The doctrine of merger is an ancient common law doctrine. Essentially it is just simplification.
Let’s look at three examples:
1) Tenant purchases leased land,
2) Purchaser completes the closing, and
3) Owner acquires adjacent property.
In all these cases, the doctrine of merger will apply, but in much different ways.
Tenant purchases leased land
In this case, the tenant purchases the land which he was previously renting. The lease which he had, now merges in the deed. That lease disappears in law. So, he has to grant a new lease should he wish to rent the property. He cannot assign the old lease, since it no longer exists.
Purchaser completes the closing
Here, the purchaser has an agreement of purchase and sale which contains conditions, warranties and representations. Upon completion and receipt of the Deed, this culmination of the deal is considered to be the final bargain. The agreement merges in the Deed. Anything previously noted in the agreement merges and does not survive the final closing. The exception, of course, would be collateral agreements that were “excepted” from the doctrine by a new “closing agreement”.
Owner acquires adjacent property
In this example, the owner holds title to property “A”, and then subsequently acquires ownership to property “B”. If the two properties are:
1) immediately adjacent, and
2) held in common ownership
the two separate titles merge into one title for the entire property.
Naturally, in order to avoid the implications and retain the separate identities of the properties, the owner could have taken steps to hold the second property under a different name.
You will notice that in all cases, the doctrine of merger applied to actually simplify the situation, that is, to make the legal circumstances somewhat less complicated. It shortens the story, if ever the matter were to go to court. And, that made a lot of sense in the 12th century.
Brian Madigan LL.B., Broker
www.OntarioRealEstateSource.com