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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 ofAlberta

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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 asestates 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 permanentlyattached 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 orpermanently attached to the land

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Real versus Personal Property

Distinction according to type of property andrights in such property

Real = land and attachments

Immovable

Real(real action) historically legal remedy a partycould get when rights to land had been interferedwith

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 tocertain rights and duties portions to vassals then sub-

vassals subject to further rights and duties

Holder had to comply with promise to necessary armedmen or services in support of the crown

Other services such as Agricultural and administrative

Escheat reversion of land back to the crown when thepromise 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 usepermitted 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 localrestrictions

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 certainprecious metals

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FEE SIMPLE

Escheat the reversion of land to the Crown

when a person possessed of the fee diesintestate 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 personslifetime

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 ofland

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 withfee simple

Reversion the balance of fee simple reservedto the grantor and her heirs at the end of a lifeestate

Remainder the balance of a fee simple thatgoes 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 LAND

EXAMPLE OF CREATION OF ESTATES IN LAND

Copyright2004by

McGraw-HillRyerson

Limited.

CROWN

FIRST

GRANTEE

A

C

Has Fee

SimpleC

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 Bs

Remainder and Life

Estate Merge to FormFee Simple Again in C

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LEASEHOLD ESTATE

Land leased to a tenant for a definite periodof 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 corporationwhose members are the condominiumowners

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 tocondominiums

Member buys a share in cooperativeorganization 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 onelandowner over the land of another for aspecial purpose but not for occupation of theland

Right to use neighbors 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 theholder a right to pass back and forth overthe land of another in order to get to andfrom her own land

Dominant tenement the piece of land thatbenefits 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 practicalconvenience

Landlocked

Prescription: long, open, and uninterrupted useof a right of way

Use visible and apparent

Statutory: public utilities

INTERESTS IN LAND (RESTRICTIVE

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INTERESTS IN LAND (RESTRICTIVECOVENANT)

Negative covenants limiting the use of land

Owner some control over use of property evenafter it has been sold to another

A covenant requiring the holder of the land to

refrain from certain conduct or certain use of theland

Need dominant tenement and servient tenement

INTERESTS IN LAND (RESTRICTIVE

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INTERESTS IN LAND (RESTRICTIVECOVENANT)

Issue: enforcement of covenants onsubsequent holders of the land (rule ofprivity)

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 servients use of the land

Easement may arise from implication or prescription

Easement Easement may allow dominants 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 landpermitting the lessee to remove materialextracted from the ground

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INTERESTS IN LAND (MINERAL RIGHTS)

Mineral eases

Right to extract and retain minerals from underthe surface of land occupied by others

Several interests in one agreement

Usually accompanied by a right to possession ofsmall 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 awatercourse; 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 toland under the registry system

Acquired by continuous, open, and notoriouspossession of land inconsistent with the title of

the true owner for a period of time (usually 1020 years)

Possessory title good against everyone, includingtrue 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 bythe passage of time

Overhanging roof, building over the property line

If true owner permits encroachment for a longperiod 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 ofthe land

Chattel attached for the better use of chattel not afixture

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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 ofwhom has a right of survivorship

Undivided interest

Identical in time, interest, possession

Right of Survivorship the right of a survivingtenant to the interest of a deceased joint tenant

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REGISTRATION OF PROPERTY INTERESTS

Two Systems

Registry Systems registry office searchesof 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 registrationwhere the land titles office brings all outstandinginterests 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 covenantAdverse Possession

Interests registered

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Transcript of Willes 727