LESSON 2

Question 1

WHAT THE PURCHASER BUYS: ESTATES AND INTEREST IN LAND -THE EVOLUTION OF REAL PROPERTY LAW AND THE DOCTRINE OF ESTATES

Answer 1

-There is an important distinction between real property and personal property.

Question 2

REAL PROPERTY

Answer 2

-Consists of land and whatever is erected, growing upon or affixed to the land, as well as the rights that are related to or derived from the land.

Question 3

PERSONAL PROPERTY

Answer 3

-Is everything else, and generally includes any right or interest that one has in moveable objects.

Question 4

REAL ACTIONS VS PERSONAL ACTIONS

Answer 4

-“Real” actions could be brought in the courts in respect of land, whereby a person could recover or obtain the land itself.

-“Personal” actions could be brought in respects of other types of property, whereby a person could obtain judgment against another person but could not recover the property itself.

Question 5

ESTATE

Answer 5

-Right to possess and use land for a period of time. The period of time could be indefinite (e.g. fee simple estate) or predetermined (e.g. a life estate or leasehold estate).

-An estate is a right to possess and use land for a period of time, during which time the estate holder has the full “bundle of rights” respecting the land. This model of land ownership is known as the “doctrine of states”.

-When we speak of private “ownership” of real property, what we are really talking about is the ownership of an estate.

Question 6

EXPROPRIATION

Answer 6

-Act of taking away a private owner’s interest in land without consent, typically carried out by the govt. or a party authorized by the govt.

Question 7

FEE SIMPLE STATE

Answer 7

-Fee simple is the legal term for the greatest estate in land known to Canadian law. It is held from the Crown, as only the Crown is the absolute owner of the underlying title.

-A fee simple estate is what ordinarily think of as outright ownership of real property.

-The owner of a estate in fee simple is not the absolute owner.

-The word “fee” meant that the estate could be inherited, and the word “simple” meant that there was no qualification on the type of heir that could inherit.

Question 8

LIFE ESTATE AND ESTATE PUR AUTRE VIE

Answer 8

-Life estate is an interest in land to be enjoyed during a person’s life and which ends on that person’s death.

-A life estate is an estate land that lasts for the lifetime of the holder who is called the life tenant.

-A life estate, like a fee simple estate, is also a freehold estate.

Question 9

RIGHTS AND OBLIGATIONS OF THE LIFE TENANT

Answer 9

-A life tenant is liable for all yearly operational expenses, including electricity, water, heat and taxes, and for the payment of interest (but not principal amount owning, if the property is encumbered by a mortgage).

Question 10

WASTE

Answer 10

-The doctrine of waste places certain limitations on a life tenant’s ability to change or damage a property.

-Common law recognized 3 categories of waste’s voluntary, permissive and ameliorating.

see figure 3.1 categories of waste

Question 11

RIGHTS AND OBLIGATION OF THE REMAIDERMEN OF REVERSIONERS

Answer 11

-The remaindermen or reversioners are people that are entitled to the fee simple estate once the life estate has expired.

-These people have the right to receive the fee simple estate is essentially the same condition as it was originally granted to the life tenant, subject to the doctrine of waste.

Question 12

WHY ARE LIFE ESTATES OF INTEREST TO LICENSEES

Answer 12

-A life estate is important to a licensee listing and selling residential property because a life estate is registered on the title to property and must be dealt with on the sale of the property.

-The remaindermen or reversioners will be unable to convey an unencumbered fee simple estate (which a buyer would normally want) unless the life tenant agrees to release their life estate.

Question 13

LEASEHOLD ESTATES

Answer 13

-Leases come to be regarded as leasehold estates, binding on successors in title, but inferior to freehold estates.

Question 14

INTEREST IN LAND LESS THAN ESTATES

Answer 14

There are 3 main classification of interest in land that do not amount the estate, namely:

1)easements;
2)restrictive covenants; and
3)profits a prendre

These three interests will affect the market value of a property and may be of importance when appraising land for the purposes of listing or mortgage qualification.

Question 15

EASEMENTS

Answer 15

Easement is the right to use a neighboring property in a specific way (without possessing it) for the benefit of the holder’s land. The land that benefits from the easement is called dominant tenement and the land over which the easement is exercised is called the servient tenement.

Question 16

DOMINANT TENEMENT VS SEVIENT TENEMENT

Answer 16

-Dominant tenement is the land to which the benefit of an easement or restrictive covenant.

-Servient tenement is a land bearing the burden of an easement or restrictive covenant.

Question 17

IN ORDER TO CONSTITUTE VALID EASEMENT 3 REQUIREMENTS MUST BE MET

Answer 17

1)There must be both a Dominant and Servient tenement.
2)The easement must accommodate the Dominant tenement.
3)The easement must be capable of forming the subject matter of a grant.

Question 18

CREATION OF EASEMENTS

Answer 18

-Easements may be granted for any length of time; however, an easement of a very short duration (e.g. six months) runs risk of being classified as a license.

-Easements may be created by statute, express doc, implication of law, or prescription (commonly called “squatter’s rights”.

Question 19

RELEASE OF AN EASEMENT

Answer 19

-An easement may be released by an express agreement between the present owners of the dominant and servient tenements.

Question 20

RESTRICTIVE COVENANTS

Answer 20

-A restrictive covenant is a covenant restricting the use of the land of the covenantor (the servient tenement) for the benefit of land belonging to the covenantee (the dominant tenement). An example would be a restriction on the height of a building on one piece of land so that adjacent land is not in shadow.

-A person who imposes the restriction is called the covenantee and the person who agrees to be bound by the restriction is called the covenantor.

Question 21

THERE ARE 5 ESSENTIAL REQUIREMENTS THAT MUST BE ESTABLISHED BEFORE THE COURTS WILL BE FIND THAT A RESTRICTIVE COVENEANT IS VALID AND WHILE RUN WITH THE LAND

Answer 21

1)It must be negative in nature, in other words, an owner must be able to comply with the restrictive covenant by not doing something. Covenants that require action are “positive” covenants and, while they might be contractually binding between the original parties, such covenants do not run with the land;
2)It must benefit or enhance the value of the covenantee’s land in some way;
3)Both the benefited and burdened land must be precisely identified in the agreement or doc. creating the restrictive covenant;
4)The burden of restriction must have been intended by the parties to bind the land. It cannot be merely a personal promise. The intent is usually states in the contract by words such as “this agreement is to be binding upon the covenator, their heir and assigns”; and
5)If the original covenator has transferred their land, the new owner must have had notice of the agreement before acquiring the land.

Question 22

BUILDING SCHEMES

Answer 22

-Building schemes is a scheme of developer that imposes restrictions on land that is land out in two or more parcels and is intended to be sold to diff. buyers or leased (or subleased) to diff. tenants. Each buyer or tenant enters into a set of restrictive covenants with a common vendor or landlord, agreeing that the byer or tenant’s particular parcel will be subject to certain restrictions.

Question 23

BUILDING SCHEMES MUST MEET 3 BASIC REQUIREMENTS TO BE REGISTRABLE

Answer 23

1)The obligation imposed by the covenant must be negative in nature. Note that some restrictions may be states positively, but their effect must be negative;
2)There must be land which benefits from the building scheme and land which is burdened by it, both of which must be precisely defined in the instrument creating the covenant. In a bulding scheme,

Question 24

BUILDING SCHEMES MUST MEET 3 BASIC REQUIREMENTS TO BE REGISTRABLE

Answer 24

1)The obligation imposed by the covenant must be negative in nature. Note that some restrictions may be states positively, but their effect must be negative;
2)There must be land which benefits from the building scheme and land which is burdened by it, both of which must be precisely defined in the instrument creating the covenant. In a building scheme, each lot is burdened by the restrictions imposed on it and benefitted by the restrictions imposed on the other lots; and
3)The title to the land affected by the covenant must be registered under the Land Title Act.

Question 25

RELEASE OF A BUILDING SCHEME

Answer 25

-The restrictions imposed by a building scheme may be modified or discharged by an express agreement between all of the current owners of the lots subject to the scheme.

Question 26

PROFITS A PRENDRE

Answer 26

-A profit a prendre is the right to enter onto the land of another person and to take some profit from the land for the use of the owner of the right.

-A profit a prendre cannot be implied by law as in the case of an easement.

Question 27

PROPERTY LAW ACT - DISCHARGE OF INTEREST

Answer 27

-Property law act is a person can apply to the BC Supreme Court to cancel or modify a certain interest in land such as easements, statutory rights, statutory building schemes and restrictive covenants.

Question 28

THE COURT MAY MAKE AN ORDER CANCELLING OR MODIFYING A REGISTERED INTEREST BASED ON A NUMBER OF REASONS

Answer 28

-The interest has become obsolete because of changes in the neighborhood, the character of the land, or other circumstances.
-The reasonable use of land will be impeded, without practice benefit to others, if the registered interest is not modified or cancelled.
-A person who is entitled to benefit from the charge (the “covenantee”) has expressly or impliedly agreed to it being modified or released by virtue of their conduct.
For ex. with a restrictive covenant this may occur where the land has been used for many years in a manner inconsistent with the covenant, and the covenantee has not raised any objections during this time.

Question 29

THE ESTENT OF “OWNERSHIP” IN LAND

Answer 29

-“Ownership” of land means ownership of one of the estates or interests in land that have been described.
-A fee simple estate is the greatest estate a person can have in land.

Question 30

AIRSPACE, SUBSURFACE, WATER AND SUPPORT RIGHTS

Answer 30

-Airspace is the one owned the airspace above a parcel of land “to the heavens”. Today airspace refers to the legal concept that a person who owns land also owns as much of the airspace above the land as they can effectively use.

-In BC, airspace can be subdivided under the provisions of the Land Title Act, just like land can be subdivided.

-The most common use of the airspace subdivision provision is in condominium developments. (The developer may wish to have both residential and commercial strata lots in the same building and keep the two components separate).

-The ownership of airspace acquired by filing airspace subdivision plans is very diff. from density rights.

-Under zoning bylaws, a person is limited to how many square meters of building that can be built per square meter of land. That is often referred to as the density or floor space ratio (FSR).

Question 31

SUBSURFACE

Answer 31

-The subsurface rights of a landowner are greatly limited by the provincial govt.

-When granting Crown land, the Province reserves all minerals, coal, gad, fossils, and petroleum products for its own use.

Question 32

WATER

Answer 32

-A water license will typically show:
-the max. amount of water that can be used;
-the purpose for which the water must be used; and
-the time of the year when the water can be used.

Two most common reasons for water licenses are cancelled:
-failure to use the water for the licensed purpose for 3 consecutive years.
-failure to pay the license fees for 3 years consecutive.

Question 33

FIXTURES AND CHATTELS

Answer 33

-One common issue that tends to arise in real estate transactions in which items are included in the purchase price (that will remain with the property one the seller moves out) and which items are excluded from the purchase prices (that the seller is entitled to take when they move out).

-To resolve these disputes, the courts have to develop a variety of legal tests to distinguish between fixtures and chattels.

-Items that are deemed to be fixtures are considered part of the land and will belong to the buyer upon completion, while chattels remain the personal property of the seller.

Question 34

CO-OWNERSHIP OF LAND

Answer 34

-All of the estates discussed above (i.e. free simple, life estate, estate pur autre vie and leasehold) may be owned by more than one person under a form of co-ownership.

Question 35

JOINT TENANCY

Answer 35

-Joint tenancy is where two or more persons hold on undivided estate or interest in a property. When one person dies to survivor or survivors continue to own the whole - the right of survivorship being known as jus accrescendi.

-At common law, 4 “unities” had to exist and be maintained in order to create a joint tenancy and to have it continue:

UNITY OF TIME
all joint tenants must receive their interest at the same time
UNITY OF TITLE
all joint tenants must receive their interest from the same doc (will or deed).
UNITY OF INTEREST
all joint tenants must have the same estate or interest in land
TERMINATION OF A JOINT TENANCY

Question 36

TERMINATION OF A JOINT TENANCY

Answer 36

A joint tenancy may be determined by:
1)severance of joint tenancy of operation of law
2)partition by mutual agreement of the joint tenants; or
3)partition by a court order under the Partition of Property Act.

Question 37

TENANCY IN COMMON

Answer 37

-Tenancy in common - where two or more persons hold estates or interests in a property and each has a separate share. Each may sell or bequeath the interest. In the event that the interest has nor been sold at the time of death, their interest passes a part of their estate.

Question 38

INTRODUCTION TO TORT LAW

Answer 38

-Tort is a private wrong or injury, other than breach of contract, for which the court will provide a remedy in the form of damages.

-Torsts are civil wrongs (in which the state is not involved) for which the courts will grant a legal remedy.

Examples: assault, defamation of character and false arrest.

Question 39

TRESPASS

Answer 39

-Consists of wither i)wrongfully entering ii) remaining on, or iii)placing something on another’s land (including the airspace or subsurface to the land).

-An injured party whose land has been trespassed upon has various remedies including the damages (compensation for any decrease in the land’s value resulting from the trespass), injunction ( a court order requiring someone to do or stop doing a particular act, including and order to stop the continuance or repetition of a trespass) and self-help (a person in possession of land can forcibly remove a trespassed if they have first asked the trespasser to leave and uses no more force than is reasonably necessary in the circumstances).

Question 40

PRIVATE NUISANCE

Answer 40

-A private nuisance occurs when an owner or occupies of land substantially and unreasonably interfered with the reasonable use of enjoyment of a neighboring property.

-“Substantial” means that interference experiences by the injured party must be non-trivial.

-“Unreasonable” means that interference experienced by the injured party is unreasonable in light of all the circumstances, including the nature of the harm, the character of the neighborhood, the sensivity of the injured party, the defendant’s conduct and frequency and duration of the interference.

Question 41

THERE ARE TWO TYPES OF HARM INTO WHICH PRIVATE NUISANCE CASES ARE SOMETIMES CATEGORIZED

Answer 41

i) unreasonable interference wit another occupier’s use and enjoyment of property (sometimes called “loss of amenity” and ii) unreasonable interference with causes physical damage to the property (sometimes caused “material injury”).

Question 42

LIABILITY OF AN CCUPIER: COMMON LAW

Answer 42

-At common law, the general rules of negligence (which will be covered in C5 together with the concepts of “duty of care” and “standard of care”) imposed liability on an occupier for injury suffered by visitors entering the occupier’s premises.

Question 43

THE OCCUPIER’S LIABILITY ACT (OLA)

Answer 43

1) In this Act “occupier” as:
a) is in physical possession of premises, or
b) has responsibility for, and control over, the condition of premises, the activities conducted on those premises and the persons allowed to enter those premises, and for this Act, there may be more than one occupier of the same premises;

Question 44

SECTION 3 OF THE OLA SETS OUT THE STATUTORY DUTY OF CARE OWED BY AN OCCUPIER

Answer 44

1)An occupier of premises owes a duty to take care that in all the circumstances of the case is reasonable to see that a person, and the person’s property, on the premises, and premises, will be reasonably safe in using the premises.
2)The duty of care referred to in subsection !) applies in relation to the
a)condition of the premises;
b)activities on the premises; or
c)conduct of third parties on the premises.
3)Despite subsection 1), an occupier has no duty of care to a person in respect of risks willingly assumed by that person other than a duty not to
a)create a danger with intent to do harm to the person or damage to the person’s property, or
b) act with reckless disregard to the safety of the person or the integrity of the person’s property.

Question 45

THE OLA FURTHER EXPLAINS WHEN A VISITOR IS DEEMED TO HAVE WILLINGLY ASSUMED ALL RISKS, INLCUDING

Answer 45

-A visitor who is trespassing while committing or having the intention to commit a criminal act.
-A visitors who enters categories of premises as outlined in section 3(3.3), such as certain agricultural or rural premises, while the visitor is
-trespassing; or
-entering the purpose of a recreational activity and the occupier receives no payment and is not providing the visitor with living accommodation on the premises.

Question 46

CHAPTER 4

Answer 46

THE SUBDIVISION OF LAND AND TITLE REGISTRATION IN BRITISH COLUMBIA

Question 47

THE PRESENT CHAPTER BUILDS ON THIS KNOWLEDGE AND ASKS THREE RELATED QUESTIONS

Answer 47

1)Who owns the land in BC?
2)How is land divided in BC?
3)How does one register an interest in BC?

Question 48

WHO OWNS THE LAND?

Answer 48

Land ownership is BC falls under five categories: provincial Crown lands, federal Crown lands; privately owned lands; treaty settlement lands and Aboriginal title.

Question 49

CROWN LANDS: PROVINCIAL AND FEDERAL

Answer 49

“Crown land” is defined as any land or interest in land, whether covered by water or not, that is invested in the government.

Approx. 94% of the land in BC is in the name of the Provincial Crown and administered by various government agencies.

The Crown lands, tracked in a Crown land system called Tantalis, are divided for record keeping purposes into parcels called district lots, but they are generally subdivided under the Land Title Act.

Approx. 1% of the land in BC is owned by the federal government as federal Crown land. This land includes Indian Reserves, national parks, national defence areas and federal harbors.

Question 50

INDIAN RESERVES

Answer 50

Reserves under the Indian Act are lands owned by the Federal Crown for the use and benefit of FN.

FN have a collective right to benefit from the reserve land allocated to them, through individual members of FN may be given an “allotment”, which is the right to use and occupy a piece of land within the reserve.

Reserves are not subject to the Land Title Act and they are generally not subdivided; however, there have been some limited exceptions to this rule.

Question 51

PRIVATE LANDS

Answer 51

Private lands are those granted or sold in fee simple by the provincial Crown to individuals, corporations, and local governments.

As discussed in C3: “What the Purchaser Buys: Estates and Interests in Land”, the fee simple is the highest estate known to Canadian law and is akin to absolute ownership.

Private lands account for only 5% of the total land in BC, through in high-density areas (such as the Greater Vancouver Region) the vast majority of the land is privately held.

Question 52

TREATY SETTLEMENT LAND

Answer 52

Unlike in other parts of Canada, treaty agreements with Aboriginal groups were not frequently carried our in BC in the early stages of European settlement.

Since 2000, four treaties have been agreed to and implemented, those being in Nisga’s Nation, Tsawwassen FN, the Maa-nuuth FN and the Tla’amin Nation.

The purpose of these negotiation is to promote reconciliation between the Crown and Aboriginal groups and also to promote certainty over the distribution of land ownership in BC.

“Final agreement”, each FN owns its treaty lands (comprising former Provincial Crown lands and former reserves) in fee simple.

Question 53

ABORIGINAL TITLE

Answer 53

The Supreme Court described Aboriginal title as “the right to decide how the land will be used; the right of enjoyment and occupancy of the land; the right to possess the land; the right to the economic benefits of the land; and the right to pro-actively use and manage the land.”

-To prove a claim for Aboriginal Title, and Aboriginal group must prove that their use of the territory was regular and exclusive prior to the assertion of Crown sovereignty.

-Aboriginal title is a unique interest in land, and as the Supreme Courte has said, cannot be described in terms of traditional property law concepts.

-Aboriginal title may be established either by court declaration or by way of contractual agreement between the Crown and Aboriginal group.

Question 54

HOW IS LAN DIVIDED?
SUBDIVISION OF LAND

Answer 54

-Subdivision is the division of land into two or more parcels.

The subdivision of land is the creation of smaller parcels of land from a larger parcel of land. It need not involve :new homes” or the requirement for disclosure under the Real Estate Development Marketing Act.

At common law, the owner of an estate in fee simple had an inherent right to subdivide their parcel of land.

Question 55

THE STRATA CONCEPT

Answer 55

Strata lot is the parts shown on the strata plan that are created for individual ownership.

Common property is any part of the strata plan that is not part of a strata lot, and a variety of service facilities, depending on their location and use.

The strata concept allows the subdivision of a building, or sometimes land, into separate parts for individual ownership, together with an ownership interest in the common property.
The terms “strata” and “condominium” are synonymous.

In strata development, individuals can own separate parts of the same development but share the ownership and use of common property. The part of the property that an individual separately owns is called a “strata lot”.

Informally, we often call this the strata “unit”, while the rest of the property is called the “common property”.

-A strata lot is a parcel that can be owned by one or more persons, by a corporation or partnership, or by a combination of these entities. A strata owner owns the strata lot plus their proportionate share of the common property.

Question 56

SUBDIVIDING A BUILDING

Answer 56

The strata concept allows the subdivision of a building into separate parts, some of which are privately owned and some of which are commonly owned.

Although the building is typically affixed to the underlying land, the presence of the land is secondary to the primary task of dividing the building into separate parts for individual ownership.

When a subdivision occurs, the building is subdivided into strata lots, while the underlying land forms part of the common property of the development.

Each owner’s proportionate interest in the common property is set out in a table called the Schedule of Unit Entitlement which is discussed further in C7.

Schedule of unit entitlement is a table included in the strata plan that sets out each owner’s proportionate interest in the common property. It is often used to calculate a strata lot owner’s share of a strata corporation’s expenses.

Conversion (of a building) is a project which the developer stratifies a building by subdividing it into strata lots.

Note, however; that conversions are not limited to buildings that were previously occupied or occupied for a residential purpose.

A developer who wishes to convert an existing building into a strata development must first obtain the necessary approval from the local municipal council or regional board of the regional district, as the case may be. Once the developer obtains all necessary permits and approvals to convert the building to a strata complex, the developer must comply with the Residential Tenancy Act to terminate the tenancies of existing tenants.

Question 57

BARE LAND STRATA DEVELOPMENTS

Answer 57

A developer may also subdivide bare land (i.e. land without buildings). There may be one or more buildings on the land at the time the subdivision occurs, or buildings might be added later.

The bare land strata device is a flexible development tool, allowing developers to use the bare land strata concept to create recreational, commercial and industrial developments.

Question 58

AIR SPACE STRATA DEVELOPMENTS

Answer 58

Aire space can be subdivided under the Land Title Act in a similar manner to land.

Air subdivisions can be expensive, and are most commonly used in condominium developments, where, for example, the developer wants separate ownership of the residential and commercial components.

Question 59

MIXED USE STRATA DEVELOPEMNTS

Answer 59

Developers sometimes create strata developments that share two or more different kinds of uses. Typically, these developments contain residential strata lots with strata lots designed for other uses, like stores or offices. We call these “mixed use” strata developments. This would occur where no air space plan has been filed to create separate properties.

Question 60

STRATA PRINCIPLES: THERE ARE SEVERAL IMPORTANT PRINCIPLLES THAT APPLY TO ALL STRATA DEVELOPMENTS IN BC

Answer 60

The first principle: a strata is a strata
The strata legislation applies to every type of strata development. A two unit strata, sometimes called a duplex.

The second principle: the strata scheme is self-enforcing
There are no “strata police” who regulate compliance with the strata legislation. Every strata development is self-enforcing.

The third principle: not on reserves
Since Indian reserve land constitutes an exclusively federal undertaking, provincial legislation, which includes the Strata Property Act, does not apply on such lands (subject to the “leasehold landlord” provision discussed below). Some FN in BC have permitted real estate developments on Indian reserve lands.

Question 61

HOW A STRATA DEVELOPMENT IS CREATED

Answer 61

The Strata Property Act uses the term “owner developer” to describe the person who creates a strata development. We simply refer to the “owner developer” as the “developer”.

Question 62

STRATA PLAN

Answer 62

To create a strata development, a developer must first subdivide a building or land into strata lots together with common property. This is done by depositing a document called a “strata plan” at the Land Title Office.

The plan must show which parts are strata lots available for purchase by individual owners and which portions are common property. The strata plan is an essential document for every strata owner.

Question 63

TEO BASIC TYPES OF STRATA PLANS

Answer 63

One that subdivides a building, and one that subdivides land.
The first is simply called a “strata plan” and the second is called a “bare land strata plan.”

Question 64

THE DEVELOPER MUST OBTAIN THE REQUIRED APPROVALS, INCLUDING APPROVAL FROM THE APPROPRIATE LOCAL GOVERNMENT AUTHORITIES, BEFORE DEPOSITING A STRATA PLAN IN THE LAND TITLE OFFICE

Answer 64

-A unique registration number (e.g Strata Plan No VR150);
-The boundaries of the land;
-The location of any buildings (except in bare land strata developments);
-A drawing distinguishing the strata lots from one another by numbers or letters in consecutive order;
-The area of each strata lot in square meters;
-A schedule of Unit Entitlement;
-A schedule of Voting Rights, if there is at least one non-residential strata lot; and
-Any bylaws that differ in any respect from the Standard Bylaws.

Question 65

TYPES OF STRATA PROPERTY

Answer 65

Strata Lots
Generally speaking, a developer who intends to develop a strata project will either purchase the necessary land or lease it. The choice determines whether the developer will ultimately sell freehold or leasehold strata lots.

Freehold
Freehold strata is a strata development in which lots are owned in fee simple, entitling the strata lot owners to all of the property rights associated with fee simple ownership.

Leasehold
Leasehold strata is a strata development created by a developer on leased land, such that the strata lots are sold through assignments of the developer’s leasehold interest in each strata lot.

Question 66

THE BOUNDARIES OF A STRATA LOT

Answer 66

Section 68 of the Strata Property Act provides, in effect, that in a building strata plan, the boundaries of a strata lot are the center of each wall, floor or ceiling that separates the particular strata lot from another strata lot, the common property or from another parcel of land. In the bare land strata plan, the boundaries of the strata lots are those shown in the plan for each strata lot.

Question 67

TITLE REGISTRATION IN BC

HISTORICALLY: THE COMMON LAW APPROACH

Answer 67

Real property plays a key role in modern economic and social life. Owners want to protect their property and purchasers want to ensure that they are taking possession of a valid interest in land.

At common law, absent any registration system, title to land or “ownership” of land was proven by producing all of the relevant deeds and other documents affecting a particular piece of real property for several decades. This was called “establishing the chain of title”.

Question 68

VOID DEEDS

Answer 68

A deed is any document under seal. For our purposes, a deed is a document that effects the transfer of real property. A void deed is one that, although it looks valid, has no legal effect and is not capable of transferring any title in the land from the vendor to the purchaser.

Deed is a document used to transfer an interest in land from one party to another.

Question 69

THREE OF THE MOST COMMON TYPES OF VOID DEEDS ARE

Answer 69

-A forged deed;
-A deed given in exchange for an illegal act or thing; and
-A deed signed in circumstances where the party can plead non est factum (that is not my deed - see the chaper on the law of contract).

Question 70

THE TORRENS SYSTEM OF LAND REGISTRATION: BACKGROUND

Answer 70

One way to solve the problems of the recording system was to adopt a system under which, rather than simply filing the documents affecting title, the actual title to land could be registered.

The main objects of the Torrens system are to provide certainty in the holding of estates and interests in real property and to remove the need for reviewing old title documents.

Question 71

TORRENS LAND REGISTRATION SYSTEM

Answer 71

TLRS is a system for registration of the actual title to land in order to provide security to those holding interests in land and to remove the need for retrospective investigation of titles to land.

Question 72

THE OPERATION OF OUR SYSTEM OF TITLE REGISTRATION CAN BEST BE EXPLAINED BY REFERRING TO FOUR IMPORTANT ASPECTS OF THE TORRENS SYSTEM

Answer 72

-The indefeasibility principle;
-The effect of registration;
Abolition or notice; and
-The assurance principle.

Question 73

THE INDEFEASIBILITY PRINCIPLE

Answer 73

The word “indefeasible” means something that cannot be defeated or made void.

Under the Torrens system, the principle of indefeasibility means that if a person is named on a certificate of title as the owner of the fee simple estate in land, then that is conclusive proof, as far as the world is concerned, that they are entitled to that fee simple estate.

Indefeasibility
In BC, subject to certain statutory exception, the Land Title Register is conclusive evidence that the person names as holding a fee simple estate in land is in fact entitled to that interest, and their holding is not subject to any condition or encumbrance other than those shown on the Land Title Register.

The principle of indefeasibility overrules the common law doctrine of the void deed.

Question 74

THERE ARE 10 EXCEPTIONS TO THE INDEFEASIBILITY PRINCIPLE

Answer 74

1.Reservations contained in the original or other Crown grant.
2. Federal or Provincial taxes, rates or assessments, etc.
3. Municipal charges, rates or assessments, etc.
4. Leases for terms of three years or less where the tenant is in actual occupation
5. Highways or public rights of way, watercourses, public easements, etc.
6. Rights of expropriation or to an escheat
7. A caution, caveat, charge, builder’s lien, judgment, certificate of pending litigation, etc. noted or endorsed on the certificate of title
8.The right of a person to show that the land is, by wrong description of boundaries, included in the certificate of title
9.Fraud, including forgery, by the registered owner
10.A restrictive condition imposed on the land by the Forest Act that is endorsed on title.

Question 75

REGISTERED CHARGES ARE NOT INDEFEASIBLE

Answer 75

Unlike some other Torrens jurisdiction, BC’s Torrens legislation does not extend indefeasibility to charges.
(Recall that a charge is any interest in land less than a fee simple. Rights of way, liens, mortgages and easements are all examples of charges).

Section 26 of the Act provides:
1. A registered owner of a charge is deemed to be entitled to the estate, interest or claim created or evidenced by the instrument in respect of which the charge is registered, subject to the exceptions, registered charges and endorsements that appear on or are deemed to be incorporated in the register.

2.Registratio of a charge does nor constitute a determination by the registrar that the instrument in respect of which the charge is registered creates or evidences an estate or interest in the land or that the charge is enforceable.

In summary, if a person honestly deals with the registered owner of the fee simple of a piece of property, and acquires the fee simple for valuable consideration, the Land Title Act protects that person’s title. A person who deals with the registered owner to acquire a charge (e.g. a mortgage) has no absolute assurance of the validity of the charge. It depends on the validity of the title of the vendor of the charge and on the validity of the preceding chain of title, just as at common law.

Question 76

EFFECT OF REGISTRATION

Answer 76

At common law, the title to an estate or interest in land was effective when the transfer deed was signed, sealed and delivered. As you will recall, the Torrens system is premised on the idea that the registry is a complete and accurate reflection of the state of title. For this reason, in a Torrens system, deeds do not transfer an interest or estate in land until they are registered.

Question 77

THE PRINCIPLE IS EMBODIED IN SECTION 20 (1) OF THE LAND TITLE ACT

Answer 77

20(1) Except as against the person making it, an instrument purporting to transfer, charge, deal with or affect land or an estate or interest in land does not operate to pass an estate or interest, either at law or in equity, in the land unless the instrument is registered in compliance with this Ac.t

Question 78

ABOLITION OF NOTICE

Answer 78

At common law, persons were presumed to know about all estate and interests affecting the land they were dealing with, so long as those estates and interest could be discovered by reasonable inspection and inquiry. This was true even if the estate or interests were not recorded or the vender did not know about them. As a result, a purchaser took title subject to those other estates and interests, even though they had not been disclosed by the vender. This is the doctrine of notice.

Question 79

THE ASSURANCE PRINCIPLE

Answer 79

Whenever legislation creates new rights for some people, it usually takes away existing rights from others.
When the Torrens system was first introduced in BC, it was recognized that the indefeasibility principle might cause some persons to lose rights in land that they had at common law. To compensate such persons, the assurance fund was established.

Question 80

THE FUNDS SERVES TWO PURPOSES

Answer 80

First, the fund is intended to compensate parties who, as a result of the principle of indefeasibility and through no fault of their own, have lost and estate or interest in land. To qualify for compensation, a claimant must prove the following:

-That the claimant has lost an estate or interest in land as a result of the registration of a person other than the claimant as the owner;
-That, if the Land Title Act had not been passed, the claimant would have recovered the estate or interest at common law by a court action; and
-That the claimant cannot recover that estate or interest (or compensation for it) by a court action.

Question 81

NOTATION OF TRUSTS

Answer 81

There are times when property is not registered in the name of the beneficial owner. For example, because an infant cannot own or transfer property in their own name, the title is put into the name of an adult, who holds the property “in trust” for the benefit of the infant. The adult is called a “trustee”. The infant, for whom the trustee holds the property, is called a “beneficiary”.

Trustee ia an individual or business entity in whose name a trust is held.

Question 82

IN BC THE RECOGNITION OF TRUST ESTATES IS COVERED BY SECTION 180 OF THE LAND TITLE ACT

Answer 82

1.If land vests in a personal representative or a trustee, that person’s title may be registered, but no particulars of a trust created or declared in respect of the land shall be entered in the register..

2.In effecting registration in the name of a personal representative, the registrar must add, following the name and address of the personal representative, an endorsement containing such additional info that the registrar considers necessary to identify the estate of the testate or intestate and a reference by number to the trust instrument.

Question 83

THE FORM OF DOCUMENTS

Answer 83

Most type of transactions have a form prescribed by the Land Title Act. The Land Title Act provides for the registration of a uniform first page of all conveyancing documents.

Question 84

LAND TITLE OFFICES, SEARCHING TITLE AND THE REGISTRATION PROCESS

Answer 84

SEE THE FOLLOWING…

Question 85

LAND TITLE OFFICES

Answer 85

There are seven land title districts in the province: Kamloops, Nelson, New Westminster, Prince George, Prince Rupert, Victoria and Vancouver.

Question 86

CERTIFICATE OF TITLE

Answer 86

Charge is an estate or interest in land less than a fee simple that can be registered under the Land Title Act. Charges include all encumbrances, such as judgments, mortgages, statutory rights of way, easements, covenants, leases and liens.

A register containing a separate certificate of title for each parcel of real property is maintained in each land title office in the province. The registered owner of the estate in fee simple appears at the top of the title and any estates or interests less than the fee simple are noted below as “charges”.

Question 87

SEARCHING TITLE

Answer 87

Licensees listing property for sale, selling property to prospective purchasers, arranging mortgage financing or acting as property managers must be able to properly read and understand a title search.

Today, licensees typically use myLTSA (formerly BC Online) (www.ltsa.ca) to conduct title searches.

Searches can be conducted if the licensee known the Parcel Identifier (“PID”) or legal description of the property. The PID is a permanent parcel identifies assigned by the registrar of land titles when the title for a property is created. The PID is a nine-digit number and never changes once associated with a property, unless the property is later subdivided or consolidated, at which point a new title is created. The PID is generally the best wat to obtain a land title search.

There are a few methods for determining the PID for a property. One method is searching the civic address of the property on BC Assessments “eValue BC” website evaluebc.bcassessment.ca.
Another method is to look up the property using the civic address on any municipalities GIS mapping services, if such a system exists in the given municipality. Vancouver’s GIS mapping services can be found at vanmapp.vancouver.ca/pubvanmap_net.

IN BC, a licensee who does not review the title of property to be listed assumes the risk of liability to the purchaser and the vender, loss of commission, and professional discipline if a complaint is registered with the BCFSA.

Encumbrance is a judgment, mortgage, lien, Crown debts or other claim to or on land less than a fee simple. An encumbrance functions to encumber (i.e. restrict or burden) title to the property against which is is registered.

Question 88

THE STANDARD FORM CONTRACT OF PURCHASE AND SALE CURRENTLY IN THE COMMON USE IN BC OBLIGATES THE SELLER TO DELIVER TITLE IN THE FOLLOWING CONDITION

Answer 88

The Buyer agrees to purchase the Property from the Seller on the following terms and subject to the following conditions:
9. TITLE: Free and clear of all encumbrances except substituting conditions, provisos, restrictions, exceptions, and reservations, including royalties, contained in the original grant or contained in any other grant or disposition from the Crown, registered or pending restrictive covenants and rights of way in favor of utilities and public authorities, existing tenancies set out in Clause 5, if any, and except as otherwise set out herein.

Question 89

IMPORTANT

Answer 89

Licensee should, explain the effect of this terms to their clients, and if necessary, should either amend this provision or, through appropriate clauses, have the purchaser approve the state of title, if there are charges (e.g. easements) that will not be discharged on completion. If the purchaser will not get title on completion in the same condition as described in the contract, the purchaser may claim breach of condition (a fundamental term) and may have the option to terminate the contract. The vendor who loses out on the sale may commence a law suit against the licensee and the brokerage if the vendor resells the property and suffers any loss.

Question 90

COMMON ITEMS APPEARING ON TITLE

Answer 90

DUPLICATE CERTIFICATE OF TITLE
Duplicate titles are a holdover from the pre-Torrens land system. A duplicate certificate of title cannot be issued if the title is subject to a mortgage or an agreement for sale. If a duplicate certificate of tittle is issued and removed from the land title office, the registrar will not register a transfer mortgage or long term lease on the title until the duplicate certificate of title is returned to the office.

Licensees should be aware that a missing duplicate certificate of title could jeopardize a sales agreement. When conduction title searches prior to drafting the agreement of purchase and sale, licensees should ensure that no duplicate certificates have been issued.

CAVEAT
Caveat is a notice registered against the title to land warning those looking at the title that a claim has been made.

A caveat is a unique features of the Torrens system. It is a note placed on a certificate of title by a person claiming an estate or interest in that land that prevents all dealing (e.g. transfers, mortgages etc) with the land inconsistent with the estate or interest claimed by the caveator.

CERTIFICATE OF PENDING LITIGATION
CPL is a notice of pending court action registered against the title to property for the purpose of warning all persons that the title to the property is in litigation and preventing dealings with respect to the property. A CPL was formerly called lis pendens, and you may still hear the term form time to time.

BUILDERS LIEN
Builders lien is a claim registered against the title to land by a contractor, supplier of materials, or workman with respect to work done or materials supplied to improve that land. While liens may be filed by individuals whom the owner or developer of the property has hired directly, they can also be filed by subcontractors who were nor paid by a general contractor. Liens may still be filed after ownership of a property is transferred so long as the time limits are met.

JUDGMENT
A judgment may be registered against a person’s estate or interest in land. Judgments are noted on the certificate of title like any other charge. The registration of a judgment normally expires automatically after two years if the registration is not renewed by the judgement creditor prior to the expiry date. Upon discovering a judgment as part of the initial title search by the licensee, the licensee should immediately discuss with the owner of the property hoe the owner proposes to discharge the judgment on sale, and should recommend that the owner seek legal advice.

SECTION 219 COVENANT
Under this section of the Land Title Act, the provincial government or a local government may require an owner or developer of property to register on the title a covenant restricting the users of the land in question.

NOTICE OF SPECIAL WASTE
Section 392 of the Land Title Act provides that a waste management director or approving officer may file on the title of contaminated property a notice specifying the nature of the “special waste” contamination and the estimated period of contamination.

HERITAGE DESIGNATION
A property can be designated as a heritage site by the province under the Heritage Conservation Act or by a local government under the Local Government Act.
Once designated, the HCA and or LGA will apply, which generally regulate and prohibit the demolition, relocation and alteration of both the interior and exterior of the property.

Question 91

REGISTRATION

Answer 91

Historically, originals of required land title office documents were physically tendered for registration at the appropriate land title office, usually by lawyers, notaries or their land title office agents. All documents are required to be filed electronically. On the completion date, the lawyer or notary will first conduct an online title search to confirm that the title is in the same condition as previously expected. Then the lawyer or notary will affix their electronic signature to an electronic version of the registration documents and will electronically file the documents. The lawyer’s or notary’s signature is certified or “verified” by a certification authority as part of the electronic filing. Within 30 to 60 minutes, the filed transfer will be noted on the existing title as a pending application. The lawyer or notary will attend on payment of the purchase money in accordance with the statements of adjustment. Once the transfer is deposited for registration, the vendor has no further claim to title and the purchases has no further claim to the deposit. Therefore, the deposit held by the brokerage is converted from the stakeholder money to the vendor’s money. If authorized by the vendor, the brokerage can then pay itself the commission due from the deposit. Final registration of the transfer may take 7 to 14 days.

Question 92

TITLE INSURANCE

Answer 92

Under the Torrens system, the deprived owner, who has a claim under the assurance fund, and the innocent purchaser, who keeps the land, are both “winners”. At common law, the only “winner” was the rightful owner who kept title to the lands, as the bona fide purchaser would not likely recover any damages from the fraudulent person who transferred under the void deed.

First, indefeasibility in BC only extends to the fee simple, not charges. Second, title insurance can provide coverage for many items that are nor part of the Torrens system, such as access, zoning and property boundaries. Third, premiums for title insurance tend to be cheaper than survey costs, so lenders now more commonly require borrowers to have more inclusive title insurance rather than a legal lot survey/

Question 93

FIRST NATIONS LAND REGISTRATION

Answer 93

There are are two basic registry systems for FN lands that have not been the subject of a modern treaty: the Indian Land Registry System (ILSRS) and the First Nations Land Registry System (FNLRS).
The ILRS consists of documents related to and interests in reserve lands that are administered under the Indian Act.
The FNLRS is used for the land records of FN who operate under their own land code pursuant to the First Nations Land Management Act.

Question 94

CONTAMINATED SITES

Answer 94

Info about potentially contaminated sites can be obtained through the BC Ministry of Environment’s Site Registry, which is available through BC online. The registrar of the site registry is required to provide “reasonable public access to info in the site registry”. The site registry allows you to search a specific area for registered sites, and may be an important source of info for buyers and their agents when conducting their due diligence searches.

Question 95

MANUFACTURED HOMES

Answer 95

Licensees are authorized to sell a manufactured home if an estate or interest in land is involved in the transaction.
Because the ownership, transfer and granting of charges of manufactured homes are not registered in the land title office, it is important for licensees to have an understanding of the manufactured home registry system under the Manufactured Home Act.

A manufactured home is defined in the Manufactured Home Act as any structure that is designed, constructed or manufactured to provide residential accommodation and to be moved from one place to another, regardless of whether it has wheels. Persons purchasing manufactured homes can place them on property they already own or they can rent space, called a “pad”, in a manufactured home park on which to place them.

The differences between the manufactured home registration system and the Torrens system are that the manufactured home system has no title (just registered ownership), no indefeasibility, and no assurance fund. A further difference is that, in some cases, registration is mandatory.

Question 96

REGISTRATION GENERALLY

Answer 96

Manufactured Home Registry: BC’s manufactured home registry is maintained by BC Registry Services. Under the Manufactured Home Act, the registrar had a seal of office and is responsible for processing all application made under the Act. The registry typically only accepts documents submitted electronically through BC OnLine. Using this service, manufacturers, lawyers, notaries and other service providers may register and transfer titles to manufactured homes.

Question 97

FORMS, FEES AND PENALTIES

Answer 97

A schedule of fees is provided at the end of the Manufactured Home Regulation. The charges levied for many of the transactions with the registrar are specified. For example, a person who moves a home that is not registered, or without a permit, or sells a home that is not registered, is liable to pay a fine up to $2,000. An owner who fails to affix or keep affixed a decal is also liable to pay a fine not exceeding $2,000.

Question 98

SUNDRY PROVISIONS

Answer 98

Of prime importance to anyone having any dealings with manufactured homes are section 18(1) which provides that no person may move a manufactured home unless it is registered, and section 15, which requires that a transport permit to do so must be obtained from the registrar.

Question 99

ASSIGNMENT OF MANUFACTURED HOME PAD TENANCY AGREEMENTS

Answer 99

When a buyer of a manufactured home wishes to keep that home in the same manufactured home park and to continue to rent the pad on which the home sits, the existing Manufactured Home Site Tenancy Agreement for the pad should be assigned to the buyer. The principal benefit of assignment is cost certainty. When a tenancy agreement is assigned to the buyer, that agreement continues on the same terms as existed prior to assignment, and the buyer assumes all rights and responsibilities under the original tenancy agreement. As a result, assignment ensures that the rent and any schedule of rent increases remain the same for the tenant.

Question 100

SECURITY INTERESTS

Answer 100

DESCRIPTION
Generally speaking, a security interest is an interest in property that secures the payment or performance of an obligation. Where a person wishes to purchase a chattel like a manufactured home and does not have sufficient funds to pay for it, they may want to use the chattel itself as security for the purchase price. There are three methods to accomplish this. First, the seller can transfer ownership of the manufactured home to the buyer. who ten gives a security agreement on the home in favor of the seller in exchange for part of the purchase price. The buyer will repay the loan by installments. Second, the buyer can purchase the manufactured home under a conditional sale contract, meaning that legal ownership remains with the seller until the buyer has made all of the payments, after which the seller is legally required to transfer the legal ownership to the buyer.

REGISTRATION OF SECURITY INTERESTS UNDER THE PPSA
Rather than filing the security agreement itself, under the PPSA a lender (“secured party”) registers a “financing statement”, which sets out only certain essential details of the transaction. A financing statement may be registered even before the transaction is complete. There are no filing deadlines or fixed registration terms.
PPSA provides few specifics on what must be contained in a financing statement, although one important criterion for validity is that the registration must not be “seriously misleading”. Manufactured homes are “serial numbered goods” for the purpose of PPSA is vital that, if the manufactured home is described by serial number, the exact serial number appears on the financing statement.

REGISTRATION UNDER THE LAND TITLE ACT
When a manufactured home becomes affixed to land, steps may be taken in the land title office to protect the interests of the security holder. When the debtor is in default, the secured party has the right, in some circumstances, to repossess and sell the manufactured home to pay the debt.

Question 101

CHATTEL OR FIXTURE

Answer 101

Fixture is a chattel attached to real property; anything which has become so attached to the land as to form, in law, part of the land.

Chattels are articles of personal property (e.g. a car, stereo, television, etc) as opposed to real property.