9. Canadian Property Law
There are two kinds of property: real and personal. Real property includes land, and certain things that are attached to land or associated with it. Land can include things such as a forest or a field, as well as buildings, like a house or an office. Things associated with land, like mineral rights, also qualify as real property. People often talk about real property by using the term real estate, which includes both real property and its related ownership interest. Conceptually speaking, we can consider real property as pertaining to things that are tangible or generally unmovable.
Personal property, on the other hand, is property that is generally movable. It can be tangible, such as a bicycle or car, or intangible, like intellectual property. Moveable or tangible personal property can also be called a chattel. Some personal property can also be described as fungible property, which relates to property that can easily be substituted with identical property. This can include juices, oil, metals such as steel or aluminum, and physical monetary currency. Although intangible property does not physically exist, it is still subject to ownership principles, including acquisition, transfer, and sale.
Although personal property is not technically unmovable, it can become attached to the land as a fixture. A fixture is something that used to be personal property, but because it has become attached to the land, it becomes a part of the land. In this way, fixtures are treated like real property. In a situation when real property is transferred, fixtures are also transferred as a part of the real property. For example, a ceiling fan for sale at a store is personal property. However, once the fan is installed in a house, it becomes a fixture and is part of the real property.
In a similar way, some things which are real property can become personal property. Imagine a farm with planted corn. The corn crop is an example of real property that can become personal property because when the corn is growing and still attached to the land, it is classified as real property. However, once it is picked from the stalk, it becomes personal property.
Both personal and real property can be privately or publicly owned. Private property is owned by someone or an entity that is not the government. This might include individuals, corporations, and partnerships. Private property can include real property like land or buildings, as well as personal property, such as vehicles, furniture, and computers.
Property that is owned by the government is public property. Banff National Park is an example of public property that is real property. Public property can also include personal property, such as vehicles and computers owned by provincial or local governments.
Under the Indian Act (R.S.C., 1985, c. I-5), First Nations people who live on a reserve do not own the land they occupy. Reserve lands are owned by the federal government and provided to a Band (a First Nation community) to administer and manage. Reserve land administration is based on what is determined to be best for the community and as such, formal transfer of the lands requires approval from the Band council and the appropriate federal Ministry. Individuals or families occupying property on reserves cannot mortgage, sell or transfer land.
This condition leads to some obvious differences and limitations in the application of property rights for those living on a reserve as expressed in this comment from a Fraser Institute post: “On-reserve members are unable to earn equity on their home, use it as collateral to borrow money, sell their land to whomever they choose or bequest their wealth to their children.” (https://www.fraserinstitute.org/blogs/property-rights-for-all-canadians-the-first-nations-issue-forgotten-by-all-federal-political-parties) With this in mind, it should be noted that although Indian lands cannot be purchased, lands on reserves can be leased. The Framework Agreement on First Nation Land Management (https://labrc.com/wp-content/uploads/2018/11/Framework-Agreement-on-First-Nation-Land-Management-Dec-2018.pdf) recognizes the rights of First Nations people to manage and govern reserve lands and to access these rights by opting-out of restrictive land management sections of the Indian Act. First Nations who enter the agreement can develop their own laws and regulations concerning land use and management.
Methods of Acquiring Personal Property
Personal property may be acquired in several different ways, including through production, purchase, gift, and by finding an object. Each of these will be expanded on below.
Acquiring personal property through production occurs when someone produces something. For instance, if you were to plant some pumpkin seeds, the pumpkin that grew from the seeds would be yours. However, if an employee produces a good as part of their job, then the employer will own the property, not the employee. Ownership by purchase is another means of acquiring property and it is the most common method of doing so. This occurs when a customer buys goods from a manufacturer. For instance, buying a lawnmower from Canadian Tire.
Another way for property to be acquired is through gifting. A gift is a voluntary transfer of property. Generally, the donor of the gift must intend to gift the property, the donor must deliver the gift, and the gift must be accepted by the intended recipient. A conditional gift is a gift that requires a condition to be met before the gift will transfer.
Property that someone finds can be classified in several ways. If property is abandoned, a person who finds it may claim ownership. However, the original owners of abandoned property must intend to relinquish ownership in it. For example, if someone takes a chair to the landfill, he or she has abandoned the chair. However, if someone puts a chair out for a picnic in their front yard, someone else cannot claim ownership of it since the actual owner did not abandon the item.
If a piece of property is simply lost or mislaid, then the finder must relinquish it once the rightful owner demands its return. Another classification of personal property applicable to found property is treasure trove. A treasure trove is money or precious metals, like gold, which is hidden by an unknown owner. Whoever finds a treasure trove becomes the owner unless the true owner (for example, the person who hid it) comes forward.
Sometimes it is necessary to intentionally leave personal property with someone else. A bailor is someone in the rightful possession of personal property who gives the property to someone else to hold. The person temporarily holding the property is known as a bailee. A bailment is an arrangement in which personal property is exchanged. The bailee agrees to accept the property and has the duty to return it. For example, a customer gives clothes to a dry cleaner. The dry cleaner is a bailee and has a duty to return the clothes (personal property) upon demand by the customer, who is the bailor.
Bailment is common in business practices. For example, placing packages with common carriers for delivery, warehousing goods with a third party, or taking clients’ or customers’ automobiles in a valet service. The duty of care that the bailee owes to a bailor depends on the nature and value of the property involved, as well as who benefits from the bailment. In general, a higher standard of care is required for more valuable property. Damages in a bailment case are based on the retail replacement value of the property.