Tenant Builds upon Land: Any Rights?

Is There a Lien on My House? Do a Property Lien Search by Address

(Ontario)

Question:

The Owner of a property purchases the 80 acres of raw land in 1987, and the leases out the land. A company rents it and upon expiration of the lease (lease in place from 1990-1997) a verbal agreement has the Tenant remain and pay the municipal taxes.
 
The Tenants have built a home on the property and now reside there. The Owner was unaware of any structures being built, and now wishes to sell.

The property is situate in Northern Ontario.

Answer:

Interesting question. Lots of additional facts are required in order to know which way this case might go.

In Ontario, if an individual were to build a house upon a property, actually believing it to be theirs, then they are entitled to a lien upon the property for that additional enhanced value. The Superior Court can make an Order providing them with a Judgment in the amount of the lien. In addition, they could Order a conveyance of the property itself, should the Court find that to be the equitable result.

Issues of adverse possession may also be applicable in these circumstances. But, because the property is in Northern Ontario, it may not apply, except as to evidence of intention.

Most of Northern Ontario is registered under the Land Titles system, and adverse possession rules would not be applicable.

Lien on lands for improvements under mistake of title

37 (1) Where a person makes lasting improvements on land under the belief that it is the person’s own, the person or the person’s assigns are entitled to a lien upon it to the extent of the amount by which its value is enhanced by the improvements, or are entitled or may be required to retain the land if the Superior Court of Justice is of opinion or requires that this should be done, according as may under all circumstances of the case be most just, making compensation for the land, if retained, as the court directs.  R.S.O. 1990, c. C.34, s. 37 (1); 2006, c. 19, Sched. C, s. 1 (1).

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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