May 13, 2010, 7:45 am

Never Trust a Realtor!

by: The Financial Blogger    Category: Properties
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As I am writing this post, I can tell you that I am so upset that I am blue banana (this is one of my colleague’s expression 😉 ). On this very rare occasion, I really don’t feel like laughing or smiling. I have actually had to re-write this first paragraph 5 times to make sure it is appropriate for public consumption (this is why the blue banana came out!).

Last Thursday evening, I was watching my Montreal Canadiens dominated by the Pittsburgh Penguins and as they scored 2 goals out of nowhere to run away with the game, I was reading my certificate of localisation.

Right after accepting the offer on our house about a month ago, we realized that the certificate of localisation had to be updated since the one we had did reflect the current situation (we added cedars on one side of our land). However, we also noticed that we didn’t receive a valid certificate in the first place since the pool was not on it.

Back when we bought this house, we were pretty young (I was 25) and didn’t have much experience with these details. To be honest, back then, I didn’t even know what a certificate of localisation was for and the impact it has on a sale of house. Beside showing a small drawing of your house on a piece of paper, I couldn’t see anything else.

When we bought the house, there were 2 realtors implicated (the seller and the one we used to buy the house). They both told me that all the documents were in order! Since we had 2 realtors involved, I didn’t see it until we signed at the notary (lawyer). And even then, I didn’t realize anything, I was just super happy to buy my house and I trusted the “professionals” to prepare the transaction (professionals my …..! they really thought about their commission, and nothing else!)

What is a certificate of localisation?

The certificate is a very very very (did I write very) important document. It actually confirms that everything built on the land was done according to municipal laws. Therefore, they identify your house, patio, pool, fence and any other construction on your property. They measure to make sure that they don’t incur any problems and that they have been placed and built according to the laws enforced.

So you can imagine how important it is to have an updated and compliant document before buying a property. In fact, if the certificate of localisation is not compliant, this can delay the sale or even cancel it.

So it appears that my pool was installed at 1.38m from the fence!

And, obviously, the municipal rule for pool is 1.50m! So we are talking about a difference of the size of my hand! I think I am going to kick someone… the problem is that I don’t know who! I do deserve a good kick in the butt (but I am already got a slap in the face!). But the 2 agents and previous owner deserve the very same kick as well!

The most frustrating part is that they have to take the furthest post of the pool structure to make the calculation. Actually, the “pool” is at 1.50m, but there is a post that is closer…

What are my options?

I don’t know yet…. I am writing this article in the bus the morning after finding out that I there is a huge problem that is my responsibility.

I will now:

– call the guy who did the certificate to see if we can do anything

– call the notary to get her advice on the problem

– call the city to ask for a 12 cm exception!

– call a pool installer to move it by 12 cm if my 3 other calls don’t produce any bright ideas

– call the guy who did the certificate back so he can issue another one

– write a tons of checks to pay these people

– call one of my lawyer friends to see if I have a case against the previous owner.

– call the previous owner and let him know that he has a bill coming his way.

– get my money back

– drink a nice glass of wine on my new terrace of my new house ‘cause I will solve the problem this very morning!

More info on my situation to come soon…. ARGH!

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As a general rule of thumb I distrust anyone who is paid on commission but this seems like a pretty big “oversight” for a pretty small problem. Luckily I don’t have to worry about anything like that here in the states but I am willing to bet that the 12cm difference can be worked out with minimal mess.

@ Kyle,

I woud normally agree that 12cm should not be a big mess but when your buyers are bugging your for hook holes in your doors… 12 cm seems a like a big problem coming up 😉

It takes time to build trust! Meeting a realtor and dealing with them once can’t create a trust even if they are licensed. In my book, it’s always better to do your own research. However, you only know what you know and this is where life experience comes in. Building codes, city laws and so forth add so much complication and many people do the work just good enough, just short of perfect.

I hope you sort it all out. Best of luck!

Unfortunately you are stuck.

As for getting at the realtors you can’t because I’m sure when you signed the documents they had a little line that said something to the effect that “measurements are to be verified by the buyer” which in your case was you. It was your responsibility to do your due diligence, although I do agree your realtor has some responsibility here to do their “fiduciary duty”. It will never stand up in court, however.

Best bet is to get an easement at your bylaw office. Only problem with these types of easements is you will have to get a bunch of your neighbors to sign off on it.

Sorry to hear you’re having this issue. Hopefully, the solution will be a simple (and cheap) one.

by: The Financial Blogger | May 14th, 2010 (4:35 am)

I have more update to come next week….stay tuned!

I had a similar issue few years ago. Ultimately, those who sold you the house were responsible to sell a property without irregularities (vice caché). They are therefore responsible to fix the problem. They can either remove the pool (at their own cost) or ask the city council to accept an exception (dérogation mineure, which costs about 1000$ and takes a few months).

Notaries are usually quite helpful in this process.

Don’t stress too much. The only thing you’re going to lose is time.

I like the title, but notice that a couple of your options involve lawyers. I predict future blog entries with headlines like “Lawyer sucked my blood”, or “Lawyer solves a $500 problem for $3,000”.

I just had to sign a release after a court settlement in a lawsuit, here was what the lawyer wrote:

KNOW ALL MEN BY THESE PRESENTS THAT I, of the City of Montreal, in the Province of Quebec, have remised, released and forever discharged, and by these presents do for myself, my heirs, executors, administrators and assigns, remise, release and forever discharge , their successors and assigns, of and from any and all manner of
action and actions, cause and causes of action, suits debts, dues sums of money, claims and demands whatsoever at the law and in equity which I ever had, or now have, or which I , or my heirs, executors, administrators or assigns hereafter can, shall or may have by reason of any matter, cause or thing whatsoever existing up to the present time, and in particular, but without restricting the generality of the foregoing:

Lawyers are awesome! Imagine if I had tried to foolishly write my own release. I might have said “Everything that happened between us up to today is resolved by the $XYZ you’re paying me now, and only that.” That could leave the door wide open for my dead grandmother to come out of the grave and sue the guy! Thank goodness. The lawyer probably charged $500 to generate that, collect the signatures, and handle the money.

Did you buy title insurance on the purchase? That should cover you, they will likely deny, but if you enforce you will be covered…if something is not built to code, title did not legally pass and you should have a claim…assuming you bought it…

by: The Financial Blogger | May 15th, 2010 (6:37 am)

yeah… lawyers are pretty expensive too! The only positive point is that I know a lot of them so I should get a “rebate” ;-)…

@ Debbie,

this is a very smart idea and I should have bought insurance on my title. However, back then, I didn’t know it exist.

Yeah, I have lawyer friends too, but they won’t do much for free other than maybe give a little advice.

…it sounds like the certificate is the equivalent of a survey and a titles search in a common law jurisdiction. If so, it is actually your lawyer’s job to do those searches or you can rely on title insurance if it falls within the policy terms and conditions (I don’t know how conveyancing works in Quebec so there may be jurisdictional differences).

In many jurisdictions, you can attend a committee of adjustments and have them accept the variance. It appears to be minor. Again, title insurance may cover the cost of this process. Better pull out your closing docs and look at the policy.

Good luck.

by: The Financial Blogger | May 18th, 2010 (4:35 am)

@ TMW,
insurance title would have been the best option… but the problem is that we now know there is a title defect so it’s kinda hard to get insured on something you know it exist already…

However, I got my problem settled! (see post of this morning)