Index: src/object_cmd.cpp
===================================================================
--- src/object_cmd.cpp	(revision 27655)
+++ src/object_cmd.cpp	(working copy)
@@ -770,6 +770,8 @@
 {
 	if (!IsTileOwner(tile, old_owner)) return;
 
+	bool do_clear = false;
+
 	if (IsObjectType(tile, OBJECT_OWNED_LAND) && new_owner != INVALID_OWNER) {
 		SetTileOwner(tile, new_owner);
 	} else if (IsObjectType(tile, OBJECT_STATUE)) {
@@ -780,12 +782,18 @@
 			SetBit(t->statues, new_owner);
 			SetTileOwner(tile, new_owner);
 		} else {
-			ReallyClearObjectTile(Object::GetByTile(tile));
+			do_clear = true;
 		}
 
 		SetWindowDirty(WC_TOWN_AUTHORITY, t->index);
 	} else {
+		do_clear = true;
+	}
+
+	if (do_clear) {
 		ReallyClearObjectTile(Object::GetByTile(tile));
+		/* When clearing objects, they may turn into canal, which may require transfering ownership. */
+		ChangeTileOwner(tile, old_owner, new_owner);
 	}
 }