Real Estate Terminology

The following is a list of Canadian real estate terminology commonly used in Kelowna, and the Okanagan region, in British Columbia. These are not legal definitions, but rather educational guides.

Accepted Offer

Upon agreement of both parties, the offer becomes legally binding.

Adjustment Date

The date on which the Vendor and Purchaser have agreed to share any liabilities which may be attached to the property. The most common example is property taxes, which are paid yearly.

Amortization Period

The length of time that it will take to pay off a loan when making equal monthly payments (including interest).

Appraisal

A professional report prepared by a certified appraiser. An appraisal provides a Market Value Estimate of your property based on recent comparable sales in the area, and a physical assessment of your home.

Assessed Value

The monetary amount that a B.C. Assessor values a property, and it's improvements (buildings & fixtures) for property tax purposes.

Please note that this value is very different than Market Value.

Bareland Strata vs. Building Strata

In a BARELAND STRATA, individual owners purchase their entire home and lot -making the homeowner responsible for all maintenance, repairs, and insurance. Homeowners will also contribute to a strata corporation that maintains, repairs and insures the common areas of the property.

In a BUILDING STRATA, individual owners purchase their unit only - making the homeowner responsible for maintenance, repairs and insurance ONLY within the boundary of their unit(which is defined in the strata plan). Homeowners will also contribute to a strata corporation that maintains, repairs and insures the common areas of the property.



Building Scheme

A charge registered against the property showing restrictions as to what buildings can be errected on a property, and/or how they may be displayed.

Certificate of Pending Litigation

A document registered against title to a property which indicates that a law suit has been commenced. The person who started the law suit and filed the Certificate of Pending Litigation is claiming an interest in the property.

Charge on Title

An interest in land (less than the fee simple estate) or encumbrance that is registered on the title by the LTSA’s land title office.

Claim of Builder's Lien

The claim that is registered against the title of the property, for unpaid materials supplied and/or work done by a contractor, and is valid for one year from the date of registration.

Clear Title

A property that is not subject to any financial encumbrances. There is no money owing against the property. A property's title almost always must be 'clear' in order to be transferred.

Common Property

Any part of the land and buildings that is not part of a strata unit is common property. For example, in a condominium, common property typically includes hallways, elevators, recreational amenities and building exteriors such as the roof.

Completion Date

The date when the documents necessary to transfer title must be registered in the Land Title Office. Also called the Closing Date. This is also the date when the money changes hands from the Purchaser to the Vendor.

Contingency Period

The period between the date of the Accepted Offer, and the Subject Removal Date. This is the period of time the Purchaser has to complete their due dilligence on the property before they legally become the owners of the property.

Contingency Reserve Fund

The contingency reserve fund (CRF) is funded through the strata fees, and is used for common expenses that usually occur less often than once a year or that do not usually occur. Examples of CRF expenses include such things as: replacing the roof, upgrading the elevator or repaving a road.

Contract of Purchase and Sale

The agreement executed by the Vendor and the Purchaser outlining the terms upon which the Property is to be transferred. Once agreed on by both parties, this is a binding Contract containing the conditions of sale.

Conveyance

The process involving the transfer of ownership of property from the Vendor to the Purchaser (including the preparation, execution and registration of documents to effect the transfer).

Counter Offer

A proposal of changes made to an offer supplied by another party. This is a part of the negotiation process.

Covenant

Covenants or restrictive covenants – must be “negative” obligations restricting what an owner can do on the lands and, similar to easements, there must be a dominant (benefited) lands and servient (burdened) lands.

Deposit

A sum of money paid by the Buyer to the Vendor to show their commitment to the purchase, and it is usually a percentage of the total price of the property. In most cases, the deposit will be held in a trust account until the sale is complete.

Down Payment

A down payment is a sum a Purchaser pays upfront when purchasing a good such as a home. It represents a percentage of the total purchase price, and the balance is usually financed. A down payment can significantly reduce the amount the borrower owes to the lender, the amount of interest they will pay over the life of the loan, and monthly payment amounts.

Duplicate Certificate of Title

A duplicate of the Certificate of Title is a document which may be issued by the Land Title Office, but only at the request of the registered owner and only if the property is free from any encumbrances, i.e. no Mortgages or Agreements for Sale registered against the property. The duplicate Certificate of Title must be returned to the Land Title Office before any further documents are registered on the title.

Easement

A benefit which owners of one piece of property have over an adjoining piece of property.

Equity

The amount of the money left over after subtracting the amounts owing on all financial charges registered against the property from the fair market value.

Freehold Ownership

Occasionally referred to as ‘fee simple,’ a freehold title grants the owner full use of, and control over, the land and/or buildings they have purchased. While this use is still somewhat limited by local by-laws and some other stipulations, a freehold title generally grants owners the most freedoms.

Foreclosure

A law suit commenced in Supreme Court by a Lender once a default occurs in a mortgage.

Form B

When referring to a mortgage - this is the document of the mortgage which shows the details of the mortgage. This is where the terms of the mortgage (names, amount borrowed, length of term, interest rate, etc.) are displayed.

When referring to a strata - this is the document provided by the strata corporation that states the ownership of designated areas of the corporation. This will state the unit/lot number, and outlines the homeowners interest in any other areas of the strata such as parking and storage.

Home Inspection

A limited, visual examination of the current condition of a building. A home inspection is designed to report observed deficiencies within specific systems and components of a home that are not apparent to the average eye.


Joint Tenants

A form of ownership of property. In this form, parties have an equal undivided interest with a right of survivorship. The right of survivorship simply means that when an owner becomes deceased, their ownership passes to the survivor, regardless of any terms in a Will. This form of ownership is frequently used when family members (husband and wife) acquire property.

Leasehold Ownership

Essentially, purchasing a leasehold property gives you the right to possess the property until the end of the lease, or you sell it to someone else. However, whilst you may own the home/condo unit, usually either the government or First Nations own the land; which may be restricted by their own bylaws.

Legal Description

Description of real property as recorded in the Land Title Office (not the street address).

Lender

The individual or company who has provided the Buyer with their mortgage loan.

Lien

An interest in land claimed to secure the payment of a debt or the performance of some other obligation.

Limited Common Property

Limited common property (LCP) is common property that has been designated for the exclusive use of one or more strata units. For example balconies and parking spaces may be designated as limited common property.

Market Value

The monetary amount that a property would sell for in the current local market conditions.

Please note that this value is very different than Assessed Value.

Mortgage

A document which represents a loan secured by land. These are almost always registered in the Land Title Office as a financial charge. A mortgage is comprised of two parts, the Form B and the Standard Mortgage Terms.

Offer

A proposal made by one party to another with the intention of creating a legally binding agreement. The offer must be clear, definite, and communicated to the other party. An offer never becomes a binding agreement until it is agreed upon by both parties to.

P.I.D. - Parcel Identification Number

A nine-digit number that uniquely identifies a parcel in the land title register of British Columbia. The registry assigns PID numbers to parcels for which a title is being entered in the computer register as a registered title. The Land Title Act refers to the PID as the permanent parcel identifier.

Possession Date

Date on which the Purchaser is entitled to move in and take physical possession of the property.

Power of Attorney

A document allowing one person to execute documents on behalf of another. If a Power of Attorney is used, the original must be filed at the Land Title Office.

Purchaser (Buyer)

Person who receives interest in property in exchange for legal consideration (payment).

Restrictive Covenant

A charge registered on title to land which documents a promise made by the Owner to another not to do certain things on the Owner’s land.

Right of Way

A charge registered on title allowing a party access rights to the property. A Right of Way is limited to certain benefits, such as power poles, telephone poles, sewer, etc. and can only be filed by persons defined in the Land Title Act.

Special Levy

Assigned by Unit Entitlement, this is each units share of a strata corporation expense or liability. This is usually a single payment.

Statement of Adjustments

A document for each of the Purchaser and Vendor showing how much the Purchaser must pay and how much the Vendor will receive on the Adjustment Date.

Strata

Commonly known as a condominium or townhouse. A lot comprised of one or more building(s), and 2 or more units, where owners own their individual unit, and share an interest in the remainder of the building(s) and lot, known as common property. 

Strata Council

The Strata Council is comprised of a team of strata unit owners that manage the strata corporation on behalf of all of the owners. It carries out the duties and affairs of the strata corporation between general meetings, usually at strata council meetings.

Strata Fees

Assigned by Unit Entitlement, this is each units share of strata corporation expenses and liabilities, usually billed on a monthly basis.

Strata Lot/Unit

A strata lot is owned individually by the owner(s) and is often referred to as a strata unit.

Subject Removal

The agreed upon date by which the Purchaser must complete their due diligence on the subjects (or conditions) that were offered in the original contract. 

Survey Certificate

A drawing prepared and signed by a BC Land Surveyor which identifies the boundaries of the property and the location of the home inside the property lines.

Tenants in Common

A form of ownership of the property. Unlike Joint Tenants, there is no right of survivorship. What this means is that each party on title may leave their interest to whomever they choose in their Will. This form of ownership is frequently used when business partners (not family members) acquire property.

Title

A certified document issued by the Registry of the Land Title Office stating the ownership of a property, and the charges. Also referred to as a land title.

Unit Entitlement

Unit entitlement is a mathematical calculation, often based on square footage, assigned to each strata unit that determines the share of common property and assets belonging to each strata lot. It is a key factor in the share of strata corporation expenses and liabilities of each strata unit owner including strata fees and special levies.

Vendor (Seller)

The person who is selling their interest in property for legal consideration (payment).

The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are member’s of CREA. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by CREA and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.