1. Copyright © 2004 McGraw-Hill Ryerson Limited 1 PART 6 – THE LAW OF REAL PROPERTY  Chapter 27 – Interests in Land Prepared by Douglas H. Peterson, University of Alberta

2. Copyright © 2004 McGraw-Hill Ryerson Limited 2 INTERESTS IN LAND Historical Development Estates in Land Interests in Land Fixtures Title to Land Registration of Property Interests

3. Copyright © 2004 McGraw-Hill Ryerson Limited 3 INTRODUCTION Interests in land takes many forms Ownership Leases Property rights are commonly referred to as “estates” in land Property vs. Title – property is the thing itself and title is legal interest in the thing

4. Copyright © 2004 McGraw-Hill Ryerson Limited 4 HISTORICAL DEVELOPMENT Real Property – land anything permanently attached to it Common law Real property includes buildings, that below and that above Carrot theory – center of the earth to the heavens above Today – reasonable depth and reasonable height Crown often owns what is below Fixture – a chattel that is constructively or permanently attached to the land

5. Copyright © 2004 McGraw-Hill Ryerson Limited 5 HISTORICAL DEVELOPMENT Real versus Personal Property Distinction according to type of property and rights in such property Real = land and attachments Immovable Real – (“real action”) historically legal remedy a party could get when rights to land had been interfered with Personal = chattels Moveable Personal action – action for money damages

6. Copyright © 2004 McGraw-Hill Ryerson Limited 6 HISTORICAL DEVELOPMENT Feudal System Land was granted by the Crown in return for promises (Ownership remained with Crown) land held by crown given to lords who held subject to certain rights and duties – portions to vassals then sub- vassals subject to further rights and duties Holder had to comply with promise to necessary armed men or services in support of the crown Other services such as Agricultural and administrative Escheat – reversion of land back to the crown when the promise underlying the grant was broken

7. Copyright © 2004 McGraw-Hill Ryerson Limited 7 HISTORICAL DEVELOPMENT Types of Interest in Land Estates Non-possessory interests Estates Tenure – a method of holding land granted by the Crown Was free or un-free 2 Main Principals of Ownership Estates in time – time during which holder of interest has exclusive right to possession of land Interests less than estates – according to kinds of use permitted or restricted upon the land

8. Copyright © 2004 McGraw-Hill Ryerson Limited 8 TYPES OF ESTATES Nature of Estates Exclusive right to possession for period of time Fee Simple Life Estate Leasehold Estate

9. Copyright © 2004 McGraw-Hill Ryerson Limited 9 FEE SIMPLE The right to use land subject only to local restrictions The highest level of land ownership Unconditional ownership Effectively amounts to complete ownership May dispose immediately or after death Generally unlimited use and abuse of property

10. Copyright © 2004 McGraw-Hill Ryerson Limited 10 FEE SIMPLE Limitations on rights of ownership Tort obligations associated with land Nuisance, occupiers’ liability Government regulation Environmental, planning, and zoning legislation Expropriation Forced sale to government for public purpose Requires compensation to fee simple owner Crown rights reserved Crown often reserves rights to minerals and certain precious metals

11. Copyright © 2004 McGraw-Hill Ryerson Limited 11 FEE SIMPLE Escheat – the reversion of land to the Crown when a person possessed of the fee dies intestate and without heirs Deed – written or printed instrument effecting legal disposition Execution Delivery

12. Copyright © 2004 McGraw-Hill Ryerson Limited 12 LIFE ESTATE Right to possession is based upon a person’s lifetime An estate in land for the life of one person Exclusive possession during lifetime Life estate holder liable for waste Waste and act that significantly affects value of land Protection of party with reversion or remainder

13. Copyright © 2004 McGraw-Hill Ryerson Limited 13 LIFE ESTATE No right to dispose of property on death Reversion to party with fee simple Remainder to person selected by party with fee simple Reversion – the balance of fee simple reserved to the grantor and her heirs at the end of a life estate Remainder – the balance of a fee simple that goes to a third person at the end of a life estate Remainder person - a person who holds the reversion or remainder in a fee simple

14. Copyright © 2004 McGraw-Hill Ryerson Limited 14 INTERESTS IN LAND EXAMPLE OF CREATION OF ESTATES IN LAND Copyright © 2004 by McGraw-Hill Ryerson Limited. CROWN FIRST GRANTEE ‘A’ ‘C’ Has Fee Simple ‘C’ ‘B’ “Owner” of All Land Grants Estate in Fee Simple to a Person Has Fee Simple May Grant Lesser Estate (Life Estate) to ‘B’ Remainder After Grant of Life Estate May Be Granted to ‘C’ On Death of ‘B’ Life Estate Ends and B’s Remainder and Life Estate Merge to Form Fee Simple Again in ‘C’

15. Copyright © 2004 McGraw-Hill Ryerson Limited 15 LEASEHOLD ESTATE Land leased to a tenant for a definite period of time Right to exclusive possession for specified period Period must be stated with certainty at outset Compare life estate: uncertain duration of life Nature of leases Examined below

16. Copyright © 2004 McGraw-Hill Ryerson Limited 16 THE CONDOMINIUM Mixed estates (joint control) Individual ownership and shared ownership Individual (fee simple)– single unit Common – (tenants-in-common) common areas such as pool, gym, recreation center Common law Property ownership either horizontal or vertical plane Property rights above and below the ground “Air rights” and “strata title”

17. Copyright © 2004 McGraw-Hill Ryerson Limited 17 THE CONDOMINIUM Required documentation varies by province Declaration; strata plan; condominium plan Exclusive use area Common use area Co-ownership of common elements tied to ownership of individual unit If title to individual passes so does interest in common elements Cannot sever the two

18. Copyright © 2004 McGraw-Hill Ryerson Limited 18 THE CONDOMINIUM Condominium Corporation – a corporation – whose members are the condominium owners Responsible for managing the property as a whole Management financed by condominium fees Investment risks Maintenance of a condominium Insurance

19. Copyright © 2004 McGraw-Hill Ryerson Limited 19 CO-OPERATIVE HOUSING CORPORATIONS Cooperative Housing – alternative to condominiums Member buys a share in cooperative organization and by virtue of equity gets a unit in development Corporation, as owner of building, is responsible for maintenance and payment of mortgage

20. Copyright © 2004 McGraw-Hill Ryerson Limited 20 INTERESTS IN LAND (EASEMENT) Easements - a right enjoyed by one landowner over the land of another for a special purpose but not for occupation of the land Right to use neighbor’s land Positive Allows one party to do something Negative Prohibits one party from doing something

21. Copyright © 2004 McGraw-Hill Ryerson Limited 21 INTERESTS IN LAND (EASEMENT) Right of way – an easement that gives the holder a right to pass back and forth over the land of another in order to get to and from her own land Dominant tenement – the piece of land that benefits from an easement Servient tenement – the land subject to the easement

22. Copyright © 2004 McGraw-Hill Ryerson Limited 22 INTERESTS IN LAND (EASEMENT) Acquisition of Easement Express grant: agreement between parties Implied by law: necessary for practical convenience Landlocked Prescription: long, open, and uninterrupted use of a right of way Use visible and apparent Statutory: public utilities

23. Copyright © 2004 McGraw-Hill Ryerson Limited 23 INTERESTS IN LAND (RESTRICTIVE COVENANT) Negative covenants limiting the use of land Owner some control over use of property even after it has been sold to another A covenant requiring the holder of the land to refrain from certain conduct or certain use of the land Need dominant tenement and servient tenement

24. Copyright © 2004 McGraw-Hill Ryerson Limited 24 INTERESTS IN LAND (RESTRICTIVE COVENANT) Issue: enforcement of covenants on subsequent holders of the land (rule of privity) Covenants run with the land Must be reasonable and not against public policy

25. Copyright © 2004 McGraw-Hill Ryerson Limited 25 INTERESTS IN LAND (DIFFERENCES) Easement and Restrictive Covenants Restrictive covenant Is contractual Must limit servient’s use of the land Easement may arise from implication or prescription Easement Easement may allow dominant’s use of land

26. Copyright © 2004 McGraw-Hill Ryerson Limited 26 INTERESTS IN LAND (MINERAL RIGHTS) Right belongs to owners in fee simple Crown often reserves rights to minerals Profit a Prendre – an interest in land permitting the lessee to remove material extracted from the ground

27. Copyright © 2004 McGraw-Hill Ryerson Limited 27 INTERESTS IN LAND (MINERAL RIGHTS) Mineral eases Right to extract and retain minerals from under the surface of land occupied by others Several interests in one agreement Usually accompanied by a right to possession of small area of land No ownership of minerals until actually extracted Usually acquired from government Private fee simple generally excludes minerals

28. Copyright © 2004 McGraw-Hill Ryerson Limited 28 RIPARIAN RIGHTS Riparian owner Person who owns land adjacent to a watercourse; or Has land through which a natural stream flows either above or below surface Right to take water Restriction Cannot interfere with the downstream flow

29. Copyright © 2004 McGraw-Hill Ryerson Limited 29 POSSESSORY INTERESTS IN LAND Adverse possession – a possessory title to land under the registry system Acquired by continuous, open, and notorious possession of land inconsistent with the title of the true owner for a period of time (usually 10 – 20 years) Possessory title good against everyone, including true owner Need not be the same occupant continuously

30. Copyright © 2004 McGraw-Hill Ryerson Limited 30 ENCROACHMENTS Encroachment – a possessory right to the property of another that may be acquired by the passage of time Overhanging roof, building over the property line If true owner permits encroachment for a long period of time, right to demand removal is lost

31. Copyright © 2004 McGraw-Hill Ryerson Limited 31 FIXTURES Fixtures – chattels that are permanently or constructively attached to real property Issue: fixture or removable chattel Traditional Rule Use and enjoyment Chattel attached to improve the land became part of the land Chattel attached for the better use of chattel not a fixture

32. Copyright © 2004 McGraw-Hill Ryerson Limited 32 FIXTURES Factors – reviewed on a case by case basis Attached by own weight or affixed to land Can be removed without damage Degree of annexation Can be removed without damage Object of annexation Use of the chattel Tenants – different rules Can remove trade fixtures Display cabinets, shelving, signs, mirrors, equipment, and machinery

33. Copyright © 2004 McGraw-Hill Ryerson Limited 33 TITLE TO LAND Tenancy in Common – concurrent holders of equal shares in an estate No right of survivorship Interests not necessarily equal Joint Tenancy – concurrent holders each of whom has a right of survivorship Undivided interest Identical in time, interest, possession Right of Survivorship – the right of a surviving tenant to the interest of a deceased joint tenant

34. Copyright © 2004 McGraw-Hill Ryerson Limited 34 REGISTRATION OF PROPERTY INTERESTS Two Systems Registry Systems – registry office – searches of the title to a piece of land Bona fide purchaser – a purchaser who buys the land without knowledge of an unregistered claim No assurance of validity of interests Purchaser must search title and bears risk of “good chain of title” Title insurance common protection for mistakes

35. Copyright © 2004 McGraw-Hill Ryerson Limited 35 REGISTRATIONS OF PROPERTY INTERESTS Land Titles System (Torrens System) – a system of land registration where the land titles office brings all outstanding interests in the land up to date and certifies them as being correct Certificate cannot be defeated Guaranteed by government All interests on certificate are valid No other interests are valid Insurance - compensation for mistakes

36. Copyright © 2004 McGraw-Hill Ryerson Limited 36 SUMMARY Real Property Includes land and attachments Various Interests Estates Fee Simple, Life Estate, Leasehold Estate Joint tenancy, tenancy-in-common Non-Possessory Interests Easement, right of way, restrictive covenant Adverse Possession Interests registered