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Chapter 16. STATUTORY BUILDING SCHEMES

WHAT IS IT? A statutory building scheme is a specific variation on restrictive covenants 206 under which all the owners of neighbouring lots are bound by mutual restrictive covenants. 207

AN EXAMPLE. Hilary and Harrison Brown arrived on Hornby Island in 1937 and bought ten acres of land on the ocean. After the War there were rumors that their next door neighbours were planning to log their land. To forestall that possibility, the Browns bought the 23 acres next door and turned it into a camp site. In the Sixties, realizing that the campsite was taking too much energy, the Browns talked to the regulars among the campers about setting up a camping cooperative to acquire the 23 acres.

The campers formed a cooperative and took an option to purchase from the Browns on the camping land. Before the option expired, the cooperative agreed to purchase the land.

Both the Browns and the campers were interested in preserving the land in perpetuity as a camping space. So, before the land was sold, the Browns created a statutory building scheme, which resulted in restrictive covenants both on their own property and on the camping site lands. The restrictive covenants included prohibitions on tree cutting, hunting, statutory rights of way, and subdivision as well as limitations on the use of the land.

POSSIBLE APPLICATIONS. A statutory building scheme is useful when a landowner subdivides land into several parcels and sells the parcels to several owners. 208 The seller can impose mutual restrictive covenants on all the purchasers and the covenants will then be binding on all subsequent purchasers, thus protecting all of those lots in perpetuity.

LEGAL BASIS. In order to be valid as a statutory building scheme, the following conditions must be met:

1. The seller must divide his or her property into defined lots and must intend to sell at least two lots. 209
2. The vendor must impose restrictive covenants on all the lots. They need not be identical with respect to each lot, but taken together they must be consistent with a general scheme of development.
3. The restrictive covenants must be for the benefit of all the lots sold, unless there is a specific exemption for part of the land.
4. The landowner must file a "Declaration of Creation of Building Scheme" in the land title office.
5. The statutory building scheme must contain restrictions consistent with a general scheme of development. 210 It is not clear whether restrictions designed to prevent development would qualify in all cases.

   If those conditions are satisfied the restrictive covenants in the statutory building scheme will run with the land as part of the title of each of the lots and, therefore, will be binding on all subsequent purchasers. All parcel owners will then have the burden of fulfilling the covenants, and the benefit of their neighbours' doing so.

   Note that the original landowner — not just the purchasers — is bound by the restrictive covenants, as to the original land and any parcels of it that the original landowner keeps.

   HOW IS IT CREATED? A statutory building scheme is created when the covenants which will comprise the statutory building scheme are written and filed with a Declaration of Creation of Statutory Building Scheme in the land title office.

   HOW LONG CAN IT LAST? A statutory building scheme can last indefinitely.

   WHO MONITORS AND MAINTAINS THE LAND? Each parcel owner can monitor compliance with the restrictive covenants. If one lot owner is violating the covenant, any of the others can take steps to enforce it.

   HOW CAN THE LAND BE PROTECTED OVER TIME? Because the landowners occupy neighbouring properties, they are in an excellent position to monitor each other's compliance with the covenants in a statutory building scheme.

   HOW IS IT TERMINATED? If all the owners of the lots agree to terminate the statutory building scheme, it can be terminated. 211

   A parcel owner can apply to court to have some or all of a statutory building scheme amended or cancelled. 212 The court can exercise its power to change or cancel the statutory building scheme having regard to the wishes of other parcel holders, changes in the neighbourhood, and other factors. 213

   Advantages

   for the conservation organization

   • 1. This tool would be useful to the conservation organization only as a suggestion to make to the landowner, or if the group itself were the landowner.

   for the landowner

   1. The landowner can ensure that purchasers of parcels of land will protect the land.
   2. The restrictive covenants in the statutory building scheme run with the land and each parcel continues to be protected even if it is sold to a new owner.
   3. Because each parcel owner has a vested interest in the statutory building scheme, the covenants are likely to be monitored and enforced.
   4. There is no government involvement in the protection of the property.

   Disadvantages

   for the conservation organization

   1. As stated above, this tool would be useful to the conservation organization only as a suggestion to make to the landowner, or if the group itself were the landowner.

   for the landowner

   1. To be valid under the Land Title Act, a statutory building scheme must contain restrictions consistent with a general scheme of development. 214 It is not clear whether covenants designed to prevent development would qualify in all cases.
   2. The covenants might cease to be effective if the neighbourhood changed and one of the parcel owners went to court to have the covenant discharged.

   Info for Conservation WCEL Home Page

   206. See Chapter 14 on Restrictive Covenants.

   207. A building scheme is defined in section 1 of the Land Title Act as follows:

   'building scheme' means a scheme of development which comes into existence where defined land is laid out in parcels and intended to be sold to different purchasers or leased or subleased to different lessees, each of whom enters into a restrictive covenant with the common vendor or lessor agreeing that his particular parcel shall be subject to certain restrictions as to use; the restrictive covenants constituting a special local law applicable to the defined land and the benefit and burden of the covenants passing to, as the case may be, the purchaser, lessee or sublessee of the parcel and his successors in title.

   208. A landowner or a registered lessee can also create a statutory letting scheme, imposing restrictions on parcels which are leased or subleased: Land Title Act, R.S.B.C. 1979, c. 219, s. 216(1).

   209. Sellers will only be able to subdivide their property if they comply with legislation governing subdivisions.

   210. Statutory building schemes are governed by section 216 of the Land Title Act, which provides:

216.(1) Where a registered owner in fee simple intends to sell or lease or a registered lessee intends to sublease 2 or more parcels and to impose restrictions consistent with a general scheme of development, he may register a Declaration of Creation of Building Scheme in the prescribed form, herein referred to as the declaration of building scheme, as a charge against the land defined in the declaration of building scheme.

(2) On receipt of the declaration of building scheme, the registrar shall make an endorsement of it in the appropriate register.

(3) From the date of the endorsement, the restrictions created by the declaration of building scheme run with and bind all the land affected and every part of it without further registration, but subject to this section and to the provisions of an applicable lease or sublease, render

(a) the owner;

(b) each purchaser, lessee and sublessee of all or part of the land; and

(c) each successor in title, future purchaser, lessee and sublessee of the land subject to the restrictions and confer on them the benefits of the building scheme, unless in the declaration of building scheme the owner in fee simple or the registered lessee expressly reserves the right to exempt that part of the land remaining undisposed of at the time the exemption takes effect from all or any of the restrictions and benefits.

(4) The owners for the time being of the land defined in the declaration of building scheme may consent to a modification or discharge of the registration in whole or in part, and the registrar, on application and on production of evidence satisfactory to him, shall amend his records accordingly.

(5) [Repealed 1982-60-59, proclaimed effective August 1, 1983.]

(6) Section 217 applies to the declaration of building scheme.

(7) A declaration of a building scheme or a modification or discharge of it is not registrable in respect of land that is subject to a charge unless

(a) the holder of the charge consents to the registration and grants priority to the scheme or the modification of it or consents to the discharge of it, or

(b) the registrar orders that the holder of the charge is not required to consent or grant priority or to do either.

(8) A declaration of building scheme registered under this section may be referred to as a statutory building or a statutory letting scheme.

(9) After this Act comes into force, no instrument creating a building scheme in a manner other than that provided by this section is registrable, but the registrar may allow the registration of the instrument on the ground that refusal to register would cause hardship or economic loss.

(10) Section 31 of the Property Law Act applies to a declaration of building scheme registered under this section.

211. The Land Title Act, R.S.B.C. 1979, c. 219, s. 216(4).

212. Subsection 31(1) of the Property Law Act states:

31.(1) A person interested in land may apply to the Supreme Court for an order to modify or cancel a charge or interest against the land, registered either before or after this section comes into force, and being an easement, a land use contract, a statutory right of way, a statutory building or statutory letting scheme, a restrictive or other covenant burdening the land or the owner, a right to take the produce of or part of the soil, or an instrument by which minerals or timber or minerals and timber, being part of the land, are granted, transferred, reserved or excepted.

213. The court's discretion is set out in subsection 31(2) of the Property Law Act:

(2) The court may make an order sought under subsection (1) on being satisfied that the application is not premature in the circumstances, and that

(a) 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;

(b) 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;

(c) 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;

(d) modification or cancellation will not injure the person entitled to the benefit of the registered charge or interest; or

(e) the registered instrument is invalid, unenforceable or has expired, and its registration should be cancelled.

214. Land Title Act, s. 216(1).

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