Working with clients in the regional real estate market is rewarding when people realize their real estate goals – whether it be as a first time home buyer or as a retiree looking to settle down in a great location without the stress of a former job or city. Each person’s understanding of the real estate industry, and the Comox Valley real estate process that applies to buying or selling a home is different. Some very experienced people may have limited knowledge of real estate while some inexperienced people may have acquired a fairly good understanding. Understanding what they know (or think they know) is a good first step.
Words are the building blocks of language and communication. Words, and the meaning that they convey, are important to facilitate effective communication, and to convey intended understanding. Words are especially important in Comox Valley real estate given the highly regulated nature of the industry and the significant number of laws that have been created to regulate the industry. It is important to understand what is meant by the words contained in law in order to understand the various laws and regulations that concern real estate.
Lexical, or dictionary, definitions are often too vague to be useful when precision is important to facilitate understanding of an issue. Think about how many time you have encountered the following: the same word used to mean several different things, and several different words used to mean the same thing. Often, we need to make small or subtle distinctions between words with the same lexical definition to ensure what we are trying to communicate is what we intended to communicate. Many years ago I was provided a clear definition of communication as follows: message transmitted; message received; and message understood as intended. While the first two parts are normally easy to effect, the third can cause problems in business.
The word property is used in Comox Valley real estate many times. Some dictionaries state that property is “that which a person owns”. However, there is a problem with this definition in terms of real estate. The British Columbia Real Estate Services Act states that real property is defined as real estate. Real estate includes land, and whatever is affixed, growing upon, and erected upon the land. So what is the problem? When we buy real property as individuals in Canada, we do not own the property. The only owner of the land is the Crown (meaning the federal and provincial governments). So the lexical definition of property does not apply to real property. Unfortunately, many people understand and use the lexical definition of property and apply it to real property in their everyday language.
When we buy real property (real estate), we buy interests in real property. Our interests and those of others are expressed in a document called the land title. This document discusses registered owners but it does not use this expression relative to the land itself. Instead, a title will refer to the registered owner in fee simple. The title also discusses charges and the register owner of charges. The Land Title Act defines a charge as meaning an estate or interest in land less that the fee simple. This Act includes an encumbrance in the definition it provides for charge. An encumbrance is defined as a judgement, mortgage, lien, debt or other claim. As a registered owner of a fee simple estate (also referred to as a freehold estate) we possess the largest bundle of rights relative to the real property apart from those related to Crown ownership. Clearly, however, the Crown and others may also have rights or interests in the real property that we possess.
The discussion of real property ownership is confusing enough without having to consider what is commonly referred to as co-ownership. Co-ownership in the context of real property does not mean ownership. It merely refers to possession of the land by two or more people. The forms of co-ownership are expressed as either joint tenancy or tenancy in common. Tenancy is defined in the dictionary as possession or occupancy of land. So here the dictionary is more helpful. Even though we discuss co-ownership, what we actually mean is co-tenancy because we possess but do not own the real property. Each form of tenancy has different rights associated with it. For example, joint tenants will have the right of survivorship relative to an undivided interest in the entire real property that they possess together. In contrast tenants in common will have interests in a portion of the real property that they can leave to beneficiaries.
By now, it should be clear that it is very important to understand the meaning of the words we use to describe and discuss Comox Valley real property. While we may commonly use words such as ownership in our everyday lexicon, we often use such words incorrectly relative to the legal understanding of real property. Saying one thing and meaning something else and saying something that is incorrect can both result in problems when it comes to legal interpretation and understanding.
Our knowledge and understanding of real property issues can be enhanced greatly by reading all of the laws that apply to real property. A competent real estate agent should be able to help you improve your understanding of real estate and provide you with advice on real estate matters. When you need legal advice on real estate matters seek such advice from a lawyer. Comox Valley real estate agents are not either licensed or qualified to provide legal advice but they should be able to help you identify when you need such advice.
If you are looking for a greater understanding of real estate and the real estate process contact Brett Cairns of RE/MAX Ocean Pacific Realty before you buy or sell your next Comox Valley home. The more you understand, the more comfortable you should feel going through the process. This, in turn, should help you acquire peace of mind when buying or selling your home.