A term derived from civil law.
A lease contract for a long period of time, subject to the terms of the lease contract, and generally giving the lessee the full use and benefit of the leased real property, on condition that the lessee does not substantially compromise the real property and alters it only by adding constructions, works or plantings that increase its value in a lasting manner.
Historically, the citizens of civil law jurisdictions used this form of lease to develop rural land while at the same time, retaining ultimate ownership in the asset. John Bouvier, in his 1848 American Law Dictionary notes that emphyteusis is a civil law term and adds that it is:
"... by which the owner of an uncultivated piece of land granted to another, either in perpetuity or for a long time, on condition that he should improve it by building on, planting or cultivating it, and should pay annual rent, with a right to the grantee to alienate (sell) it ... and under a condition that the grantor should never re-enter as long as the rent should be paid...."
Today, emphyteusis leases (also spelled emphyteosis) are not infrequently utilized for office buildings or some condominium or strata titles.
The Civil Code of Quebec, at §1195, 1197 and 1200, defines it as:
"Emphyteusis is the right which, for a certain time, grants a person the full benefit and enjoyment of an immovable owned by another provided he does not endanger its existence and undertakes to make constructions, works or plantations thereon that durably increase its value.
"The emphyteutic lessee has all the rights in the immovable that are attached to the quality of owner, subject to the restrictions contained in this chapter and in the act constituting emphyteusis."
"The term of the emphyteusis shall be stipulated in the constituting act and be not less than 10 nor more than 100 years."
But although the emphyteusis lease resembles full ownership, it remains a leasehold interest; indeed, as is noted in the above extract of the Québec Civil Code, the tenant is called a emphyteutic lessee or, in some older references, the emphyteuta.
In Reitman, the Canadian tax court noted the advatageous position of an emphyteusis lessee compared to a tenant under a commercial lease at common law, calling the latter "a simple leasehold title":
"Emphyteusis carries with it ownership full and complete of land and buildings in contradistinction to the common law (which) ... automatically vesting the landlord with the ownership of all buildings a lessee may have erected on the land during the life of the lease".
But note the words of Judge Noel in Cohen:
"...the empyhteutic lessee in Quebec has not only a right in personam in the immoveable leased (as an ordinary lessee has) but a real right although this real right is a partial one only (un droit réel démembré).
"This right does not, however, make him the owner of the land or give him complete ownership even of the plantations or constructions erected thereon."
French: emphytéose
REFERENCES: