Business Law in Canada, 6e

1
Business Law in Canada, 6/e

• Chapter 15
• Personal and Real Property

2
Types of Property
14-2

• Real property - land and anything permanently
  attached to it
• Personal property - movable items
• tangible property or chattels
• things that can be weighed and measured
• intangible property or chose in action
• a claim against someone that has value

Continued ...
3
Types of Property/2

• Intellectual property- ideas and creative work

4
Personal Property

• Movable things that have become attached to land
  or buildings become part of the real property
  except for
• trade fixtures
• things that have not been incorporated into the
  structure of the building

5
Who Owns This Stuff Anyway?

• Finders Keepers
• the only person who has a better claim to goods
  that are found is the original owner
• depending on where it is found
• if in a public place - the finder
• if in a private space - the owner of the place
• finder has obligation to return found goods to
  proper owner when it is possible to do so

6
Bailment

• When a person (bailee) acquires temporary
  possession of a chattel by arrangement with the
  owner
• fungibles - similar and indistinguishable goods
• exact goods need not be returned
• bailee is liable for damage done to goods while
  in his/her possession

Continued ...
7
Bailment/2

• Bailment for value-mutual benefit to parties
• i.e., goods being warehoused or transported
• contract may determine level of care owed
• business relationship - duty based on standards
  expected in the industry or stated in contract
• common carriers and innkeepers have higher
  standards imposed by statute

Continued ...
8
Bailment/3

• Gratuitous bailment - only one party receives a
  benefit (i.e., borrowing goods)
• when for benefit of bailee, bailee has higher
  standard of care with reference to the goods
• when for the benefit of the bailor, gross
  negligence on the part of the bailee brings
  liability

Continued ...
9
Bailment/4

• Involuntary bailment - when goods have been left
  without permission - no duty of care until goods
  have been accepted

10
Real Property
Legal Interests in Land

• Fee Simple - the right to use land subject only
  to local restrictions - ownership
• Life Estate - upon the death of a life tenant,
  property reverts back to original owner
• Leasehold Estates - land leased to a tenant for a
  definite period of time

11
Lesser Interests in Land

• Easements - right to use a portion of anothers
  land for a particular purpose
• Right of way - right to cross anothers land
• License - gives a person permission to use
  anothers land

Continued ...
12
Lesser Interests in Land/2

• Prescription/adverse possession - public use of
  private land gives right to it
• Restrictive covenants - designated restrictions
  on how the land can be used

13
Tenancy

• In Common - two people share an undivided
  interest in property with each owning a portion
• Joint Tenancy - two people own the entire
  property (includes right of survivorship)

14
Other Interests

• Option agreement - right to purchase
• Agreement for sale - includes right to retake
  possession if person buying land fails to pay
  installments
• Mortgage - lender of money to finance the
  purchase holds title to property until it is paid
  for, and can take possession in the event of
  default

15
Transfer of Interest in Land

• Registration of documents related to land
  transactions creates an accurate title trail.
• Land Titles System
• central registry prepares certificate of title
  which determines interest
• binding evidence of transaction
• government guarantees title

16
Landlord/Tenant Relationship
Leasehold Estates

• landlord retains reversionary interest in
  property
• lessee is entitled to exclusive possession during
  term of the lease

• contract law applies
• lease must be evidenced in writing (over 3 years)
• leasehold interests run with the land

17
Types of Tenancies

• Term lease - stipulated to run for a specific
  period of time
• Periodic tenancy - period-to-period rental
• Tenancy at will - purchaser takes possession
  before date specified in agreement
• Tenancy at sufferance - tenant remains in
  possession after term of lease expires

18
Rights and Obligations

• Landlord
• must not interfere with tenants use of the
  property
• repair - obligations may be modified by
  contract
• termination with proper notice by either tenant
  or landlord

19
Rights and Obligations/2

• Tenants
• pay the rent
• not responsible for reasonable wear and tear
• can remove their own fixtures before termination
  of lease

20
Remedies

• Breach of Lease
• landlord can seize tenants property
• injunction available to both landlord and tenant
  when lease is breached
• tenant may sue for injury suffered by landlords
  breach

21
Residential Tenancies

• Provincial legislation modifies residential
  tenancy rules
• rent controls
• notice of termination periods
• quality of facilities and repair
• security deposits

22
Mortgages

• The law is designed to overcome problems
  associated with financing the purchase of
  property
• Equity of redemption - mortgagor retains right to
  redeem after defaulting on mortgage payments
• Foreclosure - mortgagee takes property after a
  set time for redemption has elapsed

23
Second Mortgage

• Mortgagor can use right to redeem as security on
  a second mortgage.
• Power to foreclose by first mortgagee creates
  risk for second mortgagee
• mortgages must be registered to obtain priority

24
Remedies Upon Default

• Mortgagee
• Exercise the right to foreclosure
• mortgagor must buy insurance
• pay property taxes to avoid seizure
• keep property in good repair
• suing on the covenant (breach of contract)
• retake possession

25
Remedies

• Power of Sale - mortgagee has right to sell
  property upon default (Ontario).
• Judicial Sale - court orders and supervises sale
• must take place during redemption period
• mortgagee can sue for deficit