Sarah is preparing an offer for her client, David, to purchase a single-family home in Cochrane that David intends to develop into a small commercial property. Before drafting the offer, Sarah reviews the Land Titles Certificate for the property. She notices a restrictive covenant registered on title that limits the property's use to residential purposes only. What is the most appropriate action for Sarah to take?

Question: Sarah is preparing an offer for her client, David, to purchase a single-family home in Cochrane that David intends to develop into a small commercial property. Before drafting the offer, Sarah reviews the Land Titles Certificate for the property. She notices a restrictive covenant registered on title that limits the property's use to residential purposes only. What is the most appropriate action for Sarah to take?

Answer options:

• Advise David that the restrictive covenant will automatically be removed upon purchase if he has a concrete development plan.
• Suggest David proceed with the purchase, as restrictive covenants are rarely enforced in Alberta. ✅ Inform David about the restrictive covenant and its implications for his development plans, advising him to seek legal counsel regarding its enforceability and potential removal.
• Amend the restrictive covenant on the Land Titles Certificate herself, as it conflicts with her client's intentions.

Correct answer: Inform David about the restrictive covenant and its implications for his development plans, advising him to seek legal counsel regarding its enforceability and potential removal.

Explanation: Real estate associates must advise clients of any encumbrances discovered during a title search that may affect their intended use of the property and recommend seeking legal advice. Restrictive covenants are charges on the Certificate of Title that bind subsequent owners.