In our standard residential purchase contract, the buyer accepts easements, utility rights-of-way, and other covenants per section 5 of the contract. Usually, these are not a concern. Often these documents don't require any review. A recent court case, however, shows why sometimes a closer look is important.

What You Need To Know

Any registration or encumbrance registered on a title can affect owners or sometimes adjoining owners. And, just because a registration or encumbrance has been on title for a long time doesn't mean it can be ignored! It is important to review the title of any property being purchased based on your clients' plans. What strings or limitations might be attached? If there is anything you aren't sure of, talk to your real estate lawyer for advice and implications!

The Court Case

In Bairn Corporation v. Gabert, the Court was asked to determine whether a right-of-way from 1930 allowed a company to build an access road across another person's farmland. 

In 1930, a signed right-of-way agreement allowed access from wilderness land owned by the Canadian Pacific Railway, across the Gabert farm, to a nearby public road. The CPR lands have changed hands among companies over the years, and the Gabert farm has been passed down through generations. 

Now, the company that owns the CPR land intends to build houses on the land and wants to use the right-of-way to build an access road across the Gabert farm. The Gaberts, of course, didn't want a road through their farm based on a document signed decades ago! 

The Court reviewed the right-of-way agreement, looking at the context when it was signed. Luckily for the Gaberts, it was determined that the right-of-way only related to a water pipeline and could not be used for a residential road. Critical information/interpretation for the Gaberts and any potential purchaser of their land.

Protect yourself.

Cheers,

Barry + Reid

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