Chapter 14: Real & Personal Property

- What is Property?
- Property is the relationship existing between item and the individual who owns it
- Property is the state enforced legal right to exclude others from access or
use of something you have ownership of
- Difference between ownership and possession
- Ownership: Ownership refers to the legal right to possess, use, control, and
dispose of a piece of property. When someone owns real property, they have the
legal title to it, which means they have the right to sell, lease, mortgage, or
otherwise transfer ownership of the property. Ownership is established through
legal documents such as deeds, titles, or other conveyance instruments. It
signifies the bundle of rights that a person or entity has over the property,
including the right to exclude others from using it.
- Possession: Possession, on the other hand, refers to physical control or
occupancy of a piece of property. It signifies actual physical control over the
property, regardless of whether the person in possession has legal ownership
rights. Possession can be temporary or permanent, and it can be held by
someone who may not be the legal owner. For example, a tenant renting a house
has possession of the property during the term of the lease, even though the
landlord retains ownership.
- Types of Property: land, buildings, attached to the land and items called fixtures – items
that are attached to the land or to a building ro to another fixture attached to the land
- Real property
- Interest in land: where does it begin and end?
- Airspace
- Can’t complain against airplane
- Sue for trespass for overhanging building and power lines
that permanently intrudes and unsupported by legal right
- Mineral, oil, and gas rights
- Crown retain such rights
- Owner entitled to compensation for surface disturbance
(roads, shafts, etc) but not share of profits of minerals, oil
and gas
- Only portion that owner can permanently use or occupy is now
considered part of that property
- Estates in land: an historic artifact from feudal system
- Estate in fee simple (freehold)
- What we think of ownership
- Fee simple: the highest interest in land, equivalent to
ownership; an estate granting possession for an infinite
time
- Owner can do anything except the stuff regulated by
legislation
- Ex. nature, health, regulations
 - Can be inherited
- Life estate ad reversionary interest
- Life estate: an interest in land ending at death of the estate
holder
- Upon death, land goes back to owner of fee simple
or owner’s heirs
- Cannot be willed to others
- Reversionary interest: right to take back property
- Can be transferred to third party (remainderman)
- Remainderman holds rights for remainder of fee
simple
- Not common → popular for accommodation for seniors
- Must be upkept
- Interests similar to life estates are created through law
- Dower rights: protection of the rights of a spouse in
certain matrimonial property; have been modified or
abolished in ,most jurisdictions
- Headstead rights: rights giving a spouse a claim to
a substantial portion of family property
- Leasehold estate: an interest in land that grants the tenant
exclusive possession until a specific date
- Term is some recurring period
- Lesser interests in land
- Easements:a person the right to use a portion of another’s land,
usually for a particular purpose
- Right of way: gives a right to cross another’s land, usually
to get to one’s own property, but does not give that person
the right to stop, park a car, or build some permanent
structure on that property
- Dominant tenement: property that the advantage of
right of way
- Servient tenement: property subject to it
- Statutory (ex. Hydro lines)
- give utilities or other bodies similar rights to run
fibre optic cable, phone lines, power lines, or sewer
lines across private property
- Licenses: a person permission to use another’s land
- Ex. shopping malls
- Easement acquired by prescription: a right to use of land
that is acquired through free use of that land without
interference over a number of years
- Adverse possession: someone has had possession of the land for
a significant number of years with the knowledge and toleration of
the owner
 - Restrictive covenants:
- Interest that “run with the land”
- easements and other rights that remain with
property even after being transferred
- Ex. tenants can still stay even if ownership
transfers
- Binds all subsequent owners
- Ex. restrictions on what building can be put is put on for
subsequent owners
- Building scheme: a set of restrictions placed on all properties in a
large development
- Tenancy in common and joint tenancy
- Tenancy in common: ownership of land by two or more people
with equal undivided interest in it
- Neither owner can point to any one portion of the property
is theirs
- Heirs or beneficiary on will will inherit it
- Estate tax and probate fees apply
- Joint tenancy: shared property ownership with a right of
survivorship
- If one owner dies, the property will go to the other tenants
- Attractive to family
- Severance: an owner’s removal of chattel that they have
been affixed; separation or division of joint ownership;
action by one of the co-owners that is inconsistent with
joint tenancy
- Must take place before death
- Accomplished by one of the parties acting in a way
that breaks the joint tenancy
- Ex. selling one’s interest to third party
- Will does not work
- To avoid joint tenancy , avoid terms like “held jointly” or
“joint ownership”
- Indigenous Perspective
- Indigenous rights and claims to land are considered sui generis
- Does not conform to property law
- Other interest in land
- Option agreement: Normally, an offer can be revoked at any point
before acceptance. Such an offer can be made irrevocable when
the offeree pays some additional consideration to keep the offer
open for a specified period
- Used by land speculators
- Purchasing land is done by mortgage or agreement for sale (an
agreement where title will be transferred at some time in the
 future, typically once the property is fully paid for; an agreement
that grants possession of property to the purchaser pending full
payment of the price
- Transfer and registration
- Agreement of purchase and sale
- First stage
- Known as interim agreement
- Contract governing transaction
- All terms and special conditions must be set, especially
condition precedent (ex. Avoid being bound until
acceptable financing is arranged, until their existing house
is sold, or until the house passes a proper inspection)
- Lawyer will search for title, when all conditions are satisfied and
removed → property will transfer from vendor to purchaser
- Deed of conveyance: a document transferring an interest in
property
- Impossible to track all deeds so solved through registration
systems
- Registration system: a means of registering and tracking property
deeds
- Land titles systems (used in territories, New Brunswick and Nova
Scotia, ontario and manitoba)
- A registration system that guarantees title to real property
- Certificate of title determines interest of the parties listed
on it to the land specified
- Essentially conclusive evidence
- Can bring an action the registrar for damages
- Condominiums
- Corporate body and functions similar to a company
- Meetings with regular members voting
- Individuals have own unit but common areas are owned in
common
- Normal rules of real property apply
- Fees for each member for repairs, etc → if not paid, lien or caveat on the
title of member
- Co-operatives: an independent legal entity composed of members holding
shares in it; a method of acquiring residential accommodation
- Members have individual units but shared common areas
- Cooperate with administration of project
- Can be held in common or individual rooms are lease
- Covered by blanket mortgage (members assume portion)
- Disadvantages to condominium and cooperative
- Submission to bylaws and month fee
- Members required to leave if bylaws are violated
 - Advantages to condominium and cooperative
- Viable alternative to renting an apartment
- Shared facilities
- Personal Property: moveable property
- Chattels: movables that can be measured and weighed
- Vs. real property (land and things fixed or attached to land)
- Chattels can be real property if its attached to land
- Ex. vehicles
- Rules governing chattels
- Owner is free to remove a chattel that has a become a fixture
- Only removable during tenancy
- All chattels that are not removed when tenancy ends
belongs to owner
- If tenant of commercial property attached fixtures to enhance
trade, they have right to remove trade fixtures
- Non-trade fixtures for comfort can be removed
- If chattels were to damage property if it was fixed, they must stay
- Finders keepers rules
- Generally, finder has the right to item against everyone except a
prior owner or secured creditor
- Exceptions
- If goods are found on private property, owner of property
has right to item
- Chose in Action: an intangible right is a claim one person has against
another (right to sue)
- Ex. bonds, share certificates, and negotiable instruments
- Intellectual Property
- Copyright
- Patents
- Trademarks
- Industrial designs
- Trade secrets
- Mortgage: a means of securing loans; title of property is held by the moneylender as
security in some jurisdictions; in other jurisdictions, mortgage is simply a charge against
title
- Both title and possession remain with debtor, but rights created is same as
creditor can take title and possession in event of default
- Mortgagor gives rights to creditor in exchange for financing
- Payment is calculated of debt paid over a long period of time
- Agreement itself is shorter time, allowing parties to adjust interest rate
payable and other rates
- Equity of redemption: an interest in land retained by the mortgagor even after
default
- Has to be by paying all that was owed
 - ex.if your property was worth $400,000 and you borrowed $200,000
secured by a first mortgage against that property, your equity of
redemption would be valued at $200,000. You could then borrow a further
$100,000 from a second mortgagee by transferring that equity of
redemption to the second mortgagee as security. In the event of a default,
in order to get their $100,000 back, that second mortgagee cannot simply
take the property. They only have the right to redeem the property by
paying out the $200,000 owing on the first mortgage. Remember that the
amount owing would also include unpaid interest and the costs
associated with the process. Thus, the second mortgagee, in order to
realize on their security in the event of a default, must be prepared to pay
out the first mortgage, including interest and expenses, as well as take
over the property
- Foreclosure: a court process ending the mortgagor’s right to redeem
- Ex. six months to pay what is owed before mortgagor gains title and
possession
- Right to sell
- Mortgagor can bring application to court called Order for judicial sale: a
court order that property be sold during the redemption period
- Landlord-tenant
- Leasehold estates:
- Lease gives tenant right to use the property to the exclusion of all others
for the period of time
- Landlord cannot enter without permission
- Periodic tenancy vs term lease
- Periodic tenancy: the specific period (usually a month) is
automatically renewed
- Term lease: ending on a specified day or specified period
- Assignment vs. subletting
- Sublet: a lease executed by the lessee of land or premises or a
third party for a shorter term than that which the lessee holds
- Rules of contract law apply to leasehold estates
- Wise to put lease in writing but not required
- Leases over three years need to be in writing to satisfy statute of
frauds
- Writing must specific the premises covered by lease, parties to it,
the consideration or rent to be given by tenant, duration of lease,
and other special provisions
- Leases can be taken as they are interests that run with land
- Subject to subsequent owners or mortgagee taking the property
after a default
- Not binding if person is incapable
- Frustration now applies to land (if property is destroyed or damaged,
rendering it unusable, the contract will be discharged by frustration)
 - Notice to end periodic tenancy need one clear period in advance (ex. One
month)
- LEASE IS CONTRACT
- Residential tenancies (in Ontario)
- Residential tenancy agreements far more regulated than commercial
leases
- Due process for evictions must be followed, proper notice, right to hearing
etc
- Standards: good state of repair and fit for habitation. Doesn’t matter if you
accepted the unit “as is”
- KNOW YOUR RIGHTS!
- LL cannot ask for a security deposit. LMR only.
- Tenants get interest on LMR at rate = CPI
- 24 hour written notice for entry by landlord unless emergency or tenant is
moving out or tenant gives consent
- You do not have to renew your lease. At the end of a fixed term lease,
you are automatically switched to a monthly lease.
- LL cannot demand post dated cheques
- Tenancy “runs with the land”
- There is a requirement that the parties use a standard form lease
specified in legislation with the tenant being given a copy within a limited
time
- The landlord is also made responsible for any repairs other than normal
wear and tear, while the tenants are responsible to maintain minimal
standards of cleanliness and pay for any damage they create.
- The period of notice required when a landlord terminates a tenancy or
increases the rent has been extended in residential tenancies, and any
security deposit taken is strictly controlled.
- How often a rent increase can be imposed is usually restricted, and in
some cases the amount of that increase is restricted as well.
- The landlord is required to not eliminate any services in place such as
laundry facilities, storage, and parking during the tenancy.
- If when the tenant leaves there is unpaid rent or damage, the landlord has
no right of distress in a residential tenancy.
- Whether a term lease may be imposed on a residential tenant or if all
tenancies are periodic, which is the case in British Columbia.
- Tenants’ Rights
- Security of tenure
- Unit in a good state of repair and fit for habitation
- Quiet enjoyment
- Free from harassment
- LL cannot prohibit pets in a building (although if the pets interfere with
quiet enjoyment, that is basis of eviction)
- Minimum of 21 degrees Celsius (CIty By-Law)
 - Provision of vital services, such as water or electricity
- Investigation and enforcement branch of the municipal affairs and
housing ministry at 1-888-772-9277
- Tenants’ obligations
- Pay rent on or before the 1st of the month
- Maintain ordinary cleanliness
- Not interfere with other tenants or the landlord
- Not commit illegal acts or run illegal businesses on the premises
- If you are on a month to month lease: must give 60 days notice
- If you are on a fixed term lease; you can sublet or assign (LL cannot
unreasonably deny permission to person you find to sublet or assign)
- Using the landlord Tenant Board
- If you have any issues with your tenancy, you can make an application to
the LTB
- If the LL wants to evict you, they MUST have an order from the LTB.
Police have NO jurisdiction
- Only a sheriff can physically change the locks after eviction, NOT
the LL
- At the LTB, you will have access to duty counsel
- Almost all applications to LTB start with a notice
- Eviction
- Even after a hearing and the LTb issues and Order to evict a tenant, tenant will
have an ultimate move out date before Order can be enforced by Sheriff
- If tenant does not move out, then LL must file Order with Sheriff. Sheriff will serve
Notice to Vacate
- Commercial leases
- Landlord has obligation:
- To ensure vacant possession: an obligation to deliver possession of
vacant of a tenant at the beginning of a lease period
- Give tenant quiet enjoyment
- Nothing needs to interfere with tenant’s use of the property
- Repair (to the extent needed for quiet enjoyment)
- Specific changes to these obligations
- Notice of termination
- Tenancy at sufferance: a situation in which a tenant fails to leave
after a lease has expired and owes compensation to the landlord
- Landlord is entitled to compensation
- Tenant has obligation:
- To pay rent
- Normal wear and tear only
- Tenant cannot without rent until repairs are made
- Can ask court to make an order of abatement: a court order to
reduce the rent to be paid to compensate for a breach of the lease
by the landlord
 - Landlord needs to be notified but landlord has no obligation to
make repairs unless interferes with enjoyment of tenancy
- Landlord can demand tenant for payment for excessive wear and
tear when premises are used in a manner not anticipated in the
lease
- Tenant not responsible for normal wear and tear but for
consequential damage
- Remedies
- Rent is not paid → sue for overdue rent
- Other breaches → sue for damages or vacancy (forfeiture)
- In commercial lease, court doesn’t need to be involved and
landlord can change locks
- In other cases, there needs to be notice of breach and time to do
so and eviction
- Relief against forfeiture: an equitable principle that when a landlord
retakes a property because of a failure to pay rent prior to the end of the
lease term, the tenant can pay the arrear and apply in the court to have
the lease reinstated
- Commercial premises right to seize the tenant’s property and hold it until
rent is paid or sell it to pay the rent owing (distress or distraint)
- LL can seek contractual remedies in the form of damages
- Courts can issue injunction if activity is inconsistent with the terms of
lease
- Remedies available to tenant for LL’s breach are more limited
- Entitled to compensation
- Injunction
- Occupier’s Liability Act
- occupier of property is responsible for any injury caused to people
using the property
- Usually tenant
- LL is liable if repairs are not made
- Commercial contracts– vary: net, triple net etc.