Restrictive Covenants in British Columbia: A Complete Guide
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by Richard Morrison
- January 5, 2020
- Buying
- 0
When purchasing property or starting a business in British Columbia, it’s crucial to understand restrictive covenants. These legal agreements limit how a property can be used and are enforceable by law. This guide will explain everything you need to know about restrictive covenants in BC.
Key Takeaway
Restrictive covenants are binding legal agreements that restrict the use of a property. They are common in BC real estate and can have significant impacts on homeowners and businesses. It’s essential to review property titles for any covenants before purchase.
British Columbia’s stunning natural landscapes and thriving urban centers make it a popular destination for homeowners and entrepreneurs. However, those looking to purchase property or start a business in British Columbia need to be aware of restrictive covenants.
These legal agreements dictate what can and cannot be done on a property. They are attached to the title and “run with the land,” remaining in effect when the property changes hands. Restrictive covenants are enforceable through the courts, so buyers must understand how they work.
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What Exactly Are Restrictive Covenants?
A restrictive covenant is a clause within a property’s title that limits its use. Common restrictions include:
- Building height and size
- Types of buildings allowed
- Commercial activity
- Vegetation and landscaping
- Leasing and renting
Developers often use covenants to create uniform neighborhoods. Homeowners associations (HOAs) rely on them to regulate communities. Local governments may also attach public-interest covenants to protect heritage sites.
While covenants protect property values, they also limit what owners can do. BC’s Land Title Act governs how they are created and enforced.
Why Are Covenants Used in British Columbia?
Covenants emerged in BC as a way to control land development. They enable developers, municipalities, and Stratas to regulate:
- Architecture – features like home design, colors, and materials
- Maintenance – standards for upkeep of homes and yards
- Land use – allowing or restricting commercial activity
- Behaviors – noise, pets, parking, short-term rentals
The goal is to protect property values, create neighborhood uniformity, and resolve disputes between owners. Covenants are binding on whoever holds the title – current and future owners.
Reviewing Covenants During a Property Purchase
Before buying a home or land in British Columbia, prospective owners must review the title for covenants. A property may be subject to multiple restrictions enforced by the local government, developer, and Strata.
Covenants are registered on title at BC’s Land Title and Survey Authority. Titles should be reviewed during the subjects removal period.
Failure to identify restrictions could derail plans to develop, renovate or operate a business. Breaching covenants also risks fines and court orders.
While covenants protect communities, overly restrictive ones can impact livability and resale value. Buyers should evaluate if the limitations are reasonable.
Covenants’ Impacts on BC Businesses
Opening or running a business on restricted land poses many challenges in British Columbia. Commercial activity may be prohibited on residential properties. There could also be limits on:
- Signage
- Building alterations
- Parking
- Operating hours
- Noise and nuisance
Additionally, industrial and commercial sites may have legacy covenants barring certain uses. This prevents owners from adapting properties as economic conditions change.
Before leasing or purchasing a property, businesses must review titling thoroughly to avoid projects getting derailed. Seeking legal guidance to interpret covenants is also recommended.
Restrictive Covenant Vs Easement
A restrictive covenant is an agreement between a neighbour, usually made with the intention of protecting the purchaser of a lot. It could include title and could be registered at the British Columbia Land Title Office. Restrictive covenants on title must be approved by the local land authority before you decide to purchase property and are commonly used to create uniformity in neighbourhoods either through building limitations or colour restrictions. This restrictive arrangement limits what a person who purchases a lot can do with it and must comply with municipal zoning bylaws. It is important to know the charges associated with the property as well as any easements that may be registered on title plans for building.
The Risks of Violating Covenants
Homeowners or businesses breaching covenants face several legal and financial consequences in BC:
- Lawsuits – Individuals and associations can sue for covenant violations.
- Fines – Stratas and local governments levy fines for non-compliance.
- Court orders – Judges can order violations to be reversed at the owner’s expense.
- Building removal – Structures that violate covenants may need to be torn down.
Penalties and legal fees quickly add up. Owners may also struggle to sell or mortgage non-compliant properties. It’s critical to understand and follow all covenants.
Removing or Changing Covenants
While covenants are intended to be permanent, there are options to remove or alter overly restrictive ones in BC:
- Application to court – Judges can discharge covenants deemed unenforceable.
- Agreement by beneficiaries – All benefitting parties can mutually agree to terminate.
- Legislation – Municipalities and the province can pass laws rendering covenants obsolete.
- Waiting for expiry – Some covenants have time limits.
The process requires legal help and takes time. But it may be worthwhile if a covenant severely impedes property enjoyment and value.
Can Covenants Prohibit Short-Term Rentals?
With Airbnbs’ rising popularity in BC, many properties now face restrictions on short-term rentals. Typical covenant wordings include:
- “No transient tenants”
- “Minimum rental period of X months”
- Property use restricted to single family residential only
Such covenants aim to prevent disruption from transient occupancy in neighborhoods. Owners marketing suites online for short stays may get fined.
However, a blanket prohibition against rentals under 30 days was recently ruled unenforceable by British Columbia courts. The judge ordered the covenant removed from the title.
Covenants Help Build Livable Communities
When used properly, restrictive covenants create thriveable neighborhoods in British Columbia. They allow developers, local governments, and residents to collectively establish standards.
However, overly rigid restrictions can make properties unlivable and undesirable. Buyers must review covenants thoroughly before purchasing. Existing owners should also understand their rights and options for recourse.
With the right knowledge, BC’s beautiful communities can remain enjoyable places to call home. Just make sure you know exactly what a property’s title obligations are before taking the plunge.
This article was written by Kara Lee, a Vancouver-based real estate agent. Her passion is helping homeowners navigate BC’s complex real estate landscape.
In my 12 years as an agent, I’ve seen clients struggle with restrictive covenants, especially when doing home renovations. I always advise reviewing the title early to avoid costly surprises down the road. Understanding covenants is one key to ensuring a smooth and successful property transaction.
Q: What is a restrictive covenant in real estate?
A: A restrictive covenant is a type of agreement that imposes certain restrictions or conditions on the use of a property. It is usually attached to the property title and registered at the British Columbia Land Titles Office.
Q: How do restrictive covenants operate in real estate?
A: Restrictive covenants operate outside of the municipal bylaws and may restrict the use of the property in ways that go beyond what is covered by the bylaws.
Q: What should I do if I find a lot with a restrictive covenant?
A: If you find a lot with a restrictive covenant, it is important to know why the covenant exists and what restrictions it imposes. You can obtain this information by doing a title search at the BC Land Titles Office.
Q: Who is responsible for enforcing a restrictive covenant?
A: The person who registered the covenant on the property title is responsible for enforcing the restrictive covenant.
Q: What are some common restrictions in restrictive covenants?
A: Some common restrictions in restrictive covenants include limitations on the type of structures that can be built, the appearance of the buildings, the use of the property (e.g., no commercial activities), and the height or location of fences.
Q: Can I build a fence on a property with a restrictive covenant?
A: The answer depends on the specific terms of the restrictive covenant. Some restrictive covenants may prohibit the construction of fences, while others may have specific requirements or limitations on the height or location of fences.
Q: What happens if I violate a restrictive covenant?
A: If you violate a restrictive covenant, the person who registered the covenant can take legal action against you. This may result in a court order requiring you to comply with the terms of the covenant or even financial penalties.
Q: Can a restrictive covenant be removed?
A: In some cases, a restrictive covenant can be removed or modified. This usually requires the agreement of all parties involved and may involve a court application.
Q: What should I do if I want to buy a property with a restrictive covenant?
A: If you are considering buying a property with a restrictive covenant, it is important to review the terms of the covenant carefully and understand how it may impact your use of the property. You may also want to consult with a lawyer to ensure that you fully understand your rights and obligations.
Q: Can a new owner be bound by a restrictive covenant?
A: Yes, a new owner of a property with a restrictive covenant is typically bound by the terms of the covenant. Restrictive covenants “run with the land,” meaning they are attached to the property and apply to all future owners.
A restrictive covenant is a legal agreement that is registered at British Columbia Land Titles and is attached to a property title. Before you decide to purchase a property, it is essential to check if there is a restrictive covenant associated with it. These covenants are commonly used to enhance property values and maintain a certain aesthetic or design standard in a neighbourhood. The purpose of a restrictive covenant is to limit the use of the lot or the house according to the contractual arrangement that is legally applicable.
For example, it may specify the building limitations such as the height of the building in a particular area like Vancouver. However, it is important to note that these covenants should not be unreasonable and should be executed in a fair and just manner. Ultimately, the goal of a restrictive covenant is to ensure that the property and the surrounding area are developed in a way that benefits both the current and future owners of the property.
Ready to turn your real estate dreams into reality? Contact Richard Morrison, Vancouver’s top realtor with 20+ years of experience. As a Medallion Club member and RE/MAX Hall of Fame award winning agent, he’s the expert you need on your side. Whether buying, selling, or investing, Richard’s personalized approach and deep market insights ensure a successful transaction. Reach out to Richard today at (778) 900-2235 and make your real estate journey seamless and rewarding.
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