It was such a good plan: rezone our property to accommodate a secondary suite—a laneway house. Eventually, we would retire in a new, cosy home, with an attractive design and modern finishes. It would improve our property while bringing some needed renewal to Richmond Road. We’d be cutting-edge urbanists, living on-trend while “aging in place.”
Our immediate neighbours liked the idea, and our community association had no objections. We applied for a land-use amendment to get zoning for a secondary suite. I studied the City of Calgary’s CARL (Complete Applications Requirements List) and prepared a pile of forms. Finally, we wrote a letter explaining why we thought it was a good idea for us, our neighbours and the community.
On the day I dropped off the application at City Hall, I ran into a neighbour who lives one street over. Hearing our plan, he gravely asked about the restrictive covenant registered on our titles. I repeated the assurances I’d heard from a few professionals we’d talked to. I told him it wasn’t a big deal. I was wrong.
Now, a year later, the potential legal fees for our project are starting to look like the down payment on a modest apartment condo in Currie Barracks, and we’ve shelved our laneway project.
We thought we had a creative solution for retiring in our community. What we’ve really learned is that, even with the best intentions and the city’s approval, a legal agreement from the middle of the last century has the final say about what we can (and can’t) do with our property today.
All this leaves my wife and I with a lot of questions—most pressingly, what do we do as we approach retirement? And then there is the overarching question of whether this covenant, though it may have helped build a great community in 1952, has anything to offer now or in the future.
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My wife and I bought our bungalow in southwest Calgary in 2002 when our son was six. It backs onto a busy street but it was what we could afford. It’s a modest house on the edge of a good neighbourhood.
Fifteen years later, Richmond Road is busier and noisier. Our son will finish university next spring and the odds are good he’ll move out soon. The door on our ancient garage doesn’t work anymore and we hardly use the backyard. The mortgage is paid off. It’s time to consider where to live next.
We looked at the traditional options for downsizing, but it didn’t feel like it was time to move into a condo or a townhouse. We considered major renovations to our house, but couldn’t justify carrying so much debt into retirement. After talking with realtors, planners and an architect, we hit on the laneway house. These little homes are a popular alternative for working couples and retirees in cities like Vancouver, and they’re popping up around Calgary. It seemed like the perfect solution: our land was already paid for and we could cover the construction costs—at least partially—by renting our main house if we chose to.
Our secondary-suite application went before city council, where, unlike so many others, it passed almost unanimously. It even garnered a little praise from the mayor. But then we had to look into the restrictive covenant registered on our title at the Land Titles Office, and prepare to go to court to change its dated rules.
The covenant on our property dates back to when the neighbourhood was first constructed in the 1950s. It dictates what we can build on our property—only one house—and where we can build it—at least 25 feet from the front and back property lines. These rules don’t permit a laneway home.
We wanted to do things right, so we started working with a lawyer to figure out how to notify almost 90 other property owners about our plans and then seek permission from a judge at the Provincial Court. We were optimistic at first, but the daunting process took its toll. As our options narrowed, the lawyer could still see some creative solutions, but as she explained, in the legal world, “creative” equals “expensive and risky.”
As if to confirm that, Tim Bardsley, a real estate lawyer with Dentons Canada and a former city councillor, sighs deeply and reclines in his chair before he begins to explain the world of restrictive covenants. We’re sitting in a sunlit conference room on the 15th floor of Bankers Court, but we’re about to go to a murkier place.
Bardsley begins by stressing that readers should always seek their own legal advice. Then he offers a simple definition: “A restrictive covenant is a private contract. The reason for it is to control what you can do with land. Because it’s a private contract, it isn’t affected by any public law decisions like development permits or land uses.” He tells me that covenants are often created when landowners subdivide and sell their land. At the time of the sale, the seller can ask purchasers to agree to terms regarding how they can use their newly acquired properties.
In the early and mid-1900s, covenants helped ensure that new neighbourhoods were attractive and comfortable. Large landowners like the Canadian Pacific Railway subdivided land and sold lots to home builders. Back then, planning bylaws weren’t very sophisticated, so large landowners created building schemes to define the form and character of these new communities.
Take our house, for example. In 1952, the CPR sold a block of 50-foot-wide lots to a contractor named Charles H. Priddy. The CPR had specific ideas about what a good suburban community should look like, so it set up a restrictive covenant, which dictated that Priddy would build a single home on each lot. These homes would be no taller than one-and-a-half storeys and would be at least 25 feet away from the front and rear property lines. Covenants normally include all future property owners, so we too have to follow the CPR’s building scheme.
At first, we (and a few professionals we spoke to) thought we could simply ignore the covenant. After all, we had the zoning for a secondary suite. How important is a poorly worded contract pounded out on an Underwood typewriter in 1952? Bardsley laughs and says, “It’s kind of like handing someone a bomb and waiting for it to go off….”
Covenants are contracts shared by neighbouring property owners. If you break that contract, they can get a court injunction to stop you from making changes. When you’re halfway through building a $250,000 laneway home, that’s a big problem. Even if your neighbours don’t object, Bardsley says that banks and potential purchasers frown on covenant violations. When it comes time to finance the purchase or close a real estate deal, they don’t want to deal with a “shadow” on the property’s title. By ignoring a covenant, Bardsley says, “You’re risking, risking, risking all the way through.”
Clearly, the prudent thing is to alter or remove the covenant. But Bardsley always warns his clients that this process isn’t for the meek, the lazy or the poor. It involves serving notice to the neighbours and then going to court. Among other things, the judge will look at whether these changes are beneficial to all the other owners.
If you share a covenant with a few of your neighbours and they agree to a couple of non-controversial edits, the process is probably going to be only mildly inconvenient. But we share a covenant with over 90 of our neighbours. I’m pretty sure a few of them are queasy about secondary suites, and would argue that our laneway won’t be of benefit to them. Bardsley says objections like these make the process more complicated, time-consuming and expensive. Worse still, he adds, judges are often reluctant to make changes. “My experience has been over the years that if anybody objects—it doesn’t matter if the objection is what you would consider irrational—the judges are really reluctant to do anything.”
The bottom line is that trying to change or discharge a restrictive covenant can be costly and the results are not predictable. Bardsley says it is important to be cautious. “The last thing I want to do . . . is to look at you after you’ve spent $15,000 and say, ‘Sorry.'”
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Of course, the City of Calgary is encouraging Calgarians to consider building secondary suites. In 2014, it started by waiving the fees for some required permits. But no one at the city warned me about this covenant thing.
Cliff de Jong is the issues management co-ordinator for the city’s planning and development approvals department. He reminds me that covenants are private contracts, not public law. The city isn’t obligated or even allowed to enforce them, so when it considers an application, it largely ignores any covenants.
But de Jong is also sympathetic. He sees a growing number of “do it yourself” developers applying for secondary-suite permits. But even when they’re successful at rezoning, he’s noticing that many of them delay or abandon their projects because they don’t always understand important details like restrictive covenants. He’s currently considering whether the city should take a more assertive role in explaining these hurdles to its customers.
In the meantime, de Jong offers some important advice. Covenants don’t just apply to secondary suites; they can affect something as simple as a garden shed or a garage. “If you’re ever thinking of making any application, the first thing you’re going to want to do is pull any documents that are sitting on your title to understand if there’s anything outside of the city’s rules that might impede you from doing what you want to do,” he says.
Bardsley also offers an important tip about buying property in the first place. Be sure to consider your plans for the future. “If you want to buy something, please check it out and check it correctly . . . If your plan, at any time, would be to add a suite or do something different than the covenant, you’ve got a bit of an issue.” He says that a real estate agent or lawyer can help identify any potential issues with covenants.
All this advice leaves me feeling a little sheepish. I guess I should have known these things before we invested all that time and effort. But something about the whole thing still feels so wrong, like NIMBY ghosts have somehow seized control from the past. We really thought a laneway would be an asset to our neighbourhood.
Back on the 15th floor at Dentons, Bardsley points out that not everyone shares the same vision for the future. “That conflict between the old style and the new is becoming more and more obvious and you can’t fault anybody on either side . . . but that is a problem. The places that you would most like to densify intelligently are inner city and there you got these (restrictive covenants).”
While he’s talking, I look out past the CPR line towards the old neighbourhoods of southwest Calgary. They’re beautiful in so many ways, but they’re ideas from the last century. From on high, the noise generated by the struggle over “new” ideas like secondary suites and density is muted. But the view makes one thing clear: without a shared vision for our future, we’re condemned to fight about our past.
The Good, the Bad, the Flat-Out Strange Covenants
A restrictive covenant is a legal contract that restricts what property owners can do on their properties. That’s pretty straightforward, but because covenants can reflect the strongly held beliefs of those who create them, they can be a good deal stranger than you might expect.
If, for example, you own a certain property in Magrath, Alta., you have to be careful about who comes to your house parties. A covenant there states that “no building, tent or erection shall at any time be used or occupied as a place where intoxicating liquor is sold . . . or as a house of prostitution or for any other immoral or illegal purpose.” If you are caught misbehaving, you’re obliged to hand back your property to the President and High Council of the Alberta Stake of Zion, an administrative body of the Church of Jesus Christ of Latter-day Saints.
The covenant on our property in Rutland Park states that if we build a new home, it must not cost less than $7,000 and that it must be of “neat design and completed in a proper fashion,” whatever that means. If we ever replace our garage, the finish must be the same as the house. And while I’ve always wanted my own backhoe, it’s never going to happen; our covenant says that we’re not allowed to use our property as a gravel pit or quarry.
These restrictions are a legacy of the time when Alberta’s cities and towns were being built. Our founding fathers (and maybe mothers) weren’t always satisfied with the laws that were in place to deal with planning, commerce and even morality. Large landowners would, in a paternalistic way, set community standards by establishing restrictive covenants when they sold land to home builders.
Covenants were also used to establish neighbourhood character. In the last century, the Canadian Pacific Railway owned a great deal of land in Calgary, and covenants established by the company have had a significant influence on the city’s urban form. Communities like Mount Royal were established after the CPR sold land to builders who were required to follow a covenant that set out planning standards. If you visit parts of Mount Royal today, you can clearly see the influence—larger single-family homes on expansive lots. In our neighbourhood, the CPR also established a building scheme that prescribed single-family homes that were “not to exceed one-and-a-half storeys.” It created the sort of perfect suburban bungalow community that was popular in the 1950s.
These sorts of covenants make a certain sense, but rumours persist that covenants were used to control who could buy certain properties in Calgary. However, Tim Bardsley, a real estate lawyer with Dentons Canada, is quick to squelch these. In his almost 30 years at the bar, he says, “I’ve never seen one that has anything to do with saying you can’t have, like, an ethnic group there.”
Covenants are still used in unusual ways. Maybe you’ve seen an old grocery store or gas station in your neighbourhood that’s being used for something else. Chains and franchises have been known to register a covenant on title with Alberta Land Titles to prevent competitors from reopening old stores under a competing brand.
Edmonton’s city council has spent years grappling with redevelopment issues and “food deserts” created by these anti-competition covenants. It’s also facing opposition by residents who disagree with some of its planning policies. Property owners in a handful of Edmonton communities are creating new covenants that will ban subdividing of 50-foot lots to prevent the construction of new infills and “skinny” homes.
In direct contrast, the Town of Canmore actually promotes the use of covenants to help protect much-needed staff housing in this resort town. Its land-use bylaw states that landlords can use a restrictive covenant to ensure that their properties are dedicated to housing their employees.