You wish to buy land and develop some improvement(s) on it. You complete your purchase, take title and apply for a building permit to your local municipal government. The government responds by insisting that as a condition of the issuance of a building permit, you and your adjacent neighbour or neighbours enter into a "conforming construction agreement". You are told that this type of an agreement ("Conforming Agreement") requires one or both of the following:
(i) a minimum separation distance be established between a wall (or building face) and your lot line; and/or
(ii) providing public access ("thoroughfares") from the building exists to "public streets" through the "use of neighbouring parcels".
Alternatively, you wish to buy an already improved property, but when you search the title to same, you discover that the local government has already caused your predecessor in title and one or more of the neighbouring property owners to enter into a Conforming Agreement, with the result that the title to the property you are interested in is subject to a caveat giving notice of the existence of the Conforming Agreement, and the restrictions it imposes on your property.
The above-described scenarios are now more likely possibilities with the enactment by the Manitoba Legislature of an Act entitled "THE CITY OF WINNIPEG OF WINNIPEG CHARTER AMENDING, PLANNING AMENDMENT AND REAL PROPERTY AMENDMENT ACT (CONFORMING TO CONSTRUCTION STANDARDS THROUGH AGREEMENTS)" (the "Conforming Construction Act"). The entitlement of a local government to extract Conforming Agreements from property owners as a condition of the issuance of building permits constitute land use restrictions in addition to those contained in zoning by-laws, planning schemes, zoning agreements, development agreements and subdivision agreements. The Conforming Construction Act was given royal assent and came into effect on June 1, 2017. The objective of a Conforming Agreement is to ensure that improvements on land are set back far enough from their boundaries, so as to ensure that persons who are living, working or otherwise present in a building have sufficient "access space" within which to exit the building in the event of a calamity, most typically, but certainly not limited to, fire. Additionally, maximizing the space between buildings on neighboring properties will decrease the likelihood of damage - again, typically, fire damage - spreading from one building to the neighbouring buildings. Where buildings are built - on both sides - typically right up to the property line between them, a Conforming Agreement can ensure that persons from either one or both of the affected buildings are able to escape calamity by passing over or through the neighbouring building or property.
Where neighbouring property owners do not seek a building permit, the local government does not have the ability to unilaterally foist a Conforming Agreement on either one (or both) of them. Remember however that building permits are needed, not only to initially construct a building or other improvement, but also to effect most additions and alterations to existing buildings.
The need for a local government to extract Conforming Agreements pretty much disappears in the newer areas of settlement where the initial location and development of improvements results in the establishment of fairly substantial "separation distances" between neighbouring buildings/improvements. However, in "older" areas where buildings - commercial or residential - are built close to and sometimes right up to the dividing property lines, one can expect that local governments will now seriously consider compelling neighbouring property owners (seeking to improve their properties), to enter into Conforming Agreements pursuant to the Conforming Construction Act.
If you or your client:
(a) contemplate acquiring ownership of land where you (or your client) wish to initially improve or add improvements to the property, your due diligence should include a discussion with the local government as to whether or not it will require you (and one or more of your neighbours) to enter into a Conforming Agreement; and
(b) wish to acquire ownership of land that is already subject to a Conforming Agreement caveat, you should ensure that your purchase and sale agreement makes it clear that you can "back out" if, after investigation, and discussion with the local government and perhaps as well your anticipated neighbouring property owners, you decide that your plans for the property will not be practically possible due to the restrictions imposed by the existing Conforming Agreement.
Another matter which should be kept in mind when considering a local government's requirement for the imposition of a Conforming Agreement on property your client owns (or wishes to acquire) is the fact that the Conforming Construction Act does not provide any effective remedy where one of the property owners - not being the owner upon whom land use restrictions will be imposed under a government requested Conforming Agreement - simply refuses to sign the agreement. Consider this scenario: your client wishes to add an addition to the building currently existing on your client's property, and when your client applies for a building permit, she or he is told that no permit will be issued unless your client and the neighbouring property owner enter into a Conforming Agreement. Such agreement is to provide access over or through your property for the benefit of the neighbouring property owner. Assume that your client is willing to enter into the Conforming Agreement, but the neighbour refuses to do so, even though virtually all of the benefits under the agreement will accrue to the neighbour. It appears that all that can be done (by the local government) is to refuse to issue permit to your client! Your client does not appear to have any right to require the neighbouring owner to enter into the proposed Conforming Agreement. A variation in this scenario would be where the neighbouring property owner is willing to sign the proposed Conforming Agreement, but will only do so upon your client paying an outrageously high consideration therefor. There appears to be nothing that you can do to alleviate this situation. It might be useful for the Legislature to amend the legislation so as to provide relief for a property owner who is faced with this dilemma.
Ned Brown is focused on the areas of lending and secured transactions, banking law, subdivisions and commercial real estate development