When buying property in smaller communities and rural areas, understanding the difference between a Real Property Report (RPR) and Title Insurance is essential for making informed decisions. Both are tools that protect your investment, but they serve distinct purposes and offer different kinds of protection. Here we will explore those differences and their common standing within a real estate transaction in the Lakeland area.

What is a Real Property Report (RPR)?

A Real Property Report is a detailed survey of a property that shows its boundaries, structures, and any potential issues, such as encroachments. Essentially, it provides a clear snapshot of the property’s legal description and layout at a specific point in time. The key elements of an RPR include:

• Property Boundaries: The RPR clearly defines where a property begins and ends, ensuring that there are no misunderstandings with neighboring landowners.

• Structures: The RPR identifies the location of buildings, fences, driveways, and other structures to ensure they are positioned correctly within the property’s boundaries.

• Encroachments: The report can reveal if any part of the property or neighboring property crosses over into someone else's land, which can prevent future disputes.

What is Title Insurance?

Title insurance protects against legal issues related to the ownership of a property. It is generally a one-time premium paid that covers risks that could affect the validity of the title, including:

• Unpaid Liens or Debts: If the previous owner left unpaid property taxes or debts tied to the property, title insurance ensures you're not held responsible for them.

• Fraud or Forgery: Title insurance also protects against any fraud or forgery in past property transactions that could affect your ownership.

• Unresolved Ownership Disputes: In rural areas, properties might have complex histories or ownership disputes, and title insurance can protect you from legal challenges or claims on the property.

What’s best for you?

While neither a Real Property Report nor title insurance are legally required for a real estate transaction in Alberta, both are commonly used, and it’s generally recommended that a buyer obtains at least one of these two options to protect themselves from unforeseen Land Title issues.

In rural and small community settings like we have in the Lakeland, where properties may have been in the same family for generations or developed over time without modern surveys, it is very common for a property to not have an up-to-date RPR, if there’s one at all. In addition, because of limited access to professional surveyors, an RPR can be costly and time-consuming to obtain. For this reason, it has become common practice for a seller to include a term in a purchase contract where they pay for title insurance on the property in lieu of the RPR. This is often a much more convenient and cost-effective way to guarantee protection for the seller.

While an RPR addresses physical and boundary issues, title insurance ensures that the buyer is legally protected in the event of a dispute over ownership, which can be particularly valuable in areas where property transactions may not always be well-documented or where old records might be missing or unclear.

A buyer may see it in their best interest to obtain both an RPR and title insurance from the seller to have a clear understanding of what they’re buying coupled with the protection against title discrepancies, but in practice, it is most commonly a one or the other scenario. Regardless, it is a great benefit to have a clear understanding of the two options and the role they play in a successful real estate transaction.