There are many advantages to deciding to purchase a condominium. In many Canadian cities, condos offer an accessible entry point into the housing market. For others, a condo might offer security or an appealing built-in community. Many people are unable or simply don’t want to tend to the yard work that comes with home ownership. Whatever the reason, there are certainly advantages to condo living.
That said, owning a condo is not exactly the same as owning a home. The community aspect of condominiums can mean that owners of units or buildings might not have the freedom to do what they want with the property in the same way that a homeowner might. On occasion, this can lead to condominium litigation between the owner of a condo and the body that governs it.
In a recent decision from the Alberta Court of Appeal, the owners of a condo unit challenged the restrictions placed on their property and asked the court to rule that they didn’t have to abide by them.
Condo owners challenge restrictive covenant
The condo development at the heart of the matter was described in the decision as a “rural condominium development” located near Stavely, Alberta. The development contained 20 units of plain land as well as what was described as a common property unit. People who purchased units were permitted to build on them so long as they complied with the Guidelines established by the development. Construction also had to be approved by the developer, referred to in the decision as the “Condominium Corporation.” The relevant section of the Guidelines stated that houses had to be a minimum of 1,000 sq ft if they were one-story, while two-story or split-level homes had to be at least 1,500 sq ft.
The plaintiffs bought land in the development and sought approval to build two cabins on the property, one being 500 sq ft and the other 300 sq ft. They originally submitted their proposal in 2019, and their plans were approved on the basis that they were in full compliance with the restrictive covenant in place. In 2020 the Condominium Corporation rescinded its approval because the proposed buildings did not comply with the restrictive covenant.
After hearing this, the plaintiffs sought a declaration that the proposed cabins did indeed comply with the restrictive covenant and asked the court to find that the Condominium Corporation had engaged in improper conduct. In response, the Condominium Corporation asked the court to find that the restrictive covenants were enforceable and that the proposed cabins did not fit within the permitted building Guidelines.
Court explains the test for a valid building scheme
At the original trial, the chamber’s judge found that the restrictive covenants were valid and binding and applied to any structures proposed to be built on the land, including the cabins the plaintiffs wanted to build. On their appeal, the plaintiffs argued that the chamber’s judge erred in making those findings as well as a finding that the prior approval was properly rescinded.
The court began its analysis by stating that restrictive covenants are “agreements which bind successors in title to the original covenanters” and that they run with the land and are registerable against titles under the Land Titles Act, adding that they can be applied to a building scheme with the aim of regulating development.
In order to find that a restrictive covenant pertaining to building development is valid, the Alberta Court of Appeal stated in a 2021 decision that the following requirements must be met:
- That both the plaintiffs and defendants derive title under a common vendor;
- Previously to selling the lands to which the plaintiffs and defendants are respectively entitled, the vendor laid out his estate, or a defined portion thereof (including the lands purchased by the plaintiffs and defendants respectively), for sale in lots subject to restrictions intended to be imposed on all the lots, and which, though varying in details as to particular lots, are consistent and consistent only with some general scheme of development;
- That these restrictions were intended by the common vendor to be and were for the benefit of all the lots intended to be sold, whether or not they were also intended to be and were for the benefit of other land retained by the vendor; and
- That both the plaintiffs and the defendants, or their predecessors in title, purchased their lots from the common vendor upon the footing that the restrictions subject to which the purchases were made were to endure for the benefit of the other lots included in the general scheme whether or not they were also to endure for the benefit of other lands retained by the vendors.
The court agreed with the chamber’s judge’s finding that the Guidelines established by the Condominium Board were not vague or too general in nature. The plaintiffs had sought to have the court decide that the Guidelines did not pertain to cabins, but the court found that they apply to every type of building, not just traditional homes.
Contact HMC Lawyers for advice related to condominium litigation
This decision is a reminder to consider the restrictions of a condominium before purchasing it and to determine, when possible, if plans for a condominium property would be permitted. The experienced construction law team at HMC Lawyers has extensive experience working on behalf of both condominium owners and developers/corporations. We regularly assist clients with matters related to:
- Design and development of a project;
- Construction issues and delays;
- Contract review, negotiation, disputes & delay claims;
- Builder’s liens;
- Negligent construction & professional liability;
- Developer deficiencies and warranty claims;
- Insurance claims;
- Condominium board issues; and
- By-law and regulatory enforcement.
Please contact us online or by phone at 1-800-480-3534 to find out how we can assist you if you are dealing with these issues or any other legal services we offer.