Textbook Notes (363,232)
Canada (158,276)
BUS 393 (52)
Chapter 15

Chapter 15 – Personal and Real Property

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Simon Fraser University
Business Administration
BUS 393
Richard Yates

Chapter 15 – Personal and Real Property Introduction • Real property – land and things permanently attached to land, such as buildings; fixed and immovable • Personal property – movable, either chattels (tangible personal property that can be measured and weighed) or chose in action (intangible, claim one person has against another, such as a claim for debt) o Intellectual property – copyright (gives author control over use/reproduction of his work), patents (give inventors right to profit from his inventions), trade-marks (protect name or logo of a business, industrial designs, confidential information, trade secrets) Personal Property Chattels • Movable things, eg. clothes, radios, animals, boats • Chattels can become part of real property when it is attached to land (eg. installing a heater), but owner of the land is free to remove a chattel that has become a fixture o Test: Whether attachment was a) to enhance the land, or b) for better use of the chattel as a chattel • Tenant can remove trade fixtures, which are chattels used to enhance trade or carry on business, and non-trade fixtures, added for comfort, convenience, or taste (eg. mirrors, paintings) can also be removed o If fixtures are clearly intended to stay, or removal will cause damage, they must stay o Can only be removed during term of tenancy Finders Keepers • Finder gets good title against everyone but original owner (or a secured creditor) • If found on private property, owner of property normally has right to the item • If finder is an employee, employer gets item subject to claim by original owner Bailment • Bailment – when one person takes temporary possession of personal property owned by another (eg. rentals, goods left for repair/storage/transport, borrowing of goods) • License –permission to leave property upon land with no responsibility for guarding • Bailor is owner that gives up possession, and bailee acquires possession • Fungibles – goods identical with others of the same nature (eg. timber, oil, wheat); exact goods need not be returned, only goods of similar quality/quantity • Bailees responsible for willful, negligent, or fraudulent acts of themselves or their employees that cause damage to the goods  Bailment for Value • Involves mutual benefit or consideration, usually commercial (eg. bailor pays bailee to repair, store, or transport the goods or friend stores good in exchange for right to use it) • Standard of care is ordinary standard of negligence • Sometimes, if subject is lost/damaged, onus is on bailee to prove he was not negligent • Exculpatory clauses must be clear and brought to attention of customer  Common Carriers • Offers general transport service to public and undertakes standard of an insurer, eg. trucking/bus companies, railroads, airlines, pipelines – if goods damaged/destroyed while in its care, carrier is liable even if not caused by its own negligence (unless beyond its control)  Innkeepers’ Liability • Duty of insurer, responsible for lost/stolen goods of guests, unless it can be shown that they were lost because of ‘act of God’ or negligence by guest • Liability reduced by statute, so only liable when provided that they or their employees were at fault  Gratuitious Bailment • Only one side receives a benefit • Usually, if bailee received the benefit, standard of care was high, and if bailor received benefit, standard of care was low; now, courts moving towards imposing ordinary tests of negligence for all gratuitous bailments  Involuntary Bailment • As soon as you exercise control (eg. pick up a lost watch, put away a coat left behind at your restaurant) you become a gratuitous bailee for benefit of bailor, and duty of care applies  The Rights of the Bailee • Bailment for value governed by contract • Unpaid bailee has right to payment if he has repaired or worked on the goods, but not if the goods were only stored or transported • When bailor is unpaid, he can reclaim goods and seek normal contractual remedies, can recover reasonable payment (quantum meruit) Real Property Interests in Land • Owner only has claim to the portion of land that he can permanently use/occupy (eg. not underground, or the air above – airplanes) • Crown usually retains rights to minerals, oil, and gas Estates in Land • Estate in land – right to uninterrupted, exclusive possession of land for a time, as determined by nature of the estate; all land is owned by Crown  Fee Simple • Greatest interest possible, comparable with ownership, can be inherited • Right to use/sell land subject only to local restrictions/regulations  Life Estate • More restrictive, cannot be willed to others; upon death of life tenant, property reverts to original owner of the fee simple or his heirs • Reversionary interest – right of original fee simple owner to take back property; may be transferred to third party (remainderman) who has a right to remainder of the fee simple after death of life tenant • Not very common, unattractive from business point of view, used for seniors/widows • Homestead rights give spouse a claim to portion of all family assets in case of marriage breakdown  Leasehold Estates • Limited to specific period of time, after which property reverts back to landowner • May be periodic tenancy, without definite termination date, continues to be renewed until terminated by notice (eg. renting apartment on month-to-month basis) Lesser Interests in Land • Easement gives person right to use a portion of another’s land, not possession o Right of way – allows people to cross another’s land o Statutory easements - give utilities or other bodies similar rights to run power/sewer lines across private property • Licences – permission to use another’s land (eg. shopping mall, renting hotel room) • Easement acquired by prescription – gaining right over property through long term unabated use; landowner must periodically exercise control over the land in order to avoid this o Easement should be continuous, open, notorious, and within land owner’s knowledge • Adverse possession – gaining right to possession of land through long term possession tolerated by actual owner • Profit a prendre – contracts to take trees, gravel, soil, peat, sand, and other commodities from the land • Restrictive covenant – may bind future owners, restricting type of buildings that can be put on property, and how property may be used • Lesser interests in land run with the land, tied to the property itself rather than the owner • For restrictions to bind subsequent owners, they must be negative, not positive obligations • Building scheme – set of restrictions placed on all properties in a large development Tenancy in Common and Joint Tenancy • Tenancy in common – each have undivided interest in land, co-owners share property, and if one dies, his/her heirs inherits their interest • Joint tenancy – if one dies, other will be left with whole property; joint tenants own the entire property outright => more attractive to couples holding property together o Can be severed – must take place before death of party seeking severance, accomplished by one party acting towards property in a way inconsistent with joint tenancy continuing (eg. selling interest in the property to a third party), but cannot will it to someone else Other Interests in Land • Option agreement – subsidiary contract creating obligation to hold an offer open for acceptance until expiration of specified time • Purchase of land can happen under agreement for sale (property does not transfer title until last payment is received) or a mortgage (title transfers to creditor until last payment received) Transfer and Registration of Interest in Land • First stage: agreement of purchase and sale – must set out all terms and special conditions governing relationship between vendor and purchaser • Historically, land was transferred by deed of conveyance (or deed), but not anymore. Now: o Registration system – rights of parties determined by registered
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