Caveat Means Beware: Restrictive Covenants
Are Restrictive Covenants or Caveats from 1911 Enforceable? Recent Case Law
As real estate lawyers, we are often asked about the enforceability of old restrictive covenants and caveats. There is an assumption that because a restrictive covenant was registered in 1911 that it is expired. Some take the perspective that in some communities, people are violating the restrictive covenants, therefore they do not apply. Here is a recent case in Alberta about this issue.
A 2014 Alberta Case on 1911 Restrictive Covenants
The following is a case regarding the enforceability of a restrictive covenant that was registered in Alberta in 1911.
The Facts about the Restrictive Covenant Law Suit
In this case a restrictive covenant was registered as a caveat. (Under Alberta law, a restrictive covenant can be registered as a caveat or as a restrictive covenant on its own right . Either way has the same effect.) The restrictive covenant stated that “no building other than one private dwelling house shall be erected on each lot, and no trade, business, resort or public entertainment shall be carried out on the lands.
In 2012 a couple bought the home, holding it in a numbered company. After moving in, the decided that the home needed major renovations. After applying for and receiving the proper permits, the built a second story, they redeveloped the basement as well as the kitchen. Part of the basement redevelopment included a secondary suite. An application was then made to have the courts force the couple not to have a secondary suite as it went against the restrictive covenant / caveat.
The Home Owners Argument Against the Caveat
In this case the home owners did not argue that the restrictive covenant was old so it did not apply. They do not expire unless there is a specific expiry date in the restrictive covenant or caveat. They argued that a secondary suite in the basement was not a second dwelling. They argued that the basement suite was not self contained and it could be accessed through the main part of the house (down a set of stairs).
What the Court Said About the Secondary Suite
The court, in this case, stated that the secondary suite effectively made the home a duplex. That this situation was more like an up/down duplex. As such, the court ruled that the secondary suite violated the restrictive covenant. The judge further ruled that to bring the home into compliance with the restrictive covenant / caveat, that the home owner had to remove the kitchen and dining areas.
The Alberta Court of Appeal Ruling on the Restrictive Covenant
The Alberta Court of Appeal agreed with the trial judge. It went on to say that because the word “private” was used in the restrictive covenant, it meant more than just “not open to the public”. It also meant not shared. Further, that because thee were two separate dwellings, it violated the restrictive covenant. Renovations can not be used to change a private dwelling into something different. The inclusion of a interior door and stairway connecting the upstairs and downstairs did not keep the home as a single dwelling.
What Should YOU do If There is a Caveat on Your Land?
Breaching a restrictive covenant or caveat can lead to both a law suit and you having to undo expensive renovations or work on your property. It is important to speak to a lawyer in Alberta to make sure that you understand what your restrictions are. It is important that if you are buying a new home, that you learn about and understand the restrictions that are on that property before you sign a contract to buy it. You can learn more about restrictive covenants with our Legal Minute Video.
Getting the help with Restrictive Covenants That You Need
Kahane Law real estate lawyers can help you understand restrictive covenants. If you need help call today. Call 403-225-8810 or email today to contact us.