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Andrews v Rago : confirms "INDEFINITE DURATION" covenants on title EXPIRE AFTER 40 YEARS 2019/05/18 18:53  
( Not legal advice. Some Ontario condominium corporations may have some reliance - including externally - on "restrictive covenants". )

There has arrived a judicial step back in time to clearer see reasons why investors & lenders urged the passage of modern condominium & strata law environments.

One reason was that newly evolving Condominium/strata models transform Building Scheme communities ( a.k.a. "general schemes of development" or "general plans of development" ) into creatures of statute that do not expire on their own ie NOT like Cinderella's coach becoming a pumpkin at midnight. There were other reasons including governance powers.

The expiry ( of restrictive covenants mutually gluing such communities together ) by MRTA 'marketable record title' provisions, has conversely also been a valuable development tool & arguably protects owner rights with legislative roots back to 1929-30. MRTA arguably helps lessen the confusion & entanglements of decades of prohibitions no longer beneficial.

Pairs or small groups of properties might today still have covenanted obligations on titles without reaching as far as the "mutuality" criteria of a genuine Building Scheme ( Keen folks can check EWCA 2016 ). But THAT these expire in Ontario is widely unknown to many typical Ontario property buyers . . .

Andrews v Rago 2019 ONSC 800

After adjacency relationships soured between longtime owners of ( what lawyer Peter Spiro writes are adjacent Downsview area ) residential lots, Servient Tenement property owner Andrews applies for & wins :

- already from L.T.O. an “ex parte” deletion of parts or all of unlimited age covenant on property titles of adjacent owners. For 40 years such burdened a three foot wide sideboundary strip of Andrews’ property along full depth of sideline common to the challenger RAGOs ; and

- here at ONSC successful ratification by ONSC of the covenant deletion order at L.T.O. already granted but presumably challenged by neighbouring former Dominanter property owners Rago . They fail with tiresome argument that covenant had been a perpetuity expressed without end date.

In 2006 the challenged burdens within expiry-silent 1966 restrictive covenant expired at end of FORTY YEARS by operation of Ontario’s L.T.A. . ( Land Titles Act RSO 1990 c L.5 )

Parties expecting the covenant to last perpetually, blissfully left the duration “indefinite”. Or maybe failed to grasp the forty year expiry clock ticking away.

( Why some surprise ? For practical purposes in Ontario these longtime provisions probably and superficially suggested to most readers and even conveyancers, that the DEFAULT maximum lifespan for covenants on most Ontario land titles is forty years.

For years I myself was happy to believe that that LTA's subsection 119(9)meant that the a restrictive covenant's MAXIMUM LIFESPAN was FORTY ( 40 ) YEARS. That's 40 regardless of anything entrenched within a restrictive covenant such as what's on my own titles.

BUT central to Andrews v Rago 2019 are documents with an indefinite duration. Thus the judge's "obiter dictum" is technically a mere sideline comment that GREATER THAN 40 YEARS could be upheld within corresponding covenants if expressly provided !

For some "long mature" Building Scheme residential communities, any expiry issues may no longer matter much. That's of course unless - for example - there arise disputes about non-residential uses, so-called 'monster-homing' or lot-splitting severance proposals . . .

Numbers are uncertain, but I suspect few Ontario covenants might be found literally expressing 41 or more years duration.

Bottom Line :

In ignorance of the long-standing MRT marketable record title expiry L.T.A. subsections 119 (8) & (9), those who drafted, bought or sold these things decades ago likely MIGHT HAVE figured that a covenant without an expressed duration, would last forever. ie Guessed that “no expressed limit” means “will last forever” ! BUT . . .

Andrews v Rago 2019 clarifies for a modern age that such was an incorrect guess.

Andrews v Rago 2019 ONSC 800 issued Feb 22/19
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asking the right questions : covenants on title EXPIRE AFTER 40 YEARS 2019/05/21 11:39  
( Addendum August 5/19 : Ontario's civil courts have arguably evolved a "special case exemption" in certain specific circumstances from the potential harshness of the otherwise commendable MRT marketable record title environment. SEE : application of Ontario Registry Act's Section 113(5) a iv. Such is briefly discussed at Cafcor General Topic "Muskoka RIVERFRONT COTTAGE ROAD WAR revives past struggle against UNLAWFUL SHUTDOWN"

Sooner or later, respectfully, an ostrich response gets regretted. Owners associations, respectfully, are notoriously vulnerable to this.

IF - IF - there is an ongoing value to re-vitalizing a restrictive covenant - or mutualized cross covenants affecting MANY DIFFERENT parcels of real property - then respectfully one thing's risky. Or even foolish.

That's for an organization or individual to hope no one notices the ( upcoming ) expiration(s) at all.

Or "let's just wait to see if it becomes a big deal".

Several problems include that the future day of discovery may arrive amidst urgency for someone to sell. ( eg : "Your property is now landlocked because the right of way on adjacent titles have expired ! or "You will have to buy a renewal if you even can persuade such out of the neighbours or co-owners . . ." )

Or amidst some sort of bitter & wider disputes where getting win-win ain't easy any more.

A good start is knowledge. "The hole in the roofing won't heal itself". There will have to be some sort of fix that cheap-skating only postpones and may even worsen . . .
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