What are we selling?

It is fascinating to ponder what ownership of property really is. On one side you can see the homeless in any of the major Canadian cities, clutching their cardboard, garbage bags, and shopping carts. Their sense of security and shelter differs greatly from the general population that surrounds them. Looking up from street corners that the homeless occupy one can see the condominiums looking down. These monolithic structures contain layers of strata owners claiming ownership to what is essentially a piece of air. These lofty units usually also carry lofty prices. The structures climb up from a mere footprint on a piece of land. It’s a far cry from what property owners a few generations back would have considered ownership of real property. Seeing this dichotomy raises the question: who has a more defined de facto ownership of property, the street person with their nomadic and unfettered existence on their stake of a piece of public property, or the de jure property owners in the condominium units above?
If the aforementioned strata owners don’t pay their mortgages, they could lose their right of ownership. If any property owner in Canada doesn’t pay their taxes to the crown, or the local governing body, they could lose their rights of ownership as well. The fact that the sovereignty can come and reclaim property ownership due to unpaid taxes is a throwback to the feudal system of ownership. We fool ourselves into thinking that our modern legal systems are more evolved, when in practice they are not.

Despite the words, paper trail, and legal constructs in our present day real estate system, in many respects ownership of land is really just a fabrication of our society. One could argue that regardless of the protection of modern terms and conditions, the average Canadian can only rely on the security of ownership as long as regular dues are paid to the sovereignty. That in addition to the concept of Government appropriation, does lead to the question of what we really purchase when we claim title to real property. If home or property ownership in our Canadian cultural context is nothing more than a legal construct based on medieval foundations, what are the rights that one “buys” when a name is printed onto a deed of land?
The textbooks tell us that ownership in a property can take a number of forms, such as sole ownership, joint ownership, communal property, or leasehold. The differences in the forms of ownership or entitlement to a piece of real estate boils down to what the rights are that are associated with the different options. Essentially, a Canadian buyer does not buy the property, they buy a “bundle of rights” to the property.

In his book, The Common Law, Oliver Wendell Holmes describes property as having two fundamental aspects. The first is possession, or de facto property, and the second is title, or de jure property. In Manitoba, for example, a buyer will first claim possession of a subject property, and then a few weeks later, the title will finally be registered. In BC it is not uncommon to see different dates, usually just a few days apart between possession and completion of the transfer of title. In the interm, the buyer claims ownership under possessory rights, and then that is followed with the legal right. In Ontario, possession is not usually granted until legal rights are extended.

In every culture ownership and possession are built upon custom and regulation, both legal and social. Many tribal cultures balance individual ownership with the laws of the specific collective be it tribal, family, associate, or national. For example the 1839 Cherokee Constitution frames the issue in these terms: “The lands of the Cherokee Nation shall remain common property; but the improvements made thereon… (shall be respected)”.
Different societies have different theories of property for differing types of ownership. It does appear universal that property ownership is not a relationship between people and things, but a relationship between people with regard to things.

Despite the abstract notion of modern ownership, we are driven by a hunger to have real estate that we can call our own. This desire to own real property is not a universal need, as the nomadic tribes in the arctic or the desert demonstrate.  However, elements of ownership, such as the need for safety and shelter are primal behavioral motivators.

In his 1943 paper entitled, A Theory of Human Motivation, Abraham Maslow introduced the conceptual model for the importance of certain basic needs that a person is instinctively driven to obtain. In the mid-fifties, he expanded on his theory in his book, Motivation and Personality. Abraham Maslow’s theories focus on describing what the drivers are in our motivation in various stages of our development.

It’s interesting that Maslow studied well adjusted and exemplary people to arrive at his concept of a Hierarchy of Needs, rather than people that were psychologically damaged. In some respects this fact helps to cement the universal nature of the motivational strata that he envisioned.

Maslow’s Hierachy of Needs is usually depicted as a pyramid, with a human’s most basic needs on the bottom platform, and as the pyramid narrows the needs become more esoteric. He placed self realization needs at the top of the pyramid, while physiological needs were foundational. Some have criticized his placing self realization as a “top tier need” as being ethnocentric, or possessing some cultural bias; but no one argues that needs such as food, shelter, and safety are basic motivations in life.

So according to Maslow’s Hierarchy of Needs, the need for shelter is a foundational driver. It is a fundamental motivation in life along with food and safety. These are the ingredients that fuel the hunger for real estate. One could postulate that this primal need accounts for the wars over borders, and the arguments over hedges and fence posts. Countless neighbours have done each other harm over a few inches of lawn, alongside with countries arguing over rocky islands that are inhabited primarily by gulls and clams. History is full of unfortunate battles over real estate. It’s no wonder that dealing with competing offers in a real estate transaction can be so volatile.

The indigenous peoples who had the embarrassment of riches in their unfettered use of large tracts of land seemed to be comfortable with the notion of common property. The nomads and the gypsies also had an abundance mentality that saw the countryside not as a series of parcels of separate ownership rights, but rather as a shared resource. For these social groups the need for safety and shelter did not tie itself to a quantified lot or acreage, but was shared in a larger global sense.

The need for safety and shelter, while it can claim its roots inside the development of the legal constructs of real estate is not the only motivational driver in building a real estate industry. Canadian culture and social convention have added to the primary need for shelter with the notion of self-esteem associated with property ownership. As most Canadians find their primary needs of food, safety and shelter satisfied, they climb Maslow’s Hierarchy of Needs to the upper tier motivational level of self-esteem. As we place our sense of self-worth into the equation, the desire for ownership of property increases. There is no greater flag of conspicuous consumption than the deed to a piece of property in a desirable location.

Considering all of this gives one a new appreciation for the depth of this business of residential real estate. It is a complex industry, built from a primal need to claim a nest, (and then possibly a castle for our self-esteem needs), all for something that can be called “home”. Our cultural and societal motivators drive the real estate machine. This industry will remain strong for years to come because its foundations are built on some primal motivators in the Canadian collective psyche. The REALTOR ® that appreciates and responds to this will always find a livelihood and a satisfaction in knowing that they are fulfilling a deep rooted hunger.

Ari Lahdekorpi Aug 16 2016