City of Calgary now taxing on encroachments!
If you're thinking of selling or buying a detached home, the question of a survey will come up and this is an important read for anyone to consider... do you need a survey? or specifically maybe you don't want one.. Read on.
I've been an agent for 24 years now.. and I've actually helped a lot of people muddle their way through the survey process and get city compliance, but recently I had a chance to talk to a survey company as I had a complaint about their surveyor who classified my clients property as not being compliant and clearly the bylaw states that it is. This lead to a long discussion about the city and it's policies.
To go back a bit. I had a client who had a high end home, he bought it from the builder.. he had a lawyer to process the transaction, the builder provided a survey with a city compliance stamp and they released funds to the builder and bought the home.
About 6 years later the city was sending him letters stating that his property did not comply with city guidelines because of a retaining wall that the developer did that didn't have it's engineering permit closed out. The city demanded that this sandstone wall that was at the back of several properties on the street had to be brought into compliance or else. My client was in the midst of trying to sell his home with me and this was a big obstacle because, what buyer wants to own something that might have a substantial landscaping cost applied to it? The dilemma was.. the engineer who oversaw this wall died before he could close out the permit.
My ask to the city lawyer in development was : "if my client bought this home with a city compliance stamp, isn't the city liable for the fact that the property was misrepresented by the city stamp?" The city was culpable for this problem in my view.. most buyers wouldn't buy a property with a known problem that couldn't be resolved.
The city of Calgary lawyer stated "The city is not liable for this as they do not guarantee the validity of surveys" you might ask.. why demand a survey with compliance then? if it means nothing to the city? The reality is that the compliance stamp doesn't mean it's compliant and the city can change their minds at will.
The city is now raising taxes based on encroachments.. this is brand new.
So in my discussions with the surveyor on another property that I was arguing was compliant.. The surveyor alerted me to something new the city is now doing. If you have a permanent structure or landscaping over a utility right of way or a property line they can give you an encroachment agreement.. or an agreement that you don't need to change it.. but.. they're going to raise your city taxes to compensate them, or in other words, PAY RENT for the encroachment. Can you imagine, they arbitrarily change the rules.. then charge you rent on an agreement forever?
All of our real estate contracts demand that the seller provide a recent survey with compliance... but as I'm starting to see it now.. if there is no action on the property by the city, the best thing to do might be to have the seller and the buyer agree to either no survey or the old survey, and hear me out on this.
Let's say there's a nice patio on the property, the buyer loves it, the seller did a great job creating it. It's been there for 20 years. It may not be compliant. If the seller gets a new survey created to satisfy the contract, but the city then tells the seller he needs to take it down or alter it to get an agreement which raises the taxes on the property, does the buyer benefit from that? No.. The buyer would have to accept alterations to the deck or have it removed altogether. The buyer and seller might have to agree to a new price based on the increased future taxes on the home or the removal of something the buyer bought the property for!
Maybe in light of this we'll just let sleeping dogs lye and sell more properties without surveys, with full disclosure to the buyer, so the buyer can enjoy the property without notifying the city (that has never visited it) Your thoughts?
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