Everyone knows that you should not cut trees down on your neighbour’s property without permission. You also shouldn’t build structures on your neighbour’s property without permission. In fact, even with a neighbour’s permission it wouldn’t seem to make much sense to build a structure that is located in whole or in part on your neighbour’s property. Fixtures to the land belong to the owner of the land. Why build a structure that you don’t fully own?
Sometimes, though, structures are built which unintentionally encroach on a neighbour’s property. The exact boundary lines between properties may not be apparent; without having a surveyor identify a boundary line, mistakes can be made. In some cases, the property owner having the structure built is mistaken about the actual location of the property boundary. In some cases, the mistaken understanding of the location of the boundary is shared by both neighbouring owners. Think of an old boundary fence that has always been there – it’s just that it was never actually on the boundary.
When some encroachments are discovered, the answer is simply to move the encroaching structure. But there are some structures which cannot be easily moved or cannot be moved without great expense. What then? The structure that is encroaching on the neighbour’s property may have been in place for many decades. Perhaps it is a house that was built long ago in the wrong position. It may be that the current legally recognized property boundary is incorrect and based on a historical mistake and an order from the Court or the Director of Land Titles can be obtained to correct the boundary.
There
might also be a case for adverse possession.
Depending on how long the structure has been in place, the owner of the
structure might actually have obtained legal ownership of the land beneath the
structure through the process of adverse possession. Where a person has possessed someone else’s
land continuously for a period of ten years or more with the intention of
excluding the registered owner (or other persons entitled to possession of the
land), the ownership interest of the registered owner may be extinguished and
lost to the person actually in possession.
The acts of possession must be “open, notorious, peaceful, adverse,
exclusive, actual, and continuous having regard to the nature of the disputed
property.” Building a house or other
building on land and having exclusive occupation of it could very well meet the
requirements for adverse possession.
However, adverse possession cannot arise once property becomes part of the Land Titles system of land registration. In Ontario, most properties are now part of that system. While it is still possible that adverse possession could have taken place prior to the date when a property became part of the Land Titles system (if more than ten continuous years of adverse possession were by then completed), no adverse possession of lands after that date will be effective to extinguish the ownership interest of the registered owner in favour of the encroaching party.
So what happens if you accidentally build your structure on your neighbour’s property and adverse possession is not an available solution? What if your neighbour won’t agree to sell you the land or enter into an encroachment agreement with you? There may be another fix available. In a case recently decided by Madam Justice Doyle of the Superior Court of Justice, owners whose garage was accidentally constructed in part on the neighbours’ property were granted an order entitling them to the encroachment lands upon payment to the neighbours of $18,500. The order was made pursuant to Section 37(1) of the Conveyancing and Law of Property Act, which provides:
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.
The circumstances of the case before Justice Doyle arose from an unfortunate error. Prior to 2006, the owners of what became two adjoining lots built a garage on one of the lots. In the summer of 2006, those owners sold one lot to one purchaser and the other lot to another, but it was discovered before closing of the transactions that the garage on the one lot encroached onto the other lot. The owner-vendors fixed the situation by tearing down the portion of the garage that crossed the property boundary. Unfortunately, as was discovered in 2015 when the garage lot owners decided to sell their lot, the tear down in 2006 didn’t go far enough – the parties were wrong about the actual location of the property boundary.
By 2015, the cost of tearing down the garage and rebuilding it entirely within the lot where it was supposed to be located was understood to be more than $117,000. Justice Doyle granted the order requested to retain land under the Conveyancing and Law of Property Act because the garage lot owners had an honest belief that the land being encroached upon was theirs and they had made a “lasting improvement” to the land (something “not easily removable”). The significant cost quoted for the removal of the garage satisfied the “lasting improvement” requirement.
Justice Doyle determined that the “balance of convenience” was in favour of the garage owners to permit them to retain the encroached land in part because there was no evidence showing that the value of the neighbours’ property would be decreased by the conveyance of the area of the encroachment. Based on appraisal evidence as to the per square foot value of comparable land, the price for the land was set at $18,500.
Read the decision at: 2022 ONSC 105.
No comments:
Post a Comment