In Quebec law, this is called the right of superficies and it is governed by Articles 1110 and ff. of the Quebec Civil Code.
It can be created by an express or tacit agreement, or renunciation in any right to the construction by the land owner, but the ownership rights to the construction do not have to be registered in the land register, which can cause problems should the owner of the land decide to sell to a third party, as is nicely illustrated in the case of Harmegnies -vs- Belzile-Desjardins et al. 2019 QCCS 382.
Plaintiff acquired his property in 1986 and the Defendant acquired an adjacent property in 2009 from Paré. In 2007, Plaintiff had an architect prepare plans for an extension of his residence above the car shelter situated between his property and that of Paré. The architect's plans provided that the roof of the extension would be supported by Paré's roof and thereby encroach on the latter's property. To obtain a construction permit from the municipality, Plaintiff needed Paré's consent. Plaintiff alleges that he obtained Paré's consent and the construction permit, which expressly referred to the encroachment, was issued.
Two years later, Paré sells his property to the Defendant. Following an unrelated dispute between the neighbours, Defendant retains a construction company to demolish the encroaching construction to which the Plaintiff responds with an application for an injunction to block the demolition.
Plaintiff does not deny that his extension encroaches upon Defendant's property but argues that it is nevertheless legal because of Paré's authorization. The fact that the deed of sale between Paré and the Defendant made no mention of the encroachment authorization does not affect Plaintiff's rights.
Defendant argues that not only was there no mention of the encroachment in the deed of sale, but the certificate of location by the surveyor expressly affirms the inexistence of any encroachment. The Defendant argues that the authorisation to encroach is not valid since it was never disclosed to Defendant or registered in the land register. Alternatively, Defendant argues that Article 992 should apply i.e. where an owner has in good faith built beyond the limits of his land and the construction causes serious injury, the owner of the land encroached upon may compel the builder to remove the offending construction.
The Court found in favour of Plaintiff. The right of superficies is a quasi or limited right of ownership that was acquired with the explicit or tacit consent of Paré. Indeed, Paré never asserted any right to be indemnified for the consequences of the construction on his property nor attempted to have the construction removed. The Court also found that the encroachment was minimal or modest and did not reach the level of "serious injury" prescribed by Article 992. More particularly, although the case law considers an encroachment of 10% or greater of the total land area to be "serious", the encroachment in the present case was assessed at only between 1.6% and 3.45%. This together with the absence of bad faith on the part of Plaintiff was a bar to the application of Article 992.
And what of the argument that the right of superficies was never registered and therefore, could not be legally set up against subsequent acquirers? The Court rejected this argument by concluding that the Defendant could have no greater rights that Paré, from whom he acquired title. Since the right of superficies could be validly set up against Paré, the Defendant could not interfere with Plaintiff's rights although he could pursue Paré to obtain a reduction in the sales price or even the cancellation of the sale.
Although the general rule is that all transfers of title must be registered in order to be opposable to third parties, there is an exception when such transfers are granted or acquired tacitly or passively i.e. acquisitive prescription; right of superficies. To require registration in all such circumstances would effectively neutralize the legal validity of such vehicles for acquiring or extinguishing real rights.
This case reminds us that title searches are not perfect and there are cracks through which exceptions may get through. In retrospect, Plaintiff and Paré should have registered a Summary in recognition of the creation of the right of superficies, which would have avoided surprises and misunderstandings, and precluded costly litigation.
