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