Canadian Property Law/Printable version

Canadian Property Law

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Introduction

Introduction

In Canada there are two parallel legal regimes that apply to many areas of law. The most prevailent is the common law which is used in most provinces and territories to the exception of Quebec which is under the civil law system.

Meaning of property

Philosophically, "property" in law does not refer to a thing but to a relationship. The subject of property enjoys a "bundle of rights" over an object of property. The bundle of rights includes the right to use the object, the right to exclude others from using or enjoying the object, and the right to dispose of the object. An object in this sense need not be a physical thing. In the days of slavery, a slave was an object of property. In modern times, many abstract concepts (such as patents or copyrights) can be objects of property.

That having been said, the terms "property" and "object of property" are often used interchangeably in practice.

Common law

The common law practice of property is divided into two general type: Personal Property and Real Property. This is in practice almost identical to the distinction between movables and immovable land in civil code - see below. The distinction becomes extremely important when contracts or relationships in one place affect land in another. In those circumstances, the governing law that applies to the personal or movables is that of the contract or relationship. However that which applies to the land is that of the physical jurisdiction where the land is. This principle is "lex situs" or "law of the land". For instance, if someone dies without a will, the law in the location where the land is would apply. If they die with a will, its validity is assessed where the land is and its effects may be quite different than if the land was where they had lived or wrote the will.

Real vs. Personal Property

There are two categories of property in common law: Real property and Personal property. Real property is, essentially, the rights to land and the things that are attached to it. Personal property is, essentially, rights to any other possession.

Real property was, in English history, much more important than personal property. In the Middle Ages, when the economy relied almost exclusively on agriculture, land was the key to wealth. Therefore, the legal rules around real property developed into a much more complex state than personal property. Even though today, land is much less central to the economy, much Canadian real property law still obeys the complex English property rules of the Middle Ages. The terminology ("landlord", "title", "tenant", "right of entry and distress", "lex situs", "possession", etc.) is all directly descended from these rules with only refinements, not basic changes. See Canadian_Property_Law/Real_Property for the history, terminology and principles that apply.

Personal property, on the other hand, had relatively simple legal rules up until the 20th century, when personal property began to have a much greater value (things such as company shares, drug patents, and computer technology are all types of personal property). Therefore, the rules of personal property have become much more complex in recent decades, although they will seem much more modern than real property rules.

Civil law

Civil law property law derives mainly from the Civil Code of Quebec, and applies only to property in that province. Its inspiration comes from French civil law, but it varies in several important ways, and has gradually incorporated several important common law concepts. It has also from time to time influenced the evolution of common law in Canada, in at least two ways:

• The role of the surveyor, quite different in civil law, is that of a mediator hired by two persons after one invokes the right of "le bornage" to force the other to arbitrate their shared boundary - this has led Canadian courts to rely more on surveyor testimony than the common law says they should.
• The civil code principle of "interversion" crept into common law in Ontario as the "inconsistent use test" for a time but has now receded as it is generally understood as incompatible with common law in the stricter provinces. It has however been cited as a valid principle w.r.t. public or common land.

See Canadian_Property_Law/Real_Property for distinctions between common and civil code rules and roles regarding real property.

Similar to the "real" and "personal" division between types of property, civil law divides property into two types: movable and immovable. There is almost no distinction, except that some movables (like building supplies) are regarded as part of real property and not personal in the civil code. In practice there is only a single distinction between real "immovable" land & personal "movables", regardless of the system of law.

Return to Property Law

Personal Property

Introduction

In the common law systems personal property may also be called chattels. It is distinguished from real property. Personal property may be classified in a variety of ways, such as goods, money, negotiable instruments, security , and intangible assets including choses in action.

Personality

Back to Canadian Property Law

Real Property

Introduction: the evolution of common law

To understand real property in Canada or any Commonwealth common law jurisdiction requires some archaic terminology that makes perfect sense only in an historical context: in the Middle Ages, the king technically owned all the land in England, which his "court" (the King with the visible support or consent of the nobles who lived at court) gave or rented out in large parcels to his most trusted barons (or "lords") in return for keeping him in power. Those with "title" (meaning both land and rank) let peasants live on his land and protected them; in return, this "land lord" (a knight or baron or higher "title") extracted heavy rents from them. This system binding the peasants to the barons was known as the "land tenure" system: The peasant was a "tenant" of the baron, who was his "land lord". This system was the basis for the proper ordering of society.

Therefore, it was in the interest of the king and the barons that everyone knew at all times who had "seisin" of the land, i.e., which peasants had to pay rent to which lord for which piece of land. Any land where this was unclear was "wasted". The Medieval rules of real property transfer were therefore very strict in ensuring that it was always very clear who was receiving the land; any lack of clarity ("abeyance of seisin") was forbidden, and the transfer was "null and void". This disadvantaged the illiterate farmers who could pay for land they did not receive, if the transfer they had paid for did not satisfy this strict criteria, so this required - then as now - legal advice from a neutral third party educated in Latin who could "plead" the case at "court".

Land rights did not expire and could be enforced at any time against anyone using any land, however innocently, who did not hold a "title" to it from the "court" (making them the "true" owner). This further disadvantaged the illiterate freeholder who might improve land and then be evicted from it, so verifying that one's predecessor owned land that was sold (a "title search") became necessary.

The medieval English system had been overlaid by Norman kings on the older (Anglo-Saxon) system of freeholds, in which persons actually using land had considerable rights to continue using it, as long as they met obligations to their lords, and in which most people were actually freeholders. These older "common law" authorities' decisions were cited by way of pleading to the king (at his "court") that he was being unfair compared to those prior magistrates/courts, even back to Romans (most persons and all lawyers having a fairly good education in the classics, Latin and Roman law). It was a point of pride among rulers to be favourably viewed as behaving like good rulers, like Augustus Caesar or Marcus Aurelius, and not like bad Roman emperors, like Caligula or Commodus. The difference was largely viewed as behaving erratically versus prudently following wise "precedents".

After the chaos of King Henry II's reign and his civil war against his own sons, many lords having direct experience with better-ordered Mediterranean kingdoms and a stricter rule of law imposed by Islam on Arabs (that relied also on precedent jurisprudence or "fiqh"), began to demand somewhat more predictable rule than simply hoping or expecting that the king would follow a wise precedent. In this they had much support from their knights and especially Saxon lords, knights & freeholders, some of whom had been forced into hiding or rebellion by John's rule, i.e. the "Robin Hood" legend.

The 1215 Magna Carta was, essentially, the feudal barons imposing on King John the same well known lists of rights - and especially real property rights - that older Roman, Saxon and Scandanavian ("Danelaw") rules (back to King Alfred) had protected for Anglo-Saxon freeholders prior to Norman feudalism. John signed it only unwillingly and after putting himself in "vassalage" to the Pope to bolster his claim that to support inherent rights of nobles or freeholders was to diminish recourse of those without land to the Crown (or "court") and Church. John tried to rescind it after signing it, also, with the Church's backing. However, the Magna Carta stood, and guaranteed a more even and fair hearing of the "common law" arguments, which had been well recorded since Aethelred and Alfred, and which established a predictable body of law documented in Latin which all lawyers knew.

The vast majority of "court" hearings were between the elite "land lords". But balance of power in English society slowly shifted. The rights the barons had guaranteed themselves, including basic rights to property, eventually were recognized for most English freeholders and farmers. These argued "in the common law" before the "court", or in "appeal" to the "Crown" which had already ruled against them. Like the Church's parallel "canon" law, laws were imposed top-down on the public by literate persons with access to money and powerful people. Access to legal assistance for a price (the legal profession) refined and improved the documentation of previous precedents and made it much simpler to argue "cases" at "court". For five centuries, power shifted slowly from nobles with "titles" to judges or "magistrates" - final rulings eventually shifted from Crown to a panel of Law Lords, who to this day sit in the House of Lords, and not in the Crown's "court".

By the mid-17th century the House of Commons (the English legislature) and the common law it upheld and modified, were the pre-eminent power in England, using which Cromwell deposed and executed the King Charles I. Cromwell was a mere member of the House of Commons at the time, not even a Lord or Minister. A long process of subordinating lords, nobles and Crown to the "commons" was completed.

After the "Restoration" of Charles II, and especially after the invitations of William of Orange and then later King George I of the Habsburgs to take the throne, Crown power was confined to the conduct of war and diplomacy. It had almost no effect on daily dealings in land and in property, which continued to be governed by the same "common law" and judicial principles for nearly 1000 years as of that time, since the Saxon invaders from Germany had reconciled theirs & Roman laws.

Quebec's civil code

In France, where the very elite top-down Norman system had come from originally in 1066, a quite different judicial history led slowly to pre-eminence of the Roman Catholic Church and to various means of dispute resolution and judicial principles of logic (that were far less governed by old authority and precedent). After the French Revolution the Napoleonic "civil code" was adopted in Quebec, as it retained control of its provincial law under the British Empire after 1769. This law was retained through Confederation in 1867 not directly modified until the 1981 Constitution that limited application of the common and civil law (very little) with modern human rights limits. To this day, the Quebec civil code invokes principles rather than authorities to make major decisions. In this respect, it echoes the ancien regime French and Norman courts acting as "nobles" with a special obligation to others in society to make fair decisions and exercise power for common good.

Quebec real estate is governed by the civil code, not the English common law. There are specific differences, most notably the role of the surveyor. On some matters, common law jurisdictions have experimented with civil-code-like rules, generally failing to make them stick across the country. The civil law principle of "interversion," as defined in article 923 of the Civil Code of Quebec (CCO), apparently developed into a non-common-law-like test called the "Inconsistent Use Test (IUT)" [MH Lubetsky, 2009] [1]. This was briefly popular in Ontario but now largely abandoned, and never applied to private land in most common law jurisdictions.

A more important and pronounced difference is the role of the professional land surveyor. In Quebec the civil process of le bornage is a mandatory arbitration of boundaries that any landowner can impose on an abutting landowner. It is resolved by a surveyor hired in common who is responsible to mediate their boundary dispute. This is utterly unlike the common law doctrines of acquiescence, estoppel, possession, and primacy of agreements clearly visible on the ground over deeds on paper.

Civil vs. common law, and their common influences

Civil law bears slightly more resemblance to Church canon law, in arguing from basic principles of safety, fairness and closure, rather than from authorities to decisively settle cases by precedent. Both evolved after the Crusades also under the strong influence of Arab universities and learning, which employed citation indexes, publishing, and the process of arguing in detail every aspect of cases to find a correct decision and correct criteria to decide it (the "ijtihad"), all of which had been initially part of religious obligation. Oxford was based on the great Toledo university in Muslim Spain, where every library in Europe sent to, to get true copies of any classical texts. To this day, scholars wear caps and gowns to demonstrate they have studied the ways of the Arabs, as in the Middle Ages, even the Crusades, this was a sign of a learned and well-travelled person.

It would be incorrect to consider either civil or common law to derive solely from English, French or other narrow tradition. Both absorbed and copied at least some Roman, Catholic, Scandanavian ("Danelaw" and Norse "Norman"), German (or "Saxon") and Arab/Muslim principles and procedures. In many ways the common law was simply the codification of these principles into Latin and casebooks.

The highest compliment to the common law however is that no one ever gives it up by choice. When the Thirteen Colonies rebelled against the British Crown in 1776, and subsequently as the British Empire devolved, all the former colonies kept the English common law, even Hong Kong in 1997. The common law principles of contract law are generally upheld in commercial codes all over the world.

Canadian law is unique in having issues settled in both common law and civil code by the Supreme Court of Canada, of which three of nine justices are from Quebec. Justices refer in civil cases including real property law to the appropriate tradition, resolving conflicts of laws and 'human rights' related disputes arising from the Charter guarantee (which rarely apply in real estate or estate law, but not never). Treaties and human rights law are not directly pleadable in court but the courts have adopted a premise of continuing to evolve the common law in compliance with these.

Basic common law real estate principles

When dealing in real estate, the most valuable investment and highest risk most persons ever take, it is extremely important to understand the roles played by various professionals and documents, and the terminology that applies in title disputes, which derives from the English history above.

role of the surveyor

In the common law process, the surveyor applies the doctrines of precedent and stare decisis, traces boundary lines based on evidence on the ground or in source documents, but has a role explicitly restricted to presenting that evidence honestly: “The surveyor has no power to decide the location of the boundary or re-survey and can only express an opinion as to where the boundary is to be found based upon a search for and study of evidence he/she has found in the field, testimony of others and in searches within the appropriate registry offices, Crown records and other offices of record ” SLC 8.21 The surveyor is an expert witness only, not a mediator and can have no valid opinion on whether one boundary line is "as good as" another one under the law. A hierarchy of validity applies to the "boundary evidence on the ground matching the chain of title documents to a specific tolerance of accuracy"

title insurance and location certificates

"Title insurance is insurance for the title and does not necessarily provide protection in regards to the extent of title or location of boundaries encroachments or improvements made on lands of others."

"The Location Certificate is only intended to the party for whom it was originally prepared for. Depending on the age of the certificate, improvements and encroachments could have taken place without the purchaser knowing. By accepting the old Surveyor Location Certificates the purchases are taking on this risk perhaps unknowingly. These risks could have a significant cost should an improvement to the property purchased be encroaching on land of others and or others encroaching on the purchased land."

When faced with the unknown encroachment or improvement issue the problem is usually rectified by:

• 1. Removing the improvement from the neighbours land;
• 2. Ignoring the encroachment;
• 3. Taking a legal position with the encroaching neighbour;
• 4. Subdividing/consolidating solutions" [2]

lex situs

The distinction regarding Quebec illustrates a principle. In modern and medieval times, it was always necessary that land be governed by the law, literally, of the land: lex situs is the legal principle that whatever other rules or laws or wills or contracts govern deals or property, that the law where the land is located must always govern all disposal of real property. This includes for instance whether a foreign will is respected or not, who inherits land intestate, what procedures are required to prove or transfer ownership, and how easements and leases are agreed and expire. To permit laws of many places to govern land would result in chaos and unpredictability.

Real property law is complex and there are in all Canadian provinces several ways to claim title in land or the right to use land. These are curtailed drastically after death or for absent persons out of possession, and extincted entirely for persons who have clearly neglected their land rights for a "statutory period" after which those land rights no longer exist, regardless of a paper deed.

landlords: the "right of entry and distress"

In all common law jurisdictions, a "true owner" or "land lord" with the support of a "court" in the form of a "paper title" (equivalent in the Middle Ages to a noble or lord or freeholding landowner) has a "right of entry and distress" (i.e. a right to inspect and evict) a "possessor" (tenant, serf or squatter) who is the "owner" (not "true owner") under the common law.

The common law evolved, as its name suggests, from appeals to the king (and his "court") by the so-called "common" man (who was generally illiterate and had no paper title to the land he possessed) in direct opposition and conflict with feudal lords (or "land lords") who exchanged paper titles and paid taxes to the king on land they had cheated illiterate freeholding peasants out of. Two different paths to claim title existed - and were only reconciled in the late 19th and early 20th century by modern laws. Thus the distinction between "owner" (actual physical possessor and "owner" in common law) and "true owner" (a paper title holder entitled to enforce his rights via the courts to evict the possessor and "not true" owner). And, the general weakness of payment of taxes in title claims, as this was always the first argument advanced by nobles against peasants and usually the first to be disregarded on the grounds that the king didn't agree to back a border or take a side in a dispute merely because someone had been the first in line to pay those taxes - in practice, usually the person with the weaker claim would make a point to pay them and so claim.

The Crown, then as now, was always mindful of the need to retain popular support against the nobles (or "land lords") and to therefore be perceived as acting fairly and in accord with "common law" of their ancestors back to Roman times, on principles recognized by merchants, the Church, and envoys. Wars of succession were always justified by lengthy legal arguments (as in Shakespeare's Henry V) to retain legitimacy in the eyes of the Church, and of foreign courts who would recognize a ruler - or not. Even a "right of entry and distress" to a whole kingdom was governed by specific laws no ruler wanted to be seen breaking. Pleas against such rights by current rulers became common.

limitations: "there is more injustice than justice in old claims"

In part due to high level pleadings of limits of rights to claim whole kingdoms, by late medieval times, the right to enforce land rights in perpetuity was abolished as unfair and in clear conflict with the common law and civil order: Enforcing such rights was "barred" after a certain period, initially a hundred years, then sixty (and in modern times to forty, twenty, ten!). The legal principle says: there is more injustice than justice in old claims, and it still holds today.

Modern law continues to use the old terms. In all (nine) common law provinces and the territories, the possessor "owner" (not the paper title holding "true owner") charges anyone claiming a right of entry with trespass. Any paper title held by a "true owner" is a defense against trespass charges.

This defense is not allowed ("barred") if the limitations period on claiming such a right of entry has expired. This is ten years in some provinces (Ontario, Albert), twenty in others (Nova Scotia) with special extensions for mentally incompetent landowners. If the deed is no longer good, a new certificate of title will be awarded to the possessor who has been recognized as the "true" owner. If the deed remains good or partially good to claim some of the land, other legislation (typically called a "marketable titles act" or under inheritance a "succession act" or "intestate succession act" or "wills act") will determine if the possessor retains a partial share of it. They might also retain possession of lands that were never on the deed, or not provably on the deed. If the land rights are split, other legislation (such as a "partition act") and regulations (such as the rules of intestate accounting and tenant-in-common reconciliation of cost of improvements under a partition in equity, and etc.) establish who owes who money or equity, who has the right to demand sale (if anyone) or to occupy. All of this is entirely governed by the province where the land is even if the land right passed by will in another province, based on relationships elsewhere (for instance, a marriage) that were interpreted in the local law (for instance, to invalidate a will).

The courts can in serious disputes where partition is impractical order that land be sold, forcing both parties to bid to buy it, i.e. buy each other out. This is rare and usually follows a trial in which the parties have proven totally unable to agree on facts, prevented financing, and so on.

"possession is nine-tenths of the law"

There is a very strong bias in favour of status quo situations the courts are hesitant to undo, so persons in possession have many more rights and paths to claim that the status quo is just and fair and "perfect" their rights, than do persons not in possession to evict them and claim or sell land. Thus the popular saying that possession is nine-tenths of the law. Only a person with a clear and stronger paper title than a person who has none will generally be able to evict from the land, and it typically takes more than 2/3 ownership of an indivisible parcel of land to force its sale.

Accordingly very many persons own shares of land they cannot use, sell, lease, contract or deal in, and in some cases their heirs may continue to own marginal shares for generations without such use.

All this is by intention: The common law evolved to enable persons to remain on land, using it, in preference to permitting persons who had proven they would remain absent for long periods, permit squatting, etc.. The Crown benefits when persons it can dispossess, charge taxes, and whose names it knows are in possession of land by paper title. When a law-abiding landowner dies, it wants a long list of successors in a clear order of primacy, just as a noble "title" would pass by clear rules.

Failing however any family member coming forward, the Crown would rather grant title to a possessor who acts like an owner (see adverse possession below), than risk rebellion by taking land away and granting it to a long absent owner who didn't improve it. At the same time, property rights in land must be stable enough that paper title retains value and taxes are worth paying to protect it.

"action to recover any land"

Some provinces have become extremely strict about limitations and overturned much older laws to enforce more certainty on real estate transactions. In Ontario, legislation barring all "action to recover any land" more than ten years after the right to claim that land accrues, has been very strictly interpreted to:

1. . bar any claim to recover land when a separation or divorce happened more than ten years earlier
2. . bar any use of Statute of Frauds / of Elizabeth to annul a land transfer more than ten years old
3. . extend claims in land arising from contracts or wills to ten years instead of the more usual two

It remains unsettled if this inhibits persons living in Ontario, or claiming based on relationships in Ontario, or wills in Ontario, from claiming land in other provinces without such strict limits - to do so would likely require a separate proceeding to recognize the will and then claim land in that province through its probate process, risking challenge by anyone with ten years' possession.

Where a greater claim would be available through the Ontario law but where Ontario law would bar it on limitations, or where an Ontario relationship or contract is the basis for a claim that would be too old to enforce in Ontario, the courts may find it hard to justify allowing such a claim even in a province with a generally longer or looser limitations period - given in Ontario it would fail.

Type of estates

As English society evolved, the "incidents of tenure" (i.e., obligations to the lord) became regularized, and decreased over time. By the time Canada inherited British property law, the only incident of tenure left was "Escheat", that is, when a tenancy ends, the land reverts back to the lord. Even today, when someone dies without an heir, their land becomes property of the Crown (i.e., the government).

With the passage of the Tenures Abolition Act in 1660, although all land was still technically owned by the Crown, peasants could buy and sell their rights to the land they were living on, as well as pass it on by will or by gift. This type of property right became known as an "estate in free and common soccage" or a "free estate". This is why property rights over land are known as "real estate".

An "estate", in English medieval legal parlance, was an amount of time over which one held property rights. There are three types of estate: Fee simple, fee tail and life estate.

Fee Simple

This is the most prevalent type of common law estate. It is what most people think of when they speak of "owning" land. Although the land is technically owned by the Crown, the holder of fee simple can use the land, exclude others from it, and dispose of it.

Under fee simple, the rights to land transfer automatically from the holder of the fee simple to his heir. The holder of the rights in fee simple can grant the land to someone other than his heir. In order to do this, he must use the phrase to [the new owner] and his heirs. Any other phraseology will not legally transfer fee simple by grant. It will instead be regarded as a "life estate" (see below).

Life Estate

The other main type of estate is the life estate. Very simply, this means that someone holds the rights to the land for the duration of his life, after which it reverts back to the owner in fee simple or his heirs. For instance, an elderly landowner might remarry late in life. He may then wish to leave the estate to his new wife for the remainder of her life; when she dies, the land will revert to his heirs, rather than her heirs.

There is no particular phraseology required to grant a life estate. Something such as "to X for life" is usually sufficient. If the phrase "to X and his heirs" is not used, then the transfer is presumed to be a life estate.

Fee Tail

Fee tail is a rare estate, abolished in Canada everywhere except for Manitoba, in which only the lineal heir may inherit land. One can only transfer one's property rights in the land for as long as one lives; afterwards, the property rights revert to one's lineal descendents. This limits how land can be bought and sold, therefore reducing the value of the land. It is relevant to note that section 30(4) of The Law of Property Act in Manitoba while not abolishing the fee tail entirely, does prohibit the conversion of an estate in fee simple into any limited fee or fee tail.

Conveyancing

Grants and Wills

Grants of land were regarded with suspicion by common law courts (why would anyone give away their land, which was their main source of income?). That is why it became difficult to grant land in fee simple. The words "to X and his heirs" became absolutely necessary to make such a grant possible. Even the words "to X in fee simple" was not good enough.

will interpretation

Wills were interpreted much more flexibly. Legislation ensured this. A provable intention of the testator is usually the decisive factor - as in most wills challenges - for a judge in deciding whether the land was given in fee simple or as a life estate, or in trust for some other purpose.

However, the evidence admissible to prove intention is quite narrow and usually restricted to the "indirect" evidence, that is, not notes made specifically about the will, but about relationships and beliefs and concerns the testator had that guided their choices regarding their heirs & lands.

Canadian law has generally followed Lubberts Estate 2012 - an Alberta case - in setting aside any will where the testator's intent was not to disinherit but the narrowly interpreted wording of the will suggests it is - or has created an "equivocation" open to arguing the matter either way, in which case the evidence admissible is much broader. The Canadian courts generally prefer to find partial intestacy rather than discard entire wills, with exceptions being those provinces that generally apply stricter standards to foreign (including other provinces') wills, and where overtly admitted racist or noxious ideological goals admitted in writing had guided the choice of heirs, and thus it would be against the public interest to permit the testator's intention to stand.

imperfect title

When property owners die, often title issues come to light that were hidden, concealed, confused or in error. In most Canadian provinces, certain important rights of landowners die with them, such as the right to make any new claim in land to perfect an imperfect border (allowing such claims is generally deemed to violate the rules of reliability - since the testator cannot make a specific claim on their own behalf about their intent or purpose and cannot be cross-examined about these - and of necessity - since the testator being dead cannot have any vital interest left to protect).

Like deeded, surveyed, perfected claims in land, mere possession of land can be passed on to heirs, explicitly in wills or grants. However, the land must be possessed continuously for such claims to be good, so if the landowner is absent and merely had a claim in the past, the right would not be continued by their paper heirs, but by any actual possessor they had left in control of the land. Only if they had a mature right in land prior to death that could have been claimed without that possessor, and had claimed the intent to possess it by affidavit and been subject to examination by hostile parties, and had agreement with that possessor under no mistake to possess on behalf of the estate so as to ensure continuity to the date of claim, could an absent testator's estate be in a good position to claim lands to which it had a weak title. This right is particularly weak against common or public land, which have longer limitations and more difficult tests to pass to possess.

Adverse possession

As in medieval times, any distinction between who holds land on paper and who actually controls it is undesirable: Property taxes, capital gains taxes, insurance liability, and other modern rules cannot be properly enforced if someone is a "bare trustee" holding title for others or a "squatter" inhabiting it without the obligations of title holders.

Conditions for Adverse Possession

Actual and exclusive possession: is a question of fact. Things to consider are: surveyed boundaries, construction of a fence, construction of permanent improvements; Payment of taxes or fees is not generally considered an act of possession unless no one has occupied the lands at all, or they are remote and not amenable to occupation, and owners would not occupy them to use them.

Open and notorious possession: is possession which is not secretive. If the true owner were to visit the area he/she should have knowledge of the possessory facts. If any improvements are going on, the owner is also obligated to make third parties aware of his or her ownership, and not act in such a way as to deceive or acquiesce silently to occupation, lest a proprietary estoppel apply to prevent evicting persons who improved lands under deceit, and may be entitled to remain using them.

Continuous possession: Refers to the statutory time period. An interruption in adverse possession will restart the count. What is deemed an interruption varies, but generally anything more than a "mere visit" by a true owner will restart it, and that owner is also deemed to be in possession if there is any period of non-occupation by other possessors. This however does not apply in most Canadian provinces to seasonally used property, which if visited every year are deemed possessed. However if even one year is missed, such an absence of 18-23 months will interrupt the possession.

Even if no one party has sufficient tenure to claim possessory title in their own right, the paper (or "true") owner may still be barred from entry, if several squatters, even those with no privity with respect to each other and no agreement to pass on possession, occupied the land continuously. Provinces vary with respect to the privity they require, but those that grant title immediately on success of a real estate limitations action, generally also have looser requirements as to privity, and would require a subsequent quieting action or permit only civil claims to recover money, not land, by any person who had contributed to the possession but not been present at the end to claim. The general rule is that only the last person in a sequence of squatters "tacking" has any rights.

Exclusivity is an important attribute of possession: persons generally cannot occupy on behalf of each other except by explicit agreement, persons may occupy against their co-tenants-in-common (but not against joint tenants), and squatters must claim in sequence, not in parallel. Only if one of the squatters has pretended to be the owner or mistaken himself or herself for the owner, would the other squatters be freed of the necessity to gain peaceable agreement to continue their possession, and of the necessity to prove they had adversely excluded the prior squatters and the title holder.

Persons within families generally have each other's permission to occupy, and only if there is some serious and consistent and persistent mistake or deception of title, or some open and overt serious dispute, would it be likely that a claim of possession by one person against their family succeeds.

'Hostile' possession: Does not imply violence. It is merely possession which is against the true owner’s will; Threats or use of violence will generally prevent a claim of adverse possession.

Any type of agreement between the possessor and the true owner will also prevent a claim of adverse possession - however, both parties must actually know who the true (paper title) owner is, as it is not possible for both parties to have agreed when there is a mutual or unilateral mistake re who is the owner; Even an unknowing agreement with a true owner, made unknowingly, would not bar a claim, but could (if the owner deceived the possessor) constitute a proprietary estoppel to prevent the owner re-claiming land after encouraging the possessor to improve it. Generally, the onus of proving possession is adverse does not apply under mutual mistake, nor do some other rules such as the inconsistent use test (in jurisdictions where it applies); An agreement also can only be binding with respect to what the owner owns, not any additional or adjacent possessed lands - a possessor may not be obligated to claim & remit to an owner simply because he had an agreement that respected other lands, even if the deeded and possessory lands had changed hands in past together.

Future Interests and Conditional Conveyancing

Limitations on private authority

Certain types of contracts cannot be agreed by private parties. For instance, contracts to break the criminal code, e.g. a lease requiring the use of a building for illegal purposes would not be binding and might be set aside entirely, leaving the owner vulnerable to a claim of ownership by possession.

Remainder rules

A "remainder" is a right in land after a life tenure or other guaranteed tenancy has expired.

1) No remainders after a grant in fee simple

2) A remainder must always be supported by a precedent freehold estate

3) The benefit of a condition subsequent cannot be enjoyed by a stranger

Rule against perpetuities

The rule against perpetuities is a rule in property law which prohibits a contingent grant or will from vesting outside a certain period of time. If there is a possibility of the estate vesting outside of the period, regardless how remote, the whole interest is void, and is stricken from a grant. The rule is concerned with the utility of unused property and tries to prevent people from tying up assets for too long a period of time—a concept often referred to as control by the "dead hand".

Some provinces, notably Nova Scotia, have relaxed the rule but require refreshing the ownership rights every 21 years as if all lands were disposed of, taxes paid, and recovered by the trust. Under those conditions, a trust can be perpetual. However, Nova Scotia simultaneously made it far easier to challenge the terms of a trust even if one beneficiary is entirely against such changes.

Concurrent estates

Tenants in Common

The normal and default form of concurrent estate is tenants-in-common. When persons inherit land, they normally inherit it under this form of concurrency unless it is left to them as joint tenants. Even so it is difficult to retain joint tenancy.

Tenants in common each own a divisible and saleable share of land, and may deal in it regardless of the rights of others, though the ability to make use of the land may be limited. It typically takes between 60% and 75% of the equity in land to sell it, and that only if the land is not divisible or partitionable. When a tenant in common dies, his or her heirs inherit the land intestate or by will.

Joint Tenancy

Joint tenancy is a "last man standing" relationship. When a joint tenant dies, the land reverts to the other joint tenants, without reference to their will or intestate succession. Joint tenancy is usually applied between spouses, and it must be explicit in a deed. Even so, it is easily broken: Joint tenancy becomes a tenant in common relationship automatically if either party has any private dealings to sell or even expresses any intent to call for valuation of "their share" without prior joint agreement. Joint tenancy must come into effect at once and simultaneously with a common instrument like a new deed, it must remain a consultative and not rules-bound relationship where no division of the use of the land is in effect and it remains wholly available to both parties at all times. Joint tenancy comes to an end for both parties at once, when either deals independently.

Adverse possession follows a rule similar to joint tenancy, insofar as a series of "squatters" that are each in possession in sequence for the "statutory period" required to exclude a "true" or paper owner, may (even without "privity" passed in deed from one to the next) enable the last one in the sequence (when the rights finally "ripen" or "mature") to claim the entire value of the property "by tacking" those "credits" onto his own. However, adverse possession must be exclusive, so is most similar to joint tenancy under mutual mistake: a final possessor had accepted permission from someone with no right to give any or a right inferior to their own - which permission is thus invalid. Realizing the mistake, this final possessor need only 1. exclude the party they mistook for the true owner, or exclude them or their estate from taking possessory actions that compete 2. not acknowledge the true owner they have recently discovered, 3. possess with intent in their own right, to retain a right of non-will non-intestate inheritance similar to a joint tenant. However, this right must be proven and unlike joint tenancy the onus is against such a possessor, especially to prove the mistake regarding title, and that they never acknowledged the true owner in any way, or were entirely ignorant of their rights and therefore could never have agreed to respect those.

That said, a true joint tenancy cannot come into effect by possession or other circumstance, but must be an explicit agreement. Joint tenants cannot co-possess due to the exclusivity requirement.

Condominiums

Condominiums are a form of real estate that is physically structured like a townhome block or an apartment building, but governed in law as if it were a set of separate dwellings with a common infrastructure. Essentially they are governed by corporations with share structures to deal with common needs (common areas, yards, parking, hallways, elevators, waste disposal, utilities) and issues (noise, safety, odours, aesthetics, property security, rules regarding pets or children). These corporations have the right to compel sale of condo units by those who won't follow rules.

Most upscale rental units in Canadian cities are condominium units, owned by speculators or persons intending to use them later in life, rented to tenants and managed by a condominium corporation in conjunction with a building management company that ensure tenancies that do not devalue the units or disrupt tenant quiet enjoyment. Accordingly condominium and tenancy law are very inter-related.

Non-possessory interests in land

Easements

An easement is the right of use over the real property of another. Historically it was limited to the right of way and rights over flowing waters. Traditionally it was a right that could only attach to an adjacent land and was for the benefit of all, not a specific person. The right is often described as the right to use the land of another for a special purpose. It is distinguished from a license that only gives one a personal privilege to do something on the land of another usually the permission to pass over the property without creating a trespass.

Typically, an easement is composed of two tenements (types of land). There is the dominant tenement which is the plot of land to which the benefit an appurtenant easement is attached. Second, there is the subservient tenement which is the plot of land which bears the burden of the easement.

Easements may be considered public or private. A private easement is limited to specific owners or even just one individual such as the sole owner of an adjoining land. A public easement grants the right to a large group of individuals or to the public in general, such as the easement on public streets and highways or of the right to navigate a river, or launch boats from a beach. An "appurtenant" easement belongs to the owner of the land that benefits from the easement, as compared to other easements (easements in gross) that do not require ownership to obtain the use.

An easement may be implied or express. An express easement is typically included in a document such as a deed or other officially recorded grant, or incorporated by reference to a subdivision plan, or restrictive covenants in an association agreement. An implied easement may be of necessity or agreed to by permitting use for a statutory period. If the easement is highly visible such as an old right of way shown on widely distributed maps, it may be hard to extinguish even if never used. Another name for implied easements is "prescriptive rights". The "doctrine of lost modern grant" holds that if all interested parties behave as if a grant of right exist long enough, then it does. This only applies to the non-exclusive prescriptive rights, not rights to sell or evict from land, though there are parallel doctrines ("proprietary estoppel", "boundary estoppel") with that effect.

Application of these doctrines varies widely, but in general a fence or path or a building creates a status quo that is difficult to undo, particularly if investment in improvements and use proceeds visibly for years without objection or interference, and especially if it is based on a survey or marker placed by one party that the other abides by, relies on, and trusts. A "right of way of necessity" may apply regardless of other easements for safety reasons, and be implied by a deed. It is not however implied by mere possession or occupation of land without a deed, i.e. squatting.

In Torrens jurisdictions easements must be registered to bind successive purchasers. However, the Canadian jurisdictions vary widely in terms of how much time is allowed to advance easement claims after registration - usually at least ten years, in most provinces equal to the limitations period.

Covenants

Covenants are obligations to use land only in certain ways or for certain purposes, e.g. as a family dwelling or a wildlife refuge. Or, to dispose of it only a certain way, say by sale within family.

Mortgages

Mortgages are loans secured by land. In some jurisdictions, when the majority equity holder is the lender, that lender is formally the paper title holder or "true" owner, and no mortgage is binding without such an agreement. If the mortgage defaults then the lender has a clear "right of entry and distress" to evict the possessor and sell the property, which ensures orderly conduct of real estate.

It is more common however to require a firmer verification of land titles, including formal land registration, before borrowing against land. In most Canadian provinces no loan is binding as a mortgage without registration. The paper title may be seized as security and the possession is thus with permission of the mortgage holder until such time as the mortgage is discharged completely and the title reverts to the possessor. This is to ensure no one "squats out from under" a mortgage by claiming that the lender did not perform the acts of possession normally required of title holders.

Land Registration

Land Registration Acts have, in most provinces, moved Canada more to a Torrens-style system with less reliance on title search, more on surveys. This has generally been accompanied by a shortening of limitations to a ten- or fifteen-year period, refinements to title quieting measures, and otherwise making land transactions (after registration) more certain and less subject to common law challenge.

The Acts and court interpretations vary widely in terms of what rights registration guarantees or insures, limits placed on adverse possession, disputes over extent, estates and the capacity of deceased persons to make new claims, who is permitted to dispute or alter records after registration, and so on. None of the Acts in Canada actually establishes a true Torrens system with both extent & title guaranteed and not subject to any common law challenge whatsoever - not even from possessory claims.

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Glossary

Abatement

Adverse possession

Also known as "squatter's rights". If a person occupies land for a predetermined period of time as set out in the different provincial acts and no legal action is taken to evict or indicate to the person an act of trespass, the ownership in the land goes from the original owner to the squatter.

Allodial

Assignment

Bailment

Bequeath

Bequest

Bona fide purchaser for value without notice

Bona vacantia

Cestui que vie

Chain of title

Chattel

Chattel mortgage

Chose

Chose in Action

Chose in possession

Clear title

Colour of title

Concurrent estate

Conditional estate

Condition Precedent

Condition Subsequent

Constructive delivery

Constructive possession

Constructive trust

Contingent estate

Convey

Conveyance

Corporeal hereditament

Co-tenancy

Curtesy

Deed

Defeasable interest

Determinable limitation

Detinue

Devise

Doctrine of Worthier title

Dominant tenement

Donatio Mortis Causa

Dower

Easement

Eminent domain

Encumbrance

Encroachment

Equity of redemption

Escheat

Escrow

Estate

Executor/executrix

Fee simple

Fee tail

Feoffment

Fertile octogenarian

Fixture

Foreclosure

Freehold estate

Future interest

Gift

Gift over

Good title

Grant

Hereditament

Incorporeal hereditament

Intangible property

Intestate/Intestacy

Intestate succession

Issue

Joint tenancy

Jus tertii

Landlord

Leashold

Licence

Lien

Life in being

Life estate

Livery of seisin

Living will

Lost modern grant

Mortgage

Mortmain

Nemo dat rule

periodic tenancy

Per stirpes

Possession

Posessory interest

Possibility of reverter

power of appointment

Power of sale

Primogeniture

Property

Pur autre vie

Quia emptores

English statute of 1290 that abolished subinfudation

Quiet enjoyment

Real Property

Remainder

Remainderman

Replevin

Restrain on alienation

Restrictive Covenant

Resulting trust

Reversion

Reverter

Rule against perpetuities

Rule in Shelley's case

Rule in Andrews

A rule for constructive gifts that allows for escaping the rule against perpetuities. If one member of a group satisfies a requirement for vesting at the time the gift takes effect then the class closes on whoever is alive at the time.

Run with the land

Seisin

Severalty

Severance

Shifting interest

Springing interest

Statute of Uses

Subinfudation

Sublease

Subtenant

Survivorship

Tenant

Tenancy

Tenancy in common

Tenancy at sufferance

Tenancy at will

Tenament

Tenure

Torrens title

Trover

Trust

Unities

Use

Usufruct

Vested in interest

Vested in possession

Waste

Will

Words of limitation

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