Why real estate covenants could be a growing headache for the B.C. government

B.C.'s Bill 44 does not override restrictive covenants on land titles that stipulate only a single-family home can be built on a lot

Published Sep 09, 2024  •  Last updated 0 minutes ago  •  8 minute read

Edward Pereira, who has lived in Burnaby's Brentwood Park for 22 years, is part of a neighbourhood group that is using restrictive covenants on single-family properties to fight the province's Bill 44. Photo by Jason Payne /PNG

In the Brentwood Park neighbourhood in north Burnaby, a handful of 1950s-era detached homes are for sale along Southlawn Drive.

They’re all about 2,500-square-feet in size, assessed at just over $2.1 million, and are listed for around $4.3 million each. The listings encourage prospective buyers to imagine the redevelopment potential of these properties.

Article content

“New provincial legislation allows for multi-family building up to eight storeys,” the listings state.

But there’s a catch.

The land title for each of the properties carries a restrictive covenant, registered in the 1950s, that stipulates only a single-family home can be built on the lot.

More than 400 lots in the area are believed to have such covenants, according to a neighbourhood group that is using the restrictions to fight provincial housing policies intended to increase density in areas that were previously zoned for single-family homes.

Under the banner of “Save Brentwood Park,” these homeowners say the government’s policies represent “overreach” and will “create disjointed neighbourhoods” and “unbridled densification.”

“They are assets on our title deeds, and we should not feel ashamed to defend them since we paid for them,” said resident Edward Pereira, who is helping to lead the charge.

Just how many covenants exist across Metro Vancouver and elsewhere in the province isn’t known.

Ron Usher, a retired real estate lawyer and former general counsel at the Society of Notaries Public of B.C., said there are possibly thousands of land titles that carry so-called “statutory building schemes” and restrictive covenants that date back to the 1950s and ’60s, when builders and developers were constructing subdivisions of homes farther away from the city centre.

Article content

To make these neighbourhoods appealing to buyers who wanted uniformity, developers used covenants to stipulate that only a certain size or type of home could be constructed on the lots.

The province said its new legislation forcing municipalities to change their zoning bylaws to allow more housing units on single-family lots doesn’t override restrictive covenants but that it’s looking into the issue.

Experts say the province has the power to introduce legislation or some other mechanism to override restrictive covenants that are inconsistent with the new zoning bylaws.

But with an election just around the corner, that approach could risk alienating some voters.

“Is this a good time to be stripping property rights with an election in a few months?” Usher asked.

Neighbourhood group counting on covenants to fight Bill 44

The Brentwood Park area of Burnaby is near the Brentwood Town Centre mall and a SkyTrain station.

The Save Brentwood Park campaign started last year in response to Bill 47, which requires municipalities to allow smaller-sized apartment buildings on single-family lots within 400 to 800 metres of transit hubs.

Article content

Article content

“Burnaby is an outlier and has already, for years, been adding density around transit,” said Pereira, who has lived in the neighbourhood for 22 years. “There are two transit lines and four town centre plans. There have been 30 towers since 2017 and another 70 are in the pipeline between Holden and Gilmore, the two stations that flank Brentwood. That’s pretty aggressive.”

The group launched a petition for an exemption from the transit-oriented development legislation and received support from Burnaby city council. But it was rejected by the housing minister.

The group then turned its attention to Bill 44, which required municipalities to amend their bylaws by July 1 to allow for multi-unit buildings on lots zoned for single-family homes and duplexes.

Pereira said as soon as the legislation passed last winter — and well before municipalities had changed their zoning bylaws — real estate agents and developers flocked to the neighbourhood to seek buyers and sellers.

“No one seemed aware of Bill 44. We were told about it by land assembly people knocking on doors on Dec. 1,” he said.

Article content

Pereira added: “It feels very gratuitous that this area is a target for density as well. We were in awe of the inflexibility. We felt we have a story to tell and that the city of Burnaby has done plenty in comparison to other municipalities.”

The group put up lawn signs all over the neighbourhood to draw attention to its website, SaveBrentwoodPark.com, which gives residents instructions on how to search the B.C. Land Title and Survey website to see if there is a restrictive covenant on a property, and it asks them to register the details.

The group’s goal is to build a database so that if a property owner or developer starts to build more than a single-family home on a lot with a restrictive covenant, neighbours can take legal action.

The covenants, which were registered by original builders or developers looking to market the homes, bind multiple homeowners in a perpetual agreement.

Real estate agent Zeljko Milnar, the listing agent for the homes on Southlawn Drive, said the covenants, “often created 60 to 80 years ago, reflected the values and needs of that time, prioritizing the preservation of neighbourhood uniformity.”

Article content

He added that while it’s understandable that some homeowners are protective of their neighbourhood’s character, “it’s important to consider that allowing for more flexible housing options could enhance the community’s vibrancy and inclusivity.”

Pereira said narratives like this pit generations against each other and while there are original buyers in the neighbourhood, it’s not about hanging on to the past as there are also other buyers who will want to live in single-family neighbourhoods and who will be able to afford the cost as wealth is passed from one generation to another in the coming years.

Lawn signs posted by Brentwood Park residents who are opposed to the province’s Bill 44. Photo by Jason Payne /PNG

A potential sticking point in home sales

Meanwhile, homeowners who want to redevelop or sell their properties are closely watching a petition filed on Aug. 6 in B.C. Supreme Court.

As first reported by Postmedia News, a couple who live in the Government Road area of Burnaby are eager to sell their home, which was built in 1975, and have found a buyer who wants to convert it into a multi-unit building.

But the sale is conditional on getting a judicial ruling to cancel a restrictive covenant.

Article content

In an affidavit filed in early August, the would-be buyer of the Burnaby home said she intended to redevelop the property into a building with four to six homes, but that this may not be possible if the covenant is in place.

She said she is seeking a cancellation of the covenant and “it is my understanding, based on my review of the press releases and the legislation, that the provincial government effectively abolished all single-family residential zoning across British Columbia.”

The case is pending.

Burnaby isn’t the only municipality where covenants have emerged as a potential sticking point in property transactions.

A five-bedroom home on Blackburn Avenue in White Rock that is described as “an ideal site for your plex-plan project” has a covenant on its land title from 1958 that stipulates “not more than one dwelling for one family or household unit shall be erected on any one parcel or lot.”

Ron Gill, acting general manager of planning and development for the City of Surrey, said in an email that “staff are reviewing the various, more common, types of restrictive covenants that have been registered” on the title of residential lots and will have more information once the review is complete.

Article content

There are many different kinds of covenants in the province, but no central system for tracking them by type.

“While all building schemes and covenants are deposited in the Land Title Registry, it is not possible to determine which ones restrict the use of the land in a manner contrary to the intent of Bill 44 without reviewing each individual instrument,” said Janice Fraser, a spokeswoman with the Land Title and Survey Authority of B.C.

Understanding each one requires pulling up the land title and reading through scanned documents, which are typewritten and sometimes include handwritten notes, to see if restrictions on building height or floor space or the number of domestic pets allowed would get in the way of adding multiple homes on a lot.

Property owners versus property owners

B.C.’s Housing Ministry initially said homeowners should seek legal advice on restrictive covenants, then in an Aug. 26 email to Postmedia said it will continue to look into this issue.

Usher said the province has the authority to deal with these restrictive covenants in the same way it has made blanket changes to other types of covenants, such as racist ones that made home ownership in certain areas, such as the British Properties in West Vancouver and Shaughnessy, exclusive to white buyers.

Article content

Douglas Harris, a property law professor at the University of B.C., said he understands why the province is taking a cautious approach.

People on both sides of the covenant debate can claim property rights, he said.

“Some homeowners could say they bought their properties because of the restrictive covenants. Others could say that it’s their land, they should be able to develop it.”

Douglas Harris, a property law professor at the University of British Columbia, said people on both sides of the covenant debate can claim property rights. Photo by Jason Payne /PNG

Another flashpoint could be looming, added Harris.

He points out there’s a different type of land-use restriction that could present a similar faceoff between property owners who don’t want multi-unit buildings on single-family lots and the province’s push to increase density.

This one has roots starting in the 1970s and ’80s, when many bare land strata properties were created. Bare land strata developments subdivide undeveloped land into strata lots, usually for detached homes.

Harris said some of these bare land strata developments include bylaws that specify only one single-family residential home on each strata lot.

Most are on southern Vancouver Island, in the municipalities around Victoria, in the Fraser Valley, including Abbotsford and Chilliwack, and the Okanagan. There are more than 2,600 such developments creating more than 46,000 bare land strata lots, according to Harris’s research.

Article content

“The focus has been on building schemes and restrictive covenants, but bare land strata properties have the potential to be a bigger issue,” he said.

Milnar says there is a sense of impending change, but also a lot of questions.

“The province’s ongoing review of this issue suggests that change may be on the horizon,” he said, “though it’s still unclear what form that might take.”

With research from Carolyn Soltau

[email protected]

Recommended from Editorial

1. 

   Restrictive covenants not wiped out by new B.C. housing law, province admits

2. 

   'Frustrated, annoyed and angry': Neighbours clash as Coquitlam land assembly blocked by 1960s covenant

Bookmark our website and support our journalism: Don’t miss the news you need to know — add VancouverSun.com and TheProvince.com to your bookmarks and sign up for our newsletters here.

You can also support our journalism by becoming a digital subscriber: For just $14 a month, you can get unlimited access to The Vancouver Sun, The Province, National Post and 13 other Canadian news sites. Support us by subscribing today: The Vancouver Sun | The Province.

Article content