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WHAT IS IT? A conditional gift is a gift to someone on certain terms, with a provision that if the terms are not met the gift goes back to the person who gave it or to another party. 110
Owners of land may want to donate their land to a conservation organization, but only on condition that the conservation organization maintain the land in a particular way, for example, as wilderness or as a farm.
The technical names for conditional gifts of land are determinable fee simple and fee simple subject to a condition subsequent. 111 These tools enable a landowner to make an outright gift of land, while making sure that the group to which the land is given abides by conditions of the gift. In the case of a determinable fee simple, the land automatically goes back to the landowner if the conservation group does not abide by the conditions of the gift. 112 With a fee simple subject to a condition subsequent, however, the landowner must claim the return of the land when the conditions have been breached. The land does not revert automatically. 113
AN EXAMPLE. Linnaea Farm has been part of Cortes Island since it was homesteaded in the 1880s. When the land was going to be subdivided, Turtle Island Earth Stewards (TIES) wanted to buy the land. But they could not take the land directly, because it needed a U.S. tax receipt for the purchase price.
So, TIES arranged with the Trust for Public Land, an American conservation organization, to purchase the property.
In turn, the Trust for Public Land conveyed the land back to TIES, by way of a determinable fee simple. That meant that the land belonged to TIES, but if TIES did not maintain the land in accordance with the conditions in the determinable fee simple, the land would revert to the Trust for Public Land. Those conditions included the maintenance of the quality of the natural watersheds, the continuation of the agricultural uses of the land, designation of some parts of the land as ecological reserves, and restrictions on the erection of buildings on the land.
POSSIBLE APPLICATIONS. These tools should be considered if a landowner wants to retain some control over the way the conservation organization can use the land, while enabling the organization to deal freely with the land so long as it abides by the conditions. 114
Examples of possible conditions on the gift of land might be:
HOW IS IT CREATED? A landowner can make a conditional gift either during his or her lifetime, by deed, or upon death, in a will. Courts have carefully scrutinized tools like a determinable fee simple and a fee simple upon condition subsequent, because landowners are trying to have their cake and eat it too — to give land away, but still maintain some control over it. 115 So, if a landowner gives a piece of land to a conservation organization with conditions attached, the conditions must be very clear. If there is any ambiguity in the conditions, or if there is doubt about whether the group has or has not fulfilled the conditions, the conditions are likely to be struck down, and the conservation organization would keep the land free of the condition.
HOW LONG CAN IT LAST? On the face of it, it would seem that conditional gifts of land are a way for the landowner to exercise control over the land forever, by giving it to a conservation organization on a condition, so that it would revert to the landowner if the condition were broken. But this is not so. The rule against perpetuities limits the length of time that the condition can last. 116
The gift of the fee simple interest in the land — that is, the outright gift of the land — can last forever. The condition on the gift, whether it is put there by way of a determinable fee simple or by a fee simple subject to a condition subsequent, can only last as long as it does not offend against perpetuities.
WHO MONITORS AND MAINTAINS THE LAND? The conservation organization becomes the owner of the land. So it has responsibility to maintain the land.
The heirs of the landowner who donated the land can enforce the condition. Or, the landowner can give the right to take back the land on breach of the condition to a third party. 117
HOW CAN THE LAND BE PROTECTED OVER TIME? If appropriate conditions are imposed by the donating landowner, the land can be protected over time, because if the conservation organization breaches the condition of the gift, it will lose the land.
The donating landowner may want to keep an eye on the conservation organization's compliance with the conditions imposed. However, in the case of a determinable fee simple, unless the donating landowner also has an easement or a statutory right of way, he or she will not be able to go onto the land to check on compliance without the consent of the conservation organization.
HOW IS IT TERMINATED? If the conservation organization fails to honour the conditions of a gift of a determinable fee simple, the donor gets the land back automatically. If the organization breaks the terms of a gift of a fee simple with a condition subsequent, the donor can choose to re-enter the land to terminate the gift.
When the perpetuity period has passed, the conservation organization can have the endorsement of the condition of the gift removed from the title to the land at the land title office. 118
If the nature of the condition is such that it has been fully complied with, the conservation organization can have the endorsement of the gift removed from the title.
110. This chapter describes a gift of land with conditions attached. The landowner could also sell the land using the legal tool of a determinable fee simple or a fee simple subject to a condition subsequent. Similarly, although this chapter focuses on a fee simple estate on condition, it is possible to attach conditions to the creation of an estate, whether freehold or less than freehold. "A conditional estate is not a distinct species of estate but rather is a qualification of an estate, for any estate, whether freehold or less than freehold, may be subjected to a condition." Anger and Honsberger, above at footnote 44, at 301.
111. Ibid. at 124-126.
112. Ibid. at 124.
113. Ibid. at 125.
114. The landowner could sell the land on similar conditions.
115. "[S]ince a condition appended to an estate may lead to forfeiture, the law has been jealous in its scrutiny of conditions subsequent and will readily hold them void as offending public policy, as incapable of performance, or for uncertainty." Anger and Honsberger, above at footnote 44, at 127.
116. See Chapter 5, Everything You Always Wanted to Know about Land ... for a discussion of the rule against perpetuities. The Perpetuity Act, R.S.B.C. 1979, c. 321, s. 20 provides:
20 (1) In the case of
(a) a possibility of reverter on the determination of a determinable fee simple; or
(b) a possibility of a resulting trust on the determination of any determinable interest in property, the rule against perpetuities as modified by this Act applies in relation to the provision causing the interest to be determinable as it would apply if that provision were expressed in the form of a condition subsequent giving rise on its breach to a right of re-entry or an equivalent right in the case of personal property, and, where the event that determines the determinable interest does not occur within the perpetuity period, the provision shall be treated as void for remoteness and the determinable interest becomes an absolute interest.
(2) Subsection (1) does not apply where the event, which determines the prior interest, or on which the prior interest could be determined, is the cessation of a charitable purpose, but in such a case if the cessation of the charitable purpose takes place after the expiration of the perpetuity period the property shall be treated as if it were the subject of a charitable trust to which the cy-pres doctrine applies.
(3) This section does not apply, nor does the rule against perpetuities apply, to a gift over from one charity to another.
117. Anger and Honsberger, above at footnote 44, at 433. See also the Property Law Act, R.S.B.C. 1979, c. 340, s. 8; the Wills Act, R.S.B.C. 1979, c. 434, s. 2; and the Estate Administration Act, R.S.B.C. 1979, c. 114, s. 90.
118. A right of re-entry and a possibility of reverter are registered in the same manner as a charge on the title to the affected land: See Di Castri, above at footnote 44, at 8-261 paragraph 249. By section 225 of the Land Title Act a charge can be removed where a charge has expired or the event contemplated in the instrument has happened.
119. Alternatively, the group may be able to purchase the land for a reduced price if the fee simple estate is sold with conditions.
