Property as a legal concept is best understood not as an object, but as a bundle of rights that a legal person possesses. The pertinent legal question isn’t what you “own” but what you have the right to do with it. We are going to focus on “real property”, which is a type of property that is associated with land and things that are attached to it (e.g. a house). The law on this is different from “personal property”, which is property not attached to land—like your laptop.
You can have many different types of interest in real property. They are different not because the type of property is different (e.g. house versus farm), but because of what the person who holds the property has the legal right to do. There are many different rights that attach to real property interests—they are wide ranging and will vary depending on the nature of the proprietary interest.
The most basic kind of proprietary interest is an interest in fee simple—this is what most people are referring to when they say they “own” a house, a cottage, or a farm.
“Owning” property in Canada actually means having certain rights over it. Your grandpa’s cottage is governed by the rights your grandpa has over that property…
A fee simple estate is the highest and most complete interest in the land that can be recognized by law. The owner of the fee simple estate can exercise all rights of ownership over the land infinitely.
For example, my great-grandfather owned a cottage on a piece of land up near Algonquin Park. In legal terms, what he had was a fee simple estate.
With the fee simple estate, he had a bundle of rights. For example, he held the right to:
- Occupy the property;
- Exclude others from the property;
- Sell the property;
- Rent the property (we will discuss leaseholds and residential tenancy in another post);
- Divide the property into smaller fee simple estates;
- Destroy the property;
- Use the property as security, for example, by taking out a second mortgage; and
- Will the property to his children after he died.
Unless he granted anyone else any rights, he was the only person who held these rights. His rights under fee simple were complete and indefinite.
In 2005, he passed away. What happened to his fee simple interest in that land and cottage after that? A fee simple interest has no end date— it is indefinite, meaning that it survives even after a person dies, which means that it can be willed to another person who will possess all the same rights. Even where a fee simple estate is not willed, it still exists and descends intestate to the owner’s heirs—again, this is because it is indefinite.
My great-grandfather willed the property to my great-uncle, who decided to sell it. When he sold the property, he sold the fee simple—he didn’t just sell the cottage and the land, he sold all the rights that attached to it. Because the fee simple is absolute, it means that he no longer held any rights to the property.
This is just fee simple, we’ll look at other property rights in future posts!
— Isabelle Crew, Queen’s Law’18