The Section 50(3)/(5) Exceptions (and More)
The following is an excerpt from a training presentation by Edward Veldboom
As most committee members will know, the purpose of section 50 is to prevent the unauthorized division of land. When we speak of the “division of land” (from the point of view of a Committee of Adjustment) we are usually talking about creating new lots or authorizing the right to use/occupy a portion of a parcel of land on a permanent basis (i.e. a permanent interest in land such as an easement/right of way or a long term lease).
At its heart, section 50 requires some form of “government approval” (i.e. Local municipality, upper tier municipality or the Ministry of Municipal Affairs in some cases) for the division of land. For all intents and purposes the “exceptions” set out in subsections (3) and (5) as well as the authority granted under subsection (7) represent the various forms of government approvals that exist.
This paper and the corresponding seminar takes aim at the various exceptions that can overcome or avoid the need to obtain a consent from the Committee (which itself is the most all-encompassing exception).
In some cases, an application for consent to sever (which I will refer to as a “severance application”) lands in the lap of a Committee of Adjustment when it doesn’t belong there (or perhaps more aptly stated… when the person doesn’t need the Committee’s approval). Quite frankly the reason for this is that there are a fair number of lawyers (who practice primarily real estate law) and planning consultants who do not understand all of the aspects of section 50 of the Planning Act. There are also many land use planners who may not have focused on conveyancing issues in their studies or work experience but end up being responsible for processing these applications for municipalities. The result is that sometimes applications which do not require approval are processed and presented to the committee.
One of the other (related) reasons why unnecessary applications make it to the Committee is that there is uncertainty and the applicant wants to be sure that the land division is valid (for the long term). In this regard it is important to recognize the significance of subsection 50(21):
“An agreement, conveyance, mortgage or charge made, or a power of appointment granted, assigned or exercised in contravention of this section or a predecessor thereof does not create or convey any interest in land, but this section does not affect an agreement entered into subject to the express condition contained therein that such agreement is to be effective only if the provisions of this section are complied with”.
If a land division required a consent and one was not acquired, the transaction is not valid and can be voided.
Lawyers, consultants and planners should not be harshly criticized for pursuing unnecessary applications because section 50 is by no means crystal clear. All one needs to do is crack open the text book entitled “The Law of Subdivision Control in Ontario” by Sidney Troister and look at the table of contents to recognize that there must be something a bit hazy about section 50. This text is a comprehensive and thorough analysis and my primary resource material. (The root of the shortcomings of the wording of Section 50 is the fact that Section 50 as it currently reads, has been modified and amended countless times to respond to concerted efforts to avoid the controls on the division of land)
The bottom line…it never hurts to review the section and to reinforce for yourself when and why the committee’s approval is required; and to recognize when it is not required.
2.0 The Starting Point (or Points)
The starting point for consideration is the preliminary wording of subsections (3) and (5). Section 50(3) opens with the following:
“No person shall convey land by way of a deed or transfer, or grant, assign or exercise a power of appointment with respect to land, or mortgage or charge land, or enter into an agreement of sale and purchase of land or enter into any agreement that has the effect of granting the use of or right in land directly or by entitlement to renewal for a period of twenty-one years or more unless…”,
while Section 50(5) begins as follows:
“Where land is within a plan of subdivision registered before or after the coming into force of this section, no person shall convey a part of any lot or block of the land by way of a deed, or transfer, or grant, assign or exercise a power of appointment in respect of a part of any lot or block of the land, or mortgage or charge a part of any lot or block of the land, or enter into an agreement of sale and purchase of a part of any lot or block of the land or enter into any agreement that has the effect of granting the use of or right in a part of any lot or block of the land directly or by entitlement to renewal for a period of twenty-one years or more unless…”.
Determining which subsection applies to a specific land division starts with a determination as to whether the land is within a registered plan of subdivision or not. If the lands are not within a registered plan of subdivision the situation is or must be addressed via section 50(3). If the situation involves lands within a plan of subdivision, section 50(5) is the applicable section. That said although each section is intended to address two different sets of circumstances most of the 9 enumerated “exceptions” are identical.
Now you may wonder how there are 9 exceptions when the subsections end at (h)…h is the 8th letter isn’t it…well the province decided it was better to introduce subsections (3)(d.1) and (5)(c.1) when they introduced amendments related to the Green Energy Act rather than making them new subsections (I).
The exceptions to which each Committee owes its existence, are found in subsection (3)(f) and (5)(f) – the consent to sever.
3.0 The Exception that’s Not Technically an Exception- 21 Years Less A Day
Both subsection (3) and (5) include the phrase “for a period of twenty-one years”. As noted at the outset of this paper (seminar), at its heart section 50 is intended to prevent division of land (or the creation of interests in land) that are permanent in nature without some form of government approval. Permanence in the context of the Planning Act is a period of twenty one years or more. Accordingly, the division of land (or the creation of any interest) which is intended to last less than 21 years does not require any Planning Act approval regardless of whether it affects only a part of a parcel of land. (Which is the source of the phrase “21 years less a day”.)
Technically this preliminary condition is not an exception but whether you wish to consider it as one or not makes no difference. If the interest division of land or interest in land is intended last for a maximum period of 21 years less a day then it does not require Planning Act approval.
Thus based upon the 21 year rule, I can sell an interest in or lease a part of my property to another person without obtaining a severance if it is only intended to for any period not exceeding 21 years.
3.1 Leases Longer than 21 Years
Clearly a lease affecting part of a parcel of land with a term exceeding 21 years is a dealing of permanence and clearly prohibited. What about a 20 year lease with an option for a 20 year renewal? Prohibited without a consent to sever.
If the entitlement granted to the lessee (through a series of terms/options to renew) exceeds a combined total of 21 years it is prohibited…unless of course there is another applicable exception. And there is one.
3.2 Leases of Part of a Building
Subsection (9) states:
“Nothing in subsections (3) and (5) prohibits the entering into of an agreement that has the effect of granting the use of or right in a part of a building or structure for any period of years”.
So it is okay to lease a part of a building for longer than 21 years without a consent but not a part of a parcel of land. Furthermore, the right, under subsection 50(9), to enter into long term leases for a part of a building includes or has been extended to include the creation of an interest in “ancillary” outdoor areas (such as parking spaces).
As Mr. Troister points out, this division of land usually occurs in commercial contexts such as malls. That said it could apply equally to residential circumstances. The reason the situation does not offend the underlying principles of section 50 is that, for the most part, government oversight of the division is controlled through other Planning Act regulation (i.e. zoning).
4.0 The Whole of Lot or Block in a Plan of Subdivision
When one considers the creation of an interest which affects a part of a lot or a block in a registered plan of subdivision reading subsection (3)(a) would lead you to believe that as long as the interest created or division deals with lands in registered plan of subdivision an approval is not required. Not so…subsection 3(a), notwithstanding what it says, really means that you do not pass Go and instead you must refer to subsection (5). As Mr. Troister suggests in his book subsection (3) (a) should be read to include or the phrase “the whole of a lot or block”… in a registered plan of subdivision.
Thus one of the most critical tasks in evaluating applications is the determination of whether the lands are within a registered plan of subdivision.
4.1 What Is (or Is Not) A Registered Plan of Subdivision?
There is no definition in the Act. That’s helpful. So where does one start? No need to reinvent the wheel…here’s a basic list:
4.1.1 Original Crown Surveys of Geographic Townships – NO! This one can play tricks on people. Many a person has asserted that an original 100 acre parcel shown on the survey of the Township of Blankety Blank is a conveyable parcel because it is a lot shown on the original Township Plan and that a Planning Act severance is not required. Well this is usually a case of being right about the end result but for the wrong reasons. It may very well be a separately conveyable lot but not because it is in a registered plan (more on that later).
4.1.2 M-Plans – YES! Any plan that has an M immediately following the Registry or Land Titles Office number (i.e. 51 for Simcoe County, 19 for Grey County etc.) is registered plan.
4.1.3 R-Plans – NO! A reference plan (R-Plan) is simply a form of legal description. It represents a major improvement upon the old “metes and bounds” description. Remember the old adage a picture is worth a thousand words. Well a Part on a Reference Plan replaces a thousand words in a complex metes and bounds description. As you are all well aware, the requirement to obtain a reference plan is commonly imposed as condition of consent.
4.1.4 Land Registrar’s Compiled Plans (RCPs) – NO! These things can be tricky but at their core they are simply another form of Reference Plan. To simplify legal descriptions a Land Registrar may create one where there are numerous existing conveyable parcels of land with metes and bounds descriptions to simplify and improve the identification of the lands. Many lay persons and even lawyers mistakenly believe they are registered plans of subdivision….simply stated a lot identified in a RCP may be separately conveyable but it is not because it is in a registered plan of subdivision (more on that later).
4.1.5 Boundaries Act Plans – NO! These plans are created under authority of the Boundaries Act to resolve (surprise, surprise) boundary disputes. Such plans simply eliminate any question as to the boundary between abutting parcels of land.
4.1.6 Registry Act and Land Titles Act “Plan of Subdivision” – YES! The biggest issue is properly identifying one.
4.1.7 Composite, Compiled or Municipal Plans – Yes, but this depends upon when they were registered! These plans (as pointed out by Mr. Troister in his book) have been authorized under various versions of the Registry Act since the mid-19th Century. He has provided a clear way to identify whether such a plan will qualify as a “registered plan of subdivision”:
If the plan was created before subdivision control applying to the lands covering the plan, it will be considered to be a “registered plan of subdivision.
Note: Subdivision control began to apply to all lands as of June 27th, 1970, but between June 15th, 1967 and June 27th, 1970 Subdivision control may apply if the local municipality passed a by-law imposing subdivision control. So it is important when dealing with plans in that period to determine whether the local municipality passed and registered a by-law.
4.2 Is it the Whole of a Lot or Block?
So you have determined the lands are within a registered plan of subdivision. The next step is to confirm that it is the whole of a lot or block. If it is not then you may have to determine whether any other exemptions apply including one in particular (subsection 5(e)) to know whether a severance is required.
4.3 The Government Acquisition Exemption 50(5)(e)
If a lot or block in a registered plan of subdivision has been the subject of a government (or other statutory authority) “taking” of a portion of the lot or block (for one of its authorized purposes – most commonly a road widening), for all intents and purposes the remaining lands will be treated as though they represented the whole of the lot or block. (There can be some nuances to this issue if the owner also happens to own abutting lands.)
5.0 “No Abutting Lands”
The “no abutting lands” exception is found in subsection (3) (b) and (5)(a). It is perhaps the most complex of the exceptions as there are many variables that can come into play. These variables include how ownership of abutting lands are held (i.e. who is the owner), what kind of interest is held in the abutting lands, and whether the abutting lands have been subject to a prior Planning Act approval. (All of these variables can create complexities that are beyond the scope of this paper, so we will try to stick to the basics).
In order to understand the no abutting lands one must understand the concept of merger. A merger occurs when two parcels of land, previously under separate ownership, and separately conveyable, become one parcel for the purpose of the Planning Act when placed into the ownership of the same person or entity (i.e. common ownership).
5.1 Outside of Registered Plans of Subdivision
As a basic principle it is useful to keep in mind that as long as you don’t own any land abutting the lands that you are dealing with, a Planning Act severance approval will not be required. In other words the fact that the owner of the subject lands owns no other abutting lands is a indicative that the owner is dealing with the whole parcel (which is generally okay!).
Let’s return to the example that was discussed under subsection 4.1.1. dealing with a 100 acre parcel shown which comprises the whole of a 100 acre lot on the original Township Plan (we’ll call it Lot 2, Con. 1). The owner owns no other land abutting this 100 acre lot. The owner is entitled to sell that lot and requires no Planning Act approval (or severance). The reason…the no abutting lands exception. The owner is dealing with all of its lands.
Now let’s modify the situation. The owner owns two 100 acre lots (Lots 2 and 3, Con 1) that share a common boundary (i.e the western boundary of Lot 2 is the eastern boundary of Lot 3). The owner is not entitled to sell Lot 2 while retaining ownership of Lot 3 because of the ownership interest in abutting lands.
Let’s add one more variable. Lot 2 is owned by Bob and Jane, while Lot 3 is owned by Bob. Bob and Jane are entitled to sell Lot 2 even though it is not a Lot in a registered plan of subdivision and even though Bob has an ownership interest in abutting lands. This is permitted because the ownership interest of the two lots is not identical.
When you are outside a registered plan of subdivision it may be possible to sell lands while retaining ownership of an abutting parcel. This can occur where the parcel that is being dealt with has been the subject of a prior consent granted by the committee (this is based upon the old rule “once a consent always a consent”). It is important to note that in order for the old consent to remain “valid” (so to speak) the land that is being dealt with has to be exactly the same as the lands described in the original consent.
Now I would also suggest that this may also be applicable in the case where the abutting lands have previously been the subject of a consent. Technically the wording of subsection 3(a) does not say “unless the abutting lands were the subject of a consent” but the principle remains in existence. In order to take advantage of the “no abutting lands exception” and to stay within the technical confines of this subsection, the owner could convey the parcel that is subject to the prior consent to change the ownership (i.e. from Bob to Bob and Jane. Bob could then convey the lands that are not the subject of the consent without offending the “abutting lands” rule. (Thus one additional conveyance is required, but for all intents and purposes conveying lands while owning abutting lands that have been subject to a consent can legally occur and quite frankly it is silly to have to go through that exercise. Frankly the reference to abutting lands being the whole of a lot or block should also include reference to lands that were the subject of a consent.)
5.2 Within Registered Plans of Subdivision
When dealing with lands within a plan of subdivision, it is not uncommon for a person to own two (or more) abutting lots. Many persons either do not understand the significance of the legal description or they may not remember what their lawyer told them when they bought the lands; in other cases the lawyer may not have advised them that they own two separately conveyable parcels of land.
Based on the introductory words of subsection (5), as long as the abutting lands are the whole of a lot or block one of the old lots can be sold without any Planning Act approval. (This is quite a common situation as which arises as a result of the relatively small lot sizes in the very old plans of villages and towns; people purchased 2 or 3 lots and built across the lot lines before zoning restrictions operated to prohibit.)
There can be some nuances to this issue. If the lots are in a plan of subdivision that has been registered for more than 8 years, pursuant to section 50(4), the local municipality can pass a by-law to “deem” the plan of subdivision or specific lots/blocks in that plan not to be lots within a registered plan (for the purposes of subsection (3)). This is known as a “deeming by-law” and it has the effect of “merging” any abutting lots or blocks into one parcel where such lots are held in common ownership.
In many cases such deeming by-laws are passed because the local municipality has determined that some characteristics of the old lot fabric are not compatible with the current planning policies (commonly it is due to undersized frontage or lot area) and they wish to prevent the sale and use of smaller individual lots. In other cases these deeming by-laws are used to “consolidate” the lots to eliminate the lot lines which would preclude construction of a dwelling across the lot lines.
The most common situations where severance applications will be encountered in connection with multiple lots in old plans of subdivision include:
– where a person owns 3 or more small lots and they wish to reorganize lot boundaries the effect of which is to create a lesser number of lots that meet the current standards; (these situations will arise both in the context of lots that have been deemed and those that have not); and
– where a person owns 2 lots and wishes to transfer/sell a portion of one of their lots to a neighbour who owns a single lot and wishes to expand their property to accommodate a larger dwelling.
5.3 Rights of Way and Easements (in or outside of Plans of Subdivision)
Rights of way and easements usually only affect part of an owners landholding and for obvious reasons; If Bob wishes to gain access to his property over Jane’s property, Jane will most likely wish to limit the area of travel to an existing driveway or specific area of her property such that the right of way will not interfere with her primary use of the land. Thus, in most cases the creation of that easement or right of way will require a severance because the owner (of the land over which the right will exist) will invariably retain an interest in “abutting lands” and those abutting lands will not constitute a lot or block in a plan of subdivision or will not be separately conveyable (based on a prior consent approval).
There are certain instances where a severance will not be required. Those instances occur where the owner has agreed to grant a right of way over its entire parcel of land and owns no abutting lands (other than that which is itself separately conveyable such as the whole of lot in a registered plan of subdivision).
6.0 Government Acquisitions and Dispositions
Subsections (3)(c) and (5)(b) exempt any acquisition or disposition of land by municipalities, and the Provincial and Federal Government from the need to obtain any approval.
Although the exemption is rather clear as it relates to municipalities, the number of applications to obtain severance approval that are initiated by municipalities is surprising. The number of applications that actually proceed to the decision stage is equally surprising.
The notable question as to whether this exception applies usually arises when it is unclear whether an entity qualifies for the Provincial or Federal Government exemption. For example is a “university” an entity that falls under the Provincial Government exemption?
The answer depends upon whether the entity is an “agent” of the Provincial or Federal Government (Crown). To determine the answer, one usually looks to general legislation (such as the Crown Agency Act for Ontario) or perhaps the specific legislation that created or governs the entity. In some cases, the determination has been made by the courts.
In Ontario, if the entity is a Crown Agent, the legislation requires the Planning Act approval authority to determine whether the Provincial Government (i.e. one of its Ministries) “owns, controls or operates” the entity.
The answer for universities is… See you in May.
7.0 The Energy and Utilities Related Exceptions
Utility and service providers get different treatment depending upon whether the services are inside or outside of a registered plan of subdivision.
7.1 Outside of Subdivisions – The Electricity and Fuel Lines Exception
Pursuant to subsection (3)(d), entities which operate electrical transmission or distribution lines and entities which operate pipelines are exempt from the requirement to obtain a Planning Act severance when acquiring lands. They are also exempt from Planning Act severance approval if they give or sell that same land back to the person from whom it was acquired.
The entity does not have free reign to acquire property for any purpose. It must be acquired for the specific purpose that is authorized.
7.2 Inside Subdivisions – Utilities, a Wider Exception
Subsection (5) (c) uses the more broadly defined term “utility lines” which captures water lines, telecommunications as well as electricity and hydrocarbon lines.
Simply stated, within a registered plan of subdivision, the committee should not be seeing applications to create easements for utility lines. That said, within a registered plan of subdivision, depending upon the entity, a Planning Act severance would be required if the entity operating the utility is seeking to acquire or dispose of lands that are not specifically part of the utility lines (for example if they are attempting to dispose of a portion of a works yard).
Entities providing utilities within a registered plan of subdivision also have the ability to dispose of the land they acquired to the person from whom they acquired it without Planning Act severance approval.
7.3 The Green Energy Act Based Exceptions
As part of its Green Energy based initiatives, the province has create a special exemption to allow Solar, Wind and other renewable energy producers to acquire interests in part of a person’s landholding for periods exceeding 21 years (see subsections (3)(d.1)) and (5)(c.1).
8.0 Two Rarely Encountered Exceptions
Conservation Land Act Easements/Covenants (subparagraph (3)(h)/(3)(h))
I can’t recall encountering one of these in 14 years as a lawyer or my time as land use planner.
Conservation Authorities Act based Acquisitions for Flooding, etc. (subparagraphs (3) (e)/ (5) (d))
I encountered this once before.
Simply stated…if an application is put before the committee and the discussion begins with or includes specific mention of the Conservation Land Act or the Conservation Authorities Act, you may have one of those situations where an applicant does not need your approval.
9.0 Part Lot Control
There is another significant exception to the application of subsection (5) which is found in subsection (7). Quite frankly, many municipalities use a part lot control by-law as a tool to avoid the complexities of consent approvals. Part lot control effectively suspends the operation of subsection (5) to the lands which are identified in the by-law and quite commonly the part lot control by-law will have a limited lifespan.