If you are a real estate agent and you are submitting an Offer on a Rural Property, there are a number of basic due diligence steps that you will have to take on behalf of your client. Otherwise, you fall below the expected standard of care.
Residential Property Checklist Form 820
This is the first step. This will come up in every residential transaction including rural properties. So, use the Form carefully and be sure you know all the answers to all of the questions that are relevant.
Schedule for Water Supply, Waste Disposal, Access, Shoreline, Utilities Form 822
This is a very specific addendum or schedule that is in addition to Form 820 and specifically applies in rural areas.
Other Issues
Are there any windmills in the area?
Are there any quarrys or gravel pits?
How is the internet service?
If the building is to be enlarged, is the present septic system sufficient?
What is the specific location of the septic bed?
Will the septic system impede the location of any future swimming pool?
What are the setback requirements?
When was the septic system last inspected?
Are there records available?
How sufficient is the well water in terms of the volume?
Can the required septic size meet current setbacks and requirements?
Can the septic be replaced on failure or would a holding tank now be required?
Is the well dug, drilled, or artesian?
Are the pump, purification and softener systems present and in good working order.
Is a well Inspection available
Has the well has ever run dry?
Is the property is located close to a quarry?
Are there fertilizer smells or manure smells on neighbouring properties?
If they are next to or in close vicinity to other farms make sure they are comfortable with various agricultural activities like farming, spraying, chemical use, fertilizers smells and time periods.
If it is located on an unpaved road confirm it is managed by the township / municipality for snow removal and maintenance, and determine how frequently.
Is it located on a school bus route (ie. how early are roads plowed in winter).
Is it within 9km of a fire hall & is the closest one Volunteer or full-time staffed?
Is the garbage picked up or you buy tags and take them to the transfer station?
Comment
There are numerous other issues that arise with the purchase of an operating farm and the availability of government grants, incentives and taxes.
The potential liability for an agent will be based on the standard OREA Checklists and certain additional, relevant matters. If you know the answers, have communicated with your client and secured their informed consent to proceed, then you should be fine.
Brian Madigan LL.B., Broker