like a mortgage or lien). A common example is a notation indicating the land benefits from an easement over an adjacent property. While informational, they can have a significant impact and must be reviewed carefully.
BC Real Estate Trading Services Course Title Registration and Land Use Questions and Answers
A prospective buyer is reviewing a title search for a property in British Columbia and notes a restrictive covenant registered in 1995 that prohibits the construction of any secondary suites.
The local municipal zoning bylaw was updated last year and now permits secondary suites in this area.
Which of the following statements is most accurate?