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Laurin v. Iron Ore Company of Canada (1977) 82 D.L.R. (3d) 634.

Facts:

D sold land to P on condition that if P ever wanted to sell it, D would have a right to buy it back at the price it was sold adjusted according to a formula they set.

Issue(s):

Can a deed require that, if it is to be sold, it be sold back to original seller?

Ratio:

Conditions of title that amount to repurchase rights which base repurchase price on something other than market and last for a long time are unreasonable and therefore void.

Analysis:

(Chesire, Modern Law of Real Property) alienability is necessary and inseparable from ownership, so if you give someone an absolute interest any restriction that takes this power away is void for being repugnant to the very idea of ownership.
-This restriction is probably based in public policy (Stephens v Gulf Oil Canada), since it keeps property out of commerce, promotes concentration of wealth, and discourages improvements to property.
-This restriction is not tempered by buyer's willingness.

The restriction may be: (Stephens v Gulf Oil)
1.A Condition: void if repugnant, or made by grantor
2.A covenant: Breach gives rise to potential action, made by grantee
--Option of first refusal given after transfer is clearly a covenant, unless it is oppressive and unconscionable.
---Oppression and unconscionability only come in when the two agreements are linked.
---If time and price are reasonable, then it's allowable. Otherwise it's considered an imposition on grantee by grantor regardless of form.

Restrictions were entered into simultaneously with title.
-Clearly a condition and not a covenant because why would a grantee enter into this if they didn't have to?
-Despite subsidization, the restrictions on price impose drop in value ($17 k v $15 k), and the owner is left with no incentive to develop the land.
-The calculation of resale price was not based on market price.

Holding:

P won.

Comments:

Two-step test
1. Condition or covenant? If condition, then void.
2. If covenant, reasonable or unreasonable?


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