Chapter 4: Property Ownership in Ontario

1.      Describe the differences between real and personal property.

Real property can be defined as the land and everything affixed to it.  It is in a fixed location and is permanent, remaining, to one extent or another, long after the current owners have relinquished their rights to it.  Personal property is defined as everything that is not real property.  That includes chattels and other goods.  Personal property is typically not fixed in its location and normally has a shorter useful life expectancy than real property. 

2.      What does a homeowner actually own in relation to his or her property?

The current owner of a piece of real property actually owns rights to use the land, and not the land itself.

3.      Describe the term “Fee Simple” and discuss the rights of the fee simple holder.

The owner of this estate is in control of the real property for as long as he or she has it, subject to paying the property taxes and other municipal obligations and subject to any interests in the property that may be registered against the property’s title.  This individual may transfer his or her interest in the property during his or her lifetime or dictate who will inherit the fee simple interest upon his or her death, mortgage the interest, and so on.

If the fee simple owner dies without a will and there are no heirs, the fee simple interest is terminated and the property will escheat or revert back to the Crown.

4.      Describe the term “Leasehold Estate” and discuss the rights of a holder of this type of estate.

The Leasehold Estate, commonly referred to as a lease, is an interest in land created by a landlord and tenant, most commonly by a lease.  This interest in land is created for a fixed period of time, such as a month, year, or more.  There is no limit on the time that a leasehold estate may be in effect.

A leasehold estate provides the owner of this estate the right to exclusive use and possession of the property, subject to contractual limits contained in the terms of the lease.

5.      What makes condominium ownership unique?

Condominiums combine fee simple ownership of individual units, referred to as strata lots, including all of the rights attached to that ownership, with a combined ownership of common areas, referred to as common elements.

6.      What impact on property ownership do encumbrances have?

An encumbrance is an interest in property that has the effect of limiting the rights of fee simple ownership of real property

7.      What is an easement and what are its impacts on property rights?

Easements are rights acquired for the benefit of real property, granting rights to use another property.  An easement is an interest in land that passes from one owner to another or as is commonly referred to, “runs with the land”.

8.      What is a restrictive covenant and what are its impacts on property rights?

A restrictive covenant is a restriction of use placed on title of the servient tenement for the benefit of the dominant tenement.  As with an easement, a restrictive covenant runs with the land and can only be extinguished through the agreement of both current owners of the dominant and servient tenements.

9.      Describe the difference between a building scheme and a restrictive covenant.

A building scheme is a group of restrictive covenants registered against several properties in a development plan that is binding on all purchasers of a property within that development while a restrictive covenant is on a single property.

10.  Discuss the main difference between joint tenancy and tenancy in common.

A joint tenancy is a type of co-ownership of real property typically used by spouses purchasing a matrimonial home.  Unlike a tenancy in common, where each owner owns a divided share of the property, joint tenants own an undivided interest in the property.

11.  Explain the impact of a judgment on property ownership.

A judgment, as it relates to a debt, is a judge’s decision that a debt is owed by a debtor to a creditor.  Most Lenders will not lend on a property until this debt is paid, unless, with certain Lenders, the debt is being paid from the proceeds.