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Chapter 19

MCS 3040 Chapter Notes - Chapter 19: Professional Liability Insurance, The Sequence, Land Registration


Department
Marketing and Consumer Studies
Course Code
MCS 3040
Professor
Joseph Radocchia
Chapter
19

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Chapter 19
Real Property
Ownership
Real Property: Land or real estate including buildings, fixtures and the associated legal rights
If you own real property you own “the earth beneath and air above”
These ownership rights are limited by legal rules facilitating air travel above the surface & mining and
oil drilling below the surface etc.
Fixtures: Tangible personal property that's attached to land, buildings, or other fixtures
Includes lights, heating ducts, plumbing etc.
Real property is mostly governed by common law and it determines such things as who owns the land
when more than 1 person are making claim to it
Public policy now a days in areas such as environmental protection & conservation means statute law
is an increasingly significant factor
Interests in Land
Fee Simple: The legal interest in real property that is closest to full ownership
This is the highest & most comprehensive level of ownership of lad possible under our system
Owner essentially owns the land (except limits) & can dispose of it in any way seen fit
Ownership is easily divisible
Division of Ownership
1 piece of land can be shared by several people
Legal use of the word “tenant” is broad and applies to split ownership AND when people rent space
from the owner
Tenancy in common: Co-ownership whereby each owner of an undivided interest can dispose of that interest
If 1 tenant dies, that tenants undivided interest in the real estate forms part of his personal estate &
goes to his heirs
Joint Tenancy: Co-ownership whereby the survivor inherits the undivided interest of the deceased
Divisions of Ownership in Time
Ownership in land can also be divided in time
Through mechanism of a lease the owner/landlord gives tenants possession of building for period
of time in exchange for rent
Limits on Ownership
Numerous restrictions on land imposed by statute and common law including…
Municipal governments have authority to control land use through planning schemes and zoning
regulations
Environmental regulations
Common law of nuisance limits any use of land that unduly interferes w/ other owners enjoyment of
land
Family law may designate property as matrimonial to be shared by both spouses
Many government agencies have authority to expropriate land for particular purposes (e.g. new
highway)
Can deem land private property
Other limits on ownership result from contracts made by the landowner. The landowner may do the
following…
Grant an adjoining owner the right to use portion of land for a certain purpose (Easement)
Grant a lease to a tenant
Grant an oil, gas or mineral lease to occupy a portion of the land, access that land and remove
materials
Grant a mortgage on the land as security for a loan
Make land subject to a restrictive covenant

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Restricted Covenant: A restriction on the se of land as specified in the title document
Registration of Ownership
The provinces have a constitutional jurisdiction over property rights
Key aspect is the documentation/recording of interests in land
2 General types of system
1. A Registry System
* Eastern Provinces
Registry System: The system of land registration whereby the records are available to be examined &
evaluated by interested parties
Public has access to the records & can evaluate the state of ownership
Main purpose of search is to verify the seller’s ownership by investigation the “chain of title” in order
to confirm that nobody has a conflicting claim to all or part of the land in question
Also required is an evaluation of the result of search to decide whether the title is clear or not
If there’s title defects, the parties seek to fix those facts
The administrators of a registry system take no responsibility for the validity of the documents filed
Lawyers retained by the buyer of the property are responsible for the search and evaluation of the
results
Paralegal: One who performs legal work under the supervision of a practicing lawyer
2. The Land Titles System
* Western Provinces
Land Titles System: The system of land registration whereby the administrators guarantee the title to land
Administrators of this system have active role as they evaluate each document presented for
registration & maintain a record of the documents relating to each piece of property
Admins also responsible for accuracy of the info they provide and they maintain an insurance fund to
compensate those who suffer loss due to their errors
A person who wants to know the state of the title to a piece of land just has to consult the certificate
title and isn’t usually required to do a historical search
Certificate contains a legal description of the property and identifies the nature of an owners of
the various interests in land
The sequence of registration is important in both systems
If there is conflicting claims to same piece of land, the person who registered interest 1st has
priority
Acquisition of Ownership
There are several different ways to acquire interest in land
Purchase of land is likely to require financing probably in the form of a loan from a bank secured by a
mortgage on the property being purchased
The purchasing transaction
Its up to the purchaser to investigate and evaluate property in both financial and legal terms
Risks are significant
Seller must not mislead buyer but generally is under no obligation to disclose info about the property
There are legal & ethical complications to this general rule
Participants in the Transaction
Main participants in real estate transaction are the buyer and the seller
In a commercial deal, the parties to the contract of purchase and sale are likely corporations
People from both corporations will be chosen to coordinate & deal & conclude the contract
Each party will have real estate agent, property appraiser, land surveyor, engineer and a lawyer
providing expert advice
In a registry system, lawyers have responsibility for evaluating the reliability of the title of the property
their clients are buying
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