219 Registration Of Covenant As To Use And Alienation

PRACTICE

Covenant Charging the Fee Simple

A tenant under a registered lease may grant a covenant without the need for the instrument to be executed by the landlord so long as the rights conferred do not exceed those held by the tenant under the lease. Because a covenant under s. 219 cannot confer rights of user, there is less likelihood of the covenant subjecting the leasehold premises to rights more extensive than those enjoyed under the lease. Thus, where a tenant under a registered lease grants a covenant under s. 219, there is no need for the landlord to join in the instrument.

Covenants Required for Subdivision Approval

Electronic Submissions

Where a covenant is required by the Approving officer as a condition of Subdivision Approval, the British Columbia land surveyor adds the following notation to the plan image:

A COVENANT (OR: INSERT NUMBER OF COVENANTS) IN THE NAME OF (NAME OF COVENANTEE) ___________ PURSUANT TO SECTION 219 IS A CONDITION OF APPROVAL FOR THIS SUBDIVISION.

To ensure that the instrument contains the condition or covenant agreed upon with the approving officer, the approving officer endorses the following notation and signature on the electronic Form C Charge:

THIS IS AN INSTRUMENT REQUIRED BY THE APPROVING OFFICER FOR SUBDIVISION PLAN EPP ________ CREATING THE CONDITION OR COVENANT ENTERED INTO UNDER S. 219 OF THE LAND TITLE ACT.

____________________________ (SIGNATURE) APPROVING OFFICER

____________________________ (FILL IN NAME OF APPROVING OFFICER)

Covenant for Flooding, Land Title Act, Section 82

A covenant under s. 82 (now repealed) of the Land Title Act required the following endorsement:

THE REGISTERED OWNER DESIGNATED HEREON HAS ENTERED INTO A COVENANT IN FAVOUR OF HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE AS REPRESENTED BY (NAME OF THE COVENANTEE) UNDER S. 219 OF LAND TITLE ACT.

Section 219(9.1) provides that existing covenants registered before January 1, 2004, may be modified or discharged.

CROSS REFERENCES AND OTHER SOURCES OF INFORMATION

Ministers Responsible

Ministerial responsibility for the administration of s. 219 is shared by several ministers. Subsections (3)(c), (11)(b) and (13) are the responsibility of the Minister of Forests, who is also responsible for the administration of most other sections of the Land Title Act. Responsibility for subsections (1), (2), (3)(a) and (b), (4) to (9.2), (10), (11)(a), (12), and (14) is shared by the Minister of Municipal Affairs and the Minister of Environment and Climate Change Strategy, as these subsections relate to their ministerial portfolios.

Continuance of Covenants

Note s. 2 of the Land Title Amendment Act, 1994, which provides:

• 2 Every covenant entered into by the Crown, the British Columbia Heritage Trust or a council under the Heritage Conservation Act that has been registered in the land title office is hereby continued as if it were entered into under section 215 [now, s. 219] of the Land Title Act, as amended by section 1 of this Act.

Covenants under Other Statutes

See chapter 67 (Registration of Instruments) for a summary of other statutory provisions that provide for the creation of covenants or instruments which have the effect of a covenant, whether negative or positive in nature.

Power of Supreme Court to Cancel or Modify Land Use Contracts and Covenants

See s. 35 of the Property Law Act regarding the power of the Supreme Court to cancel or modify a land use contract or a restrictive or other covenant.

Secondary Sources

See Di Castri, Registration of Title to Land, vol. 1, para. 117, and vol. 2, paras. 332, 337, 340, 353, and 566.

See also L. Carvello, “Section 219 Covenants, Statutory Building Schemes and Statutory Rights of Way” in Subdivision Regulation and Discretion (CLEBC, 2010).

CASE LAW

Certainty of Terms

An agreement made by the parties contained a covenant obliging one party “to construct improvements for the public good”. The covenant was unenforceable because the term was inherently vague and uncertain, lacked definition and precision, and was open to a wide variety of interpretations. Covenants that run with the land must be clearly and distinctly stated so that present and future owners may know with precision what obligations are imposed on them (Newco Investments Corporation v. British Columbia Transit, 1987 CanLII 2662 (BC CA)).

Parties to a Covenant

The petitioner purchased a golf course and restaurant on leased land owned by the respondent district. Sometime later, the petitioner approached the district about purchasing the land. Wanting to keep the purchase price low, and the market of potential purchasers small, the petitioner arranged with the district for it to place a restrictive covenant on the land providing that the land would be used exclusively for a golf course, and that the owner would have to pay the difference between the land’s value with the covenant attached and the value without it in order to remove it. The petitioner then purchased the land at a public auction. The petitioner now claimed that the registered restrictive covenant was invalid and unenforceable on the basis that the district could not contract with itself, as it had done in granting the restrictive covenant to itself. In light of s. 219(1) of the Land Title Act, and s. 18 of the Property Law Act, it is clear that the district had the capacity to grant itself a restrictive covenant (Burmont Holdings Ltd. v. Chilliwack (District), 1994 CanLII 3326 (BC SC); see also the annotation for this decision under s. 35 of the Property Law Act).

Registrable Covenants

A development permit fits within the definition of charge in s. 1 of the Act and is registrable under s. 219 (Re Qualicum Beach, 1982 CanLII 263 (BC SC)).

An approving officer’s decision that a restrictive covenant under s. 219 would be required for approval of subdivision proposals was based on development guidelines in a municipal bylaw. The approving officer was entitled to rely on the validity of the bylaw, so for the purposes of a s. 89 appeal the restrictive covenant was valid. Because the sole issue of the appeal was whether or not the approving officer’s decision could be impugned, the proceedings were not the proper place to challenge the bylaw itself (Elsom v. Delta (Approving Officer), 1995 CanLII 742 (BC CA), affirming 1993 CanLII 921 (BC SC); see also the annotations for this decision under ss. 1, 75, 86, 89, and 99 of this Act).

Under s. 219(2)(a)(i) and (b)(i), an approving officer has the power to require applicants for subdivision approval to enter into restrictive covenants concerning the design of homes to be built on the property and therefore has the right to impose them on an applicant (Neufeld v. Surrey (City), 1995 CanLII 3086 (BC SC); see also the annotations for this decision under s. 86 of this Act and s. 35 of the Property Law Act).

The respondents applied to the petitioner, the City of Burnaby, for a rezoning of their property. As a precondition to the rezoning, the petitioner asked for and received a development plan and a restrictive covenant executed by the respondents. The covenant provided in part that any building and the landscaping on the property must conform with the plan. The respondents subsequently constructed a house and a retaining wall that were at variance with the plan. The petitioner then applied to the court for a declaration that the respondents were in breach of the covenant and an order that they comply with it. In the exercise of its zoning powers, a municipality can act by way of a restrictive covenant, but it cannot bind the municipal council to a particular exercise of its legislative powers. The covenant in the present case in no way compromised the legislative function of the council. Indeed, at the time council considered the rezoning application and the recommendations of its staff, council also properly considered the fact that the respondents had submitted the plan and executed the covenant to develop according to that plan. In granting the declaration and ordering the respondents to comply with the plan, the court held that s. 219 provides the petitioner with the statutory authority to proceed by way of covenant and nothing in the way it did so interfered with the legislative function exercised by council (Burnaby (City) v. Racanelli, 1998 CanLII 3833 (BC SC)).

The petitioner owned property that was subject to a covenant in favour of the local government. The covenant restricted the use of the petitioner’s property by requiring that it be subdivided before building permits were issued. The primary purpose of the covenant was to ensure that when the property was developed, it was developed as a subdivided area with water, sewer, and roads available and built to municipal standards. Although the petitioner was no longer interested in subdividing the property and, instead, wished to use the property for a single-family dwelling, the local government still intended to require that a portion of the property be dedicated as a road when it was developed, and demonstrated this intent by acquiring adjacent land for this purpose from a third party. The court found that the purpose of the covenant fell within the ambit of the use of the land and the subdivision of it under s. 219 of the Land Title Act and that, therefore, the covenant was enforceable (Deep Six Developments Inc. v. Richmond (City), 2002 BCSC 955, affirmed 2003 BCCA 518; see also the annotation for this decision under s. 35 of the Property Law Act).

The appellant granted a covenant to the respondent city limiting the square footage of a single-family dwelling the appellant planned to build on a lot. After the covenant was registered and the house was built, the city rezoned the appellant’s lot to a zoning designation that would have permitted construction of a larger house. Years later, a city building inspector found that the total area of the appellant’s house exceeded the area permitted under the covenant because an area shown on the plans as a crawl space and not part of the square-footage calculation had been converted into living space. The chambers judge held that the city was entitled to enforce the covenant and restrict the square footage of the appellant’s house to the area set out in it. Before the Court of Appeal, the appellant argued that s. 219 of the Land Title Act only permits registration of covenants authorized elsewhere in law, that the Local Government Act did not authorize the granting of the covenant in question as a means of rezoning a property, and, hence, that the covenant was a nullity. In upholding the city’s right to enforce the covenant, the Court of Appeal found that s. 219 provides the city with the statutory authority to proceed by way of covenant and nothing in the way the city proceeded interfered with the legislative functions of the city council. Further, the court found that, if it had been the intention of the legislature to merely make registerable covenants granted in favour of governmental bodies under other enabling legislation, it would have said so in simple terms. Section 219 of the Act enables municipalities to receive the benefits of covenants of the kind in this case. The acceptance by the city of the covenant was not a legislative act. The granting of the covenant was simply a voluntary act by the appellant that had been suggested by the administrative branch of the municipality. Having entered into the covenant, the appellant was bound by it (Burnaby (City) v. Marando, 2003 BCCA 400).

Enforcement

Enforcement by Third Party

A municipality conveyed property to a predecessor of the respondent and included several covenants in the conveyance which were registered against title to the property. The municipality subsequently issued a development permit to the respondent, and a third party, a neighbouring property owner, alleged that the development permit contravened the terms of one of the restrictive covenants and commenced enforcement proceedings. The court held that a third party has no right to enforce a restrictive covenant in gros running with land adjacent to land it owns. A restrictive covenant in gros is for the benefit only of the covenanting parties and not for the public at large (Nancy Greene’s Olympic Lodge Limited Partnership v. Blackcomb Developments Ltd., [1986] B.C.J. No. 1479 (QL) (S.C.)).

Injunctions

The court enforced a covenant made under s. 82(7) (now repealed) and s. 219 of the Act by mandatory injunction to remove and relocate a house knowingly constructed in breach of the covenant (British Columbia v. Metheral, [1987] B.C.J. No. 1775 (QL) (S.C.)).

A regional district sought an injunction restraining the defendant company from continuing to breach a restrictive covenant registered in 1981. The covenant provided that the subject land was to be used for auto-wrecking purposes only. The company began breaching the covenant in 1983 when it started leasing the land from the covenantor. The regional district had “forgotten” about the covenant, and the company “learned” about it in 1988, after which time the regional district commenced the enforcement proceedings. The court held that the company was entitled to raise the equitable defences of waiver, acquiescence, and delay. While lax enforcement generally does not preclude a municipality from enforcing a zoning bylaw, the same considerations do not apply where a municipality or regional district seeks to enforce a s. 219 covenant that a land owner has breached. A restrictive covenant arises out of a private contract between a municipal body and an individual citizen or land owner. Such a covenant restricts use of the land but not as part of the public civil law of the province as a zoning bylaw does. The court held that it would be inequitable to enforce the restrictive covenant by granting an injunction in the circumstances. The company was entitled to its counterclaim for cancellation of the restrictive covenant under s. 35 of the Property Law Act (Capital Regional District v. Millstream Industrial Park Ltd., 1990 CanLII 497 (BC SC)).

Whether Release Authorized as Part of a Section 219 Covenant

The court at first instance allowed an application by eight plaintiffs for a declaration that they had not, in s. 219 covenants, released the defendant District of Sechelt from the claims they now advanced against it. The plaintiffs, who brought separate actions, had purchased lots in a residential subdivision in the district. The lots were subject to covenants registered under s. 219 of the Land Title Act that contained a provision releasing the district for any “damage, loss claim, demand … arising from or in connection with the construction of any structures on the lands or use of the lands … including, without limitation, any subsidence … loss of slope stability, or any similar matter”. In 2019, the district issued an emergency order declaring the subdivision land to be unsafe due to land subsidence and geotechnical instability. The subdivision was closed, and all those living there were ordered out. The plaintiffs sued the district and the district’s approving officer, RP, claiming they were negligent in approving the development and the subdivision and in issuing building and occupancy permits. The plaintiffs sought a declaration that they had not released the district from their claims. The district applied to have the claims against RP struck and the action against him dismissed.

At first instance, the plaintiffs’ application was allowed on the basis that a release in a covenant was neither contemplated nor authorized by s. 219. That court also struck the claim against RP on the basis that the relationship between the plaintiffs and RP was not sufficiently proximate to support the imposition of a private law duty of care. Both parties appealed. The Province now applied to be added as respondents in the appeals. Held, application granted. The Province’s interests were sufficiently affected by the appeals to justify its addition as a respondent. The Province had a direct interest in the interpretation of s. 219, as this would affect the types of covenants its approving officers could issue. This, in turn, would affect subdivisions that had been approved by provincial approving officers as well as how such officers would conduct their regulatory duties going forward. In the plaintiff’s appeal, the duty of care analysis applicable to public officials bore a relationship with their overall role, and the outcome of that appeal would have a direct, albeit precedential, effect on the province (Goy v. Sechelt (District), 2020 BCSC 1242, respondent added (2021 BCCA 92 (Chambers), affirmed , leave to appeal refused 2022 CanLII 26230 (SCC).

Assumption of Registered Covenant by Way of Post-incorporation Contract

As a condition of subdivision approval in 1985, an owner developer granted to the Corporation of the District of Burnaby a s. 215 covenant (now s. 219) registered against title to two adjacent parcels, where the petitioner and respondent strata corporations now sit side by side, each on one of the parcels. Pursuant to the covenant, strata lot owners in both strata corporations would be entitled to use all the amenities to be constructed on both parcels (racquetball court, squash court, lounge, exercise room, swimming pool, change rooms, tennis court, and ancillary facilities) and maintenance costs would be shared. In 2019, the respondent strata corporation gave notice to the petitioner strata corporation that it was terminating the arrangement. The City of Burnaby provided a letter saying amendment of the covenant would require its approval but said it was not willing to be involved in policing the covenant. The court concluded that a successor in title such as the petitioner could not enforce the covenant, but the parties had entered into a post-incorporation contract on the same terms as the covenant, and the respondent was not entitled to terminate it. The court applied Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, where the court enforced a post-incorporation contract against a strata corporation notwithstanding the change of ownership over time, on public policy considerations of certainty and reasonable expectations. Pursuant to the Crystal Square decision, a positive real covenant can be enforced against a subsequent owner only if it is assumed by way of contract (Strata Plan NW 2301 v. Strata Plan NW 2364, 2022 BCSC 527).