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Chapter 17. SECTION 215 COVENANTS

WHAT IS IT? Like a common law covenant, a section 215 covenant 215 is a promise by a landowner in favour of the Crown or certain government bodies to do certain things, or not do certain things, to their land. A section 215 covenant can be used to protect environmental values. Go to: an example of a s.215 covenant

AN EXAMPLE. Rosemuir is a Qualicum landmark. The home was built in 1928 in the manner of a meandering English country cottage, and designed with great care to fit into its natural surroundings. Its owners, Hallie Muir and Alice Jean Mackay, scrupulously tended its wild English gardens in the West Coast forest. They wanted to protect Rosemuir, with its cedar shake roof and hand hewn beams, to protect the wild English garden, and to protect the trees on the land, so that the integrity of the land, the gardens, and the home would remain.

They did two things. At their instigation, the Town of Qualicum Beach passed a heritage designation bylaw under the Heritage Conservation Act to protect Rosemuir as a heritage property. The effect of the designation is that no one can demolish, alter, or construct a building on the land without the consent of council.

They also put a section 215 covenant on the land in favour of the Town of Qualicum Beach. The section 215 covenant prohibits subdivision of the property. It also requires that the owner get council approval before buildings or alterations take place on the land, or before there is a substantial change in the landscaping of the property. The Town of Qualicum Beach agrees in the covenant not to approve any changes unless they maintain the character of the property. There is a further provision that if the buildings are destroyed, they are to be rebuilt to substantially replicate the existing buildings.

Jean Mackay said at the time, "We've had some people suggest that we not put on a covenant, and just subdivide the land. They worry about the future owner's freedom. But they're thinking of the freedom to destroy, not the freedom to preserve." 216

A SECOND EXAMPLE. As part of a development on Pender Island, the developer was required to dedicate land to the Community Park and Recreation Commission. The allocation of land for a park had to be approved by the Local Trust Committee. The Local Trust Committee was concerned that the land remain in its natural state. So, as a condition of its approval of the subdivision plan, the Committee insisted on a section 215 covenant in favour of the Islands Trust Fund. The covenant provides that the land be maintained in its natural state.

POSSIBLE APPLICATIONS. Suppose there was a particular part of a landowner's property — a pond or a venerable stand of trees — that the landowner wanted to protect. The owner could write a section 215 covenant specifying that the pond was to remain undisturbed or the trees uncut.

Or, a conservation organization working on a civic rails-to-trails project along a former railroad track might want adjacent landowners to agree to leave a buffer strip of hedges and trees intact. The group could negotiate with the landowners to have a section 215 covenant in favour of the municipality on their properties, by which the landowners agreed to maintain a buffer strip.

The most common use of a section 215 covenant occurs when a municipality requires a landowner to place such a covenant on a parcel of property as a condition of rezoning or issuing a development permit. A conservation organization concerned about rezoning or development could try to convince the municipality to require a section 215 covenant to protect portions of a property or certain amenities, at the time of rezoning or issuing of the development permit.

A landowner who wanted to be certain of effective protection for land might use a section 215 covenant in combination with another tool. For example, a landowner might want to place a section 215 covenant on the land restricting the erection of buildings before donating the land to a conservation organization. Then, the conservation organization itself would be bound by the section 215 covenant.

LEGAL BASIS. A section 215 covenant is created under the Land Title Act, section 215(1.1). 217

A section 215 covenant is like a common law covenant, in the sense that it is a promise by a landowner in respect of the owner's land. But it is governed by section 215 of the Land Title Act which makes it different than a common law covenant in three important ways. First, there is no need to have two adjoining properties, one a dominant tenement and the other a servient tenement, as there is with common law covenants. Second, and related to the first, a section 215 covenant is written in favour of the Crown, a Crown corporation or agency, a municipality, a regional district, or a local trust committee under the Islands Trust Act, rather than being written in favour of an adjoining property. Third, the covenant can spell out both what the landowner must do (positive obligations) and what they must not do (negative obligations) in respect of the land.

So, instead of being a promise by the owner of one piece of land which benefits the land of an adjoining landowner, a section 215 covenant is a promise by the owner of land to the Crown corporation or agency, a municipality, a regional district or a local trust committee under the Islands Trust Act.

A section 215 covenant resembles a heritage conservation covenant under the Heritage Conservation Act, since neither requires two properties. Both are written initially in favour of the Crown or a government body, though not the same government bodies. The big difference between a section 215 covenant and a heritage conservation covenant is that a section 215 covenant cannot be assigned by the initial covenant holder to another person, whereas a heritage conservation covenant can be assigned by the initial covenant holder to another party. The result of this difference is that a conservation organization can hold a heritage conservation covenant, but not a section 215 covenant. 218

HOW IS IT CREATED? A section 215 covenant is created by a written document describing the land, the nature of the covenant and the covenant holder, which is filed in the land title office against the property of the landowner.

Although there is no requirement that the covenant holder be advised before a section 215 covenant is placed on the land, it is essential that an owner contact the government body who will hold the covenant to clarify what responsibility it is willing to assume. 219

HOW LONG CAN IT LAST? A section 215 covenant can last forever. Because it is written in favour of a government body it can be discharged by that body. Therefore, it will last as long as there is a desire on the part of the government body to conserve privately owned land.

A landowner will want to confirm with the prospective covenant holder what, if any, policies it has about amending or discharging section 215 covenants.

WHO MONITORS AND MAINTAINS THE LAND? Responsibility for maintaining the land stays with the landowner. The terms of the section 215 covenant may require the landowner to spend money to do rehabilitation or to keep the land in its current state. Or, the section 215 covenant may simply prohibit the use of the land in certain ways, such as by prohibiting building or subdivision of the land.

Whether or not the covenant holder will monitor the enforcement of the covenant is something that the landowner should establish in advance.

HOW CAN THE LAND BE PROTECTED OVER TIME? Since the section 215 covenant is written in favour of the Crown or a government agency, the Crown or government agency would be the body to enforce the covenant against a subsequent purchaser. It is essential that an owner confirm with the prospective covenant holder what its policies and practices are with respect to enforcement, since unless the covenant holder is willing to take steps to enforce the section 215 covenant it may not be effective.

HOW IS IT TERMINATED? A section 215 covenant can be released from the property if the covenant holder registers a discharge of the covenant with the land title office. 220 The covenant can also be changed if the covenant holder and the landowner agree in writing and file an amendment at the land title office. 221

It can also be terminated under section 31 of the Property Law Act. 222

If the landowner has sought and received Cabinet approval for a property transfer tax exemption, the covenant can be amended or discharged only with Cabinet approval. 223

Taxation

There is a taxation incentive specifically for land covered by a section 215 covenant. Under ordinary circumstances, property transfer tax is payable when property is transferred from one person to another. 224 But if the property has a section 215 (1.1)(e) covenant on it, the covenant has a term that it cannot be amended or discharged without Cabinet approval, and the covenant has been approved by Cabinet, there is an exemption from payment of the property transfer tax when the property is later transferred. 225 This is not directly a benefit to the landowner, since the tax is ordinarily payable by the person to whom the property is transferred, but it may affect the price of the property. 226 Coincidentally, this makes a section 215 covenant more secure because once a section 215 covenant has been approved by Cabinet for the purposes of a property transfer tax exemption, it requires Cabinet approval to amend or discharge it.

To begin the process to claim a tax exemption, the landowner should contact the Manager, Property Transfer Tax Section, Income Tax Branch, Ministry of Finance and Corporate Relations.

Advantages

for the conservation organization

1. A section 215 covenant can be tailored to protect the land in the most appropriate ways.
2. A section 215 covenant does not require a dominant tenement and a servient tenement.
3. A section 215 covenant can contain obligations on the landowner to do things, or not do things, in relation to the conservation of the land.
4. The conservation organization can facilitate a section 215 covenant being placed on a piece of land, without taking on the expense and responsibility of monitoring, maintaining, or enforcing the covenant.

for the landowner

1. Landowners can balance the conservation interests of the land, on the one hand, and the economic value of the land, on the other. For example, landowners might want to include a covenant prohibiting subdivision of land, but not prohibiting the building of one house, so as to still be able to sell the land as recreational property.
2. Landowners may be able to obtain an exemption from the property transfer tax if they use this tool, provided they obtain Cabinet approval.
3. A section 215 covenant may affect the market value of the land if it limits the uses of the land or reduces the development potential.

Disadvantages

for the conservation organization

1. Conservation organizations cannot hold a section 215 covenant themselves.
2. The Crown or other government body may not be willing to monitor a landowner's compliance with a section 215 covenant, so a breach of the covenant may go unnoticed.
3. The Crown or other government body may not be willing to enforce a section 215 covenant, so a breach of the covenant may go unenforced even if someone draws the breach to the attention of the covenant holder.
4. The Crown or other government body may change its philosophy about conservation of privately owned land and so be willing to amend or discharge the section 215 covenant in circumstances that the original landowner, committed to the conservation of the land, would find objectionable.

for the landowner

1. A landowner cannot write a section 215 covenant in favour of a conservation organization.
2. As stated above, the Crown or other government body may not be willing to monitor a landowner's compliance with a section 215 covenant, so a breach of the covenant may go unnoticed.
3. As stated above, the Crown or other government body may not be willing to enforce a section 215 covenant, so a breach of the covenant may go unenforced even if someone draws the breach to the attention of the covenant holder.
4. As stated above, the Crown or other government body may change its philosophy about conservation of privately owned land and so be willing to amend or discharge the section 215 covenant in circumstances that the original landowner, committed to the conservation of the land, would find objectionable.

Info for Conservation WCEL Home Page

215. In this report, the covenant permitted under section 215(1.1)(e) of the Land Title Act is referred to as a section 215 covenant to distinguish it from common law covenants discussed in Chapter 14 and heritage conservation covenants discussed in Chapter 18.]

216. August 5, 1992, Nanaimo Free Press.

217. Section 215 of the Land Title Act was originally designed to enable the Crown and Crown agencies to set terms on subdivisions to protect floodplains, etc., and is still used by the Ministry of the Environment, Lands and Parks to protect floodplain areas upon the creation of subdivisions.

218. Because common law covenants are burdened by technical rules which make them useful only in very limited circumstances, heritage conservation covenants are restricted to properties with a heritage character, and section 215 covenants can only be written in favour of the government, West Coast Environmental Law Research Foundation has recommended that the law be changed to permit a conservation covenant which

• could be held by any incorporated society or not-for-profit corporation whose constitutional purposes included any purpose for which a conservation covenant could be granted,
• could be registered without government approval,
• could be modified only when it serves the original purposes of the conservation covenant,
• would not require an adjoining property,
• would run with the land, and
• could be assigned to, or enforced by, a third party.

See David Loukidelis, Using Conservation Covenants to Preserve Private land in British Columbia, Ann Hillyer, ed., (Vancouver: West Coast Environmental Law Research Foundation, 1992).

219. The person to call regarding covenants to be held by the Crown is the Land Administrator at the Ministry of Environment, Lands and Parks. Landowners can find the appropriate person in a municipality, regional district, or crown corporation by contacting the legal department of that body.

220. Land Title Act, R.S.B.C. 1979, c. 219, s. 215 (5)(b).

221. Ibid., s. 215 (5)(a).

222. See Chapter 14 on Restrictive Covenants for a discussion regarding this section of the Property Law Act.

223. See Appendix A.

224. The Property Transfer Tax Act, S.B.C. 1987, c. 15.

225. Ibid., s. 5.2.

226. A purchaser of the property, however, can get an exemption even if there is no section 215 (1.1)(e) covenant on the property when the property is transferred to the purchaser, provided that he or she registers the covenant within one year: see s. 5.2(5), (6), and (7) of the Property Transfer Tax Act.

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