Thursday, January 6, 2011

Law of Property (Real and Personal)


By Brian Madigan LL.B.

There are two basic divisions in the law of property which goes back to the Middle Ages:

1) real property,
2) personal property.

These two same divisions continue to the present day.

The remedies were different. The successful party in the case of real property got an Order vesting the title to the land, while the successful party in an action related to personal property merely received damages. Consequently, there were different courts and different civil procedures applicable.

In a sense, land had substantial value and there wasn’t anything particularly unique about personal property. Money would constitute sufficient compensation. So, even in those days the unique value of land and “location, location, location” were important ingredients.

As the legal system matured, land was protected by a “property rule”, and personal property by a “liability rule”.

Leases were a little bit different again. In the 13th century, leases were clearly personal in nature. As time went by, leases adopted some of the characteristics of the protection afforded real property. So, by the 14th century, they had become a class unto themselves known as “chattels real”.

Personal property was divided into two categories:

1) chattels personal, and
2) chattels real.

Leases were something of a “hybrid” case, and some of the remedies available to landowners were made available to tenants. There was a new action for “ejectment”. That was a court order that would remove the landowner from possession of the property and restore it to the tenant under the terms of the lease. The term “new” is used in this context rather loosely, because after all, it was more than 700 years ago.

There were three areas of distinction where the laws related to land and chattels would be handled differently. They related to:

1) wrongful dealings with property,
2) the transfer of property,
3) devolution of property.

The legal system in the Middle Ages was rather complicated. In some ways it was simplistic and in other ways it was rather sophisticated, but just like today it was expensive and cumbersome. Remember, of course, that it was Shakespeare who said “first thing we do, let’s kill all the lawyers”.

Land was considered to be of significant value. If there was no Will, then there were clear rules of devolution determining the rightful heir. Essentially, the rules of primogeniture applied, and the eldest male child was vested with ownership.

Personal property was thought to have little value (on a relative basis). The scheme for intestacy was one third to the widow, one third to the children and one third to the church. This last one third was referred to as the “dead man’s part” and thought to buy a little better seat in the afterlife. However, that was changed in 1670, and the children received two-thirds. Essentially, that is the allocation that exists in Ontario for intestacies today.

Lawsuits which in effect enable the protection of legal rights were divided into two categories:

Actions in rem (a right against the whole world, like the ownership of land)

Actions in personem (a right against a particular person or individual)

As one examines the issue of chattels and fixtures today, it’s interesting to note that in the Middle Ages different rules, different laws, and different courts dealt with the matters.

So, if there ever was a time when you really needed to know the difference between chattels and fixtures (land), it was then, otherwise you could be thrown out of court.

Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888
www.OntarioRealEstateSource.com