copyright © 2004 mcgraw-hill ryerson limited 1 part 6 – the law of real property chapter 27 –...

Copyright © 2004 McGraw-Hill Ryerson

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PART 6 – THE LAW OF REAL PROPERTY

Chapter 27 – Interests in Land

Prepared by Douglas H. Peterson, University of Alberta


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INTERESTS IN LAND

Historical Development Estates in Land Interests in Land Fixtures Title to Land Registration of Property Interests


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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


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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


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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


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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


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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


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TYPES OF ESTATES

Nature of Estates Exclusive right to possession for period of

time Fee Simple

Life Estate Leasehold Estate


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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


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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


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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


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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


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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


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INTERESTS IN LANDEXAMPLE OF CREATION OF ESTATES IN LAND

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CROWN

FIRST GRANTEE

‘A’

‘C’ Has FeeSimple‘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’


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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


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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”


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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


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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

copyright © 2004 mcgraw-hill ryerson limited 1 part 6 – the law of real property chapter 27 –...

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