Selling Your House Privately in Alberta Without a Realtor

Selling without a realtor can save you the work of a brokerage relationship, but it also moves a lot of responsibility onto you. The purchase contract, the deposit, what you tell the buyer and the paperwork at Land Titles all become your job, or the job of the lawyer you hire.

This article walks through the main legal points an Alberta homeowner should understand before going it alone. It is general information, not advice on your situation.

This article covers the law of Alberta.

The contract and deposit are where private sales go wrong

When a realtor is involved, a licensed professional is part of the process. In a private sale, you and the buyer may be working from a contract you found or drafted yourselves. Gaps in a contract, such as unclear conditions, vague closing terms or an unclear plan for who holds the deposit and when it is released, are common sources of disputes.

Be careful about contract wording that tries to limit how long a buyer has to sue you. An agreement that reduces a limitation period is invalid, although the parties may agree to extend it. Having a lawyer review or prepare the contract before anyone signs is usually far cheaper than sorting out a problem afterward.

Land titles forms are legal documents with legal consequences, and Alberta.ca strongly suggests getting legal help when completing them, especially for ownership changes.

Disclosure: what you must tell the buyer

The starting point at common law is caveat emptor, or "let the buyer beware". Without an express warranty, contractual condition, collateral contract, fraud or error in substantialibus, the buyer generally takes the land with its defects after the sale and cannot reopen the contract. That doctrine does not protect a seller who commits fraud or misrepresentation, gives an express warranty or makes a collateral contract, and its exceptions have been growing.

The Real Estate Act Rules define a material latent defect as one that cannot be discerned through a reasonable inspection, or that makes the property dangerous or potentially dangerous to occupants, or unfit for habitation. RECA's bulletin says sellers cannot hide defects or mislead buyers about a property's condition, and that sellers must disclose material latent defects they know about. A defect can be more than physical, for example missing building or other permits.

In a realtor sale, the duty to disclose known material latent defects falls on the seller's licensee, so a seller who tells their realtor about a defect makes the realtor disclose it. Without a realtor, no one else is doing that for you. The safest approach is to be open about anything you know.

• Do not hide a known problem or answer questions in a misleading way.
• Keep records of repairs, permits and inspections.
• Put important statements about the property in writing, and ask a lawyer how they interact with the contract.

Spousal consent and title paperwork

If you are married, the Dower Act says you cannot dispose of the homestead during the lifetime of either spouse unless your spouse consents in writing or the Court has made an order dispensing with that consent. This applies even if only one spouse is on title. Disposing of the homestead without the required consent is an offence, with a maximum penalty of a $1,000 fine or two years' imprisonment.

The homestead is a parcel containing your residence. In a city, town or village it is a limited number of adjoining urban lots in one block, and outside those it is up to one quarter section. You can apply to the Court to dispense with consent on certain grounds, such as spouses living apart, the spouse's whereabouts being unknown, or a prior dower release agreement. The Court may grant the order if it appears fair and reasonable.

Alberta uses the Torrens system under the Land Titles Act. Land is transferred by registering an Application for Transfer of Land, and every document submitted needs a Document Registration Request form. Your mortgage comes off title when the lender signs a discharge in the prescribed form (Form 7) and the Registrar discharges it. Since April 1, 2021, the Pending Registration Queue lets a transaction close once documents are received, before registration is complete.

Two special cases: if the seller is an estate, the transfer to a personal representative is a transmission of land that uses its own form. If there are joint owners, a transfer must specify joint tenancy to create it, otherwise buyers take as tenants in common.

Tax on the sale of your home

If the home was your principal residence for every year you owned it and you designate it, the gain is generally exempt. You can designate only one home per family for each year. You must report the sale on Schedule 3 of your return, and the CRA allows the exemption only if the sale and designation are reported. For 2017 and later dispositions, if it was your principal residence for all or all but one year, only page 1 of Form T2091 (or T1255) is needed.

Watch for the flipping rule. A Canadian housing unit sold on or after January 1, 2023 that you owned for less than 365 consecutive days is generally deemed business income, and the principal residence exemption does not shelter it. Exceptions apply for certain life events. Other special cases include land over half a hectare, partial business use and non-residents. An accountant can confirm how these apply to you.

What to do next

• Decide who will prepare or review the purchase contract, and how the deposit will be held.
• Write down every defect, past repair and permit issue you know about.
• If you are married, raise spousal consent early and ask about the Dower Act acknowledgment.
• Get your mortgage payout and discharge arrangements from your lender.
• Ask a lawyer to handle the land titles documents.
• Speak with an accountant about reporting the sale and designating your home.

Frequently asked questions