chap06.pdf - DISCLAIMER This publication is intended for EDUCATIONAL purposes only The information contained herein is subject to change with no notice

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Unformatted text preview: DISCLAIMER: This publication is intended for EDUCATIONAL purposes only. The information contained herein is subject to change with no notice, and while a great deal of care has been taken to provide accurate and current information, UBC, their affiliates, authors, editors and staff (collectively, the "UBC Group") makes no claims, representations, or warranties as to accuracy, completeness, usefulness or adequacy of any of the information contained herein. Under no circumstances shall the UBC Group be liable for any losses or damages whatsoever, whether in contract, tort or otherwise, from the use of, or reliance on, the information contained herein. Further, the general principles and conclusions presented in this text are subject to local, provincial, and federal laws and regulations, court cases, and any revisions of the same. This publication is sold for educational purposes only and is not intended to provide, and does not constitute, legal, accounting, or other professional advice. Professional advice should be consulted regarding every specific circumstance before acting on the information presented in these materials. © Copyright: 2014 by the UBC Real Estate Division, Sauder School of Business, The University of British Columbia. Printed in Canada. ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced, transcribed, modified, distributed, republished, or used in any form or by any means – graphic, electronic, or mechanical, including photocopying, recording, taping, web distribution, or used in any information storage and retrieval system – without the prior written permission of the publisher. CHAPTER 6 REAL PROPERTY OWNERSHIP AND INTERESTS ŽŠ•ȱ ™›˜™Ž›¢ȱ ˜ —Ž›œ‘’™ȱ ’—Ÿ˜•ŸŽœȱ —˜ȱ ˜—•¢ȱ ‘Žȱ ’Ž—’ęŒŠ’˜—ȱ Š—ȱ ŸŠ•žŠ’˜—ȱ ˜ȱ Šȱ ŸŠ›’Ž¢ȱ˜ȱ’쎛Ž—ȱ›’‘œǰȱ‹žȱŠ•œ˜ȱ‘ŽȱŠ—Š•¢œ’œȱ˜ȱ‘Žȱ–Š—¢ȱ•’–’Š’˜—œȱ˜—ȱ‘˜œŽȱ›’‘œȱ Š—ȱ ‘Žȱ ŽěŽŒȱ ‘Šȱ ‘Žȱ •’–’Š’˜—œȱ ‘ŠŸŽȱ ˜—ȱ ŸŠ•žŽǯȱ ˜–Žȱ •’–’Š’˜—œȱ ˜—ȱ ˜ —Ž›œ‘’™ǰȱ œžŒ‘ȱ Šœȱ Ž¡™›˜™›’Š’˜—ǰȱ Š›Žȱ ™ž‹•’Œȱ ‘’•Žȱ ˜‘Ž›œȱ œžŒ‘ȱ Šœȱ ’•Žȱ ˜›ȱ ŽŽȱ ›Žœ›’Œ’˜—œȱ Š›Žȱ ™›’ŸŠŽǯȱ ˜•’—ȱ Šȱ ˜›–ȱ ˜ȱ ˜ —Ž›œ‘’™ȱ ’—ȱ ›ŽŠ•ȱ ™›˜™Ž›¢ȱ –ŽŠ—œȱ ‘ŠŸ’—ȱ Š—ȱ ’—Ž›Žœȱ ’—ȱ ‘Šȱ›ŽŠ•ȱ™›˜™Ž›¢ǯȱ‘’œȱŒ‘Š™Ž›ȱŽ¡Š–’—Žœȱ‘Žȱ‹ž—•Žȱ˜ȱ›’‘œȱ‘Ž˜›¢ǰȱ‘Žȱ¢™Žœȱ˜ȱ›ŽŠ•ȱ ŽœŠŽȱ˜ —Ž›œ‘’™ȱ’—Ž›ŽœœǰȱŠ—ȱ‘ŽȱŸŠ›’˜žœȱ˜›–œȱ˜ȱ™›˜™Ž›¢ȱ˜ —Ž›œ‘’™ǯȱ‘Š™Ž›ȱŘşȱ ’œŒžœœŽœȱ‘ŽȱŸŠ•žŠ’˜—ȱ˜ȱ™Š›’Š•ȱ’—Ž›Žœœǯ THE BUNDLE OF RIGHTS ‘Žȱ –˜œȱ Œ˜–™•ŽŽȱ ˜›–ȱ ˜ȱ ˜ —Ž›œ‘’™ȱ FEE SIMPLE IN THEORY AND IN PRACTICE ’œȱ ‘Žȱ ŽŽȱ œ’–™•Žȱ ’—Ž›Žœȱ Ȯȱ ’ǯŽǯǰȱ Š‹œ˜•žŽȱ ˜ —Ž›œ‘’™ȱ ž—Ž—Œž–‹Ž›Žȱ ‹¢ȱ Š—¢ȱ ˜‘Ž›ȱ The complexity of real property ownership in Canada ’—Ž›Žœȱ ˜›ȱ ŽœŠŽǰȱ œž‹“ŽŒȱ ˜—•¢ȱ ˜ȱ ‘Žȱ today suggests that a true fee simple interest seldom •’–’Š’˜—œȱ ’–™˜œŽȱ ‹¢ȱ ‘Žȱ ˜ž›ȱ ™˜ Ž›œȱ exists because nearly all properties are encumbered ˜ȱ ˜ŸŽ›—–Ž—DZȱ Š¡Š’˜—ǰȱ Ž¡™›˜™›’Š’˜—ǰȱ to some degree by easements, reservations, or ™˜•’ŒŽȱ™˜ Ž›ǰȱŠ—ȱŽœŒ‘ŽŠǯȱ‘ŽœŽȱ™˜ Ž›œȱ private restrictions. Although most appraisers define Š›Žȱ ’œŒžœœŽȱ ’—ȱ ŽŠ’•ȱ ’—ȱ Šȱ •ŠŽ›ȱ œŽŒ’˜—ȱ the interest being appraised as a fee simple interest, ˜ȱ ‘Žȱ Œ‘Š™Ž›ǯȱ •‘˜ž‘ȱ ŽŽȱ œ’–™•Žȱ once a lease or a mortgage creates a partial interest, ’—Ž›Žœȱ ›Ž™›ŽœŽ—œȱ ‘Žȱ –˜œȱ Œ˜–™•ŽŽȱ the fee simple interest becomes largely theoretical. ˜›–ȱ ˜ȱ ˜ —Ž›œ‘’™ǰȱ ˜Ž—ȱ Š—ȱ Š™™›Š’œŽ›ȱ Even so, many assignments call for the valuation of the fee simple interest. ’••ȱ‹ŽȱŠœ”Žȱ˜ȱŠ™™›Š’œŽȱœ˜–Ž‘’—ȱ•Žœœȱ ‘Š—ȱ‘ŽȱŽŽȱœ’–™•Žȱ’—Ž›Žœǰȱ’ǯŽǯǰȱŠȱ™Š›’Š•ȱ ’—Ž›Žœȱ˜›ȱŠȱ›ŠŒ’˜—Š•ȱ’—Ž›Žœǯ ‘Žȱ ‹ž—•Žȱ ˜ȱ ›’‘œȱ Œ˜—ŒŽ™ȱ Œ˜–™Š›Žœȱ ›ŽŠ•ȱ ™›˜™Ž›¢ȱ ˜ —Ž›œ‘’™ȱ ˜ȱ Šȱ ‹ž—•Žȱ ˜ȱ œ’Œ”œǯȱŠŒ‘ȱœ’Œ”ȱ’—ȱ‘Žȱ‹ž—•Žȱ›Ž™›ŽœŽ—œȱŠȱœŽ™Š›ŠŽȱ›’‘ȱ˜›ȱ’—Ž›Žœȱ’—‘Ž›Ž—ȱ’—ȱ‘Žȱ ˜ —Ž›œ‘’™ǯȱ ‘ŽœŽȱ ’—’Ÿ’žŠ•ȱ ›’‘œȱ ŒŠ—ȱ ‹Žȱ œŽ™Š›ŠŽȱ ›˜–ȱ ‘Žȱ ‹ž—•Žȱ ‹¢ȱ œŠ•Žǰȱ •ŽŠœŽǰȱ –˜›ŠŽǰȱ ˜—Š’˜—ǰȱ ˜›ȱ Š—˜‘Ž›ȱ –ŽŠ—œȱ ˜ȱ ›Š—œŽ›ǯȱ ‘Žȱ Œ˜–™•ŽŽȱ ‹ž—•Žȱ ˜ȱ ›’‘œȱ ’—Œ•žŽœȱ‘Žȱ˜••˜ ’—DZ ©Copyright: 2014 by the UBC Real Estate Division R1ARE10.indb 1 10/4/2010 10:35:31 AM 6.2 The Appraisal of Real Estate – Third Canadian Edition Figure 6.1 The Bundle of Rights Right to Occupy Right to Bequest Right to Transfer Right to Lease Right to Sell yȱ yȱ yȱ yȱ yȱ ‘Žȱ›’‘ȱ˜ȱœŽ••ȱŠ—ȱ’—Ž›Žœ ‘Žȱ›’‘ȱ˜ȱ•ŽŠœŽȱŠ—ȱ’—Ž›Žœ ‘Žȱ›’‘ȱ˜ȱ˜ŒŒž™¢ȱ‘Žȱ™›˜™Ž›¢ ‘Žȱ›’‘ȱ˜ȱ–˜›ŠŽȱŠ—ȱ’—Ž›Žœ ‘Žȱ›’‘ȱ˜ȱ’ŸŽȱŠ—ȱ’—Ž›ŽœȱŠ Š¢  —Ž›œ‘’™ȱ ˜ȱ ‘Žȱ ŽŽȱ œ’–™•Žȱ ’—Ž›Žœȱ ’œȱ Žšž’ŸŠ•Ž—ȱ ˜ȱ ˜ —Ž›œ‘’™ȱ ˜ȱ ‘Žȱ Œ˜–™•ŽŽȱ ‹ž—•Žȱ˜ȱœ’Œ”œǰȱ ‘’•Žȱ˜—Žȱ˜›ȱ–˜›Žȱ˜ȱ‘Žȱ œ’Œ”œȱ ǻ˜›ȱ Šȱ ™˜›’˜—ȱ ˜ȱ ’—’Ÿ’žŠ•ȱ œ’Œ”œǼȱ ŒŠ—ȱ›Ž™›ŽœŽ—ȱŠȱ™Š›’Š•ȱ’—Ž›Žœȱ’—ȱŠȱœ™ŽŒ’ęŒȱ ™›˜™Ž›¢ȱ ǻœŽŽȱ ’ž›Žȱ ŜǯŗǼǯȱ ŠŒ‘ȱ ’—’Ÿ’žŠ•ȱ ›’‘ȱ ’—ȱ ‘Žȱ ‹ž—•Žȱ ‘Šœȱ œ˜–Žȱ ™˜Ž—’Š•ȱ ŸŠ•žŽDzȱ ’ȱ Š—¢ȱ ˜›ȱ Š••ȱ Š›Žȱ ›Ž–˜ŸŽȱ ›˜–ȱ ‘Žȱ ŽŽȱ œ’–™•Žȱ ’—Ž›Žœǰȱ ˜—Žȱ ˜›ȱ –˜›Žȱ ™Š›’Š•ȱ ’—Ž›Žœœȱ Š›Žȱ Œ›ŽŠŽȱ Š—ȱ ’••ȱ ‘ŠŸŽȱ ˜ȱ ‹ŽȱŸŠ•žŽǯȱ ȱŽŽȱœ’–™•Žȱ’—Ž›Žœȱ’œȱœž‹“ŽŒȱ˜—•¢ȱ˜ȱ ‘Žȱ•’–’Š’˜—œȱ’–™˜œŽȱ‹¢ȱ‘Žȱ˜ž›ȱ™˜ Ž›œȱ partial interest ˜ȱ ˜ŸŽ›—–Ž—ǯȱ•‘˜ž‘ȱ –Š—¢ȱ Š™™›Š’œŽ›œȱ Divided or undivided rights in real estate that œŠŽȱ ’—ȱ ‘Ž’›ȱ Š™™›Š’œŠ•œȱ ‘Šȱ ‘Žȱ ’—Ž›Žœȱ represent less than the whole. ‹Ž’—ȱ ŸŠ•žŽȱ ’œȱ ‘Žȱ ŽŽȱ œ’–™•Žȱ ’—Ž›Žœǰȱ Šȱ divided interest ›žŽȱŽŽȱœ’–™•Žȱ’—Ž›ŽœȱœŽ•˜–ȱŽ¡’œœǯȱŽ—ȱ An interest in part of a whole property, e.g., a ‘Žȱ ŸŠ•žŠ’˜—ȱ ˜ȱ Šȱ ŽŽȱ œ’–™•Žȱ ’—Ž›Žœȱ ’œȱ lessee's interest. ‘¢™˜‘Ž’ŒŠ•ȱ Š—ȱ ’œȱ ™Ž›˜›–Žȱ Šœȱ ‘Žȱ ꛜȱ undivided interest œŽ™ȱ ’—ȱ ‘Žȱ ŸŠ•žŠ’˜—ȱ ˜ȱ Šȱ ™Š›’Š•ȱ ’—Ž›Žœǯȱ Fractional ownership without physical division into shares, e.g., a joint tenant or tenant in common. ˜›ȱŽ¡Š–™•Žǰȱ’—ȱ‘ŽȱŸŠ•žŠ’˜—ȱ˜ȱŠȱ•ŽŠœŽȱŽŽȱ ’—Ž›Žœǰȱ‘ŽȱŽŽȱœ’–™•Žȱ’—Ž›Žœȱ–žœȱŠ•œ˜ȱ‹Žȱ ŸŠ•žŽȱ ˜ȱ Š••˜ ȱ Œ˜–™Š›’œ˜—ȱ ‹Ž ŽŽ—ȱ ‘Žȱ  ˜ȱ’—Ž›Žœœǰȱ ‘’Œ‘ȱ’—ȱž›—ȱ ’••ȱŠ••˜ ȱ‘ŽȱŠ™™›Š’œŽ›ȱ˜ȱŽŽ›–’—Žȱ ‘Ž‘Ž›ȱŠȱ•ŽŠœŽ‘˜•ȱ ’—Ž›Žœȱ ’œȱ ™˜œ’’ŸŽȱ ˜›ȱ —ŽŠ’ŸŽǯȱ ’—ŒŽȱ Š••ȱ ™Š›’Š•ȱ Š—ȱ ›ŠŒ’˜—Š•ȱ ’—Ž›Žœœȱ Š›Žȱ ȈŒžȱ ˜žȈȱ ˜ȱ‘ŽȱŽŽȱœ’–™•Žȱ’—Ž›Žœǰȱ‘ŽȱŠ™™›Š’œŽ›ȱ–žœȱ‘ŠŸŽȱŠ—ȱž—Ž›œŠ—’—ȱ˜ȱ‘ŽȱŽŽȱœ’–™•Žȱ ’—Ž›Žœȱ’—ȱŠȱ™›˜™Ž›¢ȱ™›’˜›ȱ˜ȱŠ™™›Š’œ’—ȱŠȱ›ŠŒ’˜—Š•ȱ˜›ȱ™Š›’Š•ȱ’—Ž›Žœǯ PARTIAL INTERESTS IN REAL PROPERTY Š›’Š•ȱ’—Ž›ŽœœȱŒŠ—ȱ‹ŽȱŒ›ŽŠŽȱ’—ȱœŽŸŽ›Š•ȱ Š¢œDZ yȱ yȱ yȱ yȱ Œ˜—˜–’ŒŠ••¢ ŽŠ••¢ ‘¢œ’ŒŠ••¢ ’—Š—Œ’Š••¢ ’ž›Žȱ ŜǯŘȱ ’••žœ›ŠŽœȱ Š•Ž›—Š’ŸŽœȱ Š—ȱ Š™™›Š’œŽ›ȱ –žœȱ Œ˜—œ’Ž›ȱ ‘Ž—ȱ ’Ž—’¢’—ȱ ‘Žȱ ›ŽŠ•ȱ™›˜™Ž›¢ȱ’—Ž›Žœȱ‹Ž’—ȱŠ™™›Š’œŽǯ ©Copyright: 2014 by the UBC Real Estate Division R1ARE10.indb 2 10/4/2010 10:35:32 AM Chapter 6 – Real Property Ownership and Interests 6.3 Figure 6.2 Interests Created by Real Property Ownership Forms of ownership interests held by individuals or entities include corporations/ shareholders individual partnerships/ partners tenants in common joint tenants who can own financial interests as an equity position or a debt position, collateralized by a mortgage pledge of specific property in an identified legal estate from which economic benefits derive Indeterminate Duration Defined Duration Freehold Leasehold Includes a Future Interest or Possession Estate for Years Fee Simple Estate Life Estate Estate from Period to Period Estate at Will Fee Simple Absolute Fee Simple Defeasible Leased Fee Interest Estate at Sufferance Economic Interests ‘Žȱ–˜œȱŒ˜––˜—ȱ¢™Žȱ˜ȱŽŒ˜—˜–’Œȱ’—Ž›Žœȱ’œȱŒ›ŽŠŽȱ ‘Ž—ȱ‘ŽȱŽŽȱœ’–™•Žȱ’—Ž›Žœȱ ’œȱ ’Ÿ’Žȱ ‹¢ȱ Šȱ •ŽŠœŽǯȱ —ȱ œžŒ‘ȱ Šȱ Œ’›Œž–œŠ—ŒŽǰȱ ‘Žȱ •Žœœ˜›ȱ Š—ȱ ‘Žȱ •ŽœœŽŽȱ ŽŠŒ‘ȱ ˜‹Š’—ȱ ™Š›’Š•ȱ ’—Ž›Žœœǰȱ ‘’Œ‘ȱ Š›Žȱ œ’™ž•ŠŽȱ ’—ȱ Œ˜—›ŠŒȱ ˜›–ȱ Š—ȱ Š›Žȱ œž‹“ŽŒȱ ˜ȱ Œ˜—›ŠŒȱ •Š ǯȱ ‘Žȱ ’Ÿ’Žȱ ’—Ž›Žœœȱ ›Žœž•’—ȱ ›˜–ȱ Šȱ •ŽŠœŽȱ ›Ž™›ŽœŽ—ȱ  ˜ȱ ’œ’—Œȱ ‹žȱ ›Ž•ŠŽȱ ’—Ž›ŽœœDZȱ ‘Žȱ •ŽŠœŽȱ ŽŽȱ ’—Ž›Žœȱ Š—ȱ ‘Žȱ •ŽŠœŽ‘˜•ȱ ’—Ž›Žœǯȱ ’’˜—Š•ȱ ŽŒ˜—˜–’Œȱ ’—Ž›Žœœǰȱ ’—Œ•ž’—ȱ œž‹•ŽŠœŽ‘˜•ȱ ǻ˜›ȱ œŠ— ’Œ‘Ǽȱ ’—Ž›Žœœǰȱ ŒŠ—ȱ ‹Žȱ Œ›ŽŠŽȱ ž—Ž›ȱ œ™ŽŒ’Š•ȱŒ’›Œž–œŠ—ŒŽœǯ ©Copyright: 2014 by the UBC Real Estate Division R1ARE10.indb 3 10/4/2010 10:35:32 AM 6.4 The Appraisal of Real Estate – Third Canadian Edition Leased Fee Interests ȱ•ŽŠœŽȱŽŽȱ’—Ž›Žœȱ’œȱ‘Žȱ•Žœœ˜›ȇœǰȱ˜›ȱ•Š—•˜›ȇœǰȱ’—Ž›Žœǯȱȱ•Š—•˜›ȱ‘˜•œȱœ™ŽŒ’ꮍȱ ›’‘œȱ ‘Šȱ ’—Œ•žŽȱ ‘Žȱ ›’‘ȱ ˜ȱ žœŽȱ Š—ȱ ˜ŒŒž™Š—Œ¢ȱ Œ˜—ŸŽ¢Žȱ ‹¢ȱ •ŽŠœŽȱ ˜ȱ ˜‘Ž›œǯȱ ‘Žȱ ›’‘œȱ˜ȱ‘Žȱ•Žœœ˜›ȱǻ‘Žȱ•ŽŠœŽȱŽŽȱ˜ —Ž›ǼȱŠ—ȱ‘Žȱ•ŽœœŽŽȱǻ•ŽŠœŽ‘˜•Ž›ǼȱŠ›Žȱœ™ŽŒ’ꮍȱ‹¢ȱ Œ˜—›ŠŒȱŽ›–œȱŒ˜—Š’—Žȱ ’‘’—ȱ‘Žȱ•ŽŠœŽǯȱ•‘˜ž‘ȱ‘Žȱœ™ŽŒ’ęŒȱŽŠ’•œȱ˜ȱ•ŽŠœŽœȱŸŠ›¢ǰȱ Šȱ•ŽŠœŽȱŽŽȱŽ—Ž›Š••¢ȱ™›˜Ÿ’Žœȱ‘Žȱ•Žœœ˜›ȱ ’‘ȱ‘Žȱ˜••˜ ’—ȱ›’‘œDZ yȱ Ž—ȱ˜ȱ‹Žȱ™Š’ȱ‹¢ȱ‘Žȱ•ŽœœŽŽȱž—Ž›ȱœ’™ž•ŠŽȱŽ›–œ yȱ ‘Žȱ›’‘ȱ˜ȱ›Ž™˜œœŽœœ’˜—ȱŠȱ‘ŽȱŽ›–’—Š’˜—ȱ˜ȱ‘Žȱ•ŽŠœŽ yȱ ŽŠž•ȱ™›˜Ÿ’œ’˜—œ yȱ ‘Žȱ›’‘ȱ˜ȱ’œ™˜œ’’˜—ǰȱ’—Œ•ž’—ȱ‘Žȱ›’‘œȱ˜ȱœŽ••ǰȱ–˜›ŠŽǰȱ˜›ȱ‹ŽšžŽŠ‘ȱ ‘Žȱ™›˜™Ž›¢ǰȱœž‹“ŽŒȱ˜ȱ‘Žȱ•ŽœœŽŽȇœȱ›’‘œǰȱž›’—ȱ‘Žȱ•ŽŠœŽȱ™Ž›’˜ ‘Ž—ȱŠȱ•ŽŠœŽȱ’œȱ•ŽŠ••¢ȱŽ•’ŸŽ›Žǰȱ‘Žȱ•Žœœ˜›ȱ–žœȱœž››Ž—Ž›ȱ™˜œœŽœœ’˜—ȱ˜ȱ‘Žȱ™›˜™Ž›¢ȱ ˜ȱ‘ŽȱŽ—Š—ȱ˜›ȱ‘Žȱ•ŽŠœŽȱ™Ž›’˜ȱŠ—ȱŠ‹’Žȱ‹¢ȱ‘Žȱ•ŽŠœŽȱ™›˜Ÿ’œ’˜—œǯ ‘Žȱ•Žœœ˜›ȇœȱ’—Ž›Žœȱ’—ȱŠȱ™›˜™Ž›¢ȱ’œȱŒ˜—œ’Ž›ŽȱŠȱ•ŽŠœŽȱŽŽȱ’—Ž›Žœȱ›ŽŠ›•Žœœȱ˜ȱ ‘Žȱž›Š’˜—ȱ˜ȱ‘Žȱ•ŽŠœŽǰȱ‘Žȱœ™ŽŒ’ꮍȱ›Ž—ǰȱ‘Žȱ™Š›’Žœȱ˜ȱ‘Žȱ•ŽŠœŽǰȱ˜›ȱŠ—¢ȱ˜ȱ‘ŽȱŽ›–œȱ ’—ȱ ‘Žȱ •ŽŠœŽȱ Œ˜—›ŠŒǯȱ ȱ •ŽŠœŽȱ ™›˜™Ž›¢ǰȱ ŽŸŽ—ȱ ˜—Žȱ ’‘ȱ ›Ž—ȱ ‘Šȱ ’œȱ Œ˜—œ’œŽ—ȱ ’‘ȱ Leases specify the rights of the lessor (e.g., to –Š›”Žȱ ›Ž—ǰȱ ’œȱ Š™™›Š’œŽȱ Šœȱ Šȱ •ŽŠœŽȱ ŽŽȱ collect rent, to repossess the property upon ’—Ž›Žœǰȱ—˜ȱŠœȱŠȱŽŽȱœ’–™•Žȱ’—Ž›ŽœǯȱŸŽ—ȱ’ȱ lease expiration, to dispose of the property ‘Žȱ›Ž—ȱ˜›ȱ‘Žȱ•ŽŠœŽȱŽ›–œȱŠ›Žȱ—˜ȱŒ˜—œ’œŽ—ȱ through sale or transfer) and the rights of the ’‘ȱ –Š›”Žȱ —˜›–œǰȱ ‘Žȱ •ŽŠœŽȱ ŽŽȱ ’—Ž›Žœȱ lessee (e.g., to use, occupy, improve, and sublease the property). –žœȱ ‹Žȱ ’ŸŽ—ȱ œ™ŽŒ’Š•ȱ Œ˜—œ’Ž›Š’˜—ȱ Š—ȱ ’œȱ Š™™›Š’œŽȱŠœȱŠȱ•ŽŠœŽȱŽŽȱ’—Ž›Žœǯ Leasehold Interests ‘Žȱ •ŽŠœŽ‘˜•ȱ ŽœŠŽȱ ’œȱ ‘Žȱ •ŽœœŽŽȇœǰȱ ˜›ȱ Ž—Š—ȇœǰȱ ŽœŠŽǯȱ ‘Ž—ȱ Šȱ •ŽŠœŽȱ ’œȱ Œ›ŽŠŽǰȱ ‘Žȱ Ž—Š—ȱ žœžŠ••¢ȱ ŠŒšž’›Žœȱ ‘Žȱ ›’‘œȱ ˜ȱ ™˜œœŽœœȱ ‘Žȱ ™›˜™Ž›¢ȱ ˜›ȱ ‘Žȱ •ŽŠœŽȱ ™Ž›’˜ǰȱ ˜ȱ œž‹•ŽŠœŽȱ‘Žȱ™›˜™Ž›¢ȱǻ’ȱ‘’œȱ’œȱŠ••˜ Žȱ‹¢ȱ‘Žȱ•ŽŠœŽȱŠ—ȱŽœ’›Žȱ‹¢ȱ‘ŽȱŽ—Š—ǼǰȱŠ—ȱ ™Ž›‘Š™œȱ ˜ȱ ’–™›˜ŸŽȱ ‘Žȱ ™›˜™Ž›¢ȱ ž—Ž›ȱ fee simple interest ‘Žȱ ›Žœ›’Œ’˜—œȱ œ™ŽŒ’ꮍȱ ’—ȱ ‘Žȱ •ŽŠœŽǯȱ —ȱ Absolute ownership unencumbered by any other ›Žž›—ǰȱ ‘Žȱ Ž—Š—ȱ ’œȱ ˜‹•’ŠŽȱ ˜ȱ ™Š¢ȱ ›Ž—ǰȱ interest or estate, subject only to the limitations œž››Ž—Ž›ȱ ™˜œœŽœœ’˜—ȱ ˜ȱ ‘Žȱ ™›˜™Ž›¢ȱ Šȱ imposed by the governmental powers of taxation, ‘Žȱ Ž›–’—Š’˜—ȱ ˜ȱ ‘Žȱ •ŽŠœŽǰȱ ›Ž–˜ŸŽȱ Š—¢ȱ expropriation, police power, and escheat. ’–™›˜ŸŽ–Ž—œȱ ‘Žȱ •ŽœœŽŽȱ ‘Šœȱ –˜’ꮍȱ ˜›ȱ leased fee interest Œ˜—œ›žŒŽȱ ǻ’ȱ œ™ŽŒ’ꮍǼǰȱ Š—ȱ Š‹’Žȱ ‹¢ȱ ‘Žȱ The ownership interest held by the lessor, which •ŽŠœŽȱ ™›˜Ÿ’œ’˜—œǯȱ ‘Žȱ –˜œȱ ’–™˜›Š—ȱ ˜‹•’Ȭ includes the right to the contract rent specified Š’˜—ȱ˜ȱŠȱŽ—Š—ȱ’œȱ˜ȱ™Š¢ȱ›Ž—ǯ in the lease plus the reversionary right when the ‘Žȱ ›Ž•Š’˜—œ‘’™ȱ ‹Ž ŽŽ—ȱ Œ˜—›ŠŒȱ Š—ȱ lease expires. –Š›”Žȱ ›Ž—ȱ ›ŽŠ•¢ȱ ŠěŽŒœȱ ‘Žȱ ŸŠ•žŽȱ ˜ȱ leasehold interest Šȱ •ŽŠœŽ‘˜•ȱ ’—Ž›Žœǯȱ ȱ •ŽŠœŽ‘˜•ȱ ’—Ž›Žœȱ The right held by the lessee to use and occupy –Š¢ȱ‘ŠŸŽȱŸŠ•žŽȱ’ȱŒ˜—›ŠŒȱ›Ž—ȱ’œȱ•Žœœȱ‘Š—ȱ real estate for a stated term and under the –Š›”Žȱ ›Ž—ǰȱ Œ›ŽŠ’—ȱ Šȱ ›Ž—Š•ȱ ŠŸŠ—ŠŽȱ conditions specified in the lease. ˜›ȱ ‘Žȱ Ž—Š—ǯȱ ‘’œȱ ›Ž•Š’˜—œ‘’™ǰȱ ’—ȱ ž›—ǰȱ ’œȱ ©Copyright: 2014 by the UBC Real Estate Division R1ARE10.indb 4 10/4/2010 10:35:32 AM Chapter 6 – Real Property Ownership and Interests 6.5 •’”Ž•¢ȱ ˜ȱ ŠěŽŒȱ ‘Žȱ ŸŠ•žŽȱ ˜ȱ ‘Žȱ •ŽŠœŽȱ ŽŽȱ ’—Ž›Žœǯȱ ‘Žȱ ŸŠ•žŽȱ ˜ȱ Šȱ •ŽŠœŽȱ ŽŽȱ ’—Ž›Žœȱ Ž—Œž–‹Ž›Žȱ ’‘ȱŠȱę¡Žȱ›Ž—ȱ‘Šȱ’œȱ‹Ž•˜ ȱ–Š›”Žȱ›ŠŽœȱ–Š¢ȱ‹Žȱ ˜›‘ȱ•Žœœȱ‘Š—ȱ‘Žȱ ž—Ž—Œž–‹Ž›ŽȱŽŽȱœ’–™•Žȱ’—Ž›Žœȱ˜›ȱ‘Žȱ•ŽŠœŽȱŽŽȱ’—Ž›Žœȱ ’‘ȱ›Ž—ȱŠȱ–Š›”Žȱ•ŽŸŽ•œǯȱ ‘Ž—ȱ Œ˜—›ŠŒȱ ›Ž—ȱ Ž¡ŒŽŽœȱ –Š›”Žȱ ›Ž—ǰȱ ‘Žȱ •ŽŠœŽ‘˜•ȱ ’œȱ ŽŽ–Žȱ ˜ȱ ‘ŠŸŽȱ —ŽŠ’ŸŽȱ ŸŠ•žŽǯȱ ˜ ŽŸŽ›ǰȱ ‘Žȱ Œ˜—›ŠŒȱ ŠŸŠ—ŠŽȱ ˜ȱ ‘Žȱ •ŽŠœŽȱ ŽŽȱ –Š¢ȱ —˜ȱ ‹Žȱ –Š›”ŽŠ‹•Žǯȱ ŸŽ—ȱ’—ȱœžŒ‘ȱŒ’›Œž–œŠ—ŒŽœǰȱ‘ŽȱŽ—Š—ȱœ’••ȱ‘Šœȱ‘Žȱ›’‘ȱ˜ȱ˜ŒŒž™¢ȱ‘Žȱ™›Ž–’œŽœȱŠ—ǰȱ Žœ™’Žȱ‘ŽȱŒ˜—›ŠŒžŠ•ȱ’œŠŸŠ—ŠŽǰȱ–Š¢ȱ‘ŠŸŽȱ˜‘Ž›ȱ‹Ž—Žęœȱ‘Šȱ Š››Š—ȱŒ˜—’—žŽȱ ˜ŒŒž™Š—Œ¢ǯȱ ȱ ’œȱ Š•œ˜ȱ ™˜œœ’‹•Žȱ ‘Šȱ ‘Žȱ Œ˜—›ŠŒȱ ’œŠŸŠ—ŠŽȱ ’–™Ž›’•œȱ ‘Žȱ Ž—Š—ȇœȱ ‹žœ’—ŽœœȱŠ—ȱ’—Œ›ŽŠœŽœȱ‘Žȱ›’œ”ȱ˜ȱŒ˜—’—žŽȱ˜ŒŒž™Š—Œ¢ǯ Subleasehold or Sandwich Interests ˜›–Š••¢ȱŠȱŽ—Š—ȱ’œȱ›ŽŽȱ˜ȱœž‹•ŽŠœŽȱŠ••ȱ˜›ȱ™Š›ȱ˜ȱŠȱ™›˜™Ž›¢ǰȱ‹žȱ–Š—¢ȱ•ŽŠœŽœȱ›Žšž’›Žȱ ‘Šȱ‘Žȱ•Š—•˜›ȇœȱŒ˜—œŽ—ȱ‹Žȱ˜‹Š’—Žǯȱȱœž‹•ŽŠœŽȱ’œȱŠ—ȱŠ›ŽŽ–Ž—ȱ’—ȱ ‘’Œ‘ȱ‘ŽȱŽ—Š—ȱ ’—ȱ Š—ȱ Ž¡’œ’—ȱ •ŽŠœŽȱ Œ˜—ŸŽ¢œȱ ˜ȱ Šȱ ‘’›ȱ ™Š›¢ȱ ‘Žȱ ’—Ž›Žœȱ ‘Šȱ ‘Žȱ •ŽœœŽŽȱ Ž—“˜¢œȱ ǻ‘Žȱ ›’‘ȱ˜ȱžœŽȱŠ—ȱ˜ŒŒž™Š—Œ¢ȱ˜ȱ‘Žȱ™›˜™Ž›¢Ǽȱ˜›ȱ™Š›ȱ˜›ȱŠ••ȱ˜ȱ‘Žȱ›Ž–Š’—’—ȱŽ›–ȱ˜ȱ‘Žȱ •ŽŠœŽǯȱ —ȱŠȱœž‹•ŽŠœŽǰȱ‘Žȱ˜›’’—Š•ȱ•ŽœœŽŽȱ’œȱȈœŠ— ’Œ‘ŽȈȱ‹Ž ŽŽ—ȱŠȱ•Žœœ˜›ȱŠ—ȱŠȱœž‹•ŽœȬ œŽŽȱǻœŽŽȱ’ž›ŽȱŜǯřǼǯȱ‘Žȱ˜›’’—Š•ȱ•ŽœœŽŽȇœȱ’—Ž›Žœȱ‘ŠœȱŸŠ•žŽȱ’ȱ‘ŽȱŒ˜—›ŠŒȱ›Ž—ȱ’œȱ•Žœœȱ ‘Š—ȱ‘Žȱ›Ž—ȱŒ˜••ŽŒŽȱ›˜–ȱ‘Žȱœž‹•ŽœœŽŽǯȱž‹•ŽŠœ’—ȱ˜Žœȱ—˜ȱ›Ž•ŽŠœŽȱ‘Žȱ•ŽœœŽŽȱ›˜–ȱ ‘Žȱ˜‹•’Š’˜—œȱ˜ȱ‘Žȱ•Žœœ˜›ȱŽę—Žȱ’—ȱ‘Žȱ•ŽŠœŽȱŠ›ŽŽ–Ž—ǯȱȱœž‹•ŽŠœŽȱ–Š¢ȱŠěŽŒȱŠ••ȱ ‘Žȱ™Š›’Žœǰȱ’—Œ•ž’—ȱ‘Žȱ˜ —Ž›ȱ˜ȱ‘Žȱ•ŽŠœŽŽŽȱ’—Ž›ŽœǰȱŠ—ȱœžŒ‘ȱŠ››Š—Ž–Ž—œȱŠ›Žȱ Œ˜––˜—ȱŠ—ȱ’—Œ›ŽŠœ’—•¢ȱž™‘Ž•ȱ‹¢ȱ‘ŽȱŒ˜ž›œǯ ȱ •ŽŠœŽȱ Œ˜—›ŠŒȱ –Š¢ȱ Œ˜—Š’—ȱ Šȱ ™›˜Ÿ’œ’˜—ȱ ‘Šȱ Ž¡™•’Œ’•¢ȱ ˜›‹’œȱ œž‹•ŽĴ’—ǯȱ ’‘˜žȱ Ž’‘Ž›ȱ ‘Žȱ ›’‘ȱ ˜ȱ œž‹•Žȱ ˜›ȱ Šȱ Ž›–ȱ ‘Šȱ ’œȱ •˜—ȱ Ž—˜ž‘ȱ ˜ȱ ‹Žȱ –Š›”ŽŠ‹•Žǰȱ Šȱ •ŽŠœŽ‘˜•ȱ ™˜œ’’˜—ȱ ŒŠ——˜ȱ ‹Žȱ ›Š—œŽ››Žȱ Š—ǰȱ ‘Ž›Ž˜›Žǰȱ ‘Šœȱ —˜ȱ –Š›”Žȱ ŸŠ•žŽǯȱ ž›‘Ž›–˜›Žǰȱ ‘Žȱ ŸŠ•žŽȱ ˜ȱ ‘Žȱ •ŽŠœŽȱ ŽŽȱ ’—Ž›Žœȱ ˜ž•ȱ •’”Ž•¢ȱ ‹Žȱ ’–’—’œ‘Žȱ ’—ȱ sublease ‘’œȱ ŒŠœŽȱ ‹ŽŒŠžœŽȱ Šȱ •ŽœœŽŽȱ ‘˜ȱ —˜ȱ •˜—Ž›ȱ An agreement in which the lessee in a prior ‘Šœȱ —ŽŽȱ ˜ȱ ‘Žȱ •ŽŠœŽȱ ™›Ž–’œŽœȱ Š—ȱ ’œȱ —˜ȱ lease conveys the right of use and occupancy Š••˜ Žȱ ˜ȱ œž‹•ŽŠœŽȱ ‘Žȱ œ™ŠŒŽȱ ’œȱ •’”Ž•¢ȱ ˜ȱ of a property to another, the sublessee, for a ŽŠž•ȱ˜—ȱ‘Žȱ•ŽŠœŽǯ specific period of time, which may or may not be ȱ Ž—Š—ȱ ž—Ž›ȱ Šȱ œž‹•ŽŠœŽȱ –Š¢ȱ —˜ȱ coterminous (expire at the same time) with the underlying lease term. ‘ŠŸŽȱ Š—¢ȱ ˜ȱ ‘Žȱ ›’‘œȱ ˜ȱ ‘Žȱ •ŽŠœŽ‘˜•ȱ ’—Ž›Žœȱ ž—Ž›ȱ ‘Žȱ ˜›’’—Š•ȱ •ŽŠœŽȱ Œ˜—›ŠŒǯȱ sandwich lease ȱ ’œȱ Š•œ˜ȱ ™˜œœ’‹•Žȱ ‘Šȱ ‘Žȱ ‘˜•Ž›ȱ ˜ȱ ‘Žȱ A lease in which an intermediate, or sandwich, leaseholder is the lessee of one party and the œŠ— ’Œ‘ȱ ’—Ž›Žœȱ –Š¢ȱ ˜Ž›ȱ ŸŠ›’˜žœȱ lessor of another. The owner of the sandwich ŽŒ˜—˜–’Œȱ‹Ž—Žęœȱ‘Šȱ’—Œ•žŽȱŠ••˜ ’—ȱ‘Žȱ lease is neither the fee owner nor the user of the —Ž ȱ Ž—Š—ȱ ˜ȱ œž‹•ŽŠœŽȱ ‘Žȱ ™›˜™Ž›¢ǯȱ ‘žœǰȱ property; he or she may be a leaseholder in a ‘Žȱ Œ˜—›ŠŒȱ ‹Ž ŽŽ—ȱ ‘Žȱ ˜›’’—Š•ȱ Ž—Š—ȱ chain of leases, excluding the ultimate sublessee. Š—ȱ ‘Žȱ œž‹Ž—Š—ȱ –Š¢ȱ Œ˜—Š’—ȱ ™›˜Ÿ’œ’˜—œȱ ‘Šȱ ˜ȱ ‹Ž¢˜—ǰȱ ‹žȱ ˜ȱ —˜ȱ Ÿ’˜•ŠŽǰȱ ‘Žȱ ™›˜Ÿ’œ’˜—œȱ˜ȱ‘Žȱ˜›’’—Š•ȱ•ŽŠœŽǯ Legal Interests ’›žŠ••¢ȱŽŸŽ›¢ȱ™›˜™Ž›¢ȱ’œȱœž‹“ŽŒȱ˜ȱœ˜–Žȱ”’—ȱ˜ȱŽŠœŽ–Ž—ȱ˜›ȱ˜‘Ž›ȱ•ŽŠ•ȱ›Žœ›’Œ’˜—ȱ ˜—ȱ žœŽȱ ‘Šȱ Œ›ŽŠŽœȱ Šȱ ™Š›’Š•ȱ ’—Ž›Žœǯȱ ˜–Žȱ Š›Žȱ ™Ž›–Š—Ž—ȱ ŽŠœŽ–Ž—œǰȱ ‘’•Žȱ ˜‘Ž›œȱ ©Copyright: 2014 by the UBC Real Estate Division R1ARE10.indb 5 10/4/2010 10:35:32 AM 6.6 The Appraisal of Real Estate – Third Canadian Edition Figure 6.3 Sandwich Position in a Sublease Transaction Sandwich Position Lessor 1 (Original Landlord) Lessee 1/Lessor 2 (Original Tenant/Sublessor) Lessee 2 (Sublessee) Right of use and occupancy Right of use and occupancy Right of use and occupancy Compensation in the form of rent Compensation in the form of rent Compensation in the form of rent Leased Fee Interest Sandwich Leasehold Interest Subleasehold Interest –Š¢ȱ˜—•¢ȱŽ¡’œȱ˜›ȱŠȱœ‘˜›ȱ’–ŽǯȱŽ—ȱŠ™™›Š’œŽ›œȱ‘ŠŸŽȱ˜ȱŽ’‘Ž›ȱŽœ’–ŠŽȱ‘ŽȱŸŠ•žŽȱ˜ȱ ™›˜™Ž›¢ȱœž‹“ŽŒȱ˜ȱŠ—ȱŽŠœŽ–Ž—ȱ˜›ȱŽœ’–ŠŽȱ‘ŽȱŸŠ•žŽȱ˜ȱ‘ŽȱŽŠœŽ–Ž—ȱ’œŽ•ǯȱ —ȱŒŽ›Š’—ȱ ˜ —Ž›œ‘’™ȱœ’žŠ’˜—œǰȱŠȱ•’ŽȱŽœŠŽȱ–Š¢ȱ‹ŽȱŒ›ŽŠŽȱ ‘’Œ‘ȱ’—ȱž›—ȱŒ›ŽŠŽœȱœŽŸŽ›Š•ȱ™Š›’Š•ȱ ’—Ž›Žœœǯȱ ›Š—œŽ›Š‹•Žȱ ŽŸŽ•˜™–Ž—ȱ ›’‘œȱ ǻœǼȱ Š›Žȱ Š—˜‘Ž›ȱ ¢™Žȱ ˜ȱ œ™ŽŒ’Š•ȱ ™Š›’Š•ȱ ’—Ž›Žœȱ‘ŠȱŒŠ—ȱ‹ŽȱŒ›ŽŠŽȱ‹¢ȱ•ŽŠ•ȱŒ’›Œž–œŠ—ŒŽœǰȱ ‘Ž›Žȱœ˜–Žȱ˜›ȱŠ••ȱ˜ȱŠȱ™›˜™Ž›¢ȇœȱ ŽŸŽ•˜™–Ž—ȱŒŠ™Š‹’•’¢ȱ’œȱœ˜•ȱ˜ȱŠ—˜‘Ž›ȱǻŽǯǯǰȱ’—Œ›ŽŠœŽȱŠ••˜ Š‹•ŽȱŽ—œ’¢ȱ˜ȱŠȱ—Ž’‘Ȭ ‹˜ž›’—ȱ™›˜™Ž›¢Ǽǯ Life Estates ȱ•’ŽȱŽœŠŽȱ’œȱŽę—ŽȱŠœȱ‘Žȱ˜Š•ȱ›’‘œȱ˜ȱžœŽǰȱ˜ŒŒž™Š—Œ¢ǰȱŠ—ȱŒ˜—›˜•ȱ˜ȱŠȱœ™ŽŒ’ꮍȱ ™›˜™Ž›¢ȱ•’–’Žȱ˜ȱ‘Žȱ•’Ž’–Žȱ˜ȱŠȱŽœ’—ŠŽȱ™Š›¢ǯȱ‘ŽȱŽœ’—ŠŽȱ™Š›¢ȱ’œȱŽ—Ž›Ȭ Š••¢ȱ”—˜ —ȱŠœȱ‘Žȱ•’ŽȱŽ—Š—ȱŠ—ȱ’œȱ˜‹•’ŠŽȱ˜ȱ–Š’—Š’—ȱ‘Žȱ™›˜™Ž›¢ȱ’—ȱ˜˜ȱŒ˜—’Ȭ ’˜—ȱŠ—ȱ™Š¢ȱŠ••ȱŠ™™•’ŒŠ‹•ŽȱŠ¡Žœȱž›’—ȱ‘ŽȱŽ›–ȱ˜ȱ‘Žȱ•’ŽȱŽœŠŽǯȱ ˜ȱ’—Ž›ŽœœȱŠ›Žȱ Œ›ŽŠŽȱ ‘Ž—ȱŠȱ•’ŽȱŽœŠŽȱ’œȱŒ›ŽŠŽǰȱŠ—ȱ‹˜‘ȱ–Š¢ȱ—ŽŽȱ˜ȱ‹ŽȱŸŠ•žŽȱ‹¢ȱŠ—ȱŠ™™›Š’œŽ›DZȱ ‘Žȱ’—Ž›Žœȱ˜ȱ‘Žȱ•’ŽȱŽ—Š—ȱŠ—ȱ‘Žȱ›Ž–Š’—Ž›ȱ’—Ž›Žœǰȱ ‘’Œ‘ȱŠŒšž’›Žœȱ‘Žȱ™˜œœŽœœ˜›¢ȱ ’—Ž›Žœȱ’—ȱ‘Žȱ™›˜™Ž›¢ȱž™˜—ȱ‘ŽȱŽŠ‘ȱ˜ȱ‘Žȱ•’ŽȱŽ—Š—ǯȱ’ŽȱŽœŠŽœȱŒŠ—ȱ‹ŽȱŒ›ŽŠŽȱ’—ȱ œŽŸŽ›Š•ȱ Š¢œDZ yȱ ¢ȱ˜™Ž›Š’˜—œȱ˜ȱ•Š yȱ ¢ȱ ’••œ yȱ ¢ȱŽŽœȱ˜ȱŒ˜—ŸŽ¢Š—ŒŽ ©Copyright: 2014 by the UBC Real Estate Division R1ARE10.indb 6 10/4/2010 10:35:33 AM Chapter 6 – Real Property Ownership and Interests 6.7 ˜›ȱ Ž¡Š–™•Žǰȱ Šȱ ŽŽȱ ˜ —Ž›ȱ –Š¢ȱ •ŽŠŸŽȱ Šȱ life tenant ’••ȱ ‘Šȱ ’ŸŽœȱ •Š—ȱ ˜ȱ ‘’œȱ ’˜ ȱ ˜›ȱ ‘Ž›ȱ One who owns an estate in real property for his ›Ž–Š’—’—ȱ •’Ž’–Žȱ Š—ǰȱ Šȱ ‘Ž›ȱ ŽŠ‘ǰȱ ‘Žȱ or her own lifetime, the lifetime of another person, •Š—ȱ ’œȱ ™ŠœœŽȱ ˜—ȱ ˜ȱ ‘Ž’›ȱ Œ‘’•›Ž—ǯȱ ‘žœǰȱ or an indefinite period limited by a lifetime. ‘Žȱ ’˜ ȱ ŠŒšž’›Žœȱ Šȱ •’Žȱ ŽœŠŽȱ Š—ȱ ž—ŒȬ remainder interest ’˜—œȱ Šœȱ Šȱ •’Žȱ Ž—Š—ȱ ’‘ȱ ‘Žȱ Œ‘’•›Ž—ȱ A person who is entitled to an estate after a ‹ŽŒ˜–’—ȱ ‘Žȱ ›Ž–Š’—Ž›–Ž—ǯȱ ȱ •’Ÿ’—ȱ ŽŽȱ prior estate or interest has expired; also called ˜ —Ž›ȱ –Š¢ȱ ŽŽȱ ‘’œȱ ™›˜™Ž›¢ȱ ˜ȱ Šȱ Š–’•¢ȱ remainderman or remainder. –Ž–‹Ž›ȱ Šœȱ ›Ž–Š’—Ž›–Š—ȱ Š—ǰȱ ‹¢ȱ ‘Žȱ Ž›–œȱ˜ȱ‘ŽȱŒ˜—ŸŽ¢Š—ŒŽǰȱ›ŽŠ’—ȱŠȱ•’ŽȱŽœŠŽȱ ˜›ȱ‘’–œŽ•ǯȱ‘’œȱ™›ŠŒ’ŒŽȱ–’‘ȱŽ•’–’—ŠŽȱ‘ŽȱŽ¡™Ž—œŽȱ˜ȱ™›˜‹Š’—ȱ‘Žȱ ’••ȱŠŽ›ȱ‘Žȱ ˜ —Ž›ȱ’Žœǰȱ‹žȱ’ȱ–Š¢ȱŠ•œ˜ȱŒŠ••ȱ˜›ȱ‘ŽȱŠœœŽœœ–Ž—ȱ˜ȱŠȱ’ȱŠ¡ǯ ȱ ‘Žȱ •’Žȱ ŽœŠŽȱ Ž—Ž›ŠŽœȱ ’—Œ˜–Žǰȱ ‘Žȱ Š™™›Š’œŽ›ȱ –Š¢ȱ Žœ’–ŠŽȱ ’œȱ ™›˜‹Š‹•Žȱ ž›Š’˜—ȱ ›˜–ȱ •’Žȱ Ž¡™ŽŒŠ—Œ¢ȱ œŠ’œ’Œœȱ Œ˜–™’•Žȱ ’—ȱ ŠŒžŠ›’Š•ȱ œž’Žœǯȱ —ŒŽȱ ‘Žȱ Š™™›Š’œŽ›ȱ ŽœŠ‹•’œ‘Žȱ ‘Žȱ —Žȱ ˜™Ž›Š’—ȱ ’—Œ˜–Žȱ ›˜–ȱ ‘Žȱ ŽœŠŽȱ Š—ȱ ’œȱ ž›Š’˜—ǰȱ Š—ȱ Š™™›˜™›’ŠŽȱ’œŒ˜ž—ȱ›ŠŽȱŒŠ—ȱ‹ŽȱŠ™™•’Žǯȱ ȱ‘Žȱ•’ŽȱŽœŠŽȱ˜Žœȱ—˜ȱŽ—Ž›ŠŽȱ’—Œ˜–Žǰȱ ‘Žȱ Š™™›Š’œŽ›ȱ –Š¢ȱ ™›˜“ŽŒȱ ’œȱ žž›Žȱ ŸŠ•žŽȱ Š—ȱ ‘Ž—ȱ ’œŒ˜ž—ȱ ‘’œȱ ŸŠ•žŽȱ ‹ŠŒ”ȱ ˜ȱ ‘Žȱ Œž››Ž—ȱŠŽǯȱŽŒŠžœŽȱŽŠ‘ȱ’œȱŒŽ›Š’—ȱ‹žȱ’œȱ’–’—ȱ’œȱ’—ŽŽ›–’—Š‹•Žǰȱ’œŒ˜ž—’—ȱ’œȱ Ž—Ž›Š••¢ȱŠŒŒ˜–™•’œ‘Žȱ‹¢ȱŠ™™•¢’—ȱŠȱœŠŽȱ›ŠŽȱ˜›ȱ›’œ”Ȭ›ŽŽȱ›ŠŽȱǻ‘Žȱž—ŒŽ›Š’—¢ȱ˜ȱ‘Žȱ ’–’—ȱ–Š¢ȱ›Žšž’›Žȱ‘ŽȱžœŽȱ˜ȱŠȱ›Š—Žȱ˜ȱ¢ŽŠ›œǰȱ ‘’Œ‘ȱ ˜ž•ȱŒŠ••ȱ˜›ȱŠȱ‘’‘Ž›ȱ’œŒ˜ž—ȱ ›ŠŽȱ ‘Š—ȱ ‘Žȱ œŠŽȱ ›ŠŽǼǯȱ ‘Žȱ ’œŒ˜ž—ȱ ›ŠŽȱ œŽ•ŽŒŽȱ Š•œ˜ȱ Ž™Ž—œȱ ˜—ȱ ‘Žȱ ŠŽȱ Š—ȱ •’Žȱ Ž¡™ŽŒŠ—Œ¢ȱ˜ȱ‘Žȱ™Ž›œ˜—ȱ ‘˜ȱ‘˜•œȱ‘Žȱ•’ŽȱŽœŠŽǯȱ Š›’Š’˜—œȱ Ž¡’œȱ ’—ȱ •’Žȱ ŽœŠŽœǯȱ ˜–Ž˜—Žȱ –’‘ȱ •ŽŠŸŽȱ Šȱ ›Žœ’Ž—’Š•ȱ ™›˜™Ž›¢ȱ ˜ȱ Šȱ ›Ž•Š’ŸŽȱ˜ȱ•’ŸŽȱ’—ȱ˜›ȱ‘Žȱ›Ž–Š’—Ž›ȱ˜ȱ‘’œȱ˜›ȱ‘Ž›ȱ•’Žǰȱ ’‘ȱ‘Žȱ™›˜™Ž›¢ȱ˜ȱ›Š—œŽ›ȱ˜ȱ ‘Žȱ ’—’Ÿ’žŠ•ȱ ’‘ȱ ‘Žȱ ›Ž–Š’—Ž›ȱ ’—Ž›Žœȱ ‘Ž—ȱ ‘Žȱ •’Žȱ ŽœŠŽȱ ‘˜•Ž›ȱ ’Žœȱ ˜›ȱ ŒŽŠœŽœȱ ˜ȱ •’ŸŽȱ ’—ȱ ‘Žȱ ‘˜–Žǯȱ —ȱ ‘’œȱ Œ’›Œž–œŠ—ŒŽǰȱ Š—ȱ Š™™›Š’œŽ›ȱ –’‘ȱ ŽŒ’Žȱ ˜ȱ ’—Œ›ŽŠœŽȱ ‘Žȱ ’œŒ˜ž—ȱ›ŠŽȱ˜ȱ›ŽĚŽŒȱ‘Žȱž—ŒŽ›Š’—¢ȱ‘Šȱ‘Žȱ•’ŽȱŽœŠŽȱ‘˜•Ž›ȱ–’‘ȱ–˜ŸŽȱ›˜–ȱ‘Žȱ ™›˜™Ž›¢ȱ¢ŽŠ›œȱ‹Ž˜›Žȱ‘Žȱ˜›ȱœ‘Žȱ’Žœǯȱ Easements —ȱ ŽŠœŽ–Ž—ȱ ’œȱ Š—ȱ ’—Ž›Žœȱ ’—ȱ ›ŽŠ•ȱ ™›˜™Ž›¢ȱ ‘Šȱ ›Š—œŽ›œȱ žœŽǰȱ ‹žȱ —˜ȱ ˜ —Ž›œ‘’™ǰȱ ˜ȱ Šȱ ™˜›’˜—ȱ ˜ȱ Š—ȱ ˜ —Ž›ȇœȱ ™›˜™Ž›¢ǯȱ ŠœŽ–Ž—œȱ žœžŠ••¢ȱ ™Ž›–’ȱ Šȱ œ™ŽŒ’ęŒȱ ™˜›’˜—ȱ ˜ȱ Šȱ ™›˜™Ž›¢ȱ ˜ȱ ‹Žȱ žœŽȱ ˜›ȱ ’Ž—’ꮍȱ ™ž›™˜œŽœǰȱ œžŒ‘ȱ Šœȱ ŠŒŒŽœœȱ ˜ȱ Š—ȱ Š“˜’—’—ȱ ™›˜™Ž›¢ȱ ˜›ȱ Šœȱ ‘Žȱ •˜ŒŠ’˜—ȱ ˜ȱ Šȱ ŒŽ›Š’—ȱ ž—Ž››˜ž—ȱ ž’•’¢ǯȱ •‘˜ž‘ȱ œž›ŠŒŽȱ ŽŠœŽ–Ž—œȱ Š›Žȱ ‘Žȱ–˜œȱŒ˜––˜—ǰȱœž‹Ž››Š—ŽŠ—ȱŠ—ȱ˜ŸŽ›‘ŽŠȱŽŠœŽ–Ž—œȱŠ›ŽȱžœŽȱ˜›ȱ™ž‹•’Œȱž’•’’Žœǰȱ œž‹ Š¢œǰȱ Š—ȱ ‹›’Žœǯȱ ‘Ž›ȱ ŽŠœŽ–Ž—œȱ –Š¢ȱ ™›˜‘’‹’ȱ ‘Žȱ ˜ —Ž›ȱ ˜ȱ ‘Žȱ ž—Ž›•¢’—ȱ ŽŽȱ œ’–™•Žȱ ’—Ž›Žœȱ ›˜–ȱ ŒŽ›Š’—ȱ žœŽœȱ ˜ȱ ‘Žȱ ™›˜™Ž›¢ȱ ’‘˜žȱ ’Ÿ’—ȱ ‘Žȱ ˜ —Ž›ȱ ˜ȱ ‘Žȱ ŽŠœŽ–Ž—ȱ Š—¢ȱ ™˜œœŽœœ˜›¢ȱ ’—Ž›Žœȱ ’—ȱ ‘Žȱ ›ŽŠ•ȱ ŽœŠŽǰȱ Žǯǯǰȱ œŒŽ—’Œȱ ŽŠœŽ–Ž—œȱ Š—ȱ ŠŒŠŽȱŽŠœŽ–Ž—œǯ •ŽŠ›•¢ǰȱŠȱ™›˜™Ž›¢ȱ‘ŠȱŽ—“˜¢œ...
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