Building Schemes - Consequences of Failing to Obtain Building Plan Approval #375

Sep 01, 2004

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By Gerry Neely
B.A. LL.B.

In carrying out their duties, licensees, lawyers and notaries give their clients copies of titles, registered building schemes and other restrictive covenants and, in doing so, often duplicate them. It's surprising then to find cases involving restrictive covenants, where buyers must have forgotten their existence or significance, with resulting costly consequences.

This comment arises from a decision involving a building scheme registered in 1954, which prohibited construction of buildings more than one storey high on certain lots to preserve the ocean views of neighbouring residents. An owner of an existing one-storey home demolished it and began construction of a one-storey home with a basement. When construction reached the lockup stage, it became clear that the home would be higher than the one it replaced. The residents whose views would be obstructed if construction continued petitioned for an order directing the owner to modify the design to comply with the building scheme.

The owner's defense that the basement couldn't be counted as a storey because of the definition of "basement" in a zoning bylaw was rejected. The owner was given 120 days to either remove the structure or modify the design to comply with the building scheme, or obtain the approval of the residents.1

In another case, a building scheme for waterfront property on Salt Spring Island required the prior approval of building plans by the developer. An owner started construction of a $30,000 garage without obtaining approval. Although the developer told the builder about this requirement after construction had commenced, the owner instructed the builder to finish the job.

When the judge decided there was a breach of the building scheme, the owner asked the court to consider awarding damages for the breach of covenant instead of ordering its removal. A judge may do this by taking into account the cost of the building, the cost of its removal and the circumstances under which the owner proceeded to build without plan approval.

The judge decided the other residents' continuing obstructed views , the relatively low value of the garage and the decision of the owner to proceed despite having knowledge of the covenant couldn't be compensated by damages and wouldn't create a hardship for the owner. The owner was ordered to remove the structure or rebuild, in accordance with plans approved by the builder, within 120 days of the date of the reasons for judgment.2

What happens if the developer, whose approval is required, ceases to exist? Contractors, who began construction on lots subject to a building scheme that required plan approval, found the developers' corporate registrations had been cancelled.

Several owners commenced an action to enforce the building scheme by requiring the contractors to get plan approval from all owners in the subdivision. This was such an impossibility that the contractors applied under s. 35 of the Property Law Act to have the building scheme modified by deleting three plan approval paragraphs. This section of the Act gives the Supreme Court the power to modify or cancel an unenforceable building scheme.

The building scheme gave the developers the right to appoint another person to approve plans in their place. That hadn't been done, so the three paragraphs were cancelled. The remainder of the building scheme remained intact.3

  1. McCarten et al. v. Davis et al., SCBC, Victoria Registry, Reasons for Judgment, July 16, 2004.
  2. Lynch et al. v. In-Situ et al., SSCBC, Victoria Registry, Reasons for Judgment, July 4, 2000.
  3. Andrex Developments (1985) Ltd. et al. v. Sheppard et al.SCBC, Victoria Registry, Order dated October 31, 2000.

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