What are Restrictive Covenant?

Restrictive covenant

A restrictive covenant restricts the use of a land for the benefit of another piece of land. The restriction on the land usually requires something not to be done to the land. The covenantee is the person imposing the restriction, while the covenantor is the person agreeing to the restriction.

The restriction is registered with the title office and placed on the property title. In British Columbia, you will find the restrictive covenant upon searching the property’s title.

The restrictive covenant runs with the land, which means individuals buying the property will have to adhere to the restriction as it runs with the land, not with the specific owners of the property.

Restrictive covenants fall outside of the city zoning bylaw, which means it’s possible the property zoning might allow you to do what you wish with the property, while the restriction would still be imposed on the land. Most city zoning offices cannot remove restrictive covenants even if what the land owner wishes to do is not in violation of current zoning for the property.

What is Required for a Restrictive Covenant to be Valid?

For a restrictive covenant to be valid, five things are required.

  1. A purchaser of the land must be provided notice of the restrictive covenant before they purchase the land
    • This is usually done by pulling the title and providing it to the potential buyer. If purchasing such a property, also consider requesting the actual documents that detail the restrictive covenant. Don’t simply accept the title confirming there is a restrictive covenant.
  2. The lands that benefit from the restriction and the land that the restriction is imposed on should be identified in the agreement or the restrictive covenant document.
  3. The restriction must be negative in nature.
    • This means the covenant should be able to comply with the restriction by not having to do something. If the property owner is required to take some form of action to comply with the covenant, the courts might not find it valid.
  4. It should benefit or enhance the land in some way
  5. The restriction place must have been made with the intention of it to bind with the land
    • Restrictions that act as more of an agreement between land owners without the intention of staying with the land might not be valid.

What is the Purpose of a Restrictive Covenants?

The primary purpose of placing a restrictive covenant is to restrict land use. The individual wanting to impose a restriction wants to prevent something from happening to the land. The use of a restrictive covenant ensures their desired restriction will stay with the land regardless of who owns the land in the future.

What is an example of a Restrictive Covenant?

Here are some examples of possible restrictions that might be possible with a restrictive covenant;

  • Building height restriction
  • House square footage restriction
  • Pet and animal restrictions
  • Building scheme restriction
  • Restriction on type of business that can be operated on land
  • Subdivision restriction
  • Secondary suite restrictions
  • Conservation covenants

These are just some of the things a restrictive covenant can be used to restrict the usage of the land. When reviewing a restrictive covenant, ensure the restriction placed on the land will not impact how you plan to use the land.

How is a Restrictive Covenant Different than an Easement?

An easement provides a property owner with the right to use a neighbouring property in a specific manner without needing to own it for the benefit of that property owner. A typical example would be one property owner accessing a section of their neighbour’s property to access a road. Easement deals with the right to do something on a property that you might not own, while a restrictive covenant restricts how someone can use a particular land that they own.

Should You Buy a Property with a Restrictive Covenants?

Whether to buy a property with a restrictive covenant comes down to the specific details of the restriction itself and your planned usage of the land. It is possible to purchase a property with a restrictive covenant and enjoy it without any issue. Some restrictions might serve you well personally and fit how you expect or believe the land should be used.

Before purchasing the property, the restrictive covenant should be reviewed in detail with a lawyer specializing in real estate transactions. You want to ensure the restriction will not impact what you can do with the property and what you may plan on doing with it in the future.

The best property to purchase would be one without such a restriction, but depending on the restriction, it might still be a worthy pursuit with appropriate due diligence being conducted.

How to Remove a Restrictive Covenant?

If you have a restrictive covenant on a home and would like to remove it, you have a couple of options. First, you can reach out to the original individual who placed the restriction and see if they will remove it. If that’s not possible, you can apply to the courts to remove the restriction.

Applying to the court can be expensive, and there is no guarantee that the courts will side with you and remove the restriction. In British Columbia, the courts can cancel or modify restrictive covenants. The courts will consider the following when deciding to modify or cancel the restriction;

  • Is the restriction still relevant or not
    • For example, the restriction might have said only single-family homes on land, but the entire neighborhood is now full of condos making the restriction obsolete.
  • The ability of the owner to use the land is restricted with no real benefit to others.
  • The original benefactors of the restrictive covenant have expressly or implied for it to be canceled or modified.

A property with a restrictive covenant should be appropriately reviewed before purchasing. Failing to check the restriction properly could prevent you from using the property as you hoped or cost you additional money to apply to remove or modify it.

Related Articles

Responses

Your email address will not be published. Required fields are marked *