LAW 601 Lecture Notes - Lecture 8: Title Insurance, Adverse Possession, Fee Simple
19 Feb 2017
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Lecture 8
Chapter 16 – Real Property: Sales & Mortgages
PARTS OF THIS CHAPTER:
1. Registration Systems
2. Land Sales
3. Mortgages
REGISTRATION SYSTEMS
There are different “interests” (e.g. fee simple, easement, restrictive covenants, lease, etc.) may
exist at the same time in a single parcel of land.
Registration Systems → documents the existence of interests in land. There are two types:
1. Registry System
2. Land Titles System
Registry System
• Is used in four Atlantic provinces as well as parts of Manitoba and Ontario
• Provides an opportunity to inspect and evaluate documents that may affect real property
• If you are interested in purchasing a property you would go visit the registry office before your
purchase and verify the chain of title
• Chain of title is the series of transactions in which ownership is validly passed from one person to
the next (the task of looking for chain of title is called searching title)
• You are limited to going 40 years back in a registry system and look at every entry of the transfer
**The government does not guarantee that the documents are accurate sometimes you might experience a
defect in the chain of title and that the information related in the registry system is inaccurate. In that
situation you want to purchase title insurance.
A defective title can occur in a number of ways such as purchasing a property with someone that
doesn’t have real ownership. From a risk management perspective it is beneficial to get a lawyer and if
the lawyer fails to do their job well and is misses a defective chain of title then you can sue them.
If you do go through a sale of the property you should immediately go and register your
ownership otherwise you might have some complications down the line. Initial owner might try to re-sell
it to someone else that’s why its important to register in the registry.
Land Title System
• Superior to registry system
• LTS generates certificate of title that guarantees validity of interests that are listed
• Government guarantees validity (subject to certain expectations)
• The key to LTS is the doctrine of indefeasibility which means that with few exceptions, the
interests that are included in the certificate cannot be defeated. Based on 3 principals
o Mirror: in general all interests reflected in the Certification of Title reflect valid interests
o Curtain: only valid interests are listed in the C of T; no need to “look behind the curtain”
find more resources at oneclass.com
find more resources at oneclass.com
o Insurance: states that a person who suffers a loss as a result of an error in the system in
C of T is usually entitled to compensation → assurance fund (no guarantee for the
assurance fund must make a successful claim)
Unregistered Interests in LTS (exceptions):
Not all interests on land are listed under the registry or title systems but they can be binding on
the new owner. Therefore, it is important to do your due diligence and inquire about any of the following:
• Short term leases (less than 3 years): do not have to be recorded in the land registry office and
can still have rights to the land. Notice of Lease is required if greater than 3 yrs
• Prescription: having rights to a land because of constant usage, e.g. driving through neighbors
yard (squatter)
• Adverse Possession: obtain rights to a land because you occupy part of the property for more
than 10yrs (similar to prescription)
• Public easements: utility companies, water lines have public easements over property given by
the government, they are not registered under the certificate of title
• Unpaid tax bills: lawyer should search municipal records to ensure that there are no outstanding
taxes because the government may be entitled to seize and sell the land to raise the necessary
money
• Unpaid creditors (writs of execution): banks get access to the land because they already had
rights to the land prior to. Writs of execution is a document that allows a court’s judgement to be
enforced. What about a creditor that has no interests in the land (unsecured creditor).
CASE BRIEF 16.1
-when the land titles are recorded indefensibility arises and despite how deferred owner obtains land the
still have the greatest rights to it
-but in this court case, the courts over turned itself and decides that the deferred/intermediate owner
DOES NOT have the greatest rights and that the property and decided that the property should go back to
the original owner and that the intermediate owner should seek relief through the assurance fund
-Introduces a new concept called deferred indefeasibility saying that the party that dealt with the fraudster
had the opportunity to catch and stop the fraud
LAND SALES
Sale: ownership is transferred in exchange for consideration
• Caveat Emptor: Seller has no obligation to disclose defects to a buyer, but if the seller does
decide to disclose then they must tell the truth (how about if you ask them if anything is wrong
with the property and they say no)
• Exception: under common law if the seller knew that there was a latent (not visibly seen) but the
defect that are dangerous or makes the property unfit then they have the duty to disclose
**Should look at material facts**
RISK MANAGEMENT → for risk management perspectives you should hire professionals in order to
asses the property
• Real Estate Agent: looks for properties that may interest you
• Appraiser: looks at the value of the property and decides if it is selling at the correct price
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Chapter 16 real property: sales & mortgages. Parts of this chapter: registration systems, land sales, mortgages. There are different interests (e. g. fee simple, easement, restrictive covenants, lease, etc. ) may exist at the same time in a single parcel of land. Registration systems documents the existence of interests in land. There are two types: registry system, land titles system. Is used in four atlantic provinces as well as parts of manitoba and ontario: provides an opportunity to inspect and evaluate documents that may affect real property. A defective title can occur in a number of ways such as purchasing a property with someone that. **the government does not guarantee that the documents are accurate sometimes you might experience a defect in the chain of title and that the information related in the registry system is inaccurate. In that situation you want to purchase title insurance. doesn"t have real ownership.
