Canada: Subdivision Control

Subdivision control is one of the most important restrictions on land use in Canada. All of the Canadian provinces have enacted subdivision control legislation in one form or another.

Subdivision control means the statutory control by government of the division of land into smaller parcels. Historically, government control over the division of land has been viewed as necessary (i) to allow for logical road access, (ii) to reduce disputes over boundaries that might arise if the creation of multiple parcels was unrestricted, (iii) to avoid the creation of lots of unwieldy size or shape, and (iv) to permit municipal services to be provided in a cost effective manner.

In Ontario, subdivision control is effected by Section 50 of the Planning Act. The Ontario legislation is both the oldest subdivision control statute in Canada and the subject of the most judicial commentary. The remaining comments in this article concern the Ontario statute. The Ontario legislation does not define "subdivision". Instead, it prohibits any transfer or mortgage of land or any other agreement granting rights in land for a period of 21 years or more unless the land is already described in accordance with a plan of subdivision (and has thus been the subject of a government planning process) or the transaction receives the consent of the appropriate governmental body. There are several exceptions to this broad prohibition, the most significant of which arises where the owner purporting to deal with the land is dealing with the entire parcel of land and does not retain ownership or control of any abutting parcel of land following completion of the transaction.

Because the prohibition against subdivision is so broadly cast and because any permissible transaction must qualify as an exception, the Planning Act subdivision control restrictions are a pervasive concern in any transaction involving real property in Ontario. This is especially so in light of the drastic consequences of having contravened the Act – no interest in land is created or conveyed by the improper transaction. The scope of the legislation can be surprising, as it applies not just to transfers and mortgages of land, but also to the creation of easements, the delivery of partial discharges of mortgages and to long-term tenancies where the term of the lease, including renewal options, exceeds 21 years.

Previous breaches of the Planning Act that may have occurred at a prior time in the chain of title are also of concern when purchasing real property in Ontario. Fortunately, there are several saving provisions contained in the legislation that mitigate the effect of such hidden dangers. All transactions completed prior to June 15, 1967 are deemed to have been validly effected. Previous contraventions of the Act are deemed not to have occurred if a plan of subdivision or a condominium description is subsequently registered with respect to the land in question or if the land is subsequently conveyed with the consent of the appropriate governmental subdivision control body. Furthermore, if a registered deed or transfer contains certain prescribed statements by the transferor, its solicitor and the transferee’s solicitor verifying to the best of his or her knowledge and belief that the deed or transfer does not contravene the Act, then an interest in land will be validly conveyed notwithstanding that the Act may in fact have been contravened.

If the proposed transaction does not fall within one of the exceptions to the broad prohibition contained in the Planning Act, it may be necessary to obtain a severance consent for the transaction to proceed. The identity of the governmental body having jurisdiction to grant the consent will depend upon where the land is located. It generally takes at least 60 to 90 days to obtain a consent, from the time that the initial application is submitted to the expiry of the appeal period, subject to local administrative procedures. The governmental body may impose conditions to the granting of consent. Any conditions must be fulfilled within one year following the initial notice of the decision. The consent will in any event lapse not later than two years after a certificate confirming the consent has been issued.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.