Party Wall Agreements – Something Old is New Again

Categories: Blog, Real Estate

Party Wall Agreements have historically been used to manage the relationship between land owners with a common boundary and a wall down the middle of the property line that supports buildings on both properties.

Party Wall Agreements have not been commonly used a great deal for several years, but housing is becoming increasingly unaffordable and developers are looking for ways to deliver reasonably priced units. Freehold townhomes, which incorporate the use of Party Wall Agreements, can provide an affordable alternative as the area of land used can be higher, with no setbacks between lots, and the elimination of strata fees. However, local governments have been hesitant to approve this form of development because of concerns with Party Wall Agreements.

Party Wall Agreements were historically registered as an easement, with each property owner having access over the other owner’s land to facilitate the common wall. The concern with a Party Wall Agreement by way of easement is that positive obligations within an easement are not binding on future land owners. Although the easement would run with the land, and the entitlement for each party to access the other party’s land would be binding on future land owners, the positive obligations within the terms of the easement, such as repairing and maintaining the party wall, would not be binding on the future land owners.

Changes were made to the Land Title Act of British Columbia in 2012 that resolved this issue by making all positive covenants contained within a Party Wall Agreement binding on each successor in title to a parcel of land against which a Party Wall Agreement is registered.

With this certainty in the obligations of future land owners, local governments are more supportive of the use of Party Wall Agreements in projects like freehold townhouse projects, and some developers in the Okanagan have been choosing this “new” option for their projects.