3.6 Restrictive Covenants

Standard

A lawyer must examine restrictive covenants and similar restrictions on the use of the parcel in conjunction with all title information and survey information to determine if the restrictions may affect the client’s proposed use of the parcel or the marketability of title.

A lawyer who determines that there are restrictive covenants that impact the use of the parcel or the marketability of the title must bring the restrictive covenants to the attention of the client prior to closing. The lawyer must specifically make the client aware of the restrictions that may have a potential and significant impact on the parcel.¹

A lawyer to whom a specific proposed use of the parcel has been communicated must examine the restrictive covenants to ensure that the restrictive covenants do not prohibit the use.

LAND REGISTRATION SYSTEM

(a)     ON MIGRATION

The Land Registration Act and Land Registration Administration Regulations require the migrating lawyer to identify the restrictive covenants that impact the parcel being migrated and require that the restrictive covenants are reflected in the parcel register and in the parcel description.²

The Land Registration Act and Land Registration Administration Regulations require the migrating lawyer to ensure that the restrictive covenants affecting the parcel are included in full text in the parcel description or are referenced in the parcel description. If the restrictive covenants are referenced in the parcel description the migrating lawyer shall ensure that the enabling document referenced in the parcel register contains the full text.³

(b)     REVISION AND RECORDINGS

A lawyer who revises a parcel register must add to the parcel register and parcel description as a burden any new restrictive covenants contained in the document being registered. A lawyer who revises the parcel register where restrictive covenants are referenced in the parcel description must ensure that the enabling document referenced in the parcel register contains the full text of the restrictive covenants.⁴

Footnotes

1. Rice v. Condran, 2012 NSSC 95, Paragraph 65 Boudreau J.:  “I can say, however, that the common practice of not pointing out the potential and significant impact of a waiver clause may, in appropriate circumstances, leave a real estate practitioner susceptible to liability and an award of damages. This cannot be considered an onerous or burdensome duty for any lawyer.”; Standard 1.5 – Documentation of Advice and Instruction
2. Land Registration Administration Regulations, s.7(10)(b); Land Registration Act, s. 37(9)(a)(i)
3. Land Registration Administration Regulations, ss.23(1)(b); (e); and 7(10)(b)(i)
4. Land Registration Administration Regulations, ss.14(1) and (4)

Additional Resources

• Land Registration Act, S.N.S. 2001, c. 6, s. 61
• A.G.H. Fordham KC / Restrictive Covenants, Article prepared for the “Practical Property” CLE Conferences, October 12 and 13, 1984.
• Elias Metlej / “Post Subdivision Registration” Nov. 2, 2011 RELANS Presentation
• Elizabeth Haldane and Fraser MacFadyen / Restrictive Covenants Revisited, CLE paper April 12, 1996
• Loss prevention: The Claims Wise Bulletin, No.1 and No.15
• Standard 1.1 – Legislative Review

Practice Notes

A lawyer who revises the parcel register should examine the restrictive covenants and it is recommended that any applicable expiry date is documented as a textual qualification. The lawyer should take note of any expired restrictive covenants and should remove the expired covenants from the parcel register.

A lawyer who revises a parcel register for a parcel located in a subdivision may consider examining abutting parcels in the subdivision to determine if there are any differences or omissions between the parcel and the abutters. If there are differences or omissions the lawyer should advise the client and consider requesting rectification of the discrepancies by the vendor’s lawyer.

Amended by Council on April 29, 2013