The previous chapters have outlined a number of the tools currently available in British Columbia for protecting private land, along with some of the difficulties in using these tools for that purpose. The current options are not adequate to meet today's need to preserve land for conservation purposes. New options are required.
It is recognized that it is already possible in British Columbia to grant a section 215 environmental covenant, that is, a covenant under section 215 of the Land Title Act for the purpose of preserving land in its natural state. It is also possible to grant a covenant or easement under the Heritage Conservation Act. However, these statutory instruments must be granted in favour of a government body. This seriously restricts their use. The new land preservation tool advocated in this report, a conservation covenant, would have a much broader application.
This chapter outlines the law reform necessary to create a new statutory tool for British Columbia that resembles the conservation easement widely used in the United States. It includes discussion on the following topics:
There are complex and subtle legal differences between covenants and easements under the common law and equitable rules. However, these differences become largely irrelevant when a statute creates a new legal instrument, as is recommended in this report. For a number of reasons, some arbitrary, this report favours the use of the term "conservation covenant."
In many cases the legal obligations being imposed will resemble a restrictive covenant more than an easement. Frequently, the interest being created will be hybrid, with elements of both easements and restrictive covenants.
As discussed earlier, recent law reform work in other jurisdictions has called for
fundamental changes to the law on easements and covenants. [[Footnote: (44)
-- 44. See the Ontario Report, supra,
Recommendation 1
There are a number of issues that need to be addressed in the development of conservation covenant legislation for British Columbia. The discussion below examines and makes recommendations on the following key issues which must be addressed in law reform:
One of the most important policy decisions to be made is who should be qualified to hold conservation covenants. Allowing private organizations to be holders will make this a much more flexible land preservation tool. However, the issue of who may hold a conservation covenant is particularly sensitive if tax incentives are adopted to encourage their use. Since tax incentives involve public subsidy through foregone tax revenues, the government
(1) may wish to ensure that the use of conservation covenants is consistent with, or complements, government land preservation initiatives, and
(2) will wish to ensure that tax benefits available to grantors of conservation covenants are not abused.
These policy objectives may be achieved by limiting qualified holders to certain quasi-governmental entities or to well-established conservation organizations. Limiting qualified holders is intended to ensure that only organizations with both a genuine commitment to land conservation and the expertise to carry through with that commitment hold conservation covenants. It also lessens the likelihood that sham transactions will be effected through organizations set up for that purpose alone.
However, the legislation in British Columbia should not too narrowly restrict who may hold a conservation covenant, and may not need to be as restrictive as some legislation in the United States. Many land conservation initiatives are grassroots efforts. Local citizens who are familiar with regional land conservation needs -- and who are frequently in the best position to act appropriately -- often work together to conserve a particular piece of property. [[Footnote: (46) -- 46. This feature of United States private land conservation efforts is evident from a perusal of the Land Trust Exchange's 1989 National Directory of Conservation Land Trusts (Alexandria, Virginia: Land Trust Exchange, 1989). Land trusts -- which are usually not-for-profit corporations -- are a common vehicle for holding and enforcing conservation easements in the United States. The 1989 directory indicates that there is a decidedly local flavour to each of the listed trusts, of which there are many. See The Land Trust Alliance, Starting A Land Trust: A Guide To Forming A Land Conservation Organization (Alexandria, Virginia: The Land Trust Alliance, 1990) ["Starting A Land Trust"] at 1 and at 25-30. The subject of land trusts and their usefulness in British Columbia merits a study of its own, and will be undertaken by the West Coast Environmental Law Research Foundation in the future.]] Restricting qualified holders to larger -- and therefore often national -- organizations risks losing valuable local knowledge. It may also discourage participation of local volunteers, whose services often will be necessary to monitor and enforce a conservation covenant properly.
Another related issue is whether it should be possible for an individual, an unincorporated association or a common law charitable trust, that is otherwise a qualified holder, to hold a conservation covenant. While it was argued above that government control in this matter should be minimal, only incorporated entities should be permitted to hold conservation covenants. This would limit holders to societies incorporated under the Society Act [[Footnote: (47) -- 47. R.S.B.C. 1979, c. 390 [the "Society Act"].]] or registered under that Act as extra-provincially incorporated not-for-profit corporations.
There are good reasons for such a limitation. First, it would give better assurance, if not certainty, that specific minimum standards are adhered to in the operation and government of every conservation covenant holder. There is no comparable statutory regulation of the individual behaviour or the affairs of either an unincorporated association or a common law charitable trust. [[Footnote: (48) -- 48. For example, section 56 of the Society Act stipulates that a society must hold a general meeting of its members at least once every year after the first year of its existence. Section 6 provides minimum standards for bylaws which must be observed by every society. Parts 4 and 5 provide detailed financial and auditing requirements.]]
Second, an incorporated society is an entity with an independent perpetual existence and the powers and capacity of a natural person. [[Footnote: (49) -- 49. Society Act, s. 4.]] This feature gives it great flexibility in conducting its affairs and insulates its members from personal liability for obligations incurred by the society. Neither a common law charitable trust nor an unincorporated association enjoy these benefits. [[Footnote: (50) -- 50. This statement must be qualified in the case of charitable trusts. Since such trusts are not subject to the rule against perpetuities, they may have a perpetual existence. Moreover, the doctrine of cy pres ensures that where a charitable trust fails, the next closest charitable purpose will be pursued using the assets of the failed trust. For an authoritative discussion of charitable trusts, see D.W.M. Waters, Law of Trusts In Canada, 2d ed. (Toronto: Carswell, 1984) at 501 ff. End of Footnote]] z
For these reasons, the UCEA approach should be considered for British Columbia. That
approach should be adapted slightly, since there is no need for the conservation covenant
legislation itself to deal with income tax consequences. Section 1(2) of the UCEA defines
a "holder" as a charity "the purposes or powers of which include" the
purposes for which a conservation easement may be granted under the UCEA. [[Footnote: (51) -- 51. See the discussion of those purposes at page 50. See,
generally, Katz, supra,
The legislation should address the situation where a conservation covenant holder becomes moribund and ceases to exist. Although incorporated societies have a perpetual existence, that existence depends on the diligence of the individuals who run the society. For example, if statutorily required information filings are not made, the society may be dissolved by the government agency responsible for overseeing its compliance with statutory requirements. [[Footnote: (52) -- 52. Society Act, s. 71. ]]
This problem can be addressed by providing that upon the dissolution of a society or not-for-profit corporation holding a conservation covenant, the conservation covenant is transferred to another incorporated society or not-for-profit corporation eligible to hold a conservation covenant, with the consent of the new holder.
Recommendation 2: (1) its purposes include any purpose for which a conservation covenant may be granted,
and (2) upon dissolution any conservation covenant held by it shall be transferred to
another incorporated society or not-for-profit corporation eligible to hold a conservation
covenant is qualified to hold a conservation covenant. Some jurisdictions require government review or approval prior to the creation of a
conservation covenant or before any tax benefits may be obtained. California's Open-Space Easement Act of 1974 [[Footnote: (53)
-- 53. California Government Code §§ 51070-51097.]] is an example of this type of
control. Section 51080 of that statute provides that an open-space easement may be created
only where the local government has adopted an open-space plan. Sections 51083 to 51085
provide that the local government must review and approve a proposed open-space easement
before its grantor becomes eligible for property tax benefits available under the Act. There is a serious risk that control of this kind will stifle private sector use of
conservation covenants. Therefore, it is recommended that this approach not be followed in
British Columbia. Recommendation 3: Both judge-made and statute law allow several grounds for holding an existing covenant
affecting land invalid or unenforceable. If these rules were applied to conservation
covenants, they would threaten the usefulness of these tools for land preservation.
Therefore, the legislation should provide that the existing rules not apply to
conservation covenants. To illustrate the reasons for this, the common law and statutory
rules are outlined briefly below. The relevant common law rules are as follows:
The third of these rules is probably the most important in relation to conservation
covenants. In some cases the ongoing validity of a covenant is governed by statute. [[Footnote: (59) -- 59. For a very good and thorough discussion of this aspect of
conservation covenants, see M. McLelan, "Conservation Easements in British Columbia:
Concerns Regarding Extinguishment" (Victoria: Faculty of Law, University of Victoria,
1990) [unpublished]. See also J. Blackie, "Conservation Easements and the Doctrine of
Changed Conditions" (1989) 40 Hastings L.J. 1187. Blackie argues that the doctrine of
changed conditions should not apply to statutorily authorized conservation covenants, on
the basis that the policy underlying the common law doctrine does not apply where land
preservation is in issue. The author argues, in the alternative, that if the doctrine is
applied, it should be supplemented by an analogue of the cy pres doctrine of trust
law. This would mean that if the original purpose of the covenants is found to have
failed, the court will adapt it to the nearest comparable purpose, rather than destroy it
altogether.]] In British Columbia, section 31 of the Property Law Act gives the
Supreme Court of British Columbia the power to modify or cancel a covenant or easement on
being satisfied that the application is not premature in the circumstances, and that
(1) by reason of changes in the character of the land, the neighbourhood or other
circumstances the court considers material, the registered charge or interest is obsolete, (2) the reasonable use of the land will be impeded, without practical benefit to
others, if the registered charge or interest is not modified or cancelled, (3) the persons who are or have been entitled to the benefit of the registered charge
or interest have expressly or impliedly agreed to it being modified or cancelled, (4) modification or cancellation will not injure the person entitled to the benefit of
the registered charge or interest, or (5) the registered instrument is invalid, unenforceable or has expired and its
registration should be cancelled. The Property Law Act provides further that the court may order that compensation
be paid to anyone suffering damage as a consequence of the order. The court is also
required to "direct inquiries to a municipality or other public authority" and
to give notice by "advertisement or otherwise" to those who appear entitled to
the benefit of the charge. If these common law and Property Law Act rules were to apply to conservation
covenants, they would negate the purpose of conservation covenants, particularly when the
objective is to preserve a parcel of land forever. The reasons are as follows:
The rules set out in section 31 of the Property Law Act reflect the 19th century
policy of precluding dead hand control of land. In the 19th century various mortmain
statutes were enacted, aimed at preventing enduring control over land by those long dead.
At the time, the demand for land placed pressure on government to ensure that large blocks
of land could not be removed from human use or development by conveyancers' ingenuity.
[[Footnote: (60) -- 60. For a good discussion of this development
in the law of England, see R.E. Megarry & H.W.R. Wade, The Law of Real Property,
5th ed. (London, U.K.: Stevens & Sons, 1984) at 1027. Korngold, supra, While there may be a need for controls of this nature in some circumstances, the policy
of preservation chosen by a landowner should prevail over the policy promoting free
marketability of land. Any concern that large amounts of land will be frozen in time by
conservation covenants to which the Property Law Act does not apply is probably
exaggerated. Given the extent and pace of development in British Columbia, it is plain
that only a small amount of land in this province will be subject to preservation or
conservation of some sort. Since our green spaces are disappearing rapidly, especially on
the urban fringe, there is broad recognition that we must use innovative tools if we are
to preserve that land. For these reasons, the provisions of the Property Law Act should not apply to
conservation covenants. While this could create tension between long-term protection of
conservation covenants and the desire not to freeze land from human use, most of our land
base is and will remain open and suited to development of one kind or another.
Conservation covenants will be most widely used by private property owners to voluntarily
preserve those small but environmentally valuable pieces of privately owned green space
which cannot be protected through existing mechanisms. Recommendation 4 There may be situations, however, in which it is desirable to be able to modify or
discharge a conservation covenant in order to achieve the intention of the grantor. For
example, a conservation covenant that is granted for the purpose of protecting a
particular rare plant species may need to be modified or substituted if some natural
occurrence alters the location where this species is found. However, the ability to modify
or discharge a conservation covenant should be based on the original purposes of the
conservation covenant and the intention of the grantor, rather than other societal
purposes. The state is always able to rely on its powers of expropriation in situations
where the land is needed for other purposes. The California Society Act of 1974 provides an interesting example of how
another legislature has tried to deal with this issue. Section 51090 of that Act provides
that an "open-space easement" may be "terminated only by ... nonrenewal, or
... abandonment." An open-space easement may be abandoned or allowed to lapse only if
it is approved by resolution of the "governing body of the county or city" in
which the land is located. The statute restricts the ability of the governing body to
permit abandonment or lapsing of the open-space easement. Section 51090 of that California
statute says that approval may be given only if the governing body finds:
(1) that no public purpose described ... [elsewhere in the Act] will be served by
keeping the land as open-space; (2) that the abandonment is not inconsistent with the purposes of ... [the Act]; (3) that the abandonment is consistent with the local general plan; and (4) that the abandonment is necessary to avoid a substantial financial hardship to the
landowner due to involuntary factors unique to him. The California approach is closely linked with regulatory land use planning processes.
The Act requires that the matter be referred to the local planning authority, which must
hold a public hearing on the matter and then report to the governing body, which must also
then hold a public hearing on the issue. Finally, the landowner who wishes to remove the
open-space easement must pay an abandonment fee equal to half of the "abandonment
valuation" of the property, which is set at one quarter of the market value of the
land as if it were free of the open-space easement. The conservation covenant legislation for British Columbia will need to address
modification and discharge since, as discussed earlier, the common law rules and the rules
for modification and discharge found in the Property Law Act are inappropriate in
the context of conservation covenants. The rules set out in the California statute provide
a useful model for consideration. The rules developed for British Columbia should provide that a conservation covenant
may be terminated only where it would no longer serve the conservation purposes
articulated in the conservation covenant. In addition, modification should be permitted
only in circumstances where the modifications are not contrary to the original spirit of
the conservation covenant. The courts should be permitted to modify or discharge a conservation covenant on
application by the holder, the owner or any other party that the court considers has a
sufficient interest in the conservation covenant. The conservation covenant holder and
other affected parties should have the opportunity to argue against the proposed
modification or discharge. Recommendation 5: (1) the original purposes of the conservation covenant and the intention of the grantor
are no longer being achieved, and (2) the modification or discharge serves the original purposes of the conservation
covenant and the intention of the grantor, rather than other societal purposes. The existing legal rules on what purposes may be fulfilled by easements or covenants
present significant obstacles in using these tools to preserve land for environmental
purposes. The courts have viewed covenants and easements as instruments designed to
accommodate the use of land by humans for human purposes. While it is possible to argue
that preservation of land from any human development is a human use of land, if that is
what its owner wishes to do, there is reason to be concerned that even today our courts
might decide otherwise. The common law rules on easements and covenants are supported by a judicial policy
which permitted title to land to be affected only by restrictions which serve human uses
of land. Even the range of human uses which could form the subject of a burden on title is
limited. It is not clear that the courts today would favour applying these rules to
situations where a landowner wished to place restrictions on private property to prevent
human development of the land. This uncertainty is one of the central reasons that
conservation covenant law reform is required in British Columbia. The risk that a judge
will find a conservation covenant invalid seriously inhibits those who might wish to
create such interests under the existing law. The legislation therefore must clearly state the purposes that may be fulfilled by a
conservation covenant. This is the approach taken in the model United States statute, the
UCEA. [[Footnote: (61) -- 61. Section 1 of the UCEA defines a
conservation easement as "a non-possessory interest of a holder in real property
imposing limitations or affirmative obligations, the purposes of which include retaining
or protecting natural, scenic or open-space values of real property, assuring its
availability for agricultural, forest, recreational, or open-space use, protecting or
maintaining or enhancing air or water quality, or preserving the historical,
architectural, archaeological or cultural aspects of real property."]] It provides
that a conservation easement may be used, among other things, to
(1) retain or protect natural, scenic or open-space values of real property, (2) assure the availability of real property for agricultural, forest, recreational, or
open-space use, (3) protect natural resources, (4) maintain or enhance air or water quality, or (5) preserve the historical, architectural, archaeological, or cultural aspects of real
property. This list is not exhaustive, since the definition states that the purposes of a
conservation easement "include" the ones listed. While the list names many
useful conservation purposes, it may not be extensive enough to meet local needs in
British Columbia. Although detailed lists in legislation can create problems of interpretation and
application, a carefully drafted non-exhaustive list similar to that in the UCEA would
serve as an express guide to users. Recommendation 6: (1) the environment, broadly defined, (2) any form of plant or animal life or habitat, (3) aesthetic values, (4) recreational use of land, (5) an existing state or use of land, or (6) heritage values, including the paleontological, archaeological, historical,
architectural, scientific or cultural values associated with land. The legislation should provide expressly that a landowner may grant a conservation
covenant only in writing, consistent with the Law and Equity Act [[Footnote: (62) -- 62. R.S.B.C. 1979, c. 224, s. 54 [the "Law and
Equity Act"].]] requirement that interests in land be in writing. The legislation should provide that a conservation covenant is a non-possessory
interest in land which may contain
(1) positive or negative obligations respecting the use of land, and (2) obligations to permit access to or use of land by others, for any of the purposes in respect of which a conservation covenant may be granted.
[[Footnote: (63) -- 63. See recommendation 6 of the Ontario Report,
supra, This would make it clear that a conservation covenant may have any of the elements now
found in positive or restrictive covenants or easements, thus ensuring considerable
flexibility in designing obligations appropriate to the preservation needs of each
situation. The legislation also should provide that certain ancillary obligations and powers may
be included in a conservation covenant which, when they are included in the document, are
valid and bind successor owners. One example is the right of access to the land for monitoring purposes. At least one
American model conservation easement includes rights of access and inspection in the
easement document. [[Footnote: (64) -- 64. See the model
conservation easement in Janet Diehl & Thomas S. Barrett, The Conservation Easement
Handbook (San Francisco, California: Trust for Public Land, 1988) at 156 ["The
Conservation Easement Handbook"]. ]] However, even if these rights were expressly
included in the easement document, a recalcitrant successor landowner could argue that the
right of access is merely a personal obligation on the part of the landowner who granted
the obligation, rather than an obligation that runs with title to the land and binds the
successor landowner. Therefore, the legislation should make it clear that this obligation
binds successor owners. Some have argued that the legislation should go even further and provide that certain
ancillary obligations are automatically included in every conservation covenant and
therefore always bind successor owners. [[Footnote: (65) -- 65. See
recommendation 7 of the Ontario Report, supra, holder of a conservation easement ... may enter and inspect the property burdened by a
conservation easement in a reasonable manner and at reasonable times to assure compliance
with the restriction. However, the conservation covenant is attractive largely because it is voluntary and
affirms the value and primacy of private property rights. Therefore, if these
supplementary obligations are mandatory, they may inhibit the use of the conservation
covenant. Accordingly, the conservation covenant legislation in British Columbia should
provide that these supplementary obligations and rights are valid and bind successor
owners if created in the covenant, but that they are not required to be in the covenant.
This will allow landowners and conservation groups to agree on which ones should be
included in any particular case. The legislation should provide that the following obligations and powers are valid and
bind successor owners if created in the covenant:
(1) the right of access to the land for monitoring purposes; (2) an obligation on the landowner to supply information or produce documents directly
concerning the implementation of the conservation covenant; (3) an obligation on the landowner to create and maintain a fund out of which specific
expenditures may be met by the landowner or the conservation covenant holder; (4) the ability of the parties to create a charge against title to the land,
enforceable by court action or appointment of a receiver of the land, or both, to secure
the performance by the landowner of any specified aspect of the conservation covenant; and (5) the right of the conservation covenant holder to enter the burdened land and
perform any obligation the landowner has failed to carry out, at the expense of the owner,
but only after giving the landowner the required notice. The legislation should give parties the option of creating either:
One of the goals of the legislation is to permit the greatest possible flexibility in
preserving private land. If tax benefits are to flow from creation of a conservation
covenant, the government may wish to stipulate in taxation legislation a minimum duration
for conservation covenants. [[Footnote: (67) -- 67. For example,
section 51081 of the California Open-Space Easement Act of 1974 provides that an
"open-space easement" under the Act "shall run for a term of not less than
10 years." Paragraph 6 of section 49-0306 of the New York Act requires the
government to "promulgate regulations establishing . . . the minimum term for a
conservation easement."]] Apart from the need to protect the integrity of any tax
incentive regime -- a need which is best met through tax laws and not conservation
covenant legislation -- the legislation should allow the greatest possible flexibility
regarding the duration of conservation covenants. Recommendation 7: (1) positive or negative obligations respecting the use of the land or anything to be
done or not to be done on it by its owner or the holder of the conservation covenant, (2) obligations to permit access to or use of the land by the holder of the
conservation covenant, and (3) obligations and entitlements relevant to achieving any of the purposes for which
the conservation covenant has been created. Our present law requires that covenants or easements must be shown to benefit land
adjacent to the land subject to the covenant or easement before the interest binds
subsequent owners of the land subject to the covenant or easement. The current rule is a
serious obstacle to the use of conservation covenants in British Columbia. The utility of
conservation covenants can be assured only if the requirement that a covenant or easement
must benefit adjacent land does not apply to a conservation covenant. Recommendation 8: Rules to govern when subsequent owners are bound by a conservation covenant must be
explicit, in part because the existing legal rules governing covenants are so complex.
[[Footnote: (68) -- 68. See discussion in Chapter 3 and Appendix
C.]] The common law rules applied by our courts provide that the burden of either a
restrictive or positive covenant cannot run with title to the burdened land. In other
words, at common law a covenant on land will bind the owner who created the covenant, but
will not bind subsequent owners. To serve conservation purposes, the reform legislation
must provide expressly that a conservation covenant binds later owners of the land subject
to the conservation covenant, whether the conservation covenant imposes positive or
negative obligations. The rules of equity applied by our courts provide that a covenant will bind later
owners of the land, but only if
(1) the covenant is restrictive or negative in nature, (2) the person to whom the covenant is granted owns land benefitted by the covenant, (3) the covenant touches and concerns the land it supposedly benefits, and (4) the covenant demonstrates an intention to bind the burdened land and run with it.
[[Footnote: (69) -- 69. See the discussion above, at pages 25-26
and Appendix C.]] Recommendations 7 and 8 eliminate the first three equitable rules governing when
subsequent landowners will be bound. The fourth equitable requirement -- that the covenant
must demonstrate an intention to bind the burdened land and run with it -- can be dealt
with by providing in the legislation that a conservation covenant is conclusively presumed
to run with title to the land and to bind successors in title. Recommendation 9: While it is relatively uncontroversial to argue that successors to the granting
landowner should be bound by the conservation covenant, it is not as clear that the burden
of a positive conservation covenant should also bind those with a lesser interest in the
burdened land. [[Footnote: (70) -- 70. It is important to note that
a conservation covenant will not bind a prior interest holder, such as a prior mortgagee,
unless a priority agreement is obtained from the prior interest holder and is registered
on title to the land together with the conservation covenant.]] This is an important issue
that will affect the popularity of the conservation covenant for land preservation. The Ontario Report recommends that those with a limited interest in land should be
bound only by negative land obligations and not by positive land obligations. [[Footnote:
(71) -- 71. See recommendation 25 of the Ontario Report, supra, In reforming British Columbia law, it will be necessary to set out clearly who will be,
and who will not be, bound by positive obligations in a conservation covenant. The
following is suggested:
As for negative obligations in a conservation covenant, anyone with an interest of any
kind, subsequent to the conservation covenant, or who is in possession of the burdened
land should be subject to negative obligations. [[Footnote: (73) --
73. See recommendation 25 of the Ontario Report, supra, While these types of obligations will often have some impact on the value of land, or
its utility to even the holder of an insignificant interest in it, they are generally of a
much less onerous nature and should bind everyone with a subsequent interest in the land
or in possession of the land. Recommendation 10: (1) the grantor of the conservation covenant and the successors in title of the
grantor, whether or not in possession of the burdened land, and (2) anyone in possession of the burdened land. The legislation should provide that restrictive obligations in a conservation covenant
bind
(1) the grantor of the conservation covenant and the successors in title of the
grantor, whether or not in possession of the burdened land, (2) anyone who has any subsequent interest in the burdened land, and (3) anyone in possession of the burdened land. Another issue to consider is whether every party that is bound to observe a
conservation covenant should be liable at law for breach by another of that obligation.
Raising this issue presupposes a distinction between
This is a distinction accepted in the Ontario Report, [[Footnote: (74)
-- 74. Ibid. at 124-128.]] but not necessarily accepted in United States
conservation easement legislation. [[Footnote: (75) -- 75. For
example, section 49-035 of the New York Act provides that a conservation easement
"is enforceable against the owner of the burdened property." This does not
expressly limit the right of enforcement, but may be interpreted to do so. Similarly,
section 3 of Michigan's Conservation and Historic Preservation Easement Act,
399.251, Michigan Compiled Laws (Annotated), West Publishing Co. [the "Michigan
Act"], provides that a conservation easement is "enforceable against the
owner of the land or body of water subject to the easement." End of Footnote]] z Possession of and control over land burdened by a conservation covenant is important to
observance of that obligation. A restrictive obligation in a conservation covenant -- for
example, not to alter prime grassland habitat in any way -- cannot realistically be
observed by anyone other than the possessor of the land. On the other hand, if land is
burdened by a positive obligation in a conservation covenant -- for example, to spend
money to restore wetland habitat -- possession of the land is not crucial. Anyone who owns
an interest which subjects that person to the conservation covenant can perform the
obligation. [[Footnote: (76) -- 76. This assumes there is a right
of access to the land in favour of those not in possession of it, so they can enter the
land and perform the positive obligation if the person in possession fails to do so.]] The
question is whether this distinction is sufficiently important to warrant treating
liability for breach of restrictive and positive obligation in conservation covenants
differently. It is argued in the Ontario Report that different treatment should be given to positive
and restrictive obligations in conservation covenants. [[Footnote: (77)
-- 77. Ontario Report, supra, Ordinarily only those who are in possession of the land are in a position to breach a
restrictive obligation. However, there are cases where someone other than the possessor of
the land, such as a trespasser, has breached a restrictive obligation. To deal with both
situations, the rule should be that only someone who personally breached a restrictive
obligation -- or allowed it to occur -- should be liable. A positive obligation requires that something be done and almost always entails the
expenditure of money or money's worth on the land. Since possession of the land is not
essential, interest holders who are bound by a positive obligation should be liable for
its breach, whether or not they are in possession of the burdened land, if they personally
breached the obligation. Even if a number of interest holders are jointly bound by a
positive obligation, if there is a breach of that obligation, all will be in breach and
all should be liable. [[Footnote: (79) -- 79. It will be necessary
to consider whether the liability of interest holders for breaches of a positive
obligation in a conservation covenant, which requires the expenditure of money, should be
joint and several as regards the person who has the right to enforce the conservation
covenant. If so, the law of restitution will provide a right of contribution to any
interest holder who has made good on the obligation. For a discussion of the relevant
restitutionary principles, see P.D. Maddaugh & J.D. McCamus, The Law of Restitution
(Toronto: Canada Law Book, 1990) at 187-203.]] Recommendation 11: Normally, a person who undertakes an obligation by way of an agreement is bound by it
until the person to whom the obligation is owed releases that person from liability,
unless the parties provide otherwise in the agreement. [[Footnote: (80)
-- 80. For example, a lessee who has assigned the leasehold interest or sub-leased the
premises remains liable for breaches of the lease unless the lessor has released the
lessee from further liability for such breaches. See Anger & Honsberger, supra, Conservation covenant legislation should provide that a landowner is released from
liability under the conservation covenant upon the disposition of his or her interest in
the burdened land, to the extent of the interest which has been disposed of by the
landowner, subject to an express agreement to the contrary. The parties should be able to expressly provide in the conservation covenant that the
obligor remains liable even if he or she disposes of all interest in the land. This option
will permit the parties in effect to arrange for a guarantee of performance of the
conservation covenant. This will provide flexibility, especially in situations where the
conservation covenant has been purchased and not donated. It will also be useful where the
conservation covenant exists for a limited number of years. In such cases, the landowner
may be willing to assume the risk of liability for an appropriate payment or for no
payment at all. The legislation should allow such arrangements to be made. Recommendation 12: (1) a person who is bound by a conservation covenant ceases to be liable after
disposition by that person of his or her interest in the burdened land, but only to the
extent of the interest disposed of, and (2) the parties to the conservation covenant may provide that, contrary to the
foregoing rule, the person who is bound by the obligation remains liable after disposition
by that person of his or her interest in the burdened land. Easements may be enforced by an injunction or damages. [[Footnote: (82)
-- 82. See Anger & Honsberger, supra, In the interests of both certainty and flexibility, conservation covenant legislation
should provide that a conservation covenant may be enforced by action in the Supreme Court
of British Columbia and that all equitable and common law remedies are available for its
breach or threatened breach. In the case of positive obligations in a conservation covenant, injunctive relief would
involve the court ordering compliance with an obligation to do something. However, our
courts traditionally have declined to make an order requiring specific performance of a
contractual obligation where it would entail personal service. It could be argued that
enforcement of a positive obligation in a conservation covenant -- for example, where the
landowner is required to engage someone to do some work on the land -- entails such
personal service, perhaps indirectly. For this reason, the legislation should provide that a court is empowered to order
compliance with a positive obligation in a conservation covenant, despite any rule of law
or equity to the contrary. Recommendation 13: The UCEA contains a back-up enforcement mechanism which should be considered in
developing British Columbia's legislation. Section 3 of the UCEA provides that "[a]n
action affecting a conservation easement may be brought by ... a person having a
third-party right of enforcement." Section 1(3) of the UCEA defines a third-party
right of enforcement as a right provided in a conservation easement to enforce any of its terms granted to a
governmental body, charitable corporation, charitable association, or charitable trust,
which, although eligible to be a holder, is not a holder. Following are some of the arguments in favour of including such a mechanism in the
British Columbia legislation and some of the issues that should be considered. Giving a third party the right to enforce a conservation covenant offers greater
assurance that the conservation covenant will be enforced. The actual holder of the
conservation covenant might not enforce it according to its terms for a number of reasons.
For example, lack of expertise, human resources or money, or all three things, may disable
a conservation organization, leaving the conservation covenants it holds unenforced. In
rare cases there may be collusion between a landowner and the holder of a conservation
covenant, leading to inappropriate compromise on enforcement or a complete lack of
enforcement. In addition, where a government agency is the holder, the landowner may wish to have
the right to grant a right of enforcement to a non-governmental organization. By doing so,
the landowner will have added assurance that political agendas -- for example, relating to
land development -- will not affect enforcement of the conservation covenant against his
or her successors in title. There would be no additional cost to government in creation of third party rights of
enforcement. The legislation need only provide that a conservation covenant may include a
third party right of enforcement granted to an entity which is qualified to be a holder.
The legislation also would have to make it clear that the holder of such a right of
enforcement has the standing and all of the rights of the holder as regards enforcement
and remedies. Section 27(3) of the Heritage Conservation Act is an example of a
comparable provision. Designing a conservation covenant which grants a third party the right of enforcement
may lead to management problems or conflicts between the holder and the third party
enforcer. Therefore, the decision to include a third party enforcer should be left to the
parties, on a case by case basis. It should not be a mandatory requirement that every
conservation covenant must include a third party enforcer. If a conservation organization qualifies to be a holder, it should be able to hold a
third party right of enforcement. Therefore, the criteria applied to determine if an
organization qualifies to be a holder of a conservation covenant also should be applied to
determine if it qualifies to be a third party enforcer. The legislation should provide that upon the dissolution of a third party enforcer, the
right of third party enforcement may be transferred to another incorporated society or
not-for-profit corporation eligible to hold a conservation covenant, with the consent of
that party. The legislation should make it clear that the proposed third party enforcer must first
consent to creation of the enforcement right. This will ensure that enforcers are
self-selected and therefore more likely to be committed to that role. There may be cases where the third party enforcer and the actual holder of the
conservation covenant cannot agree on the need to enforce the interest. The potential for
conflict of this kind would be diminished by providing in the legislation that, despite
the terms of any conservation covenant, a third party right of enforcement may be
exercised only where the holder of the conservation covenant has failed to take and
continue steps to enforce the conservation covenant within 60 days after notice to do so
is given by the third party. Consideration also should be given to allowing the third
party to enforce the conservation covenant in an emergency without giving notice. Recommendation 14: British Columbia law does not permit assignment of the benefit or the burden of an
easement. [[Footnote: (84) -- 84. See Anger and Honsberger, supra, Section 2(a) of the UCEA provides that "a conservation easement may be ...
assigned ... in the same manner as other easements." This provision follows from
recognition in many states that an easement can exist in gross and therefore can be
assigned. [[Footnote: (85) -- 85. See Katz, supra, Some other American statutes expressly deal with this issue as well. For example,
section 6(2) of the Michigan Act provides that a conservation easement "may be
assigned to a governmental or other legal entity." [[Footnote: (86)
-- 86. It is interesting that section 6(3) of the Michigan Act is more restrictive in
relation to historic preservation easements. That section provides that such an easement
"may be assigned to a governmental or other legal entity whose purposes include"
historic preservation purposes.]] Section 3 of the New York Act provides that a
conservation easement may "be held only by a public body or not-for-profit
conservation organization." In British Columbia, section 27 of the Heritage Conservation Act provides that a
heritage conservation covenant may be assigned by the Province, the British Columbia
Heritage Trust or a local government "to any person". This provision does not
restrict assignment to qualified entities. Despite this domestic precedent, a restriction
similar to that in the New York Act is desirable in British Columbia's conservation
covenant legislation. To allow unrestricted assignment would be inconsistent with
Recommendation 2, which would restrict initial holders to certain qualified entities. There may be some concern that such a restriction on assignment is an unwarranted
intrusion on property rights. It might be argued that a landowner has an interest in
allowing free assignment by the initial holder of the conservation covenant. However,
restriction of assignees to qualified holders is likely to offer a broad choice of
potential assignees. The public interest in ensuring that only qualified entities hold
such interests justifies such a minimal incursion on free alienation of property
interests. In the Restatement of the Law of Property (Servitudes) it was stated that the social utility of devoting property to conservation, historic preservation and
charitable purposes is strong enough to justify severe restraints on alienation that are
reasonably necessary or convenient to assure that the property will be used to carry out
the intended purpose. [[Footnote: (87) -- 87. Tentative Draft No. 2
(Philadelphia: American Law Institute, April 5, 1991) at 61. This observation also carries
weight regarding what grounds, if any, should be used to vary or discharge a conservation
covenant. See the discussion above in this chapter.]] This passage provides support for the argument that such a statutory restraint is
desirable. Recommendation 15: The above recommendations would effect the main legal changes necessary to enable
conservation covenants to be used in British Columbia. Nonetheless, the legislative
reforms also should eliminate as much uncertainty as possible regarding the application of
existing legal rules on covenants and easements to conservation covenants. To do so, the
legislation should expressly stipulate the particular common law and equitable rules that
will not apply to conservation covenants. Recommendation 16: (1) land other than the land burdened by the interest must be benefitted, or that the
interest must touch and concern or be appurtenant to land other than the land burdened, (2) the burden of an interest will not run with title to the burdened land, or that it
will run with title to that land only if the interest is restrictive or negative in
nature, (3) an interest cannot be enforced unless there is privity of estate or of contract, or (4) an interest must demonstrate an intention to bind the burdened land and run with
title to it. Traditionally, the law has been hostile to any property interest which is not held by
someone within a reasonable time after its creation. The law sought to eliminate the
possibility that a property right could be created that would only be enjoyed at some
remote time in the future, thus being in limbo for a long time. The law encouraged
liquidity of property rights, by forcing them to be possessed and enjoyed within a
reasonable time after their creation. A legal rule was developed which invalidates any right or interest which is not vested
in, or held by, someone within a specified time. This judge-made rule, known as the modern
rule against perpetuities, was very complex. In essence, the rule was that a right or
interest was invalid if it might vest in someone only on the happening of a remote
contingency. Due to the drastic effect some think this rule could have on conservation
covenants, it is necessary to examine it in some detail. The British Columbia Perpetuity Act [[Footnote: (88) -- 88. R.S.B.C.
1979, c. 321 [the "Perpetuity Act"].]] was enacted in 1975 to codify and
modify the rule against perpetuities. Section 2 of the Perpetuity Act provides that
the common law rule continues in force. Other sections of the Perpetuity Act,
however, modify the rule significantly. For example, although the common law version of
the rule would invalidate unvested yet long duration interests at the outset, the
legislation now adopts a wait-and-see approach. Section 4 provides that a
"disposition creating a contingent interest in property" is not "void as
violating the rule against perpetuities by reason only of the fact that there is a
possibility of the interest vesting beyond the perpetuity period." Sections 18 and 19 deal specifically with easements and "other similar
interests." Section 18, the title of which is "commercial transactions",
provides that in
the case of an option or other contractual right under which an interest in property
may be acquired for valuable consideration, the perpetuity period is 80 years from the
date of the creation of the option or contractual right ... [emphasis added]. The section goes on to provide that where "an interest in property could arise
more than 80 years after the creation of the option or contractual right," the option
or right is "void after the expiration of 80 years." Section 18(2) provides that
the 80 year validity rule laid down by section 18(1) applies to "future ... easements
and restrictive covenants." Section 19 provides that in "the case of the grant of an easement, profit a
prendre or other similar interest" not referred to in section 18, other rules apply.
Section 19 further provides that any easement or "other similar disposition" to
which the rule against perpetuities "may be applicable" is subject to special
rules. First, the perpetuity period is 80 years, as is the case under the Act with other
interests. Second, the validity or invalidity of the interest is to "be determined by
actual events within the 80 year period." Last, the interest "is only void for
remoteness if and to the extent that it fails to acquire the characteristics of a present
exercisable right ... within the 80 year period." The rules in section 19 do not apply to any provision in a will or a trust created
other than by will. Some people may be concerned that conservation covenants will be vulnerable to attack
because they are perpetual and therefore violate the rule against perpetuities as modified
by the Perpetuity Act. This concern is unnecessary so long as a transaction
involves the immediate vesting of a conservation covenant. [[Footnote: (89)
-- 89. Anger & Honsberger, supra, The present grant of a conservation covenant means the interest is vested and is not
subject to the rule. As is noted in Anger & Honsberger,
[s]ince the rule against perpetuities is a rule against remoteness of vesting and has
no concern with how long an estate or interest lasts, present interests which are vested
in some person are not objectionable on any ground of perpetuity regardless of the fact
that they may last for an indefinite time. Consequently, the rule does not apply to vested
interests, including easements and profits a prendre, rent charges, and similar interests
lasting indefinitely, and restrictive covenants and conditions running with the land, for
they are so annexed to the land as to create something in the nature of an interest in the
land. [[Footnote: (90) -- 90. Ibid. See also the well known
case of London and South Western Ry. Co. v. Gomm (1882), 20 Ch. D. 562
(C.A.) at 583.]] The situation would differ, of course, if the landowner merely granted the holder an
option to acquire a conservation covenant at some future time. In that case the rule
against perpetuities would apply, since there would be no conservation covenant until the
option was exercised. Similarly, if a document contained a conservation covenant but
stipulated that it was to come into being only on the happening of a future event, such as
the sale of the land by the owner, the rule would apply. In those situations the
conservation covenant would fail if the event did not occur within the 80 year period set
out in the Act.
5.3.2 Creation, Modification and Termination
a. Government Approval
b. Modification, Extinction and Discharge
I. Common Law and Statutory Rules
II. Possible Application of Common Law or Statutory Rules
III. New Rules for British Columbia
5.3.3 Permissible Purposes
5.3.4 Basic Elements
a. Made in Writing
b. Elements of both Conservation and Easements
c. Obligations and Powers
d. Duration
5.3.5 Benefit to Adjacent Land
5.3.6 Binding Subsequent Owners
5.3.7 Binding Other Interest Holders
a. Positive Obligations
b. Negative Obligations
5.3.8 Liability for Breach
a. Owners and Other Interest Holders
b. Former Owners
5.3.9 Remedies for Breach
5.3.10 Enforcement by Third Party
a. Improved Enforcement
b. No Extra Cost
c. Voluntary, not Mandatory
d. Qualified Third Party Enforcers
e. Dissolution
f. Consent
g. Conflict Between Holder and Third Party Enforcer
5.3.11 Assignment
5.3.12 Excluding Debilitating Legal Rules
5.4 The Rule Against Perpetuities
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