Canada Property Ownership

The Canadian Constitution specifically states that property rights are within the domain and jurisdiction of the provinces. The Provincial governments maintain real estate records, which are publicly available over the counter. There is, however, a wide variance in fees charged by different provinces for information. Many provinces are providing the information electronically and Ontario has implemented electronic registration that will eventually be mandatory throughout the province.

Canada Transaction Information

Information on the sale or lease of a property is publicly available for inspection and is maintained by the provincial government. Saliency of information and size of fees associated with obtaining sale or lease information varies from province to province. Additionally, within CREA there exists provincial and territory agencies and within those exist 117 different local boards or regional affiliates that conduct many of the general operations. Most of these regional offices maintain an MLS system similar to that of the United States and in recent years, many have become affiliated or associated with U.S. brokers.

Canada Trade Associations

Name: Canadian Real Estate Association (CREA)
Address: 320 Queen Street, Suite 2100, Tower A Ottawa, Ontario, Canada K1R5A3 phone/fax: 613-237-7111 / 613-234-2567

Canada Land Rights

Govt. - property taxes: Ad Valorem property taxes are collected. The province enacts laws for the assessment and classification of property and the municipalities are responsible for setting the yearly tax rates and collection. Property tax arrears take priority over ownership and all other encumbrances.

Govt. - eminent domain: The government does have limited eminent domain rights in Canada. If a valid public use is demonstrated in the expropriation of private land, the owner of the property must be compensated at fair market value by means of a valuation analysis. If the owner feels this value is unfair, the value may be appealed judicially.

Govt. - escheat: The government does have escheat rights in Canada.

Govt. - police power: The Canadian government does not have police power.

Statutory estates: A spouse acquires right in the matrimonial home even if it is owned by his or her mate upon the death of the spouse.

Canada Forms of Ownership

Severalty: Sole ownership of property is allowed.

Concurrence - tenancy in common: Multiple owners of the same property is allowed.

Concurrence - joint tenancy: Joint Tenancy ownership is allowed. Concurrence - partnerships, J.V., corporations, trusts: Partnerships, Joint Ventures, Corporate and Trust forms of ownership are all allowed in Canada. Corporate ownership can be either federal or provincial. Federal incorporation takes longer than provincial incorporation and has rather strict financial reporting requirements, but a federally incorporated name is protected throughout Canada. Provincial incorporation, although much quicker than federal, offers the corporation protection only within the same province. Condominium, co-operative and time-share ownership exist.

Life Tenancies can be created as can Landlord and Tenant relationships of any term.

Canada Real Estate Info Summary

Deeds: Transfer of title is commonly achieved through the use of Transfer/Deed.

Conveyance after death: Upon death, title to a property can be conveyed by means of a written will.

Adverse possession: Although adverse possession exists in Canada, the rights associated with it are quite limited. Adverse possession is established after 10 years uninterrupted and uncontested use of a property. Land Titles systems are being implemented across the country to facilitate electronic registration. The systems do not recognize adverse possession.

Public records: Deeds of trust are recorded as public records. They are open to public inspection upon payment of the requisite fees.

Chain of title: When investigating and confirming clear title to a property, proof can offered in two forms: 1) clear title evidenced by abstract certification by lawyer, and, 2) clear title evidence by abstract certification by government. The first is pursuant to the older and disappearing registry systems and the latter by the land titles systems. With each, further title confirmation can be purchased through a lawyer from a title insurance company.

Elements of a contract: As in the United States, Canadian law recognizes the same elements of a contract. Those elements are: Consideration, mutual consent of the parties bound by the contract, reasonable mental capacity of the parties bound by the contract, contractual agreements must be placed into written form.

Performance and discharge:
Breach - causes and remedies: Breach of a contract is constituted by a failure to perform duties or responsibilities specifically outlined in the contract or by
recision. The party who suffers as a result of the breach is awarded liquidated damages.

Listing/sales contracts: Listing and sales contracts do not require notarization or the involvement of an attorney. They can be drawn and executed by a real estate agent by signature. Typically, a standard form is used in sales and listing agreements.
Standard form - types: Standard forms are typically used for sales contracts,
lease contracts and listing agreements.

Property Taxes:

Within Canada, property taxes are levied at the provincial level and collected at the municipal level. Annual property taxes are Ad Valorem. Upon the transfer of title, there is a transfer tax levied. The amount of the transfer tax varies depending on the province and is paid for by the Buyer.

Settlement procedures: Closing of sales and escrow procedures are regulated by the various provincial governments.

Timing: Closing and escrow typically less than 60 days from the date of contract for sale, however closing and escrow lasting 120 - 180 days are not uncommon for the purchase of new homes from developers.

Land Use & Control:

Public - zoning: Canadian provincial laws provide for municipal public zoning. Public zoning requirements are used to safeguard against incompatible land uses in an area and also used to regulate growth.

Public – site plan control: Requires approval for multi-residential, commercial and in properties prior to the issuance of a building permit

Public - subdivision regulations: In addition to zoning, there are restrictions in Canada on the subdivision or severing of real property. Check with local zoning officials for information on how land can be converted into buildable lots.

Private - covenants: Covenants are allowed in private development to direct acceptable activity and to discourage unacceptable activity. Check with association officials or board members for covenant restrictions that bear upon your neighborhood.

Private - deed restrictions: Private deed restrictions are allowed in Canada; however Ontario is banning the prohibition of clothes lines in deed restrictions in favour of environmental concerns.

Canada Mortgages & Financing

Typical: Typically, property is held as collateral for a mortgaged property. debt priorities: Second, Third, Fourth (etc.) mortgages are allowed in Canada. Claims on the property are ordered by the chronology of the liens recorded against the property.

Foreclosure: If the debtor defaults, the lender has the right to foreclose on the subject property. Foreclosure is a court procedure and can be converted by the debtor to a judicial sale if there exists equity in the property. The standard method of mortgage enforcement is power of sale, which is a self-help remedy. The lender has the right to sell the property after the redemptive rights of the debtor have been exhausted. If the property should command a selling price higher than the balance of the loan in default, the debtor has the right to claim the proceed of the sales in excess of the debt. Conversely, power of sale by the lender leaving a balance still owing does not relieve the debtor from payment of the balance owing. The “action on the covenant” (debt responsibility) against a debtor ends upon a successful foreclosure action.

Loan types: In Canada loans can be acquired most typically from Banks or lending institutions. To a lesser degree loans are available from private individuals and from the government, although government loans are most commonly offered to businesses as a relocation incentive or as a "lender of last resort."

Financing sources: In Canada there are many provincial and federal statutory restrictions or guidelines that govern the term of loans. Fixed rate loans with a term of greater than 5 years amortized over 15, 20, or 25 years are most common. By federal law, if lenders loan greater than 75% of the value of the property which is the subject of the loan the lender is responsible to have the mortgage insured, the cost of which is added to the mortgage debt.