I am not looking for legal advice, since I am not involved in this in any way; just asking out of curiosity.
Two nights ago a decorative concrete slab fell off a Mariott motel in downtown Montreal and killed a young woman eating in a sushi restaurant on the ground floor. (The restaurant had a skylight and the slab went through it.) The owner-of-record is a trust company registered (of course) in Delaware. They say they are acting as trustee for the real owner (whom they have so-far refused to name) and they have no responsibility for maintenance or any other responsibility for that building.
Can they really absolve themselves of responsibility in this way? They are the owners of record and are, so far, hiding the real owners.
Fascinating question. Here’s what I know (with IANAL disclaimers understood):
Title to a property held under a deed of trust, or in connection with a bankrupty, is vested in a trustee – not in his or her own interest, but a fiduciary for a beneficiary debtor, who is entitled to the property after clearing the debt. (For example, A. Bank X underwrites Y’s purchase of a property, similarly to taking a mortgage as security for a loan. They vest title in Z, who holds it as trustee. Z’s role is to sell the property to discharge the loan if Y defaults, and to sign it over to Y if/when Y discharges the loan him/herself. B. Corporation K is overextended, with debts owed to L, M. N, O, and P. Q is named trustee in bankruptcy, and is charged with disposing of the assets of K according to the terms of the bankruptcy, paying off L, M. N, O, and P to the extent possible.)
The responsibilities for maintenance, and the resulting liability, would be defined in the contract or in state law insofar as I know. The trustee is not automatically liable.
However, its refusal to identify the beneficiary of the trust – the “owner”/occupant of the property – in a liability situation, may expose it to liability itself (this is my hypothesis) as “covering up” the identity of the responsible party.
Clarification and correction by real live lawyers is welcomed.
I’m terrible at conflict of laws, but I think Montreal law would govern this. So the answer will depend on Quebec law. (As an aside, is Quebec law different in the same way New Orleans law is different in the US?)
It also depends in part on the theory of the suit. The assumption in the question seems to be that the suit is based on the owner of a property’s duties owed to people off-premises for dangers caused by artificial additions to the property.
But if the slab was negligently installed (which seems to be the case as a matter of res ipsa loquitur), the contractor who installed it is likely liable, and so will be the entity that hired the contractor because of the inherent dangerousness of installing facades over public areas. Thus, regardless of ownership of the property, if the trustee is the one who employed the contractor, then they could be held liable.
The building was built in 1967 and the contractor is almost surely long gone (these contractors go broke and start over every few years). FWIW, I think the restaurant is part of the ground floor of the building, certainly not a public area.
From the OP, I would guess that title was in a land trust (by virtue of a deed in trust and not a deed of trust), if such is permissible in Montreal. I don’t know how many US states allow it, but the concept begain in Florida and I’m sure Illinois and quite a few others allow it. The trustee in a land trust holds title for the beneficiary (or beneficiaries), of course, but not to secure a loan, as is the case in a deed of trust. Slum landlords frequently use this in Chicago so the real (equitable) owners are not disclosed of record.
A land trustee holds bare legal title and has no burdens of ownership. If sued in a negligence case, it would disclose the real owners who are the liable paries.
Moreover, in situation (A), the trustee does not hold title for the benefit of debtors, but for the benefit of creditors. It is a creditor as much as a mortgagee is a creditor, which, in effect, is what it is. This usual arises on bonds issued by various parties to one debtor, usually a large institution and usually in the process of development of land (which land is usually the property in question). In order to simplify things, the creditors appoint a trustee to hold title for them. When the trustor/mortgagor pays off all the bonds, the trustee will execute and record a release deed, conveying title back to the trustor/mortgagor. This is also different from a mortgage, wherein the mortgagee merely executes a satisfaction piece since title is not actually transferred in a regular mortgage. The law I just summarized is the law in Illinois. State laws vary on these topics.
It is to be noted, that in either case, if the loan is not repaid, even though title is transferred in a deed of trust (aka trust deed), a foreclosure suit is still necessary since the debtor is entitle to his right of redemption, but in some states (not Illinois), the redemption period is much shorter.
But, anyway, all of that is not relevant to the OP.
Seems to me it’s potentially quite complicated. The civil law in Quebec is based on French civil law, which does not have the concept of a trust in the same way as the common law jurisdictions, such as Delaware. At the same time, Quebec law does recognize that other jurisdictions have different legal systems, and will try to respect the principles of those other systems when they come into play in a case in Quebec, through the principles of private international law.