By: Nigel Bankes
Case commented on: Schnell v Stene (Heidinger Estate), 2022 SKQB 146 (CanLII)
PDF version: Novel Form of Agreement to Reserve Surface Rights Payments
It is not uncommon for a vendor of agricultural lands in western Canada to seek to ensure that the vendor will continue to receive the benefit of surface rights payments payable under the terms of surface rights leases or right of entry orders. Perhaps the most common technique to achieve this result is by way of an agreement to assign rents. This will be effective so long as one is confident that such an agreement creates an interest in land that can be protected by way of caveat. In some jurisdictions legislation deems such an agreement to give rise to an interest in land, (see, for example, Law of Property Act, RSA 2000, c L-7 at s 63(1)(b)) whereas in other jurisdictions the point may be more debatable: (e.g. Alberta prior to the 1985 amendment to the Law of Property Act: see Webster v Brown, 2004 ABQB 321 (CanLII) and Canadian Crude Separators Inc. v Mychaluk, 1997 CanLII 14841 (AB QB), [1998] 1 WWR 545.