Restrictive Covenants
'The covenant must “touch or concern” the land, meaning the restriction must benefit or enhance the value of the dominant tenement in some way. The covenant must be attached to the land, which is accomplished by registering the restrictive covenant against title.'
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Restrictive covenants are frequently used by municipalities, developers, and landowners to ensure land is developed in a manner that maintains or enhances the value of neighbouring properties.
A restrictive covenant must meet the following requirements for it to attach to land and bind future owners:
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The covenant must be a negative obligation, meaning it prevents a certain activity
There must be a servient tenement (property that is subject to the restriction) and a dominant tenement (property that benefits from the restriction) identified in the covenant
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The covenant must “touch or concern” the land, meaning the restriction must benefit or enhance the value of the dominant tenement in some way
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The covenant must be attached to the land, which is accomplished by registering the restrictive covenant against title
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The instrument granting the restrictive covenant must be signed by the owner of the servient tenement.
If a restrictive covenant meets the above requirements, it runs with the land, meaning future owners of the servient tenement are bound to observe the restrictions and future owners of the dominant tenement can enforce the restrictive covenant if there is a breach. If a restrictive covenant does not meet the above requirements, it will be considered a personal obligation and will be unenforceable after the servient tenement is transferred to a new owner.
Under section 651.1(1) of the Municipal Government Act, municipalities have a unique statutory power to register restrictive covenants. A municipality may register a caveat “in respect of any restrictive covenant granted by a registered owner of a parcel of land to the municipality for land that is under the direction, control and management of the municipality whether or not the municipality has been issued a certificate of title to that land”. While the requirements for the covenant to run with land still apply, municipalities do not need to own a titled parcel which benefits from the restriction; the dominant tenement can be municipally controlled roadways adjacent to or nearby the servient tenement.
Section 651.1(1) gives municipalities considerable leeway to register restrictive covenants, which can be an excellent tool to control or restrict future development. If properly prepared and registered, a restrictive covenant will attach to the land and be enforceable against future owners.​
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