Legal Matters

Possession is NOTnine-tenths of the law. The saying is rooted in the law of adverse possession, which prevents the true owner of land from reclaiming it once the prescribed time has passed. Although not yet dead in Ontario (the Weilers.ca website has a recent article on this), it is fading into the sunset with new Land Titles systems prevailing.

What about personal property? How important is possession there?

We can all think of situations where we leave articles with another person without transferring ownership – a car for repair; clothing at the dry cleaners. Maybe you left Mom’s antiques to an auctioneer to bundle into an estate auction. Or left the keys for Dad’s house with the realtor to find a buyer.

What matters is whether there is transfer of title. Title in turn includes both legal (or paper) and beneficial title. In a trust situation, the trustee has the legal title, but the beneficiaries have the beneficial title. The beneficial title is so importance that we sometimes refer to it as “true ownership”, though the power of a beneficiary to deal with the property is almost non-existent. Confused yet? Don’t worry- that is my point.

Beware the idioms of law! And the ides of March.

Documentation is important to prove the intent around possession – the repair slip; the listing agreement; a trust instrument. “off the shelf” is fine for simple situations, but to prepare a sophisticated agreement, legal assistance is a good investment. If you need legal help, call my colleagues at Weilers LLP.