Wednesday, October 11, 2006
Air Space Strata Plans
The development of air space to offset scarcity of urban lands.
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At Common Law a landowner has the right to control the air space above the land he owns subject to statutory restrictions for zoning, aviation and the like. As such, landowners may create one or more air space parcels above their land. Once this is done, the title to each air space parcel may then be dealt with separately from the other titles. Since an air space parcel is treated as land, it may be subdivided into strata lots with common property.
The vertical division of real property is based on the legal conception of land as a volume of space with boundless height and depth. As the density of building in urban areas increases, fewer sites are available for new construction and land values escalate. This trend has produced a growing interest in developing air rights. The concept of land as a three-dimensional entity underlies the land title scheme pretty much everywhere in North America, which allows air space parcels to be created, transferred, mortgaged, leased and subdivided.
Since air space parcels still have a physical relationship to the land because air space rights are part of the land and the ownership of land, the Land Title Act (in British Columbia) as well as other statutes allow landowners to treat their air space as if it were land by depositing a survey of the air space above their land at the Land Title Office. Such survey is called an ‘Air Space Plan'. If the landowner keeps the underlying land but allows someone else to occupy the air space parcel, he becomes what it is commonly known as a ‘remainderman'.
Developers have used the air space parcel concept to construct mixed-use strata projects. This method is typically used where the same structure contains different uses. In effect developers create different air space parcels to contain single-use strata developments. By this means, the same complex may contain one or more separate strata plans, each having a different use. For example, one strata development may be residential while another is commercial. Although they share the same complex, each strata corporation controls a separate portion of the structure.
Virtually every air space development involves construction of a strata building over top of land or buildings owned by the developer as remainderman. It is very important to ensure that there are appropriate arrangements to compel the remainderman to maintain the necessary physical support and related services to the air space parcel, even if the remainderman's property suffers damages. The major concern is that the creation and unregulated sale of such vacant airspace strata lots will, at some future date, through fraud or financial difficulties of a developer, result in the purchasers of such lots being left with vacant airspace strata lots which have little value, as the contracted building will not be built or not completed.
In each air space strata development, furthermore, there should be one or more written agreements between the strata corporation as the occupier of the air space and the remainderman, who is likely the developer. These agreements deal with obligations of support, access, provision of utilities, insurance and other important matters. Finally, the owner of an air space strata lot must be familiar with the relevant agreements between the strata corporation and the remainderman. Since these agreements are usually complex, an owner should obtain legal advice when reviewing such agreements.
Luigi Frascati
Real Estate Chronicle
