Please read the disclaimer before perusing the following article.
(originally published in Beef in B.C. in 2011)
On October 19, 2010, the top BC court decided that a lease for a portion only of a parcel of land is not valid unless created after May 31, 2007 or is for a term of three years or less; unless the landlord and tenant went through the lengthy and costly process of defining the part of the parcel to which the lease applies.
Any rancher operating under a private lease of land made before June 1, 2007, for less than the whole parcel of land, should be aware that the lease may not be valid.
It would not be prudent to invest in expensive improvements or infrastructure relying on the validity of a lease made before June 1, 2007, which is for less than the whole parcel.
These leases are common where there are two different uses on the same parcel or where the land owner reserves a residence or some part of the title for the landowner’s own use, leaving the tenant with one part of the title and the owner with the other part.
was void—completely invalid—and created no rights between landlord and tenant.
The validity of a lease of an unsubdivided part of a parcel of land for a term of three years or greater, was unaffected.
The rationale for the decision was that the Land Title Act contained a procedure for approval of a surveyed plan creating a lease parcel. If the court allowed a lease of an unsurveyed part of a parcel to be valid, it would have the effect of completely avoiding the approval procedures in the Act, which the Court decided were in the public interest and should be upheld.
(Note – the case applies to leases between private parties, not grazing leases.)
Government decided that effective May 31, 2007, leases for an unsubdivided part of a parcel were to be valid. It enacted section 73.1 of the Land Title Act, to that effect.
But in October, 2010, the Court of Appeal decided the Idle-O Apartments case. In doing so, the court decided that section 73.1 of the Land Title Act only validated leases for an unsubdivided part of a parcel where the lease was made after May 31, 2007.
The court said that the legislation is not retroactive. So any lease of an unsubdivided part of a parcel which was entered into before June 1, 2007, for a term more than three years in length, is not valid.
BC Cattlemen’s Association has asked government to incorporate a retroactivity provision into section 73.1 of the Land Title Act so that a lease of an unsubdivided part of a parcel, whenever made, will be valid.
If you are a landlord or tenant under a lease of an unsurveyed part of a parcel of land, for a term more than three years in length, you should consider terminating the lease by agreement of landlord and tenant, and entering into a fresh lease. The validity of the fresh lease will not be affected by the fact that the lease includes only part of the land in that parcel.
If you are a landlord or tenant who wants out of the lease, you should consult your lawyer to see if the lease may be invalid as a result of the Idle-O Apartments case.