One of the most misunderstood property rights involve promises on title, or what are legally referred to as restrictive covenants. What this means is, if an owner of a property makes a promise to another property owner that they will not use their property in a certain way, then every subsequent buyer of the first property must follow this promise.
These promises originated when property owners throughout Canada decided to divide their land into two pieces and sell one of the pieces to someone else. The owner might be concerned that whatever the new owner built on that new piece of land might somehow devalue his existing home. So as part of the purchase agreement, he obtained a promise from the new owner, perhaps, not to build anything other than a single family residence, or to prevent any commercial building of any kind.
The result is that even if the local city zoning by-laws permitted construction of a duplex or commercial building in the above example, the owner could not build it because the promise overrides the zoning by law. We see the effects of restrictive covenants all around us today.
As an example, if you drive around the Bridlepath area in Toronto, you will note that there are no retail plazas on the west side of Leslie St., between York Mills Ave. and Lawrence Ave. but there are many on the east side. The same can be said for the south side of York Mills Ave. between Bayview and Leslie and the north side of York Mills Ave.. This was due to restrictive covenants placed many years ago by the original owners of the Bridlepath properties to restrict any future use to residential, and for the most part, single family residential only.
However, promises must be reasonable. In the early 1900’s there were promises placed into deeds that restricted owners from selling their properties to certain races or religions. At the time, these were deemed to be reasonable. Thankfully we live in a society that would not tolerate any of these types of covenants and an owner can apply to remove them from their title with a court application.
A popular promise in most subdivision agreements over the years was “no clotheslines.” This now has no effect in Ontario because the Provincial government passed a law in April 2008 that said that due to the energy benefits of having clotheslines, any restrictive covenant on any title that prevents clotheslines has no more legal effect.
What the standard agreement of purchase and sale says today is that buyers accept all restrictive covenants as long as the seller is following them. This can be very dangerous for a buyer.
As an example, if a buyer wants to place an antenna on their new home and there is no antenna there today, and if there is a promise on title that says no antennas, then the buyer will still have to close the deal and not be able to install an antenna.
There may be other restrictions registered which may prevent any additions, such as an enlarged deck or swimming pool being built on your land.
If you are buying any property, make certain to ask the seller or the seller’s real estate agent for details of any restrictive covenants that may be registered on title before you make your offer, or make your offer conditional on there being no restrictive covenants that may prevent your future plans.
Mark Weisleder, LLB, REI, is a lawyer, author and public speaker for the real estate industry. You may visit Mark at www.markweisleder.com or contact him at mark@markweisleder.com.
