Article by Gerald Swinkin, ©2006 Blake, Cassels & Graydon LLP
This article was originally published in Blakes Bulletin on Real Estate, March 2006
Land Registration Systems
Although there has been a gradual and ongoing conversion of lands from Ontario’s old Registry Division land registry system into the Land Titles Division (being a form of Torrens land registry system where the registry actually reflects title rather than being a simple repository of documents), that conversion is not yet complete throughout the province. In fact, to facilitate the conversion of land registration to an electronic registration format, the province itself has undertaken responsibility for the conversion of communities of land into the Land Titles system on a qualified conversion basis.
It is a statutory condition precedent to the registration of a plan of subdivision or plan of condominium that the underlying parcel of land be in the Land Titles system with a fee simple absolute title. The conversion to land title essentially involves a full scale title search and notice to all parties according to that search who may have an interest in, or who may abut, the lands. Notice of the application is accompanied by a draft survey showing the boundaries of the parcel. The exercise ultimately fixes the extent of title as reflected on that boundary survey and forecloses any quarrelling by neighbours with the limits of the parcel. The process effectively puts to rest any claims of adverse possession or claims to easement by prescription which might be claimed by reason of old instruments or historical use.
Following certification of the fee simple absolute title, anyone dealing with the lands is entitled to rely upon the interests shown on the face of the parcel register.
Policy Framework for Development Approvals
Under the authority of the Ontario Planning Act, the province has reserved the right to fix overriding provincial policy as it relates to land use planning matters. Under that authority, Cabinet has approved a set of policy statements that are grouped under the three rubrics of:
- Building strong communities;
- Wise use and management of resources; and
- Protecting public health and safety.
Under the Planning Act, in the exercise of any authority relating to planning matters by a provincial ministry or agency, a municipality and any other agency or local board exercising jurisdiction with respect to planning matters, their actions must be consistent with these policy statements. The policies under the rubric of building strong communities are generally directed toward achieving efficiency in the use of infrastructure, the protection of employment areas on a long-term basis, the provision of affordable housing, the containment of development to defined settlement areas and intensification of development within those settlement/urban areas. Under the rubric of wise use and management of resources, the general goals are to protect the province’s mineral aggregate resources and its prime agricultural lands, as well as ensuring the protection of significant areas of natural heritage, including wetlands, woodlands, wildlife habitat and areas of natural and scientific interest. Under the rubric of protecting public health and safety, the policies primarily relate to flood hazard and ensuring the protection of persons and property from potential flood damage along the province’s lakes and waterways.
It is now common practice in the consideration of any policy or legislative amendment that express consideration be given to the Provincial Policy Statement and that the rationale of consistency be articulated in the justification for the amendments. If that justification is inherent in the adopted amendments, any development approvals given under those approved amendments implicitly also should be treated as consistent with the Provincial Policy Statement. Despite that, individual development applications are often vetted independently against the Provincial Policy Statement even though that policy is typically achieved at a much broader or macro scale and cannot necessarily be applied on a site-specific basis.
Official Plans. The statutory framework in Ontario is that each municipality, whether an upper tier municipality such as a county or regional municipality, or a lower tier municipality such as the various townships, towns and cities, will have an approved policy framework known as an Official Plan. The Planning Act sets out a framework for the development of these policy documents, which involves broad consultation and input from the community at large and the various municipal and provincial agencies and departments that have an interest in land use matters. Official Plans typically address the development forecast for the municipality over a variable time horizon, which can be set anywhere from five years to 25 years out. These planning documents typically identify those districts in the community that are intended to accommodate residential uses and those intended to accommodate employment uses. The plans usually carry a whole set of strategic goals and operating policies with respect to the various activities of the municipality, including the establishment of standards for the provision of recreational and other services to the population.
The plans also address the long range road network and servicing strategy of the municipality and thereby represent a blueprint for capital spending over a longer term. This is critical in the sense that the Planning Act declares that the municipal council shall not pass any by-law nor undertake any public work except in conformity with the approved Official Plan. As such, any development application filed by an owner must be vetted against the policies in the Official Plan and found to conform. Failing that finding of conformity, an owner is obliged to simultaneously file an application for Official Plan amendment in order to achieve the policy adjustment necessary to accommodate the proposal. Failing that amendment, the development proposal cannot move toward approval.
To the extent that the municipal council does not deal with the application on a reasonably timely basis, or if the council refuses the application, the owner has a right to appeal to the Ontario Municipal Board and to put its case before that tribunal. The Ontario Municipal Board has an independent jurisdiction under the Planning Act and makes decisions in the public interest. In that regard, the Municipal Board, like all other municipalities and agencies in the province, is bound to render a decision consistent with the Provincial Policy Statement and will typically have considerable regard for the adopted policy framework within the municipality. Save for questions of law for which leave to appeal is given by the Divisional Court, the decisions of the Ontario Municipal Board are final and are binding upon the municipality.
Zoning. In Ontario, the right to use land is governed by zoning by-laws. The zoning authority is essentially entrusted to the lower tier municipalities. As a result of municipal reorganization in Ontario in the recent past, there are now a number of single tier municipalities in major urban areas. The Cities of Toronto, Ottawa, Hamilton and Sudbury are now all single tier municipalities and exercise jurisdiction across the entire spectrum of authority available to upper and lower tier municipalities.
The zoning by-law assigns the legal entitlements with respect to the use of land and fixes the development standards which must be observed in connection with any permitted use of land, such as the maximum gross floor area and coverage of buildings, setbacks from lot lines, minimum required on-site parking, minimum landscaped open space provision and such other matters as the by-law may address.
To the extent that a developer’s project cannot be undertaken within the provisions of the existing zoning on the parcel of land, all municipalities will receive applications to amend the zoning by-law. Those applications must provide certain minimum prescribed information and such additional information as may be required by the local council in order to properly assess the requested amendment. In some instances, the additional information required by the municipality can involve rather sophisticated analyses of impacts on the environment, local traffic networks, economic impacts or other matters identified by the municipal council as issues within that community. The process for consideration of these applications and enactment of amending by-laws is governed by the Planning Act. The Planning Act does require that there be notice to the public with respect to any such application and that the municipal council hold at least one "statutory public meeting" at which anyone may come forward and address the council with their views on the proposal.
As with Official Plan amendments, the council may adopt them or refuse them. Any decision by a municipal council (or any failure to decide within the prescribed time limits) triggers a right of appeal to the Ontario Municipal Board by any person. A developer who is facing a refusal may take its case before the Municipal Board and attempt to secure the amendment at that level. An amendment enacted by the municipal council which is objected to by one or more residents or other third parties can also be appealed to the Ontario Municipal Board and that objection will be tested by the Board in the forum of a hearing where evidence is given under oath and subject to cross-examination. As with Official Plan amendments, the Board hears these appeals in light of the Provincial Policy Statement and the municipality’s approved Official Plan policy framework, as well as such other policies or considerations which are determined to be relevant and germane by the Municipal Board.
Subdivision/Severance of Land. The subdivision or severance of parcels of land is also governed by processes mandated under the Planning Act. The Planning Act sets out criteria that must be regarded in the consideration of any application for subdivision approval, which criteria demand consideration of the impact of the subdivision upon approved policy and the infrastructure of the municipality, including the ability of the municipality to adequately service the lands, both in terms of utilities and municipal services, as well as the provision of community facilities such as parks, community centres and schools.
If an assessment is made that the subdivision proposal will meet the mandated statutory criteria, the approval authority is empowered to give draft approval and to impose conditions which must be satisfied before final approval of the plan will be given. Those conditions typically relate to the settlement of arrangements between the developer and the municipality or other interested agencies regarding the provision of services to the lands and the provision of capital contributions to deal with off-site impacts as a consequence of development.
The process of subdivision approval now includes an obligation on the part of the municipality to give notice to the public of the proposal and, similar to the zoning amendment process, to afford the public an opportunity to make comment upon the application to the council.
Contemporary subdivision approval typically includes an obligation to undertake an archaeological assessment of the lands and a programme for preservation of any artifacts which may be found in the course of that assessment. In Ontario, the management of storm drainage has evolved so that there is now generally universal adherence to a principle that post-development flows to the receiving watercourses should not be any greater in volume or intensity than pre-development flows. This principle is intended to preserve the ecological function of the natural watercourses and to protect fish, plant and wildlife habitat as it has evolved in that watershed. The consequence of this is that most broad scale development involves the establishment of storm water management facilities in the form of stormwater detention ponds.
Subdivision approval also necessitates the identification and reservation of sites for future schools, recreational facilities and parkland. In Ontario, a municipality is entitled to require a parkland contribution from residential development up to 5% of the land area within the development parcel or up to 2% of the area within the parcel regarding non-residential development. For higher density residential development, there is an alternative requirement of one hectare of land for every 300 dwelling units.
The principle now well settled is that development pays its own way and it is a regular feature of subdivision/development agreements that the developer will fully fund the cost of all piped services, roads and utilities and other public improvements necessary to service the subdivided lands. These agreements are also typically accompanied by financial securities for the full cost of the public works to be undertaken so that in the event of default, the municipality is in a position to fund itself to complete those works without recourse to its own treasury.
Condominium Approval. Condominium approval follows a process similar to that prescribed for subdivision approval. The prime difference between subdivision approval and condominium approval is that most of the services within a condominium development constitute common elements within the condominium corporation rather than public assets such as public highway, public parkland and other public features. As a result, the processes tend to be somewhat abridged as these essentially constitute building projects that are largely regulated through the zoning amendment and site plan approval exercises on a parcel-specific basis.
Ontario’s Condominium Act recently underwent a wholesale revision to provide for a host of new forms of condominium. Specifically, that Act now allows for the creation of common elements condominium corporations (which consist only of common elements, the lands which have the benefit of those common elements being outside the condominium corporation but identified as "parcels of tied land"), phased condominium corporations, vacant land condominium corporations (which essentially amount to parcels of land that constitute the units without physical improvements, the purchaser undertaking construction on the land parcel and being the owner of the structure) and leasehold condominium corporations.
Development Charges/Capital Contributions. To normalize the ability of the municipalities to fund growth and secure contribution for major capital works that would be triggered by development and growth, Ontario has a Development Charges Act. The purpose of the Act is to create a decision-making framework for projecting capital costs likely to be incurred by a municipality that has growth potential and to devise a charge of universal application which allows the municipality to secure incremental contribution from development as it occurs. This mechanism essentially sets the groundwork for equitable contribution by all owners who are undertaking development toward those major capital projects which facilitate development, such as expansion of water treatment facilities and water distribution networks, expansion of sewage treatment plants and major trunk sewage systems, the reconstruction of major arterial roads to add lanes and other projects of that character which provide broad scale benefit and for which individual owners should make proportionate contribution.
The municipality is obliged to reconsider its growth projections and capital programme at least every five years and revise its development charge by-law accordingly. To encourage industrial development, the province has included a statutory exemption from charges under the Act for additions to industrial buildings up to 50% of the existing floor area. Although the Development Charges Act allows for full cost recovery against development lands (subject to certain modest municipal contributions for certain services), many municipalities have decided to assume some of these capital costs as a municipal responsibility in the interest of establishing development charges which do not discourage certain types of land use, especially employment-related development.
Site Plan Approval. The most detailed level of development approval is exercised through site plan approval. Under Section 41 of the Planning Act, a municipality is entitled to define a site plan control area and exercise specific development review over individual projects. Under this authority, the municipality can require the submission of a plan for approval which shows the siting of the building and any other structures on the parcel, the driveways and parking areas, the landscaped areas, lighting and other features of the site development. The municipality has authority to require the developer to adjust the location of those features. Although most urban municipalities have adopted urban design standards and policies which are meant to govern the review and approval of these plans, this exercise does involve a fairly significant discretionary element and is often significantly influenced by the state of existing and proposed development in the immediate vicinity of the site. Although the Planning Act does not mandate this as an exercise requiring public consultation and input, a number of municipal councils have transformed the process into one involving the public. As with the other processes discussed above, an owner who has failed to achieve approval or who is being offered approval on terms and conditions unacceptable to the owner, has the right to appeal to the Ontario Municipal Board to hear the matter and settle the site plan.
Building Permits. The final construction of buildings is dependent upon the issuance of a building permit. In Ontario, that matter is governed by the Building Code Act and the Ontario Building Code. This is uniform throughout the province. The legislation does not permit local codes. The Building Code is a very technical document which is essentially designed to ensure structural integrity of buildings and the protection of the public entering and occupying those buildings from fire and other hazards. The premise of the Building Code Act is that an owner is entitled to a permit to construct provided that the application for the permit conforms with all applicable law. That phrase comprehends any and all necessary precedent approvals, including site plan approval from the municipality, zoning which supports the building as proposed, permissions which may be necessary from the local Conservation Authority, permits which may be required from one or more provincial ministries arising out of the proximity to major public highway or sensitive natural features and a host of other matters that are prescribed by regulation under the Act.