Canadian Real Estate Law
In Canada, the real estate concept is very much like the concept of real estate in the Medieval Ages. Only the King owns every parcel of land in his country and he rents out these large parcels of lands to his trusted lords or barons. These renting out of parcels of lands are reciprocated by the lords by keeping the King in his place and protecting him from threats. The barons or lords then rent out their parcels of land to the peasants or common people by collecting large amounts of money from them. The people buy this concept because the lords or barons protect the people in their territory. So it’s quite an agreement with mutual interests gained by all the parties involved.
Although this concept of real estate was decreased due to the Tenures Abolition Act in 1660, the whole country is still technically owned by the Crown. But this time, the residents don’t pay regular rents. They can buy and sell their rights to the land they were living on. They can also pass their parcels of land to their successors or give their lands as gifts. This type of property right is known as ‘free estate’ or ‘estate in free and common soccage’. That’s the reason why rights over land are called ‘real estate’.
Kinds of Real Estate
There are three types of real estate in Canada.
Fee Simple
The Fee Simple real estate is the most prevalent type of law estate in Canada. It is like ‘owning’ your own land. The property rights of the person entitle him to use the land, exclude others from it and dispose it in the manner he wishes such as by selling or granting.
This kind of law estate does not give the land to the owner but gives him the authority to manage the parcel of land. This means that the land is still owned by the Crown. So once the owner passes on without acknowledging any heirs, the land reverts back to the Crown’s ownership.
But if the owner had stated a will which says that he wanted to pass it on to his heirs or to a person who he wants to grant the property, the land will be passed on to the rightful owners. But the only phrase that the law accepts is: to [the new owner] and his heirs. If that was not the exact phrase used in the will, it will not be accepted and the land will be converted into a life estate.
Life Estate
This kind of real estate gives the owner the authority to use the land but only throughout his lifetime. Meaning, once the owner passes on, the property will not be passed on to the heirs of the life estate owner but to the heirs of the owner who had initially owned the land. This person is the one who granted the land to the life estate owner.
For example, if the owner has children and he remarried, he can give his land to his wife. But when she dies, the land will revert back to the heirs of the initial owner, the husband. If there are no heirs, the land reverts back to the ownership of the Crown.
There are no specific phrases used in this kind of real estate. If the heirs were not mentioned in the will, the land is considered a life estate.
Fee Tail
This kind of real estate degrades the value of the real property because it limits the way the land could be sold. Only the heirs of the owner can inherit the parcel of land and not any other parties. This kind of real estate was abolished in Canada except in Manitoba where fee tail real estate still exists.
Grants and Wills
It had been difficult to grant land because of the suspicions of common law courts. It is not really convincing to court judges for someone to give their own land to others without asking anything in return. That’s why to be able to grant a land to someone, a certain phrase (the one stated in fee simple real estate – (to [the new owner] and his heirs) was needed by the court to approve the grant.
Other phrases are not sufficient to convince the judges to grant the land to the successors especially if the real property being granted is fee simple real estate. Because it gives absolute power to the successor to use the land and dispose of it, the grant should be considered very well.
Wills are also interpreted flexibly. Courts should examine closely if the parcel of land has been granted to the heirs as fee simple or life estate.
Rules against Perpetuities
The rule against perpetuities is the rule which prohibits a group grant or will from vesting outside a certain period of time. This means that if someone has accumulated a non-forfeitable right on the land for a very long period of time, the grant is considered void. The rule shuns the possibility of accumulating real estate property for too long a period of time—a concept often referred to as control by the “dead hand”.
Easements
Easement is the right given to a person to use the property of another owner. In the past, this had been used for right of way and right of flowing waters. But this right should serve for the benefit of everyone involved and not just a specific person. This right is often used to avoid conflict between land owners or adjacent land properties.
Private Easement
A private land owner gives right to a person or persons to use a part of his land for the benefit of all the parties involved.
Public Easement
Public easement is a right of the public sector that gives the right to a group of people or the public to use a parcel of land for the benefit of all. An example is a right given to the public to use the streets or river to commute.
Easement can be expressed or implied. Expressed easements can be stated in deeds or grants. It can also be included in subdivision plans or restrictive covenants. Easements should also be registered so that it can benefit the successive purchasers of the lands involved in the easement.
