A restrictive covenant imposes a restriction on the use of a parcel of land to the benefit of one or more adjoining parcels. Such covenants are registered against title to the land burdened by them and generally must be negative in substance. For example, a developer may impose restrictive covenants on building lots within a plan of subdivision to maintain a consistent building scheme within that subdivision. A developer could impose a covenant restricting the width of a garage from exceeding a certain percentage of the home’s frontage, or restricting a roof from having a pitch lesser than, or exceeding, a specified slope. Such covenants could even prevent a homeowner from painting the exterior of their home a vibrant colour, or from installing a satellite dish.
Subsection 119(9) of the Land Titles Act, R.S.O. 1990, c. L.5 (the “Act”) expressly states that a restrictive covenant that is registered without a defined expiration date expires 40 years after the date of registration. In a recent Ontario decision, the Superior Court of Justice was asked to consider a unique question– is “forever” a defined expiry date for the purposes of s 119(9) of the Act?
Neighbour Dispute Over Land Subject to Restrictive Covenant
In Andrews v. Rago, 2019 ONSC 800, the applicant was the owner of the property at Street No. 99, which contained a three-foot strip of land along the eastern border (the “Strip”). The Strip had originally formed part of the lot for Street No. 97, but had been conveyed to the owner of No. 99 in 1966 to satisfy a by-law requirement regarding minimum lot frontages. At that time, a restrictive covenant was registered on the Strip in favour of No. 97, which restricted the owners of No. 99 from altering the Strip or interfering with a right-of-way that the owners of No. 97 retained over the Strip. The deed for the conveyance of the Strip states that it was conveyed to the “Grantee [i.e. the owner of No. 99], its heirs and assigns to and for its sole and only use forever” (emphasis added).
The applicant’s parents purchased No. 99 in 1966, shortly after the covenant was registered on title. In 2008, the property was conveyed to the applicant after her father’s death. The respondents purchased No. 97 in 1981.
For several years, the land between the homes, including the Strip, had been paved in a combination of concrete and asphalt. Sometime around 2009 or 2010, the applicant installed weeping tile along the foundation of her home and, in the process, removed some of the concrete and asphalt. In response to this, the respondents installed a 6-inch tall concrete curb along the western edge of the Strip, which sat entirely on the applicant’s property. They also installed a concrete walkway between the homes and an asphalt driveway extending from the front of the houses to the roadway. The applicant was vocal about her resistance to these changes at the time and said that the respondents had ignored her objections. The applicant had also become concerned about the respondents’ method of snow removal from the Strip, which she claimed caused water problems when the snow melted.
In 2018, the applicant applied to the Land Titles Registrar (without notice to the respondents) to have the covenant deleted from title on the grounds that it had expired in 2006. Given that more than forty years had passed since the covenant was created, the Registrar approved the request and the covenant was deleted from title to No. 99. The owners of No. 97 retained a right-of-way over the Strip but were no longer permitted to make changes to or otherwise interfere with the applicant’s use of it.
Sometime later, the respondents objected to the remedial work undertaken by the applicant’s husband to a fence located on the Strip. In response, the applicant applied to the Court for a declaration that she was no longer bound by the restrictive covenants, that the Registrar’s deletion of them was proper, and that the respondents’ right-of-way pertained only to ingress and egress over the Strip and not to occupation, possession, or exclusive control of the Strip.
Interpreting s. 119(9) of the Land Titles Act
The applicant argued that because the restrictive covenants did not set out an expiration date, they automatically expired 40 years later, as set out in the Act. The respondents argued, however, that the deed had indicated that the Strip had been conveyed, together with the restrictive covenants, “forever”, which they claimed was a defined period of time.
Neither party was able to locate a precedent case that had examined the meaning of s. 119(9) of the Act. The court, therefore, went back to first principles of statutory interpretation, first looking at the “plain and ordinary meaning” of the words:
The use of those words in the deed suggests that the rights granted were intended to be perpetual. In turn, this would suggest that the covenants were not intended to be for a specified period of time or to a specified end date. I find that the covenants in dispute in this case do not have either a period or date fixed for their expiry. On the basis of the “plain and ordinary meaning” principle of statutory interpretation, therefore, the covenants are caught by the express language of s. 119(9) and are deemed to have expired forty years after their registration, or on March 3, 2006.
Having determined that the plain and ordinary meaning of the words did not support the argument that “forever” was a defined expiry period, the court then examined the wording in context and considered the overall scheme of the Act and the intentions of Parliament. Having traced the provision back to 1952 and finding that the Legislature had included a method for removing a covenant after expiry, the court found that the intention had always been to allow for the deletion of expired covenants after a defined period. This interpretation supported the one reached when examining the plain and ordinary meaning. As a result, the court found in favour of the applicant.
Restrictive Covenants Will Not Be Permitted to Run in Perpetuity in Ontario
Given the outcome of this case, it is likely that similarly worded covenants may not actually run with the land “forever” because of the operation of s. 119(9) of the Act. It would be prudent for developers, municipalities and anyone else that intends to register a restrictive covenant to affix a specific term to any covenant intended to run for more than 40 years, and standard form covenants should be reviewed carefully to ensure that they do not run afoul of section 119(9). Interestingly, based on the reasoning in this decision, it would appear that even a seemingly egregious amount of time would suffice, so long as there is in fact a defined expiration date. However, at a recent professional development session, we were advised that the director of Land Titles will not accept covenants specified to run for 1,000 years or longer for registration, so the practical limit is in fact 999 years.
If you have questions about a real estate matter, including restrictive covenants or neighbour disputes, contact the real estate lawyers at Duncan, Linton LLP. We provide exceptional legal guidance on both commercial and residential real estate transactions and regularly produce exceptional results. Call us at 519-886-3340 or contact us online to schedule a consultation.