Long delays at Alberta Land Titles office slowing down real estate transactions
Service Alberta working to address backlog, says number of transactions has surged
Transferring property from one owner to another is taking a lot longer in Alberta than it used to.
According to the provincial government's land titles website, the office is currently registering land title documents received on Feb. 4 and survey plans and documents received on March 2.
Lou Pesta, a Calgary real estate lawyer with Parlee McLaws, said the typical turnaround time during his 40-year career has been two-to-five days and as long as two weeks during peak times.
"One of the lawyers did a little bit of research online and discovered that we were taking much longer than some Third World countries in terms of registration times right now, which, frankly, is embarrassing for a province like Alberta," he told CBC News on Thursday.
Professionals in the real estate, law and land surveying industries say the title registration delays have yet to derail deals, but they are holding up certain types of real estate transactions. They are also a looming problem for municipalities, which send out property tax bills this month.
Why are titles important?
A land title is a document that proves ownership of a piece of land.
Without it, parties in real estate transactions are in limbo between the date of sale and the purchaser taking possession, said Jim McKinnon, a partner at AICRE Commercial in Edmonton.
"It's another impediment or another thing in the way of a deal happening," said McKinnon, who first noticed title delays last summer and saw them increase through the fall and winter.
Because of the delays, he now recommends all purchasers have title insurance.
Title insurance is a type of policy that can protect property owners from title-related problems, including liens against a property, title fraud and surveying mistakes. It also allows money to exchange hands before a land transfer is finished.
Another workaround is the Western Law Societies' Conveyancing Protocol — an arrangement that allows mortgage funds and sale proceeds to flow before the title is registered — but the protocol doesn't apply to commercial properties.
A problem for municipalities
Because cities don't have data on property ownership changes during the past few months, property tax invoices may not reach the right people when they are mailed out later this month.
"Homeowners have to track down the tax bills to pay them on time in June, which could be a problem this year with some people falling through the cracks and potentially being penalized for late property tax payments," Pesta said.
Some cities, including Cold Lake and Airdrie, are advising property owners to submit new property information online.
Ab. Land Titles reports 3-4 month delay in processing land title transfers. We likely won't receive updated ownership info for property purchased after Feb/22 before tax notices are mailed in June. Update the City on your new property ownership: <a href="https://t.co/1NvDtpRSYZ">https://t.co/1NvDtpRSYZ</a>. <a href="https://twitter.com/hashtag/ColdLake?src=hash&ref_src=twsrc%5Etfw">#ColdLake</a> <a href="https://t.co/ggBfkPaYMa">pic.twitter.com/ggBfkPaYMa</a>—@CityofColdLake
"While delays are out of our control, we are working on a variety of mitigations that will still allow new property owners who may not yet show up on title to find out their tax balance information as well as to sign up for the monthly payment program through a tailored approach for these circumstances," said Anton Szabo, director of policy and data quality with the City of Edmonton's assessment and taxation branch.
Szabo said the city encourages property owners in this situation to contact 311.
Land surveyors also affected
Delays are also affecting the land surveying industry, with a wait for survey plans and document registrations of at least two months.
"It slows down the process with regards to how we can turn over title to developers so that they can turn over title to home builders, so home builders can build a home and turn it over to individuals for purchasing," said John Byrne, a land surveyor with IBI Group.
Byrne, who is also the president of the Alberta Land Surveyors' Association, said he and executive director Brian Munday brought up the issue with Service Alberta during a September meeting.
He said the government said it tried to hire back some retired staff and committed to hiring more people, but the training for new hires takes several months.
What's causing the delays?
Lindsay Milligan, press secretary for Service Alberta Minister Nate Glubish, said real estate transactions and packages submitted for registration have nearly doubled since April of last year.
She said the government allocated $9.1 million in the most recent budget to address the backlog and that money will mean staff in the land titles office will nearly double.
"We are also making changes to examination processes, looking into technological solutions and continuing to provide resources to help acquaint lawyers with the pending registration queue," she said.
She said Service Alberta is working to implement solutions by the summer and expects to see the backlog decrease after that.