Termination of Land Use Contracts
Changes have recently been introduced to the laws surrounding Land Use Contracts (“LUCs”) that could materially affect the right of a land owner to use his land that is presently subject to a LUC.
LUCs are contractual agreements between property owners and a local government which were used in BC throughout the 1970s to negotiate the terms and conditions of subdivisions and developments, as well as use of the lands after subdivision and development, within a municipality. LUCs describe the uses permitted on the lands including, amongst other things, the regulations for siting of buildings, the use of parks, landscaping requirements, parking, off-site infrastructure development and development fees.
New LUCs have not been created since then the late 1970s. However, LUCs that were negotiated during the 1970s are effective today if they remain registered on title to lands affected. The greatest advantage of a LUC remains that the terms and conditions within the LUC supersede regulations and bylaws, including zoning bylaws, enacted by a local government after the LUC was negotiated. This is often advantageous for developers in areas that currently have more restrictive zoning bylaws.
Previously, LUCs could only be amended or discharged with the consent of both the municipality and the property owner. Bill 17-2014, which received royal assent on May 29th, 2014, terminates LUCs on June 30th, 2024 and allows municipalities to unilaterally terminate LUCs any time before then.
A local government can terminate a LUC early by adopting a zoning bylaw that will apply to the land affected by the LUC and then adopting a bylaw that specifies a termination date for the specific LUC. The termination date must be at least one year after the date the bylaw is adopted and not later than June 30, 2024. Upon adopting a bylaw that terminates a LUC the local government must provide written notice of the bylaw to the Land Title Office for each parcel of land subject to the LUC terminated by the bylaw within 30 days and the local government must provide written notice to the owners of land affected by the termination within 10 days.
Bill 17-2014 provides relief for buildings and lands currently in use under the terms and conditions of a LUC. Buildings or land being lawfully used before the termination of a LUC for a use that would be non-conforming after the termination of a LUC may continue to be used for such non-conforming use after the termination of the LUC. However, if such non-conforming use is discontinued for a period of 6 months the non-conforming use will no longer be permitted.
Land owners have time to develop lands currently benefitting from a LUC but Bill 17-2014 does not provide for compensation for land owners whose LUC rights are terminated. Land owners of property that is subject to a LUC should be aware of the potential loss of entitlement under the LUC and keep up to date on any changes to LUCs a local government intends to make prior to June 2024.
Authors: Bradley Cronquist and Jesse Bernhardt. Brad and Jesse practice in the areas of real estate development, business law, and wills, estates and trusts. Contact Brad at 250-869-1150 or firstname.lastname@example.org and Jesse at 250-869-1191 or email@example.com.