Refreshing update to the Ontario Planning Act now in force

Originally published on Feb. 25, 2022. This article has been updated to provide clarification in respect of the amendment to Section 53(41) of the Planning Act.

On Jan. 1, 2022 amendments to the Ontario Planning Act were proclaimed. As a result of these amendments, a good number of unfortunate traps have been done away with.

A prominent feature of the Planning Act is that a conveyance in contravention of its subdivision control provisions is deemed to have no effect. This is true regardless of whether the contravention is a true affront to the planning principles that the Planning Act is intended to address, or if the contravention is simply a technical error with no true planning implications.

With these new provisions under the Planning Act, property owners (and their lawyers) are able to save themselves a great deal of time and expense – both in correcting technical contraventions, and in avoiding convoluted conveyancing practices that are no longer necessary.

We discuss some of these new amendments below:

1. Abutting properties no longer merge on the death of a joint tenant
2. Purchasers may now apply for consent
3. In-progress consent applications can be amended
4. Time to satisfy conditions extended to two years
5. Certificates can now be cancelled
6. Retained parcels are now more easily dealt with
7. "Part of building or structure" exemption is expanded to ancillary areas
8. Validation certificates
9. Simplification re condominiums
10. Concluding thoughts

1. Abutting properties no longer merge on the death of a joint tenant (s.50(3)(a.1) and s.50(5)(a.2)).

A frequent violation of the Planning Act occurred when abutting properties were held: (i) by family members as joint tenants, in respect of one parcel; and (ii) by one of the same family members, in respect of the other parcel. This is a common ownership structure used by families to keep two abutting properties owned by different parties, and therefore unmerged and separately conveyable.

The issue would arise as a result of a key characteristic of joint tenancy. Namely, that on the death of an owner, their interest automatically passes to the surviving owner. Where abutting properties are held in the manner described above, a surviving co-owner can come to own both abutting parcels of land on the death of the co-owner. The resulting ownership of both parcels by one party results in the inadvertent merger of the title. This unfortunate result was previously the cause of a great deal of frustration. The solution was a costly and time consuming application for a consent to the municipality to recognize the two parcels as separate, and, in the worst circumstances, abutting parcels were irreparably merged if the municipality was not inclined to consent to the severance, or required onerous conditions to allow it.

Thankfully, the recent amendment to Sections 50(3)(a.1) and 50(5)(a.2) of the Planning Act addresses the inadvertent merger of title caused by the death of a joint tenant. A person may now deal with a whole parcel of land that was previously owned by, or abutted land previously owned by, joint tenants that would have merged as a result of the death of one of the joint tenants. Accordingly, owners no longer need to employ convoluted ownership structures (or attend to costly corrections) to avoid this type of inadvertent merger.

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2. Purchasers may now apply for consent (s.53(1); (1.1)).

Where there is an extended time between the signing of an agreement of purchase and sale and the ultimate closing (or if a short development timelines exists), a buyer may wish to have a severance application submitted to the committee of adjustment in advance of becoming the owner on the closing of the transaction. Previously, this was accomplished by negotiating specific language in the agreement of purchase and sale that obligates the vendor to submit such an application, or authorizes the purchaser to submit one as agent for and on behalf of the vendor. An amendment to Section 53(1) and (1.1) now permits a purchaser to submit such an application on their own behalf but only if the agreement of purchase and sale expressly authorizes this.

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3. In-progress consent applications can be amended (s.53(4.2.1))

Owners previously encountered a good deal of frustration when, as is often the case, plans would change for a property subject to an in-progress application for consent. To account for such a change the only available option was to submit a new application and start the process for consent again. This is of course costly, and time consuming.

An amendment to Section 53(4.2.1) relieves this issue by allowing for an existing application to be amended by the applicant at any time before a consent is refused or granted (note that such an amendment may result in a request for additional information or the payment of additional fees).

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4. Time to satisfy conditions extended to two years (s.53(41))

An amendment to Section 53(41) extends the statutory timeline within which one must satisfy conditions of a consent: from one year to two years (with a transition provision addressing how this extension applies to outstanding consents). Given the nature and extent of conditions that a municipality can impose on a consent application, it may not be feasible to satisfy them within one year, and many applicants found out that the municipality could not extend the time frame to allow for more time. With the extension of this deadline to two years, it helps to facilitate compliance with the terms of a severance.

It is important to note, however, that this amendment speaks to the statutorily imposed timeline where a notice of conditions has been given. Where conditions were issued by a committee of adjustment in advance of January 1, 2022, the statutorily imposed timelines in place at that time (which are often cited or copied in the conditions themselves) are still operative notwithstanding the subsequent proclamation of the amendments to the Planning Act. The timeline to satisfy these conditions would therefore not automatically be extended by the amendment to Section 53(41) and an applicant would be wise to satisfy the conditions within the original timeline or return to the committee to ask that conditions be amended or re-issued.

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5. Certificates can now be cancelled (s.53(45))

Developers previously encountered a technical hurdle when attempting to develop lands that included a parcel that had previously been subject to a consent for severance. Section 50(12) provides that where a consent has been provided in respect of a severance, it can be relied on in the future (absent express stipulation to the contrary) such that the same lands can be dealt with independently without applying for a new consent. This is a principle commonly referred to as "once a consent, always a consent". Given this section of the Planning Act, an issue would arise where a municipality would become concerned with providing its consent to a new application without having the means to restrict future dealings that make use of a previous consent.

One example of such a circumstance would arise when applying for a lot addition (adding a portion of neighbouring lands to the developer's lands, which had previously been subject to a consent for severance). A municipality may be willing to approve redrawing the boundaries between two parcels of land, but would be concerned that an owner could subsequently rely on the previously issued consent to divide lands into three parcels: (i) the lands originally owned by the developer that were previously subject to the consent; (ii) the lands that were added to the developer's lands pursuant to an approved lot addition application; and (iii) the neighbour's remaining lands.

Another example could arise when a developer is making a development application in respect of lands that include, but are not limited to, a parcel that was previously subject to a consent. A municipality may be in favour of the development when considering the totality of the lands, but not so if the portion subject to the consent were later transferred independently.

Previously, the solution to this issue was to transfer a nominal portion of the lands subject to the consent to the municipality. This would make it so one could not rely on the previously issued consent, as they could no longer transfer all of the lands described in the consent (a portion now being owned by the municipality). While effective, this cumbersome and inconvenient solution is no longer necessary as a developer can now apply to cancel a previously issued consent pursuant to the amendment to Section 53(45).

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6. Retained parcels are now more easily dealt with (s.50(6) and s.52(42.1))

Where a consent was granted to transfer one parcel of land, owners (or their counsel) commonly contravened the Planning Act by transferring what was meant to be the "retained" lands prior to the parcel that was subject to the consent. This was an issue that could be encountered when first effecting the severance by consent, and then perhaps again when relying on the consent sometime in the future. While the order of dealing with these lands seems at first to be an academic point, it becomes plainly important once one remembers that the inadvertent contravention still results in the transfer being ineffective. This was a common trap for owners and their lawyers, particularly where they felt that conveying the severed land to itself would get around the issue (but it didn't) ^[1].

This type of contravention could be remedied by simply re-registering the ineffective conveyance of the retained land after first properly registering a conveyance of the parcel subject to the consent to a different party. After first registering a conveyance of the parcel subject to the consent there was no longer common ownership between the two parcels, and the retained lands could then be dealt with freely without contravening the Planning Act.

This solution, however, is entirely unavailable in many circumstances. For example, when the contravention is not discovered soon enough. If the consent has not been properly effected by a conveyance before the consent lapsed (within two years, per Section 53(43)) then it could no longer be relied on. Accordingly, if the historic contravention is discovered too late, the owner must return to the committee of adjustment and request a new consent. This is of course time consuming and costly. Worse yet, on considering the new application the committee may impose new restrictions, or even refuse the consent outright (adverse outcomes that are relatively common when the original consent is somewhat dated).

Thankfully, the recent amendments to the Planning Act remove many of these traps. The changes to Sections 50(6) now allow for retained lands to be dealt with before the land that is subject to a consent. Additionally, the addition of Section 50(42.1) now allows for the committee of adjustment to issue two consent certificates under one application: one for the lands subject to the application (as has been typical), and a second for the retained lands (provided that the owner requests the certificate for the retained parcel in the application). With a certificate issued for both parcels, each can be relied on independently, and this frustrating trap can be avoided.

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7. Part of building or structure" exemption is expanded to ancillary areas (s. 50(9.1))

Section 50(9) has been successfully relied on by landlords for years. It allows owners to grant rights in parts of a building or structure for terms longer than twenty-one years, such as a unit in a shopping mall.

Unfortunately, this exception was not available where the subject area is not within a building or structure. This resulted in a great deal of frustration when trying to successfully deal with parking areas, patios, food courts, and many other types of outdoor areas and amenities.

The addition of Section 50(9.1) now explicitly clarifies that areas ancillary to the use of or right in the part of a building or structure are equally exempt. As a result, owners can now more freely grant exclusive rights to these ancillary areas.

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8. Validation certificates (s. 57(6) and (7))

A validation certificate, authorized by Section 57, provides for the correction of a previous contravention of the Planning Act. This has the effect of retroactively confirming the effect of a historic conveyance, despite it having contravened the Planning Act. As one would expect, a validation certificate can be a useful tool.

Previously, however, Section 57(6) and (7) could impose substantial costs on satisfying the conditions for obtaining a validation certificate, or even prevent the ability to obtain a validation certificate entirely. Most apparent was the statutory requirement for the subject property to comply with the municipality's current official plan and zoning by-laws. Accordingly, in correcting a historic error, an owner may be obligated to pursue expensive and time consuming changes to their property that, but for a technical contravention of the Planning Act, would not be necessary.

The amendment to Section 57(6) and repeal of Section 57(7) remove the obligation to comply with official plans and by-laws, and specify that the criteria for obtaining a validation certificate are the same criteria that apply to granting a consent (which give regard to the municipality's official plan and zoning by-laws, but do not require strict compliance).

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9. Simplification re condominiums (s.50(3)(b)(ii))

It was and remains the case that an owner can separately deal with abutting lands with common ownership if the abutting land in question is the whole of one or more lots or blocks on a plan of subdivision. The rationale is that if the municipality took the steps to register a plan of subdivision, it did so to specifically allow for the described lots and blocks to be separately conveyable. It therefore does not serve the intent of the municipality to then require an owner to obtain a consent to a conveyance due to common ownership of abutting lands – essentially asking the municipality to once again consider the subdivision of the same lands.

Interestingly enough, a similar exception was not previously available for lands within a registered description under the Condominium Act. An amendment to Section 50(3)(b), however, now allows for lands abutting lands within a condominium to be conveyed independently. This removes some frustrating hurdles in developing condominium lands, often arising when dealing with common elements, easements, rights of way, mortgages and phased condominiums.

Concluding thoughts

These amendments are welcome and truly improve the planning landscape with more efficient and common-sense approaches to subdivision and development controls. There are additional amendments beyond those discussed here that will assist owners in achieving their objectives for succession planning or the development of land. One of the more important questions arising from these amendments is whether they apply retroactively, correcting historical contraventions, or only to circumstances arising after the amendments came into force this January. The answer is dependent on the facts of the individual contravention and the provisions of the statute that may be applicable. We would be pleased to discuss your planning and succession questions to see how these important changes could save you time, money and frustration.

Should you have any specific questions about this article or would like to discuss it further, you can contact the authors or a member of our Real Estate Group.

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