07/05/2019 – Jurisdiction British Columbia
Part 66 published on 01/06/2019
Strat corporation not bound by positive covenants in easement agreement
The lower Court had held that a covenant to pay towards parkade costs, contained in a registered easement that had been executed before creation of the strata corporation, was not binding upon the strata corporation since this would run contrary to the long-standing law that positive covenants generally “don’t run with the land”. [See Condo Cases Across Canada, Part 60, December 2017.]
The decision was upheld on appeal. The Appeal Court confirmed the rule that positive covenants generally don’t run with the land and therefore are generally not binding upon successors in title (unless they have directly agreed to be bound). However, the Appeal Court acknowledged the possibility for a “conditional easement” under which the rights to exercise the easement would be conditional on the fulfilment of certain burdens (or positive covenants), but the Appeal Court said that this possibility had not been pleaded in this case. The Appeal Court said:
The rule in Austerberry (namely, that positive covenants don’t run with the land) does not preclude parties from creating conditional easements, where the owner of the dominant tenement cannot exercise the rights under the easement unless they have fulfilled a corresponding condition. The requirement to fulfill such a condition is not a freestanding obligation the owner of the servient tenement can enforce. However, the consequence of non-performance may be that the owner of the dominant tenement cannot exercise, or loses rights under, the easement. In that sense, the positive obligation of a conditional easement cannot be said to run with the land as a free-standing obligation, despite the fact it is an incident of the use of the easement.
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This does not leave property owners without any means of ensuring the ongoing costs of shared facilities are borne by successors in title to the original participants in a building scheme. The legislature has specifically provided one means of doing so, in the statutory regime created by the Strata Corporations Act. Where the development of a multi-use project makes the air space parcel model more attractive, the parties can fall back upon the chain of contracts approach the parties intended to use in this case but did not carry into effect. Further, as I discuss below, while the law is not without its complications, the rule in Austerberry does not preclude parties from creating conditional easements.
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The original parties to this agreement appear to have intended to grant an easement conditional upon the performance of an obligation. The obligation does not run with the land despite the parties’ intentions that it would be binding on subsequent owners. As a result, the covenant to pay the Parkade Operating Costs is unenforceable against non-parties to the Easement Agreement. As we are only called upon to determine whether the Strata is bound by the positive obligations in the Easement Agreement, we make no final determination of whether the Strata’s failure to meet the obligation may serve as a ground for the appellant to refuse to permit the Strata to exercise the Parking Easement.
The Owners, Strata Plan BCS 4006 v. Jameson House Ventures Ltd., 2019 BCCA 144