Did you know that each province in Canada has different property laws?
Property laws deal with buying and selling land, dividing property at the end of a relationship, property liens and claims, registering interests in property, buying and selling goods, inheritances, etc.
The reason for each province having different property laws goes all the way back to the founding of our Constitution Act in 1867. In this Act, the legislators decided which areas of law the federal government would control and which areas the provinces would control. Property laws are listed as a provincial matter in this Act, which is why each province has different laws relating to property.
Property is categorized as real property or personal property. Real property is land, homes, mine and mineral rights, etc. Personal property is all other property, such as vehicles, mobile homes, bank accounts, furniture, etc. Let’s look at a few lesser-known real property laws in Alberta.
Land Registration Systems
Land registration systems are government registries that show who owns particular real properties. There are two land registration systems in Canada:
- title registration, and
- deed registration.
Alberta, British Columbia, Saskatchewan, Manitoba and most of Ontario have a title registration system based on the “Torrens” system. The Torrens system is a land registry method developed by Australian Robert Torrens in the mid-1800s. It was first used to keep track of the ownership of ships. The modern version of this system uses a centralized registry controlled by the government. The government guarantees the accuracy of its title registry and has a special fund to pay anyone who suffers a loss due to any errors in the system. It is the foundation of Alberta’s Land Titles Act.
For example, when you buy a house in Alberta, your lawyer registers a Transfer of Title document with Alberta’s Land Titles Office, which shows you as the new owner. The Land Titles Office produces a certificate of title that lists you as the current owner of the property. The certificate will also list any other person or company that has a current interest in your property, such as a mortgage registered by a bank.
Other provinces use the deed system. In this system, deeds to land and other documents that affect land (such as mortgages) are registered in a public registry system. However, the record is open to inspection, verification and challenges. The government does not guarantee ownership rights or other claims to land under the deed system. Ontario, Nova Scotia and New Brunswick have made efforts to convert to the Torrens system. Quebec, P.E.I. and Newfoundland still operate using the deed system. For example, if you buy a house in P.E.I., you would register a document showing you are the owner but someone could challenge your ownership based on documents they have.
Land Ownership Rights
A person can have one of three ownership rights in land:
- fee simple ownership
- a leasehold interest
- a life estate
“Fee simple” ownership gives an owner basic land rights. This basic ownership right is subject to public or government restrictions. For example, some land is designated for residential uses only, while other parcels of land are designated for commercial or farming purposes.
A leasehold interest is an exclusive right to use the land for a limited amount of time. If you have a lease interest in land in Alberta for longer than 3 years, you can register your interest with the Land Titles Office. The Land Titles Office can produce a certificate of title showing you as the current owner of a leasehold estate in that land.
Many do not know about another type of land interest, called a “life estate.” This ownership right is valid for the lifetime of a particular person. Once that particular person dies, the right is extinguished and the ownership right to the land goes back to the original owner. A landowner can grant a life interest to someone else at any time. Life estates are not very common. We sometimes see these in estate situations where a life estate to land is given to a surviving spouse or other family member. For example, when a person passes away, their surviving spouse can have the right to live in their deceased spouse’s house for the rest of their life.
Shared Ownership Rights
When there is more than one owner of a property, the owners should carefully document their type of ownership interest in order to avoid disputes in the future.
The first type of shared ownership is joint ownership or joint tenancy. The owners own the property together, and no owner has a distinct and separate interest in the property from the others. If one owner wants to sell or use the property, then all owners must agree. When one owner dies, the right to the property automatically passes to the surviving owners upon filing a proof of death document. This type of shared ownership is common for couples buying a house together.
The second type of ownership is tenants in common ownership. In this case, the specific ownership right of each owner is separate and distinct. For example, two owners can own a parcel of land equally, with each described as an owner “as to an undivided ½ interest.” The owners need to work together to maintain and protect the property and will be responsible for a share of property costs depending on how much of the property they own. Each owner can do as they wish with their separate share of property – the share can be sold, gifted, mortgaged, etc. As you can imagine, this can cause awkward problems. If one owner of a house decides to sell their share to a stranger, the other owners have no choice but to share the property with the new owner.
If the certificate of title does not specify the type of ownership as between two or more owners, we assume the owners own the land as tenants in common.
Rights in Land
Height and Depth of Rights
Ownership rights to land historically included all rights to the surface of the land and extended below the surface all the way to the centre of the earth and up through the atmosphere to the boundaries of space. However, the government has restricted these rights over time. Land rights today typically exclude all rights to mines and minerals (e.g. gold, silver, precious stones, copper, iron, petroleum, oil, natural gas, coal, limestone, marble, quartz rock, sandstone, shale, sand, gravel, etc.). Instead, the government owns these rights. Therefore, if there is oil beneath your land, the government owns it, not you. Additionally, there are often height restrictions on parcels of land for the common good, such as when a parcel of land is on a flight path or when a building or structure must conform to local bylaws or building codes.
Interestingly enough, the government has not captured ownership in all mines and minerals. There are persons who still specifically own mine and mineral rights. These mine and mineral rights have typically been passed down through generations. The rights often have been split up between children and other family members over time, with each mine and mineral right share becoming smaller and smaller. For example, if a parent owned ½ of a mine and mineral right and passed the right to four children, then each child would have a 1/8 share. If each of those children pass their share to their children, the share splits into smaller shares among several more people. To combat a never-ending dilution of mine and mineral rights, Alberta’s Land Titles Act has a rule restricting how small mine and mineral shares can get. Anyone who tries to register a transfer of land that would create less than 1/20th of an interest in a mine and mineral right can be refused by the registrar (see s.52).
Condo ownership is a relatively recent development and is described in condo laws. For standard condos, a person owns legal title to their own unit as well as a share of the common property of the building. Common property includes areas used by all of the condo owners, such as the parking lot, garden spaces, outdoor sidewalks, hallways, stairwells and elevators. Because all condo owners share the ownership of the common areas, condo boards are set up on behalf of all owners to manage the building and maintain the common areas. Sometimes, a condo building will have separate legal titles for parking stalls and storage units associated with a condo unit. In rare cases, the titles to these parking or storage unit titles are mistakenly not transferred when the condo unit is sold. This leads to complications tracking down the old owner to transfer the titles. Because these titles are separate and distinct from the main unit, owners will get a separate tax notice for any such parking or storage unit and will have pay property taxes accordingly.
Ownership of Water
Now picture this: you found your dream country property with a beautiful babbling creek. Think you own that part of the brook on your land? Well you would be wrong! Generally, the government owns and controls water as a resource. Rules vary between provinces. In Alberta, the Water Act allows landowners to use water on their property for ordinary household purposes, including water for farm animals up to a certain amount per year without charge.
Improvement of Other’s Land
Let’s consider a different scenario. You buy some land out in the secluded countryside with amazing sunset views. You build your dream house, only to find out later that you built your house in the wrong spot. Your house is actually located on your neighbour’s parcel. You fret as your money and hard work have instead gone to improve someone else’s land. But fear not! There are laws designed to protect the efforts of those uncareful individuals who accidently improve a neighbour’s land. Under section 69 the Law of Property Act in Alberta, you are entitled to a lien against the land you improved up to the value of the improvement. In some cases, you may even be lucky enough to have a court grant you ownership of the part of the land that you improved, as long as you pay the owner for the land you acquire.
As a last point, let’s talk about a term commonly known as “squatter’s rights”. More properly known as adverse possession, it is true that in some instances a person who lives on another person’s property without permission for a certain amount of time (at least 10 years in Alberta) can actually gain ownership rights to that property. If you find someone living on your land who does not have permission to be there, your best course of action is to take immediate steps to have them removed.
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The information in this article was correct at time of publishing. The law may have changed since then. The views expressed in this article are those of the author and do not necessarily reflect the views of LawNow or the Centre for Public Legal Education Alberta.
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