ADMS 2610 Lecture Notes - Second Mortgage, Concurrent Estate, Net Lease

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Published on 10 Oct 2012
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Real Property Law
Leasehold interests apply to real property (ie, land, buildings, farms).
Tenancy: a relationship between parties governed by a lease
A lease is a transfer of possession of land or property (real property) from the owners to the tenant
for a period of time with the expectation of the property being returned.
A lease that is more than a year should be written, with the exception of leases residential
under leases residency tenancy legislation can be oral, but by law they have to be in writing
so that there’s no conflict with the Statute of Frauds
A lease can be an express term or term servient
For ex. A in lease with B, a tenant, the landlord, for term of 5 years, this is a lease for a
specific term (fixed term – 5 years), so long as A meets the obligations under the lease,
then A will have the leased property for 5 years until the contract comes to an end, unless
the parties agree otherwise
Period of time lease – maybe a day, week, month, then it renews itself unless terminated
Tenancy at will lease – happens when A enters into formal leases with landlord for office,
today. But office won’t be ready for 3 months, but B says I have vacant offices in my
building for the mean time. That is tenancy at will. It can be terminated by the landlord at
any time. Read in text
The owner of the property who is going to give the lease is referred to as Landlord or
lessor. The person who takes the lease is the tenant or lessee.
oA the landlord, leases property to B the tenant, and then B leases the property to C
(the sub tenant or sub-lessee). Lease between landlord and B (headlease), so A
becomes the head-lessor. Then B becomes the tenant. The lease between B and C
(sublease): B becomes the sub-landlord, and C is the sub-tenant. A sublease can
only occur with a lease in existence. A - headlandlord. B - Sublandlord, C -
oWhere you have the sublease, C the subtenant will pay the rent to B. B still has the
obligation to pay the rent to the landlord
oAny other obligations between the landlord and B and passed on to B and C, C still
has those obligations to fulfill to B. And same with B – has to fulfill obligation to
pay A.
An assignment will help to solve this: in assignment, we can get rid of B in
entirety and create a lease directly between the landlord and the subtenant.
To do this, notice must be given, etc.
Assignment to C: landlord gave a lease to tenant…the tenant will make the
assignment. Assignment will be from tenant to sub tenant with landlord’s
consent. Tenant will step out of the picture and sub tenant will become the
tenant and will carry out the obligations the original tenant had to the
landlord. Landlord has nothing to assign. The tenant had the rights to the
lease. Sub tenant becomes assignee. Tenant becomes assignor.
A residential lease applies to premises that are used as a residence. Ex a
house, condominium.
Commercial tenancy is a lease of commercial premises like a lease of an
office of a building. Used for commercial purposes.
Difference between commercial and residential lease has to do with the
number of terms. Commercial leases will be longer. For commercial leases,
a net net lease: the tenant pays a base rent/initial rent based on the square
foot of the premises of the place being rented. For ex, $3 per sq ft. The base
rent if first paid. On top of that there is additional rent, like paying of the
real estate of the taxes of the building. If lease doesn’t specify terms, the
landlord is responsible…all obligations falls on the tenant and not the
Obligations of a landlord under a residential/commercial lease is to give
quiet enjoyment (not interfering with the tenants use or enjoyment of the
leased premises) of the that is leased is called lease
premises (aka lease property). If there is a breach by the landlord of the
covenant of quiet enjoyment then it is actionable by the tenant and can
amount to terminate the lease. Quiet enjoyment is an important covenant
Obligations a tenant has to landlord is to pay the rent, and not damage the
leased premises (keep them in good repair). Any other obligations are
specifically set out in the lease…landlord and tenant have a contractual
relationship. Must look at the fact situation to determine the terms of the
contract (if any) when you have a leasehold question.
On default of a residential lease, landlord can sue you if default is arrears of
rent. Landlord can give re-order for re-entry. Landlords can’t just re-enter
premises. Landlord, for both commercial and residency lease, can also have
the right of distress to collect the property of the tenant and hold on to it
pending payment and then return it – if failing, landlord could sell the
property and get recover his or her money…but this has been removed from
legislation, and expressly is stated in the commercial lease. Right of distress
continues in a commercial lease and landlord has the right to re-enter the
premises, defined in the lease itself and not in Statute.
In a commercial lease, the right of re-entry by landlord terminates the lease.
Landlord can sue in damages.
In a residential lease, where landlord gets an eviction order and serves it, the
lease is over, but is different.
A covenant is a provision in a contract that is of extreme importance
In Commercial Lease, landlord has to consent. Shopping centre is a
commercial lease
Surrender of leasea mini contract between landlord and tenant, where the tenant surrenders the
remainder of the term (for ex, maybe they don’t want the premises) for ex, the remaining of 4 years
left of a 5 year lease, back to the landlord, and landlord releases the tenant for good and final.
oThis is in favour/benefit of a tenant.
Lesser Interests in Land
Full ownership interest in land is called fee simple;
oA owns land in fee simple, he owns it fully, he can lease, sell, rent, transfer, etc. (all the
rights of ownership)
Chattel: something you own and can move (desk, chair)
Express grant: a right to allow a second party to use the other party’s land, for repairs, etc. It
deals with right of way: a right to pass over the land of another, usually to gain access to one’s
property (for public purposes like hydro powerline or pipeline) and easement: a right to use
the property of another, usually for a particular purpose (ex, a person may wish to place
something such as a telephone line or gas pipeline on or under the lands of another for
particular purposes)
oDominant tenement: a parcel of land to which a right-of-way or easement attaches for
its better use
oServient tenement: a parcel of land subject to a right-of-way or easement
Restrictive covenant: a means by which an owner of property may continue to exercise
some control over its use after the property has been conveyed to another
Just read the section generally
Registration of Property Interests/Possessory Interests in Land
Adverse possession: a possessory title to land under the Registry System acquired by
continuous, open, notorious possession of land inconsistent with the title of the true owner or a
period of time (usually 10 – 20 years)…occupant would be expected to use the land, pay taxes,
maintain fences, etc.
Registry system: a provincial government operated system for the registration of interest in
land. It is the older system, Ontario has moved to Land Title’s system
They had to do a 40 year chain of title search
oA wants to buy B’s land, if it’s under the Registry system, A’s lawyer has to do
search of title that goes back from a minimum period of 40 years. A’s lawyer has to
look at 40 years of documents. They would trace title from 40 years ago to present.
oChain of title has to be continuous. A will say, from C to D to E to F to G (all
transfers) has to go continuously. If it stops here for a period of time, gap, and starts
again, its not 40 yr chain of title, then lawyer has to go back to establish 40 full
years of full chain of title of that gap and then gap to present
oAdverse possession: refer to definition above.
oA could take a shortcut to cross B’s lot to get to bus stop faster (instead of
going another longer way). A is doing it openly/notoriously and
uninterruptive for a long time. B doesn’t object to this. After 10 years, A
will acquire a possessory right on this piece of land. And A does it for 20
years, A will obtain with prescriptive right (tant amount to ownership).
Dominant tenement here is A the one who owns the land. B is the

Document Summary

Leasehold interests apply to real property (ie, land, buildings, farms): tenancy: a relationship between parties governed by a lease. But office won"t be ready for 3 months, but b says i have vacant offices in my building for the mean time. It can be terminated by the landlord at any time. Read in text: the owner of the property who is going to give the lease is referred to as landlord or lessor. The person who takes the lease is the tenant or lessee: a the landlord, leases property to b the tenant, and then b leases the property to c (the sub tenant or sub-lessee). Lease between landlord and b (headlease), so a becomes the head-lessor. The lease between b and c (sublease): b becomes the sub-landlord, and c is the sub-tenant. A sublease can only occur with a lease in existence.