Restrictive Covenant

A restrictive covenant is a private contractual restriction on the use of land, registered on the title to the burdened property in the Ontario land registry. It is a form of negative obligation — it restricts what the owner can do with the property, rather than granting a positive right to another.

Restrictive covenants are often created when a developer subdivides land and imposes restrictions on all lots in the development to maintain a consistent character — for example, restricting all homes in a neighbourhood to single-family residential use, setting minimum setback distances, or requiring consistent architectural materials.

Like easements, restrictive covenants run with the land — they bind not just the original covenantor but all future owners of the burdened property. When a property with a registered restrictive covenant is sold, the new owner takes the property subject to the covenant.

In Ontario, restrictive covenants registered in the Land Titles system are visible on the Parcel Register. In the older Registry system, they may appear in historical deed documents. The Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34 and common law principles govern the creation, interpretation, and enforcement of restrictive covenants.

Ontario properties — particularly those in planned subdivisions — frequently carry registered restrictive covenants. Common examples include:

Land use restrictions: - No commercial use of the property; residential use only - No multi-family residential use (single-family only) - No recreational or institutional use

Building restrictions: - Minimum setback from the front lot line (e.g., 'no structure shall be erected within 20 feet of the front property line') - Maximum building height - Minimum gross floor area - Prohibition on accessory dwellings or garden suites

Architectural restrictions: - Building materials must match neighbouring properties - No exterior changes without approval from the developer or a homeowners' association - Prohibition on certain types of fencing or landscaping

Use-specific restrictions: - No business activity generating more than a specified level of traffic - No storage of commercial vehicles on the property

Heritage covenants: - Restrictions on demolition or alteration of heritage features, often registered as a condition of heritage designation under the Ontario Heritage Act, R.S.O. 1990, c. O.18.

Conservation covenants: - Under the Conservation Land Act, R.S.O. 1990, c. C.28, conservation authorities and land trusts can register conservation covenants that restrict development on environmentally sensitive lands.

Restrictive covenants are not automatically enforceable simply because they are registered on title. Ontario courts apply a set of common law requirements:

The burden must run with the land: Under the rule in Tulk v. Moxhay (1848), a restrictive covenant binds a purchaser who takes the property with notice of it. In Ontario's Land Titles system, registration provides constructive notice — meaning all future owners are deemed to have notice of registered covenants.

The benefit must run with the land: The party seeking to enforce the covenant must show they own land that benefits from the restriction. If the developer who imposed the original covenant sold all of its neighbouring lands, there may be no identifiable party with an enforceable benefit.

The covenant must touch and concern the land: The restriction must relate to the use of the land itself, not merely the personal obligations of the original parties.

Changed neighbourhood character: Even if a covenant is technically valid, Ontario courts (applying principles under the Conveyancing and Law of Property Act) will not enforce a restrictive covenant that has been waived or whose purpose has been frustrated by changed circumstances. In neighbourhoods where the character has changed significantly from residential to commercial, courts have refused to enforce single-family residential use covenants.

Partial release: If a developer who imposed the restriction sold all its lands without reserving enforcement rights, there may be no one with standing to enforce the covenant — making it effectively unenforceable as a practical matter.

Restrictive covenants that are genuinely enforceable can be a significant burden on a property owner who wants to develop, renovate, or change the use of their property. Options for dealing with them include:

Negotiated release: If the party entitled to enforce the covenant can be identified and contacted, the property owner may be able to negotiate a release — either for free (if the covenant is no longer relevant to the benefiting party) or for compensation.

Application to the Divisional Court under Section 61 of the CLPA: The Conveyancing and Law of Property Act provides a statutory mechanism to modify or discharge a restrictive covenant that is 'obsolete' or where the land has been so used as to make the covenant of 'no practical utility.' This is a court application requiring evidence that the restrictive covenant should no longer be enforced.

Ontario Municipal Board / Local Planning Appeal Tribunal (now OLT): If the restrictive covenant conflicts with a valid zoning by-law that permits the proposed use, the municipality's planning approval may effectively override the covenant as a practical matter — though the covenant technically remains on title.

Title insurance: Title insurance may provide coverage for losses arising from an unenforceable but still-registered restrictive covenant — for example, if a municipality issues a building permit for a renovation that technically violates a registered covenant, title insurance can cover the risk of an injunction being sought by an adjacent owner.

Quiet title application: A property owner can apply to court for a declaration that a restrictive covenant is unenforceable — confirming that no one has the ability to enforce it despite its presence on title.

Historically, some restrictive covenants in Ontario contained discriminatory provisions — for example, prohibiting the sale of land to persons of specified racial or religious groups. These covenants were common in Ontario subdivisions in the early and mid-20th century.

Such discriminatory restrictive covenants are void and unenforceable under the Ontario Human Rights Code, R.S.O. 1990, c. H.19, and in some cases under federal human rights legislation. The Ontario Human Rights Code prohibits restrictions on property ownership or use based on race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age, marital status, family status, disability, or other protected grounds.

The fact that a discriminatory covenant appears on title does not affect the validity of the title — the covenant simply has no legal effect. However, property owners who discover discriminatory covenants on their titles may wish to have them formally removed through a court application or through the Ontario government's administrative process for removal of discriminatory covenants.

Ontario's Not-For-Profit Corporations Act, 2010 and various legislative amendments have addressed the removal of historic discriminatory covenants from Ontario land titles.

Thomas purchased a property in a 1950s Toronto subdivision with plans to convert the detached house to a duplex (two residential units). Before making his offer, his real estate lawyer reviewed the title search and noted a registered restrictive covenant dated 1952 stating: 'The lands shall be used for single-family residential purposes only. No multi-family dwelling shall be constructed on the lands.'

Thomas' lawyer raised this as a requisition. Investigation revealed: - The original developer who imposed the covenant had long since sold all neighbouring lands to individual homeowners - No homeowners' association was identified with standing to enforce the covenant - Several nearby properties had already been converted to duplexes without challenge

The lawyer provided a legal opinion that the covenant was likely unenforceable due to changed neighbourhood character and the lack of an identifiable enforcing party. Thomas' title insurer agreed to provide enhanced coverage for the risk.

Thomas proceeded with the purchase and obtained a building permit for the duplex conversion without challenge. However, had a neighbouring property owner still owned lots originally part of the same developer's subdivision and had standing to enforce the covenant, Thomas could have faced an injunction application in the Ontario Superior Court — potentially requiring costly legal proceedings.

This example illustrates why title searches must include careful review of registered restrictive covenants and why legal advice on enforceability — before committing to a purchase — is essential when the buyer's plans may conflict with a registered restriction.