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WHAT IS IT? A lease is an interest in land which gives the tenant 255 the right to exclusive possession of the land for a period of time, usually in return for rent. Go to: an example of a lease for conservation purposes.
AN EXAMPLE. The most systematic use of leases in the land conservation context in this province is by the Nature Trust of British Columbia. The Nature Trust will not agree to acquire a piece of property unless, at the same time, it can reach an agreement with a government agency or a private society to manage the lands — often the Ministry of the Environment, Lands and Parks. This division of labour means that the Nature Trust does not have to have people in the business of monitoring the state of the land, or enforcing protective covenants, easements, and other charges on title.
By the terms of the lease which the Nature Trust typically negotiates with the Ministry of the Environment, Lands and Parks, the Ministry pays no money. It agrees to hold the land, permitting only uses which are consistent with the health of the land; and to take steps to enforce the protection of the land if anyone else is mistreating it. Such a use might be as an ecological reserve, for example. The Nature Trust has the right to terminate the lease if in its opinion the Ministry is not properly caring for the land. For its part, the Ministry pays no money for the lease, so it gets environmentally valuable land in a protected state for the term of the lease, which is usually 99 years.
POSSIBLE APPLICATIONS. A conservation organization can lease property from a landowner and look after the land under the terms of the lease. A lease can last as long as the parties wish, so this tool provides a way for the land to be controlled for a long time.
Or, if the conservation organization owns the land, it may want to lease the land to someone else — a government body, for example, that would then care for the land. Land leased to the Crown is exempt from municipal and rural property taxes. 256
A third possibility would be for a landowner to sell the property to a conservation organization and take a lease back on terms which would conserve the land.
LEGAL BASIS. At common law, a lease is a way of permitting one person to have all of the use and occupation rights of the landowner over the land for a period of time, while the owner retains the right to dispose of the land. During the lease, the tenant has exclusive possession of the land and the responsibility of maintaining it according to the terms of the lease. The landowner has the right of reversion, that is, the right to get all of the fee simple back when the lease is over, meaning that when the lease is over the land reverts to the landowner. The landowner has the right to sell the property during the lease, subject to the terms of the lease.
HOW IS IT CREATED? A lease should be drawn up in writing between the parties. The main terms of the lease are a description of the land, the length of the lease and the amount of the rent. There can also be other terms in the lease, including terms which relate to the protection of the land. 257
A lease should be registered in the land title office, so that purchasers of the land will know that the lease exists. If the lease is to last more than three years or if the tenant is not going to occupy the land, the lease must be registered in the land title office to protect the tenant. Since most leases set up for conservation purposes will not involve the tenant occupying the property, all should be registered. If the landowner sells the land and the lease is not registered, the purchaser may not be not bound by the lease. 258 But if the lease is registered, the purchaser buys the land subject to the terms of the lease.
HOW LONG CAN IT LAST? A lease can last as long as the parties want it to. 259 If the lease is properly registered, it is binding on anyone who takes an interest in the land during the term of the lease. The tenant can pass on the lease to another person, by assigning it. 260
Usually leases contain covenants between the landowner and the tenant — promises the owner makes to the tenant or the tenant makes to the owner. Some of the covenants will, and some will not, be binding on a successor in title to the landowner, or a person to whom the tenant assigns the lease. 261
WHO MONITORS AND MAINTAINS THE LAND? If the lease does not contain a clause saying who is responsible for maintaining the land, the tenant is responsible. 262
Generally, the lease sets out the tenant's responsibilities for maintaining the land. The landowner can have a right of reentry if the tenant fails to maintain the land properly. This right of reentry would be contained in a term of the lease.
HOW IS THE LAND PROTECTED OVER TIME? The parties to the lease can specify what duties the tenant has to conserve the land, what rights the landowner has to go on the land to inspect, and what happens if the tenant breaks the conditions relating to the conservation of the land.
So, the lease is a tool which divides control over the state of the land between the landowner and tenant and allows the landowner to enforce the tenant's duties to maintain the property.
HOW IS IT TERMINATED? A lease ends when it is over. Sometimes a lease will contain an option to renew, that is, a provision saying the tenant is entitled to a further period of time to rent the property according to terms set out in the lease.
A lease can be surrendered by the tenant to the landowner if both agree. In that case the tenant has no further right to possession and the landowner has no further right to receive rent. 263
Usually a lease has a provision entitling the landowner to reenter and recover the property if the tenant breaches an important term of the lease. This is another way that occupation of land under a lease can be terminated. 264
255. The landowner is also called a lessor and the tenant a lessee.
256. See the Municipal Act, R.S.B.C. 1979, c. 290, s. 398(1)(a) and the Taxation (Rural Area) Act, R.S.B.C. 1979, c. 400, s. 13(1)(g).
257. Though there are other kinds of tenancies, for example, residential tenancies, they are not normally relevant in the conservation context. Non-residential leases are governed by the Commercial Tenancy Act, R.S.B.C. 1979, c. 54.
258. Although the Land Title Act, R.S.B.C. 1979, c. 219, s. 29, provides that "no person ... taking ... from a registered owner ... shall be affected by a notice ... of an unregistered interest ... other than ... a lease or agreement for lease for a period not exceeding 3 years where there is actual occupation under the lease or agreement", a purchaser may be bound by a lease over three years, even though unregistered, if his or her conduct shows acceptance of it. CCH Canadian, British Columbia Real Estate Law Guide above at footnote 70, at paragraph 10,230.
259. The rule against perpetuities does not apply to leases because the tenant's rights vest immediately. "A lease in perpetuity is void apart from statute. ... However, apart from statute, a lease renewal in perpetuity is valid provided that the language is clear and unequivocal." Di Castri, above at footnote 44, at 12-369. Also, see section 17(4) of the Perpetuity Act, R.S.B.C. 1979, c. 321. The lease must specify the length of its term: CCH Canadian, British Columbia Real Estate Law Guide, above at footnote 70, at paragraph 45,405.
260. The lease may contain restrictions on assignment. The terms of the lease govern.
261. The law about which terms survive to bind a successor in title or an assignee is very complicated. For this reason, and because a lease may be intended to last a very long time, it is important to have the help of a lawyer in drafting the lease.
262. Anger and Honsberger, above at footnote 44, at 243.
263. A tenant cannot unilaterally terminate a lease, unless the terms of the lease permit it.
264. If the tenant breaches and the landowner reenters, then the landowner can apply to the registrar of the land title office to have the lease taken off the title: see the Land Title Act, R.S.B.C. 1979, c. 219, s. 226.
