Building Schemes: A Question & An Answer!

Our Managing Broker, Mike Holmes who manages about 350 Real Estate Agents gets questions from us all the time and he posts the answers and sends them out to everyone as educational tips. Here is a very informative response he sent out yesterday that I thought many of you would find very interesting!!!

Building Schemes – Aug 2019

Q – 

If a property has a Building Scheme registered in 1983 and the original Owners of the Development are long since gone and the lots all sold off, who would you go to for variance or for that matter for enforcement.

The question is that,  it has a restriction on running any kind of Business which is against the Islands Trust Zoning Bylaw,  which says you can run a Small Business (with restrictions of course).

If a Buyer wants to run an Art Studio which we have all over the place on the Island, will he get in trouble and with who?

A –     

This is an interesting and not well understood area. Statutory Building Schemes were created by Legislation to allow the additional and private regulation of developments over and above zoning requirements. They are essentially a form of restrictive covenant designed specifically for subdivisions and planned developments.

As such their requirements are in addition to and may go further than zoning restrictions.

The typical Building Scheme has two basic elements.

*The first is the regulation of building and development of the lots. This is usually regulated by the Developer.

*The second element is the ongoing regulation of the use of the lots.

Once the Development is completely built out, the Developer will typically drop out of the picture and may even be dissolved as an entity.

This does not invalidate or affect the ongoing provisions regulating the use of the lots.

In theory, each Owner is individually entitled to enforce each and every provision of the Building Scheme as against any Owner who they feel is violating the Scheme.

Sometimes this enforcement is done by a Collective Association set up for this purpose.

In practice Building Schemes, when not administered by an Association, are infrequently enforced by individual owners. The cost of doing so is usually prohibitive to an individual owner, as to do so requires the commencement and follow through of a Supreme Court Action.

Sometimes multiple breaches of the Scheme start to proliferate throughout the Development and Owners tend to assume the Scheme is unenforceable.

This is not the case and Schemes can lie dormant and unenforced for years before an Owner decides to take action.

To remove or modify a Building Scheme is a private matter that would involve either the unanimous agreement of all registered Owners against which the Scheme is registered, or in the alternative an application to Supreme Court under provisions of the Property Law Act and the service on all parties to the Building Scheme of the intent to do so.

For that reason this is also rarely undertaken even where the Building Scheme is clearly irrelevant or it’s provisions against some public policy.

A typical example is a provision restricting roofs to cedar shingles.

Thus Owners are commonly left in a “no man’s land” where no one is enforcing certain provisions yet no Owner is completely confident that they can use their property in a way contrary to the Building Scheme.

That would perhaps be the case in the example you have given.

A long winded explanation but I hope it provides some guidance.