CASUAL LEGAL: Restrictive Covenants and Stop Orders

Restrictive Covenants and Stop Orders

By Sean Ward

Reynolds Mirth Richards Farmer LLP

AMSC Casual Legal Service Provider

Restrictive Covenants can be a useful tool for municipalities as a way of controlling and restricting certain uses of land. A restrictive covenant is an agreement entered into by a landowner who undertakes not to use his or her land in a certain way or for certain purposes. As long as it is drafted as a restriction, it can effectively impose significant requirements on a landowner with respect to the future use of the land (for example, a restrictive covenant could indicate certain lands may not be used for any purpose other than as a park accessible to the public).

However, a downside of restrictive covenants is that they are a private law remedy. In order to enforce a restrictive covenant, a party is required to take legal action to sue on the covenant. Unlike a breach of a development permit or a bylaw, the municipality cannot simply resort to its rights under the Municipal Government Act to issue a Stop Order or Order to Remedy. Instead, like any private owner of land, the municipality would have to take legal action to enforce the restrictive covenant.

Despite this limitation, a recent decision from the Alberta Court of Appeal shows how municipalities can effectively enforce the terms of a restrictive covenant through a stop order if the restrictive covenant was imposed as a condition of a development permit or subdivision approval.

In that case, a municipality approved a subdivision with a condition that the developer of the proposed subdivision would have to enter into a restrictive covenant to provide for common fencing over the land which could be registered against the certificate of title for the parcels subject to the subdivision. As required, a restrictive covenant was registered which provided “No fence or all or any other structure of any kind shall be erected along, parallel to, or in any way abutting or adjoining the outside wall” of the main common fence constructed through the development.

However, a landowner with that common fence (a four foot chain-link fence running throughout the development) running along the back of his property constructed his own six foot wooden fence on his property immediately inside and parallel to that common fence. Rather than suing the landowner to enforce the restrictive covenant, the municipality issued a Stop Order pursuant to section 645 requiring the landowner to remove the six foot fence as it was contrary to that condition of subdivision approval which required the registration of the restrictive covenant.

The landowner appealed the Stop Order to the SDAB and ultimately to the Court of Appeal, but both agreed the municipality had the authority to require that the fence be removed based on a breach of the condition of subdivision approval. The Court accepted the restrictive covenant itself was part of the subdivision approval, and that failing to comply with the terms of the restrictive covenant meant the landowner was not in accordance with the conditions of subdivision approval.

This shows that although restrictive covenants are generally a private law remedy, where they have been registered as a condition of a development permit or subdivision approval, it may still be open to a municipality to enforce the covenant through a Stop Order under the Municipal Government Act.