Chapter 4: Property Ownership in Ontario Flashcards
Describe the differences between real and personal property
Real property can be defined as the land and everything affixed to it.
It is in a fixed location and is permanent, remaining, to one extent or another, long after the current owners have relinquished their rights to it.
Personal property is defined as everything that is not real property.
That includes chattels and other goods. Personal property is typically not fixed in its location and normally has a shorter useful life expectancy than real property.
What does a homeowner actually own in relation to his or her property?
The current owner of a piece of real property actually owns rights to use the land, and not the land itself.
Describe the term “Fee Simple” and discuss the rights of the fee simple holder
The fee simple estate is the most common form of ownership in Ontario and provides the widest breadth of rights available.
‘Fee’ refers to the fact that the estate may be inherited while ‘simple’ refers to the fact that there are no prohibitions against who may inherit it.
The owner of this estate is in control of the real property for as long as they have it, subject to paying any property taxes and other municipal obligations and subject to any interests in the property that may be registered against the property’s title.
- property taxes
- municipal obligations
- other interests in property that maybe registered against the property’s title
The owner of this estate is in control of the real property for as long as he or she has it, subject to paying the property taxes and other municipal obligations and subject to any interests in the property that may be registered against the property’s title.
This individual may transfer his or her interest in the property during his or her lifetime or dictate who will inherit the fee simple interest upon his or her death, mortgage the interest, and so on. If the fee simple owner dies without a will and there are no heirs, the fee simple interest is terminated and the property will escheat or revert back to the Crown.
Describe the term “Leasehold Estate” and discuss the rights of a holder of this type of estate
Commonly referred to as a lease, is an interest in land created by the landlord and tenant, most commonly by a lease.
Interest in land is created for a fixed period of time. No limit on the time that a leasehold estate may be in effect.
A leasehold estate provides the owner of this estate the right to exclusive use and possession of the property, subject to contractual limits contained in the terms of the lease.
What makes condominium ownership unique?
Condominiums combine fee simple ownership of individual units, referred to as strata lots, including all of the rights attached to that ownership, with a combined ownership of common areas, referred to as common elements.
Each unit pays a condominium maintenance fee on a monthly basis to the condominium corporation. The corporation is charged with maintaining and repairing common elements. It is managed by a Board of Directors consisting of unit owners who are elected by the other unit owners on a regular basis.
What impact on property ownership do encumbrances have?
An encumbrance is an interest in property that has the effect of limiting the rights of fee simple ownership of real property.
- Mortages
- Easements
- Restrictive Convenants
What is an easement and what are its impacts on property rights?
Provide an example of Easement (Cottage).
Easements are rights acquired for the benefit of real property, granting rights to use another property. An easement is an interest in land that passes from one owner to another or as is commonly referred to, “runs with the land”.
Easements are rights acquired for the benefit of real property, granting rights to use another property.
The land giving the right is called the servient tenement while the land receiving the right is called the dominant tenement, where the term tenement simply refers to the real property.
An easement is an interest in land that passes from one owner to another, commonly referred to as “runs with the land”.
Unlike fee simple interest that may be transferred by the current owner, an easement cannot be extinguished by the owner of the servient tenement. Both the owner of the dominant and servient tenement must agree to remove an easement. It is important to note that an easement must benefit the property, not simply the property owner. If it simply benefitted the owner, it would be considered a contract and not an easement.
Example:
Adam owns a cottage that fronts a lake. Behind his property is Mary’s cottage. Her cottage does not have direct access to the lake.
To improve Mary’s property, Adam and Mary have agreed to create and allow the use of a 3-foot wide strip of land on the far right-hand side of Adam’s property as a path from Mary’s cottage to the lake.
This has the effect of granting Mary’s property access to the lake via Adams property. As such, this creates an easement that is registered on the title.
What is a restrictive covenant and what are its impacts on property rights?
Provide an example.
A restrictive covenant is a restriction of use placed on the title of the servient tenement for the benefit of the dominant tenement.
As with an easement, a restrictive covenant runs with the land and can only be extinguished through the agreement of both current owners of the dominant and servient tenements.
Example
Adam owns two parcels of land. One fronts a lake while the other is directly behind that parcel. Adam is going to build a new two-story home on the parcel behind the lakefront parcel and sell the lakefront parcel.
When selling the lakefront parcel, Adam wishes to ensure that the new owner does not construct a building higher than one story, since this would impede Adam’s property’s view of the lake. In so doing, Adam and the purchase of the lakefront lot have agreed to place a restrictive covenant on the title that prohibits the construction of a building higher than one story. In this scenario, Adam would also request an easement granting his parcel of land access to the lake.
Describe the difference between a building scheme and a restrictive covenant.
A building scheme is a group of restrictive covenants registered against several properties in a development plan that is binding on all purchasers of a property within that development while a restrictive covenant is on a single property.
Discuss the main difference between joint tenancy and tenancy in common.
A joint tenancy is a type of co-ownership of real property typically used by spouses purchasing a matrimonial home. Unlike a tenancy in common, where each owner owns a divided share of the property, joint tenants own an undivided interest in the property.
A tenancy in common is a type of co-ownership of real property typically used by parties who wish to own individual shares in a property.
Example: Two business partners would like to purchase an office building. One partner puts up 60% of the capital while the other puts up 40%.
To reflect this arrangement, the ownership of the property is being divided into two portions, one representing a 60% percent ownership and the other 40% of the ownership. Either party can sell or mortgage or will his interest in the property.
A joint tenancy is a type of co-ownership of real property typically used by spouses purchasing a matrimonial home. Unlike a tenancy in common, where each owner owns a divided share of the property, joint tenants own an undivided interest in the party. In other words, both own 100% of the property together.
Explain the impact of a judgment on property ownership
A judgment, as it relates to a debt, is a judge’s decision that a debt is owed by a debtor to a creditor. Most Lenders will not lend on a property until this debt is paid, unless, with certain Lenders, the debt is being paid from the proceeds.
