Positive Covenants are still unenforceable in B.C.

A triad of cases were recently decided in British Columbia pertaining to whether positive covenants in the development context were enforceable. These situations arose where strata corporations inherited cost‑sharing agreements with their neighbours which had been entered into by the owner developer and never explicitly assumed. In the latest of these cases, The Owners, Strata Plan BCS 4006 v Jameson House Ventures Ltd., 2017 BCSC 1988, the Plaintiff condominium corporation had a dispute over shared expenses for the operation and maintenance of the parkade with the developer who still owns the remainder parcel.

The owner developer (Respondent in this case) signed an easement agreement with itself promising to pay a percentage of cost of operating, maintaining and insuring the parkade.  However, the strata corporation sought declaration that as a positive covenant, this obligation did not run with the land and it did not have to contribute.  The Respondent argued that the law was evolving in other jurisdictions, including most notably the UK and Ontario, towards recognizing registered positive covenants.

However, the BC Supreme Court confirmed that positive covenants in BC are still unenforceable – despite the fact that the strata corporation had been contributing to the costs for a number of years and was actively using the parkade.  An owner developer therefore should turn its mind to ensuring that the strata corporations it creates subsequently assume all obligations prior to the first conveyance.