By Shannon Kinsella: Associate Lawyer at Stillman LLP
When purchasing a new home, it is very common to see a restrictive covenant on title. Most people don’t pay attention to these registrations against their title, but what do they really mean for a new homeowner?
A restrictive covenant is something that restricts the action of any party to it. Developers and homeowners associations have registered these on title to force homeowners to keep the aesthetics of their properties looking a certain way by following certain design guidelines. For example, fences can only be painted a particular colour, sidings and roofs can only be of a specific material or colour and certain trees have to be planted in the yards. Some people may find some of the restrictions very prohibitive or absurd or not keeping with their person style and may ask what would happen if a homeowner does not follow the rules contained in the restrictive covenant?
A recent Court of Queen’s Bench decision, Blackburne Creek Homeowners Association v Burt, 2019 ABQB 608 (“Blackburne”) very clearly sets out what happens when the neighbourhood design guidelines are not followed.
In Blackburne, the design guideline in the restrictive covenant that was at issue dealt with roofing materials. The covenant specifically stated that all shingles must be “wood shakes or shingles only”. Three households decided to replace their roofs with synthetic rubber roofing materials. The Homeowner’s Association, tasked with enforcing the restrictive covenant, brought this action when the homeowners refused to comply with their notices to change the roofing materials to ones that were acceptable under the design guidelines.
There are three requirements for a Restrictive Covenant to be enforceable (paragraph 36):
1. The covenant must be negative in nature;
2. The covenant must be made for the protection of land retained by the covenantee or his assignees; and
3. The burden of the covenant must have been intended to run with the covenantor’s land.
Parts 2 and 3 of the test were easily met in this case. The covenant imposed a building scheme over an area of land in the subdivision to regulate the development of the subdivision and it ran with the land. Part 1 of the test was also met. A restrictive covenant cannot force someone to do something, but if they decide to do it, they must do it in a certain way. For example, it cannot force someone to replace their roof, but if they choose to, it must be with wood shingles or shakes.
The homeowners argued that the restrictive covenant needed to be revised, given the recent experience in the province with forest fires destroying entire neighbourhoods. They also argued that the shingle they chose still fit with the design guidelines as they had a “wood like look consistent with the intent of the design guidelines”.
Unfortunately for the homeowners, it was found that these restrictive covenants are able to be strictly enforced. The homeowners association was entitled to a mandatory injunction against the homeowners. This injunction compels the homeowners to replace their roofs with the appropriate roofing materials.
Blackburne has confirmed that restrictive covenants will be strictly enforced, so long as the requirements are met. Therefore, it is important when purchasing a new home that the purchasers are aware of any registrations against the title to their homes. The lawyers at Stillman LLP will review the title of the home with the purchasers and inform them of any restrictive covenants or other registrations on title so that a new purchaser has as much knowledge as possible when entering into this large transaction.
If you have any questions regarding restrictive covenants, or any questions about purchasing or selling your home, please call any one of the lawyers on our real estate team.