Casual Legal: The importance of being earnest & accurate

DISCLAIMER: This article is meant to provide information to Alberta Municipalities members only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated. This content is not intended for the general public.

By Daina Young
Reynolds Mirth Richards Farmer LLP
Alberta Municipalities Casual Legal Service Provider

It is common for municipalities to undertake to provide Certificates of Compliance in relation to lands within the municipality. The typical procedure is for a person requesting a Certificate of Compliance to submit a Real Property Report (RPR) to the municipality, showing the location of improvements on the property.

The municipality will review the RPR to determine whether it is compliant with the applicable municipal requirements and issue a Certificate of Compliance if the RPR shows that the property is compliant. Certificates of Compliance are usually requested and relied upon by purchasers in real estate transactions. They are a valuable service that municipalities provide, but one which much be undertaken carefully.

When a municipality issues a Certificate of Compliance with respect to a property it is making a representation with respect to the compliance of the property with the applicable municipal requirements, which it is reasonably foreseeable the purchaser of the property will rely upon. To the extent that the municipality’s representation is inaccurate or misleading, and a purchaser suffers loss or damages as a result, there is the potential for the municipality to be liable to the purchaser for damages on the basis of the tort of negligent misrepresentation.

Any municipality that issues Certificates of Compliance should have procedures in place to ensure that there is clarity in terms of the scope and content of the review process, and that it is clearly communicated throughout the process what the municipality is and is not reviewing. A Certificate of Compliance will typically certify that the improvements shown on a RPR are compliant with the setback requirements in the applicable land use district in the municipality’s Land Use Bylaw. If that is the extent of the municipality’s review of a RPR, the Certificate of Compliance (or another method of confirming compliance, such as a stamp of compliance) should clearly identify that what is being certified is that the improvements shown on the RPR are complaint with the setback requirements in the applicable land use district. A municipality should avoid using language in a Certificate of Compliance which indicates that the property shown in a RPR is compliant with the Land Use Bylaw generally, given that the review process does not typically include a review of all potentially applicable provisions of a Land Use Bylaw (for example, in relation to use, which is something that cannot typically be ascertained through the review of a RPR).

During the review of a RPR submitted in support of a request for a Certificate of Compliance, a municipality may also undertake a review of whether any of the improvements shown on the RPR encroach onto adjacent lands and/or utility right of ways and other easements registered against title and shown on the RPR. If this is included within the scope of a municipality’s review, the municipality should clearly identify that its comments in relation to encroachments are limited to what is shown on the RPR so that a person relying upon a Certificate of Compliance understands that the municipality is not commenting on compliance with any utility right of way or easement which is registered against title but which is not shown on the RPR. If encroachments are not within the scope of the municipality’s review, the documents used as a part of the Certificate of Compliance process should reflect this.

To access Alberta Municipalities Casual Legal Helpline, Alberta Municipalities members can call toll-free to 1-800-661-7673 or casuallegal [at] abmunis.ca (email) to reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, please call 310-MUNI (6864) or riskcontrol [at] abmunis.ca (email) to connect with Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.