Thursday, November 24, 2005
Estates and Interests in Land.
A distinction is commonly made at law between two types of properties: real property and personal property. Real property generally consists of land and whatever is erected, growing upon or affixed to the land. The term "real estate" has a precise historic origin: in England real actions could be taken in court in respect of land and personal actions could be taken in respect of other types of property. Therefore, a distinction between real property and personal property was developed over time. In Canada - as opposed to the United States or continental Europe - the application of English law has inherited one of its fundamental concepts: the land itself is not owned. This is because English law focused not on ownership of land but, rather, on possession of land. The result is that the land itself is not owned or otherwise subject to ownership. Instead the person who has the right to possession is entitled to exercise certain proprietary rights over the land. The only one thing that is subject to ownership is an "estate" in the land.
An "estate" is an abstract legal concept that can be best characterized as a "bundle of rights". In other words, the owner of an estate has certain rights he can exercise over the land. These rights are limited in nature and are incapsulated at common law in the Doctrine of Estates. Estates still in existence today are the Fee Simple Estate, the Life Estate and the Life Estate Pur Autre Vie.
THE FEE SIMPLE ESTATE
The Fee Simple Estate is what we ordinarily think of as "ownership" of real property. A fee simple owner has more rights over the land than any other owner. Originally the word "fee" meant that the estate could be inherited and "simple" meant that there was no qualification on the type of heir that could inherit it. In practicality that meant that the owner could leave the fee to his heirs in a will. And in the absence of a will, the fee could go to whomever could prove that he was the nearest heir to the deceased owner. A Fee Simple is also known as a freehold estate, that is held by a free tenant, and it can be held for an unlimited period of time. An interesting situation that applies to Fee Simple estates even today is that if the owner does not make a will and no heirs can be traced, then the property will "escheat" or revert back to the Crown much the same as in old times.
LIFE ESTATES AND LIFE ESTATES PUR AUTRE VIE
A Life Estate is an estate for the life of a person who is called the life tenant. Again it is a freehold estate, but for an uncertain period of time because it terminates upon the death of the life tenant. A Life Estate Pur Autre Vie, on the other hand, is a life estate not for the life of the life tenant but for the life of another person. This would occur in a situation wherein the owner leaves a life estate to the wife and, after his death and after becoming a life tenant the wife remarries and disposes of her property for the life of another person. Needless to say, situations such as these are very rare and are difficult - if not impossible - to sell for value.
In addition to the foregoing, there are bundles of rights that are less than Fee Simple and Life Estates. More specifically, there are three main classifications of interests in land that do not amount to estates: easements, restrictive covenants and profits a prendre.
Easements
An easement is, by definition, a privilege acquired by a landowner for the benefit of his land over the land of another. The land receiving the benefit is the dominant tenement, the land over which the right is exercised is the servient tenement. In order to be characterized as such, an easement must have three basic requirements: 1) there must be a dominant and a servient tenement; 2) the easement must accomodate the dominant tenent; 3) the easement must be capable of forming the subject matter of a grant.
Specifically as it relates to the third requirement, the easement must be capable of exact definition. In other words, one must be able to identify its boundaries, and the person granting the easement as well as the person receiving it must have the legal capacity to be grantor and grantee respectively. Whereas a life tenant can create an easement while he is alive, it cannot extend beyond his death. Typical examples of easements are rights of way, rights to light and rights of support like the ones found in elevated construction. Finally, the so called statutory rights of ways are those easements created by act of law and typically in favor of public utility companies.
Restrictive Covenants
A restrictive covenant imposes a restriction on the use of one person's land and the restriction must be negative in nature. Again, there must be three requirements for a restrictive covenant to be characterized as such: 1) it must be negative in nature, for example by imposing a restriction on use; 2) the person who imposes the restriction must retain property which will itself be protected; 3) the burden of the restriction must have been intended by the parties to bind the land.
A "Building Scheme" is a special example of restrictive covenant attaching to two or more lots in a development plan. Often this type of restrictive covenant is used by a developer who is selling lots in a residential subdivision and wants to maintain uniformity in the use of the lots to protect their value. Like a restrictive covenant, a building scheme will be registered against the titles of the lots.
Profits a Prendre
A profit a prendre is the right to enter into another person's land and legally take some profit of the soil, like minerals, trees, fish or game, for the use of the owner of the right. Unlike an easement, it does not need to accompany a dominant tenement and, in fact, may be held as a right per se. Furthermore, it does not need to be granted for a definite period of time. Finally, a profit a prendre cannot be implied by law.
Luigi Frascati
Real Estate Chronicle
