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MCS 3040 (228)
Chapter 19

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Department
Marketing and Consumer Studies
Course
MCS 3040
Professor
Joseph Radocchia
Semester
Fall

Description
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 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 1 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  Lawyers search the little and give an opinion on its validity  Lawyers have professional liability insurance that compensates clients for negligence in providing advice on title to property Stages in Transaction  3 Stages in the transaction hat will result in the transfer of land … 1.Agreement of Purchase & Sale  Agreement is entirely negotiated between the parties but will usually contain provision of buyer to investigate property, time for financing, and specific date for conclusion of transaction  Arrangement may also be conditional  An important legal requirement that affects the contract is that it must eb writing and signed by the parties Basic terms are…  Names of parties  Precise identification and description of the property  Purchase price, deposit and method of payment  Statement of condition which agreement depends  A list and description of what’s included in price  Date for closing  Statement of who is responsible for what 2. The investigation  Buyer must thoroughly investigate all aspects of property during search period allowed in contract Title to the property Title Search: Investigation of the registered ownership of the land in a registry system Legal Claims Against Seller  Searches should be done to establish what legal claims exist against the seller of the property in question Verification of boundaries  Buyer will retain a surveyor to confirm he boundaries described in the registered title fit the physical boundaries of the land Physical Examination  Buyer must confirm property is In the state e
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