Real Estate Law Blog

By way of Bill 17, the Miscellaneous Statutes Amendment Act, the provincial government adopted several amendments to the Local Government Act on May 29, 2014. These amendments were intended, amongst others, to allow modern land use policies by phasing out any remaining land use contracts^[1] and to protect developers by “insulating” in-stream rezoning and development permit applications from increases in development cost charges^[2].

Phasing Out Land Use Contracts

Many parcels of lands in British Columbia are subject to land use contracts.  Land use contracts were a common planning tool used by local governments between 1972 and 1977.  These were contractual agreements between the land owner and a local government that established the specific use and development restrictions on parcels of land.  The land use contracts were filed in the Land Title Office.  The provisions of the land use contract superseded the relevant zoning bylaw as well as other land use bylaws.  They were in many ways an early type of site specific or comprehensive development zoning.  Often the effect of the land use contract was to preserve the zoning that was in place at the date the land use contract was entered into.

In 1978, the Municipal Act was amended to remove the ability to create new land use contracts, but any existing land use contract that remains registered on title to lands continued to regulate the land use and development of the charged lands.  Local governments have had limited ability to amend or to discharge these land use contracts.  Any amendment requires the agreement of the land owner, or the issuance of a development variance permit or development permit that does not affect the permitted use or density of any parcel, or as otherwise may be provided for in the land use contract.  A discharge of the land use contract requires the consent of the land owner.

With the recent amendment to the Local Government Act, all outstanding land use contracts will be terminated by June 30, 2024.  This will happen either by the local government adopting a bylaw terminating the land use contract or if they fail to do so, by operation of the Local Government Act.  Upon such termination, the lands subject to a land use contract will then be subject to underlying zoning bylaws.  While 2024 may seem a long time away, owners of land subject to a land use contract are on notice that the uses permitted under their land use contract may become non-conforming uses, as the permitted uses revert to those uses permitted under the relevant zoning bylaw.  As the land use contract may regulate things other than land use (they can address other issues such as setbacks, etc.) other problems may result.

Owners of property subject to land use contract should review their land use contract, the underlying zoning bylaw and other statutory restrictions and determine whether or not they can live with the underlying zoning.  Owners may want to enter into discussions with their local governments about the potential of changing the underlying zoning if necessary or desirable to reflect the land use contract provision.

Protection from Increases in Development Cost Charges

A local government may, by way of bylaw, impose development cost charges on any person who obtains approval of a subdivision or a building permit.  Development cost charges are imposed for the purpose of providing funds to assists the local government with the payment of capital costs associated with providing certain facilities required to services a development, for example sewage, water and parking facilities.  Typically, development cost charges are payable at the time of the approval of the subdivision or the issuance of the building permit.

Under section 937.001 of the Local Government Act prior to its amendment by Bill 17, if a developer applied for a building permit for a project, any increases in development cost charges subsequent to the developer’s application did not apply to the project for 12 months after a development cost charge bylaw was adopted.

With the adoption of Bill 17, developers may be able to trigger similar protection from increases in development cost charges at other stages of the planning process.  Under the amended section 937.001, any increases in development cost charges will not apply to a project if a developer has applied for a building permit, a development permit or an amendment to the zoning bylaw provided that a building permit for the project is issued within 12 months after the development cost charge bylaw is adopted.

[1] Division 7.1 Local Government Act

[2] Section 937.001 Local Government Act