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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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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
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Copyright 2004 McGraw-Hill Ryerson Limited 3
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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HISTORICAL DEVELOPMENT
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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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 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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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 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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INTERESTS IN LAND (EASEMENT)
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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INTERESTS IN LAND (EASEMENT)
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