Under section 219 of the Land Title Act in British Columbia, a covenant can be registered against title to a property for the benefit of the Crown, a Crown corporation or agency, municipality, regional district and a few other specified bodies.  These instruments are useful for government to be able to impose restrictions on the use and development of a piece of land.  For this reason, it can be important to review these registrations on a title to ensure they don’t unreasonably limit the owner or prospective purchaser’s ability to take desired steps with the land. 

As examples, these covenants can include either positive or negative obligations on a property owner governing the use of land, use of buildings, construction or development requirements, and restrictions on subdivision.  As well, these types of covenants can be registered to require that two or more pieces of land be sold together so that the registered owner cannot sell one parcel, without selling both (or all, if more than two).  Common in the Okanagan region are covenants imposing restrictions on an owner to ensure certain steps are taken for wildfire mitigation efforts (such as removal of specific trees, limits on wood product use, specific roofing requirements) as well as covenants to limit or protect the geotechnical sensitivity of land.  We frequently also see covenants that impose no build or no disturb requirements for certain portions of a property for various environmental or structural integrity reasons.   Covenants can also include indemnity provisions or rent charge requirements resulting in fees payable by the property owner. 

We often see these types of registrations required by government authorities in connection with applications made by property owners for building permits, subdivision applications, or other similar development processes.  In some cases, the government authority will require that a covenant has priority over any financial charges on title.  This means that if a land owner has a mortgage on title, they would have to get that charge holder to sign off on a priority agreement to give the respective covenant registration priority over the mortgage in the event of a foreclosure (i.e. the covenant would remain on title).  This means the lender needs to be agreeable to signing these documents to allow the owner to move forward with their development project.

Covenants are not easily releasable from title and require signatures from the benefiting party(ies) or a court order for the release or modification of same.  If they are no longer necessary, the benefiting party may be willing to sign a release, but given the difficulty in getting these registrations removed, a discharge should not be counted on without the prior approval of a charge holder.

We often get engaged by clients on a real estate purchase in advance of condition removal to review these types of registrations on title to ensure the registered restrictions will be acceptable to a purchaser.  As well, a property owner that is required to have a covenant registered in the course of a building permit application or similar process will often require a lawyer to assist with preparing, arranging for execution and registration of the covenant.

These covenants, as registered against the land, remain with the land and bind all future owners of the property.   As well, a person who sells their interest in the land, ceases to be liable for any breaches of the covenant that may arise after they have transferred their interest.

Author: Una Kuzio

This information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (250)448-2637 or any of our lawyers practicing in the area of real estate at the following:

Una Kuzio: una@touchstone.law

Jane Otterstrom: jane@touchstone.law