SGI Realty One Real Estate Blog

Mortgage escrow accounts were developed more than fifty years ago when many Americans started losing their homes to foreclosures, mostly due to late tax payments. Homeowners were burdened to come up with large, lump sums of money at tax time that was often too difficult to pay. To ease the burden, lenders agreed to collect the taxes in small monthly payments made along with the mortgage payment. In 1934, this became standard procedure when the government stepped in and made it mandatory that lenders manage escrow accounts on all Federal Housing Administration (FHA) mortgages.

Mortgage escrow accounts are made to protect the homeowner by making sure that all insurance premiums and property taxes are paid in a timely manner. Escrow guarantees that there will always be enough money available to pay these bills on time. This way, the homeowner can avoid overdue taxes and insurance.

The U.S. Department of Urban Development (HUD) has administered the Real Estate Settlement Procedure Act (RESPA) to regulate all escrows and include laws for all lenders to follow when managing and funding the borrower’s escrow account. All lenders must maintain their escrow accounts and comply with federal law, with the interpretations set by HUD. Lenders are required to release itemized statements of escrow accounts to all borrowers yearly. While most lenders already issue these statements, the 1990 Housing Bill will ensure this practice.

Although borrowers are not required to maintain an escrow account with their lender, the lender may require it of the borrower. Escrows are made to protect the lender and as well as the borrower. Borrowers who do not understand the purpose of the escrow account, or those who have questions or other concerns, should consult with their lenders right away. It’s important for the borrower to understand escrow completely in order to be aware of all the benefits.

Escrows reassure homeowners that their mortgage related bills will be paid on time by automatically budgeting the borrowers insurance and tax obligations over a years time. This way homeowners can rest assured that their obligations are taken care of without having the burden of coming up with several large, lump sums of cash each year. In addition, it’s comforting that homeowners don’t have to calculate any unexpected increases in their insurance premiums or taxes. It is the lender’s responsibility to allow any potential increases in the payments, therefore covering the bill, without charge to the borrower, if there are not enough funds in the mortgage escrow to pay the increased bill. Many lenders will pay for the insurance and taxes when the payments are due regardless if the money has been collected by the homeowner at that time. In 1989, lenders advanced an estimated $600 million to homeowners to avoid penalties and any risk of not paying their insurance and taxes on time.

Escrow accounts have made it possible for mortgages to lower their rates and have lower down payments while protecting the interests of the investors. This has made the home mortgages more attractive as a secure investment, allowing escrow to lead the way to a stronger home mortgage market. Escrow accounts also prove beneficial to local governments by saving them money by using a less expensive and more efficient way of collecting taxes. Municipalities will only need to collect from a few hundred lenders instead of millions of homeowners.

For borrowers who decide to refinance or transfer their loan to another lender, the new lender will take on the responsibility of managing that borrower’s escrow account. The new lender may review the borrower’s escrow account to be certain that the funds are being collected sufficiently enough to cover all payments. Should the collected amount need readjustment, the new lender will notify the borrower of the change in monthly payments. Lenders in some states may pay interest on the money held in an escrow account although the RESPA does not require it.

Some lenders may ask borrowers to keep an excess balance that is often called a cushion, in their escrow account to cover potential increases in the borrowers insurance and tax bills. Many lenders may ask that the borrowers fund their cushion to the maximum amount of one-sixth of the total amount paid each year. If for some reason a lender asks the borrower to keep more than one-sixth in the escrow cushion, the borrower has the right for an explanation. If the borrower is not satisfied with the explanation, then they may file a complaint with HUD.

When you get a loan to buy a home, you are required to sign a security instrument. Depending on where you live in the United States, this document could be in the form of a mortgage or a deed of trust. What’s the difference? The following presents an overview of each instrument to help you answer that question.

Mortgages

Even though most people commonly refer to their home loan as a mortgage, technically this is not an accurate definition. A mortgage is actually a document that borrowers sign and give to their lender to secure the debt on their home. It involves two parties – the borrower (mortgagor) and the lender (mortgagee) – and it creates a lien against the property that is normally recorded in public records. Property title/ownership cannot be transferred until that debt is paid in full and the lien released. The title holder during the loan period can be either the borrower or lender depending on which custom is practiced in the state where the property is located – “title theory” or “lien theory.” In a title theory state, the borrower conveys title to the lender during the loan term. In a lien theory state, the buyer holds title.

If the borrower fails to repay the loan, the lender can foreclose on the property. In other words, the lender has the right to sell the property to recover funds. When a mortgage is the security instrument, the lender usually has to go through a court action to foreclose. This is called a judicial foreclosure.

Deed of Trust

A deed of trust essentially serves the same purpose as a mortgage; however, there are important differences with respect to parties involved, title holder, and foreclosure process.

Unlike a mortgage, a deed of trust involves three parties – the borrower, the lender, and the trustee. The trustee is a neutral third party that holds title until the debt is paid. Who is eligible to be a trustee varies from state to state. In some states, attorneys can act as trustees; and in others, title companies provide trustee services.

Another significant difference is in the foreclosure process. When a deed of trust is involved, foreclosure can be quicker, less expensive, and less complicated than when a mortgage is the security instrument. If the loan becomes delinquent, the trustee has the power to sell the home. Of course, the lender must provide the trustee with proof of delinquency and request that foreclosure proceedings be initiated. And the foreclosure must progress according to law and as dictated by the deed of trust. However, the foreclosure does not have to go through the court system.

Do You Get To Choose?

The answer is no. The way your home loan is secured is determined by the law in effect where your property is located. Therefore, you need to find out which security instrument is used in your state. You should also check to see which theory is practiced in your state – title or lien. This knowledge will help you better understand the relationship between parties involved, how title to your property is held during the loan period, and how foreclosure proceedings would take place if, unfortunately, they were to become necessary.

The easiest way to explain real estate bubbles is the market swells and prices rise like a bubble does when you blow into it. This is a great achievement when something like this occurs, especially for homeowners. However the bubble can burst and seemingly disappear.

We understand the market isn’t going to completely disappear when it comes to real estate, because everyone needs a place to live. Unfortunately owning a home is a dream and some people never get the chance. The good news is even those who never thought it was possible can take advantage of the recent economic chaos that left the housing market in shambles.

Real estate bubbles simply refer to a natural economic cycle where prices pick up and soar to unbelievable highs and then crash back down. While the crashing part can bring widespread panic and alarm, there are some people who make it their business to predict when this type of exploding bubble is going to occur so they can profit from it.

We would even go as far to say that investors get excited when the bubble bursts since they can get crazy deals on homes. If families are trying to do the same they will have to save up money and be careful about which home they purchase. Investors on the other hand already know which ones they will be able to sell when the bubble swells again.

In order to do this you have to be financially stable. When you purchase a home and have to wait then you will spend money maintaining the property until a sale can take place. This can become a huge expense and those who are not familiar with the system could end up losing more than they imagined.

If you haven’t noticed we are in the beginning stages of a very slow pick up. Anyone who purchased a home back before the housing market burst was likely devastated by how far their land decreased in value. Some have taken it to the extremes and given their homes back to the bank instead of waiting it out.

If you have been trying to sell a property in the past few years then you have probably been forced to hang onto your home or sell it for way less than it is actually worth. You may be hanging onto your property through this slow recovery just as investors are doing with property they bought after this latest bubble popped.

The good thing about real estate bubbles is they always correct themselves. When prices simply become too high the bursting of the bubble is a way to bring things back down to realistic prices. Yes, prices may go unbelievably low before they get back to “normal” again, but for many people the super high prices are just as bad as the super low ones.

The winners in a real estate bursting bubble are those that are able to purchase a nice home at the low end of the market and benefit from increased value down the line.

A VA loan is a mortgage loan in the United States guaranteed by the U.S. Department of Veterans Affairs. The VA loan was designed to offer long-term financing to eligible American Veterans or their surviving spouses (provided they do not remarry). The basic intention of the VA direct home loan program is to supply home financing to eligible veterans in areas where private financing is not generally available and to help veterans purchase properties with no down payment. Eligible areas are designated by the VA as housing credit shortage areas and are generally rural areas and small cities and towns not near metropolitan or commuting areas of large cities.

The following guidelines may help you determine whether your service makes you eligible for a VA guaranteed loan:

• Active duty – eligibility begins after 90 days of continuous active service, or after 181 days of continuous active non-wartime service.
• Selected Reserve – reservists or National Guard personnel with a minimum of six years service, or those who have been honorably discharged due to disability, and who have been retired, who now serve on a different Ready Reserve, or who remain in the Selected Reserve are all eligible to apply for a VA loan.
• Certain service does not meet the requirement for VA financing, including World War I service and active duty for training in the Reserves or National Guard. Individuals who do not qualify for a VA loan may, however, find themselves eligible for a Housing and Urban Development /Federal Housing Administration veterans’ loan. Contact your regional VA office for more details.

Eligibility for a VA loan is made by Veterans Affairs. Qualified individuals will receive a certificate which they can use when applying for a VA loan. Certificates can be obtained from any VA Eligibility Center upon submission of VA Form 26-1880 and suitable proof of service and discharge conditions. A copy or Certificate in Lieu of Lost or Destroyed Discharge papers is available to veterans who can prove their military service but who may no longer have their original discharge documentation. This certificate can be helpful in obtaining a VA loan.

Each Veterans Affairs home loan supplies an amount of money that it guarantees lenders against loss on loans made to veterans. The maximum entitlement amount is currently $36,000 (or up to $60,000 for certain larger loans), but that figure is always subject to legislative changes. Contact your local VA office regarding loan figures and eligibility before agreeing to a particular loan. This entitlement amount is a one-time allotment unless a prior VA loan has been paid in full and the property it was used to obtain has been sold. The entitlement may also be restored if a qualified buyer agrees to assume the outstanding loan balance and substitute his or her own entitlement (same amount used on the original loan). If only part of the entitlement has been used to secure a loan, the remaining balance may be used for a second loan. This ‘remaining entitlement’ option may be particularly useful for veterans who secured a loan using their entitlement when the maximum amount was lower than its present value: in this case, a veteran may use the difference between what he or she was eligible for then and the new maximum to help secure another loan.

When trying to determine which property to buy or fix, veterans should consider that most lenders require the total of the guaranteed entitlement and any cash down payment the veteran is able to make to equal about one quarter of the total sale price of the property in question. This limitation may help veterans decide what they can afford to spend to buy a home, mobile home, townhouse, or VA-approved condominium, to build or repair a home, to refinance an existing home loan, or to purchase a domestic lot for a home.

Finally, VA guaranteed home loans are not administered by Veterans Affairs. Rather, veterans obtain the loans by applying to regularly lending facilities and supplying the necessary proof that they qualify for a VA guarantee.

Imagine a 7,900-square-foot lakefront mansion in Las Vegas with six bedrooms, an in ground pool and an illustrious landscape available for purchase at a meager one million dollars. Sound impossible? Not if you look into foreclosure properties for sale. Homes like these million dollar mansions can be found all over the country through local banks after the owners have defaulted on their mortgage. Buying a million dollar or more home that is in the foreclosure process will not only save a great amount of money, but some investors agree that buying a home in foreclosure is a much easier process than a normal home sale. This way there are no prices to haggle over or move in dates to set. When you buy it, it’s yours.

With foreclosures running up to 1.27% of all mortgage loans, according to the Mortgage Bankers Association, the best place to look for a million-dollar mansion to buy may be a bank or on the court house steps. In the first five months of 2004, over 113,000 million dollar mansions came onto the market as foreclosures. This is an increase of 37% from the previous year, according to Foreclosure Free Search.

As interest rates rise, mortgage rates are more likely to inflate, thus putting pressure on financially exhausted homeowners that are barely making ends meet already. More people have been taking out loans that have been more than they could possibly afford, while maintaining a certain lifestyle, or by trying to maintain a certain lifestyle. While the lender will calculate the amount that the borrower should be able to repay, according to the borrowers yearly income, this amount can often be more than the borrower can actually afford.

A million dollar mansion foreclosure can happen to the best of people, in the best neighborhoods, in any price range. These foreclosures can and do occur in the same proportions as do other homes. A million-dollar mansion foreclosure can sometimes be a surprising steal, mostly because some lenders don’t want to price their properties to move fast. There are deals out there for those that are patient enough to look for them.

There are also disadvantages of buying a million-dollar foreclosure property as well, because most of these homes come onto the market due to a financial hardship. Sometimes the former owners become bitter from the loss of their home and sabotage the home by damaging or removing doors, appliances or light fixtures. Some of these homeowners may go as far as pouring concrete down the toilets or punching holes into the walls of these million dollar homes. Sometimes the financially strapped homeowners allow the homes to fall into disrepair, because the basic foreclosure can take about four months. This allows ample time for the lawn to become seriously overgrown and a slimy green pool to grow.

There are many ways to buy a million-dollar mansion in foreclosure. On average, at least 10 properties priced $1 million and more, will fall into default every year, but only a fraction of these properties will be sold at auctions. Most of these million dollar mansions are actually sold in a pre-foreclosure sale to buyers who search legal postings for Notices of Default. All buyers will need to be financially prepared to make an offer on the pre-foreclosure home immediately and have the down payment already in hand. These buyers also need to be prepared to deal with the emotional property owners who are losing their homes and who may not want to leave willingly. There may also be furious tenants to evict, which the buyer should be readily prepared to do.

Laws can vary from state to state, but home owners normally have up to four months to pay their debts to avoid foreclosure on their property. If the homeowners can’t pay their debt in this time frame, then the lien holder of their property can force their home to be auctioned off, normally on the steps of the courthouse. These auctions are advertised in newspaper classifieds and are available for anyone to buy, so long as those buyers show up with a check of at least 10% of the anticipated purchase price. If buyers don’t have this kind of money readily available, then most often a bank will be the successful bidder. Million dollar or more foreclosure properties can be also be found through brokers who specialize in Real Estate Owned properties, or REO’s. These properties can be found by visiting the offices of these brokers or by searching the internet.

The term “fixer upper” may often strike fear in the hearts of home buyers. There are no strict measures in defining exactly what a fixer upper is. It could mean a historical house in need of minor repairs or it could mean a rundown house with sagging floors, a leaky roof and a serious foundation problem. Still, fixer uppers represent a great way for some home buyers to move up into larger homes at a fraction of the cost, provided their willingness to accept the effort and costs needed to make the necessary repairs and improvements the home needs.

Don’t let the term “fixer upper” discourage you from considering them in your search of buying a home. By all means, consider these homes during your house hunting escapade, but you should take your time and carefully look into all of the repairs needed in order to make the house a home. More important, you will need to figure out how much it will cost you. A seemingly great bargain can turn into the money pit if you don’t do your homework.

In your quest for a fixer upper, you can check out various real estate web sites on the internet and in your local newspaper. Even if you’re new to house hunting, you will shortly learn frequent discrepancies in between a house that seems too good to be true and reality. Even if you pull up to a house that seems to live up to the promises that were advertised, have your real estate agent take you inside the house for a walk through so you can get a better look. Many fixer upper houses can look extremely appealing on the outside, when the inside can be a completely different story. You will learn soon enough how to recognize fixer upper houses that are worth further investigation and the houses that are not.

Even if you decide that a house in need of a substantial number of repairs, don’t let the prospect of a great buy tempt you into ignoring the house’s problems. Many fixer uppers can appear intoxicating, when buyers are looking for the greatest deal of all times. Sometimes the seller of the fixer upper may try to make the problems seem less complicated or try to convince you that the repairs will be an easy fix to make a quick sale. They may also try to discourage you from having an appraisal on the house, where the appraisers may be able to find more problems in the house and therefore reduce the value of the house even more.

Never let a seller pressure you into buying a fixer upper or offer you a special once in a life time deal if you agree to buy the house right then and there. Never make a same day decision when buying a house. Buying a house is an important financial commitment that should not be taken lightly and should be carefully considered. Buyers need to allow themselves enough time to consider how much work, time and money it will cost them before committing to a house. You’ll be surprised how much different that great buy will seem after a day or so of consideration and after looking at other potential houses.

Buyers should also find out how the asking price compares with the prices of other houses in the area. Are there any other fixer upper houses in the neighborhood? Have any other nearby houses been renovated and sold? What do you expect to get for the house if you renovate it and decide to sell it? There is nothing more aggravating to a home owner than renovating a home with the intent to make a profit, only to discover the real estate market had turned bad. If home values are depreciating, the home you purchase may be worth less than you originally paid for it even after all the hard work of making the home improvements and repairs.

Once you find your dream fixer upper and have already been pre-approved for a mortgage, you must now find yourself an experienced house inspector to perform a thorough inspection before you commit to the purchase. Sometimes house inspectors can turn up significant problems’ that the interested buyer was not aware of.

Buying or refinancing your home may be one of the most important and complex financial decisions you'll ever make. Many lenders, appraisers, and real estate professionals stand ready to help you get a nice home and a great loan. However, you need to understand the home buying process to be a smart consumer. Every year, misinformed homebuyers, often first-time purchasers or seniors, become victims of predatory lending or loan fraud.

Don't let this happen to you!

11 Tips On Being A Smart Consumer

1. Interview several real estate professionals (agents), and ask for and check references before you select one to help you buy or sell a home.
2. Get information about the prices of other homes in the neighborhood. Don't be fooled into paying too much.
3. Hire a properly qualified and licensed home inspector to carefully inspect the property before you are obligated to buy. Determine whether you or the seller is going to be responsible for paying for the repairs. If you have to pay for the repairs, determine whether or not you can afford to make them.
4. Shop for a lender and compare costs. Be suspicious if anyone tries to steer you to just one lender.
5. Do NOT let anyone persuade you to make a false statement on your loan application, such as overstating your income, the source of your down payment, failing to disclose the nature and amount of your debts, or even how long you have been employed. When you apply for a mortgage loan, every piece of information that you submit must be accurate and complete. Lying on a mortgage application is fraud and may result in criminal penalties.
6. Do NOT let anyone convince you to borrow more money than you know you can afford to repay. If you get behind on your payments, you risk losing your house and all of the money you put into your property.
7. Never sign a blank document or a document containing blanks. If information is inserted by someone else after you have signed, you may still be bound to the terms of the contract. Insert "N/A" (i.e., not applicable) or cross through any blanks.
8. Read everything carefully and ask questions. Do not sign anything that you don't understand. Before signing, have your contract and loan agreement reviewed by an attorney skilled in real estate law, consult with a trusted real estate professional or ask for help from a housing counselor with a HUD-approved agency. If you cannot afford an attorney, take your documents to the HUD-approved counseling agency near you to find out if they will review the documents or can refer you to an attorney who will help you for free or at low cost.
9. Be suspicious when the cost of a home improvement goes up if you don't accept the contractor's financing.
10. Be honest about your intention to occupy the house. Stating that you plan to live there when, in fact, you are not (because you intend to rent the house to someone else or fix it up and resell it) violates federal law and is a crime.

What is Predatory Lending?

In communities across America, people are losing their homes and their investments because of predatory lenders, appraisers, mortgage brokers and home improvement contractors who:

· Sell properties for much more than they are worth using false appraisals.

· Encourage borrowers to lie about their income, expenses, or cash available for down payments in order to get a loan.

· Knowingly lend more money than a borrower can afford to repay.

· Change high interest rates to borrowers based on their race or national origin and not on their credit history.

· Pressure borrowers to accept higher-risk loans such as balloon loans, interest only payments, and steep pre-payment penalties.

· Target vulnerable borrowers to cash-out refinances offers when they know borrowers are in need of cash due to medical, unemployment or debt problems.

· “Strip” homeowner’s equity from their homes by convincing them to refinance again and again when there is no benefit to the borrower.

· Use high pressure sales tactics to sell home improvements and then finance them at high interest rates.

What Tactics Do Predators Use?

· A lender or investor tells you that they are your only chance of getting a loan or owning a home. You should be able to take your time to shop around and compare prices and houses.

· The house you are buying costs a lot more than other homes in the neighborhood, but isn’t any bigger or better.

· You are asked to sign a sales contract or loan documents that are blank or that contain information which is not true.

· You are told that the Federal Housing Administration insurance protects you against property defects or loan fraud – it does not.

· The cost or loan terms at closing are not what you agreed to.

· You are told that refinancing can solve your credit or money problems.

· You are told that you can only get a good deal on a home improvement if you finance it with a particular lender.

Remember:

If a deal to buy, repair or refinance a house sounds too good to be true, it usually is! We can help you! For more information you can call 800-931-9703 x 27 or email us at info@sgi-solutions.net

FSBO - For Sale By Owner route and you'll save thousands of dollars. With the help of this web site, selling your own home yourself isn't difficult. After all, who knows your home's key features better than you do?

An agent can maybe point out the gleaming hardwood floors and the recently remodeled kitchen. But you can add more personal details such as how cozy it is with the family gathered around the fireplace during a fierce winter storm, how solid and safe everything is and what a good neighborhood it is for raising children. You can convey the quality of life a buyer will experience when he moves into this home.

Most people believe that a so-called "professional" real estate agent is needed to sell a house that selling a home requires special skills that only real estate agents and brokers have. Not true! The FSBO - For Sale By Owner way is often faster and, most important, leaves more money in your pocket.

Let's be realistic, selling houses is not a highly specialized field, it's not brain surgery. Still, where do you start? There are a few more steps than just displaying a "For Sale by Owner" sign on the front lawn. Here is what an agent would normally do for you, but at an excessive fee:

« Determine a market price
« Put up for sale signs
« Advertise
« Book appointments
« Show strangers through your home
« Negotiate with a prospective buyer
« Fill out the offer to purchase form
« Close the deal

You don't need an agent to sell your house. Save thousands, even tens of thousands, of dollars by just following the FSBO - For Sale By Owner information you'll find here.

Most real estate sales people look as average as your aunt or uncle. They probably have no more formal education than you, they're not any smarter than you, and they will never be as motivated as you are to sell your home.

One of the most critical home selling how-to secrets that is hardly ever mentioned by real estate agents, is "staging" a house for the market. There are simple and virtually cost-free ways to make a home look more spacious and more appealing to a potential buyer.

As the legal owner of property, you have the right to keep people from cutting across it or to stop people from just using it and taking it away from you, right? Well, not exactly. In certain limited circumstances, a person can lose control of their own property, or pieces of it, to people who are not owners of the property. These situations fall into three categories:

• Easements (or sometimes known as rights-of-way);
• Adverse possession (or sometimes called “squatters’ rights”); and
• Restrictive covenants.

An easement can be written permission to go across a piece of land. This is used by the cable companies, telephone companies or gas companies who run cables and pipes under and over land. Most property is subject to that type of easement, and they are necessary to make modern neighborhoods work with all the conveniences. Unwritten easements arise because someone makes use of a person’s property without their permission for a long time, and the owner of the property doesn’t stop them. Hikers or snowmobilers may cut across the back of farm property for years, or people may cut a path across a vacant lot to get from their home to a shopping centre. Homeowners often cross each other’s driveways or properties. Crossing a neighbor’s land is particularly common in cottage country where access to a remote lake or riverfront property is only possible by crossing over another person’s land. If the use lasts long enough, the person cutting across the property may get a “right-of-way” over the property. Technically, it’s not that the person cutting across the property gets the right to cross it, it’s that the owner of the property loses the right to stop them from cutting across the property. The owner’s rights to deny access to the property are prescribed. Hence, these are often called “prescriptive rights.” How long does the use of the property need to continue? It’s generally between ten and twenty years, depending on the province. How does a homeowner or property owner stop the unwanted crossing of their property? Lock it, put up signs or a fence prohibiting access. Use the trespass laws and take active steps to interrupt that ten to twenty-year period. In other words, get in the way and interrupt the period of time and the use of the property, and the easement will not arise.

Adverse possession sounds so much more civilized than “squatters’ rights,” but it means the same thing. Through adverse possession, someone can actually take control of a piece of another person’s land. They may, for example, put their fence around a portion of another person’s land. It is different from an easement, which arises because someone crosses land. Adverse possession arises because someone is actually taking control and excluding the true owner from their property. That’s why the possession is called “adverse.”

Adverse possession is not available everywhere in Canada and, for example, it cannot be used to obtain possession of land owned by the Crown (the government). So forget about trying to take over a part of a provincial park or a national park simply by putting up a fence. There are also different ways each province and territory keeps track of registering title to property in Canada. One system is called the Land Titles System and the other is called the Registry System. Adverse possession is not possible against land that is covered by the Land Titles System. However, it is possible to obtain adverse possession against land that is registered under the Registry System. You need to check with a lawyer in your province if you are worried that someone is trying to take control of your property.

Restrictive covenants are restrictions on the use or ownership of property, and they are registered on the title. A person may buy property and agree to abide by these restrictive terms. Your lawyer will discover them at the time of purchase when searching title to the property on your behalf. The lawyer may report to you that you can only paint your house a certain color scheme to blend with the rest of the neighborhood. This is a fairly modest and typical restrictive covenant. However, long ago some restrictive covenants dictated who, in terms of race or religion, could buy, or not buy, property in communities. It is not that long ago that we saw restrictive covenants that prohibited “Negroes” or “Jews” or “Turks” from purchasing property in particular neighborhoods. The courts decided that these and other vile restrictions on ownership of property were contrary to Canadian public policy and struck them down, but lawyers still see these covenants when they search title. They’re an ugly reminder of the past, but they’re unenforceable.

The bottom line is that your control of your land is not to be taken for granted. Protect it from unwanted easements and, possibly, adverse possession. Restrictive covenants may surface during an attempt to buy property, and it is up to you to decide whether you want to accept them.