Levy Zavet Lawyers – Are restrictive covenants always totally and completely enforceable?
For most buyers purchasing real estate, it is common practice to check municipal by-laws to determine whether their intended use for a property will be permissible. What they may not know however is to check for any restrictive covenants – which are often even stricter than municipal bylaws.
What is a restrictive covenant?
Restrictive covenants are conditions of use and appearance that can affect buyers who are purchasing a property. These conditions apply not only to the current buyer, but to future buyers as well who purchase the property at a later date because they attach to the land itself and not the owner
These covenants are often placed on the properties by developers to tell you what you can and cannot do with the property in order to maintain consistency throughout the neighborhood. For example, they may place restrictions on what type of trees can be planted or what types of materials can be used when building a fence. Or they may place restrictions on how you can use the property – such as whether it can be used as an Airbnb or whether you can put a pool in the backyard.
And developers are not the only ones that place restrictive covenants on properties. Property owners who are selling the property may do so as well. It is therefore extremely important to consider this before you sign the Agreement of Purchase and Sale. Standard agreements have fine print that includes the Purchaser’s acceptance of any restrictive covenants that may run with the land. To avoid any issues and ensure that you will be able to use your new property for the purpose that you intend, make sure the agreement is conditional upon your lawyer’s review and get their approval before finalizing the agreement.
Do restrictive covenants expire?
Since a lot can change over time, it doesn’t make sense for restrictive covenants to last forever – as neighborhoods change, these covenants can become obsolete. For this reason, the Land Titles Act, sets an automatic expiry on restrictive covenants of 40 years.
This is enforceable unless the covenant itself provides a different end date to the covenant.
Can a restrictive covenant be removed before the expiry date?
Removing a restrictive covenant before it expires can be tricky, although it is not impossible. If the parties for whose benefit the covenant was created agree to the removal, it is much simpler.
If you cannot obtain that agreement, you will have to make an application to the court if you would like the covenant removed or amended. It is important to note however, that this can be both time-consuming and costly, and the outcome is not guaranteed. It is strongly recommended that you work with an experienced real estate lawyer if you decide to go this route.
Circumstances in which the court may remove or amend a restrictive covenant include the following:
- Circumstances have changed, making the original covenant obsolete.
- Reasonable land use is restricted by the covenant and does not provide practical benefit to others.
- Parties for whom the covenant was meant to benefit have expressly agreed to having the covenant removed or amended.
- Removing or amending the covenant will not injure those that the covenant was meant to benefit.
- The covenant has expired or is invalid or unenforceable.
Contact Levy Zavet today.
If you are purchasing a property, knowing ahead of time about any restrictive covenants can save you a lot of hassle in the future. Having a real estate lawyer on your side to review your purchase agreement is the best way to avoid any nasty surprises later on.
And if you already have a property with a restrictive covenant and need advice on whether a court is likely to agree to a removal or amendment, we can help you with that too. Contact us today to speak with one of our real estate lawyers.