Real Estate Definitions
Accepted OfferWhen an offer to purchase a home is written it is typically negotiated to a point where both the Buyer and the Seller agree on price and other terms. At this point, the contract becomes an Accepted Offer.
AddendumA document that changes or adds to the terms or structure of an existing contract.
Agency RelationshipThe relationship between a licensed agent and a member of the public. In BC, we have designated agency, limited dual agency and no agency relationships. An overview of agency relationships is provided here: Real Estate Board of Greater Vancouver – Agency Relationships
Agricultural Land Reserve (ALR)The Agricultural Land Reserve (ALR) Commission is an independent body who is tasked with preserving agricultural land and encouraging use of the preserved land for farming purposes. They designate land parcels that are to be protected from development/subdivision and used for agricultural purposes only. For more information on the ALR, including maps of ALR designated land, visit http://www.alc.gov.bc.ca/alc/content/home
Annual General Meeting (AGM)The Strata Property Act (Strata Property Act – Website) compels all strata corporations to hold a meeting annually in which all owners are allowed to attend. It is during these meetings that an annual budget is approved, the strata council is elected and other motions are voted on. In order for any motions to be approved, they must do so with 75% of owners in favour of the motion.
Appraisal/AppraiserA third party, unbiased report that is used to aid in determining market value of a property. Commonly used by banks/lenders in conventional lending scenarios or for refinancing mortgages. Further information and/or to find an appraiser in your area, visit: Appraisal Institute of Canada
AsbestosAsbestos was a fibre commonly used in construction typically prior to the 1980s. It has been found to cause mesothelioma and its use has been banned in many countries. For information on asbestos visit Canadian Centre for Occupational Health and Safety – Asbestos and for information on asbestos removal and testing, visit Asbestos Vancouver
AssignmentOccasionally a Buyer will sell their rights (contract) to a property to a third party prior to the sale finalizing (completing/closing). For example, if a Buyer purchases a property prior to it being built and the value rapidly increases prior to them taking possession, some speculators may attempt to sell that contract to another Buyer for a profit.
Bare Land StrataA bare land strata is a strata development, typically consisting of detached homes, where the owner of a home will usually own the structure and the lot on which the structure rests but will pay a monthly fee to contribute to the maintenance of common area components such as roadways, sidewalks, lighting, gardening etc.
Breach of ContractThe breaking of or failure to perform a material term of a contract.
Builder’s Lien HoldbackA builder’s lien is used when selling/purchasing a newly constructed property. It provides that for a period of 55 days after the transfer of title from builder to buyer, a portion of the sale proceeds is held back from the builder to account for any liens registered to the property title as a results of unpaid trades. For further information on the Builder’s Lien Act, visit Real Estate Council of BC – Builder’s Lien
Building EnvelopeThe exterior components of a building, including but not limited to siding, windows, doors, roof, walls etc. For a general overview, see Building Envelope – Wikipedia
Building SchemeA charge on property titles typically used when a sub-division is approved to ensure that the homes within the sub-division are built to a similar style and/or standard. See the following document from Coldstream, BC for a great in-depth description: Building Scheme Explanation – Coldstream, BC
BylawsA set of regulations that a strata corporation has in place to regulate the use of strata properties. Bylaws can be amended or added to as time passes, provided these changes are approved by 75% of the owners by a vote at an Annual or Special General meeting. Information on strata bylaws and restrictions can be seen at Strata Bylaws and Rules. A generic set of strata bylaws can be found here: Strata Property Act – Standard Bylaws
ChattelsA chattel is the term used to describe personal property which is not an included part of real estate. Generally speaking, if it can be picked up and moved, it is a “chattel” rather than a “fixture”. A great article on the difference between the two can be found here.
Common PropertyAreas within a strata development that are jointly owned and used by all the owners in a strata corporation. Examples include, hallways, walkways, areas within a parkade, playgrounds, recreation areas. A great site to further define Common Property is Common vs Limited Common Property
Comparative Market Analysis (CMA)Agents who are planning on determining a market value for a property will run a Comparative Market Analysis (CMA) or an Evaluation on that property. This CMA will take into account basic criteria like geographical location, age, size, lot size, style of home and condition of home. This will then be compared to other properties that are both for sale (what the market has not absorbed) and have been sold (what the market has absorbed) in a close window of time where the market conditions were similar. The variables of the property are taken into account and a market value is determined.
Completion DateCommonly referred to as “Closing”, this is the date in which the title to the property is transferred from the Seller to the Buyer and the proceeds of sale are transferred from the Buyer to the Seller. At this point, the Buyer will be the registered owner of the property and it is imperative that they have their home insurance policy in place.
Condition(s)Also referred to as “Subjects”. These are terms in the contract that must be fulfilled and removed by whomever they are for the benefit of (either the Buyer or the Seller or both) prior to an accepted offer becoming firm and unconditional. Common conditions include Financing, Inspection, Document Review etc.
Contingency Reserve Fund (CRF)A Contingency Reserve Fund (CRF) is used by strata corporations to bolster savings that will be used for common expenses/projects/repairs that occur less than once a year or on an emergency basis. More information on the CRF can be found at the following site: Contingency Reserve Fund Info
Contract of Purchase and SaleThe commonly used contract that is used by real estate professionals in BC to buy and sell property. A blank and generic copy of the basic residential contract can be viewed here: BC Real Estate Association – Residential Contract Sample
Conveyance(er)The process of preparing documentation and information for the completion of a purchase or sale. Each real estate office has a conveyance department that ensures paperwork is sent to the applicable lawyers, calculations are correct and sent to other parties and that everything is ready in time for the title to transfer and the sale to complete.
Court ApprovalCourt approval is sometimes required when a bank/lender has been forced to sell a property to recoup their loan to a delinquent borrower. In this case, any offers made on the property must be approved by the Supreme Court prior to a sale being confirmed. These types of sales are also known as foreclosures.
CovenantA promise/guarantee from one party to another relating to land/structure use in regards to real estate. Here is a deeper explanation of covenants: Covenants – Wikipedia **Please note that BC uses the Torrens land system which is closest to the land system used in the United Kingdom.
DepositThe funds used to secure a property, also known as “goodwill money”. While a deposit can be any sum or anything given in consideration, most real estate offices in BC have been requesting that Buyers tender an amount equal to or greater than 5% of the purchase price. Typically, a deposit on resale properties is only tendered once all conditions have been removed from a contract.
Designated AgencySee “Agency Relationships”
Down PaymentThe amount of money that a Buyer must have to contribute towards the purchase price of the property. The balance of the purchase price can be mortgaged from a bank/lender upon their approval.
When purchasing a new construction property, prior to the completion date the Buyer and builder will walk through the home and identify any deficiencies that are present. Once a list of these deficiencies are agreed upon both parties will sign off on them and the builder will work towards repairing/rectifying these items within a reasonable time period. More information on new construction deficiencies can be found here.
EasementAn easement is a charge on a property title that typically grants use of land to one party over another. For example, a hydro company may have an easement registered on the title of a property where their hydro box is located so that they are lawfully allowed to enter the property for the purpose of maintaining/repairing their hydro box. A deeper description of easments can be found at Legal Dictionary – Easement
Estate SaleWhen a property owner passes away, the rights to their estate pass to their appointed executor/executress. When the Executor(tress) sells that property it is known as an “Estate Sale”. Most estate sales are conditional upon probate proceedings through the court system. See Wills and Probate for further information.
FloodplainFloodplains are generally flat areas surrounding rivers/bodies of water that may be at an elevated risk of flood hazard. Here are maps of local floodplain areas:
Alouette River (Maple Ridge and Pitt Meadows)
Other Regions Menu
ForeclosuresWhen a property owner fails to pay their mortgage, the mortgage holder (bank or lender) will apply to the court for relief. The owner is given time to bring their account up to date. If the account is not brought up to date the court will then grant the bank/lender authority to sell the property in order to recoup the outstanding loan amount. Any funds remaining after the amount is paid back will go back to the owner after any other obligations are paid. Information on how a property goes into foreclosure is found at Foreclosure Help BC. See also “Court Approval”.
For information on how to purchase a foreclosure, visit our Foreclosure page for a step by step guide and tips.
Home InspectorsIt is highly recommended that a Buyer hires a home inspector prior to removing their conditions from an offer to purchase a property. A home inspector will review the major components of a property and identify issues that could cause a Buyer financial hardship. For more on what a home inspector will review, visit our Buyer Resources page. If you are looking for a home inspector, click here for a list of our certified and insured professionals.
Home Warranty InsuranceAny new construction homes built by licensed builders in BC must be covered by a new home warranty policy. This is a three stage warranty that covers various components of the property and expires on a staggered timeline.
At a minimum, home warranty insurance coverage includes:
- 2 years on labour and materials (some limits apply)
- 5 years on the building envelope, including water penetration
- 10 years on the structure of the home
The two-year labour and materials coverage covers any defect in labour and materials for:
- 12 months on detached homes and on non-common property in strata units (including fee simple homes)
- 15 months on the common property of strata buildings
- 24 months on all new buildings for defects when related to delivery and distribution systems, such as air conditioning, electrical, heating ventilation, plumbing, etc.
For further information including coverage limits, exclusions and exact definitions, please visit BC Housing – New Home Warranty
Homeowner Protection ActThe BC government established the Homeowner Protection Act to establish quality standards and consumer protection for new construction in BC. It implemented a builder registry and made home warranty insurance mandatory. Further information on the Homeowner Protection Act can be found at BC Housing – Homeowner Protection Act
Homeowner’s GrantThe BC homeowner grant is a benefit that can reduce the amount of annual property tax a property owner pays if they meet certain criteria. Amounts of the various grants and the criteria needed to obtain those grants can be found at BC – Homeowner Grant Info
Information Certificate (Form B, Strata Properties)More commonly known as a “Form B”, this form is issued by the strata corporation via the property manager upon request of an owner. It gives prospective purchasers a “snapshot” of the current financial and legal standing of a strata corporation.
Commonly found on a Form B:
- Maintenance fee amount.
- Amounts, if any, owing by the owner to the strata corporation.
- Amount currently in the Contingency Reserve Fund (CRF)
- Indication of any bylaw/regulation amendments passed but not yet registered.
- Any legal action the strata corporation is currently a party to.
- Parking stall and storage locker numbers.
- Amount of strata lots currently rented.
InsuranceThere are typically two types of insurance for real estate:
- Fire/property insurance – used for single family homes. Can be adjusted to fit the property and/or the owner’s choices.
- Content insurance – used for strata properties. As strata corporations must have fire/property insurance in place for buildings, a strata lot owner should have contents insurance in place to protect their belongings.
For a list of our recommended insurance professionals, click here.
Lease Land (Leasehold)A type of ownership where a Buyer would own the home but not necessarily the land upon which it rests. The land is leased to the owners of the homes on a long term basis and these homes can be bought and sold many times during and up until the expiry of the lease term. These are also known as “99 year leases” and are common for developments located on crown or native land. See Long Term Lease Properties for more details.
Letters ProbateWhen a property is sold on behalf of a deceased person, the executor/administrator of that person’s estate must have final approval from the courts in order to finalize the sale. They ensure that there are no other outstanding claims to the estate aside from those dictated in the last will and testament of the deceased. In the event that no will was left by the deceased, the courts take allow time for the estate to publish notices about the deceased’s death to allow for claims to the estate to be heard. Once the courts have satisfied themselves, letters probate are granted and the sale of the property can complete.
Levies (Strata Properties)Funds collected from the owners in a strata building in addition to their regular maintenance fees to be used for a shared and common expense. This occurs if there are not enough funds in the Contingency Reserve Fund (CRF) or if the owners feel that the strata corporation would be better served by approving a special levy rather than withdrawing from the CRF. It should be noted that a special levy can only be approved by the owners voting 75% in favour of said levy. More information on strata levies and the processes leading up to them can be found at Strata Special Levies
Limited Common Property (Strata Properties)Limited Common Property (LCP) are portions of a strata development that are designated as common (owned by all) but whose use is limited to that of a specific owner or strata lot. Some examples of LCP include but are not limited to: balconies, patios, yard areas, driveways etc. Please note that LCP is designated on a strata by strata basis and a review of the pertinent strata plan will identify the LCP designated within that particular development. A great site to use to determine the differences between Limited Common and Common properties is Common vs Limited Common Property
Limited Dual AgencySee “Agency Relationship”
Listing ContractThe contract used when a seller and a real estate brokerage enter into an agreement to have the brokerage’s designated agent market and sell the seller’s property. A sample of this contract can be viewed at BC Real Estate Association – Listing Contract Sample
Market ValueNot to be confused with “Tax Value”, the market value of a property is simply what a buyer will pay for a property at a specific time on the open market. It is usually determined by a Comparative Market Analysis (CMA) based on similar properties that have sold in the same time period as that illustrates what a buyer is willing to pay for that product. To determine the market value of your home, click here or visit: What’s your Home Worth?
Material Latent DefectA defect which is not typically discoverable by a reasonable visual inspection. Some examples of this include, but are not limited to: asbestos within walls, black mold in areas that are not accessible by a home inspector, previous undisclosed illegal substance cultivation. Information on the disclosure requirements of Material Latent Defects can be found at Real Estate Council of BC – Material Latent Defects
New Housing GST RebatesWhen purchasing a new build from a builder, GST applies on top of the purchase price. If purchased as a primary residence, a buyer is able to apply for a rebate on a portion of the GST, provided they and the property meet certain criteria. Information on criteria and qualification for this rebate can be found at the following sites:
A helpful calculator you can use to see rebate amounts can be found at GST Rebate Calculator.