Law Times

Law Times • November 1, 2010 FOCUS Changes complicate real estate field Trends include municipal activism, increased competition BY DARYL-LYNN CARLSON For Law Times S everal developments in real estate law reveal the growing complexities in- volved in land transactions. For example, in an effort to leverage more control over real estate development, some municipalities are resorting to rather novel initiatives to reg- ulate land use. Michael Polowin, a partner at Gowling Lafleur Hender- son LLP whose work spans the eastern Ontario region, says the City of Ottawa has adopt- ed some noteworthy means to curb development that it deems inappropriate. "Municipalities are becom- ing more and more like activ- ists to shape building form and usage and are putting constraints on development than ever before," says Polow- in, who mostly represents de- velopers. "This is making it increasingly difficult for devel- opers and is an indication of the municipalities' over-regu- lation of the use of land." He points to one example in which the city referenced s. 37 of the Planning Act, which places limits on a project based on its density, in order to sty- mie a developer's proposal un- less it could demonstrate ben- efits to the community. "It's the very first time the city has said, 'We will let you build but only if you give us something back,'" Polowin points out. In another instance, the city invoked the Heritage Act by designating an entire property, including adjacent green space. "It gave the city a much larger hammer in opposing the de- velopment of that land as they designated not just the building but the green space," he notes. "So what we see is a more active public regarding development proposals, prompting munici- palities to use their authority under the Planning Act and Heritage Act to impose greater control on development. So with this greater regulation, there is a strong pushback from the development community." In Polowin's view, the strat- egy change isn't doing munici- palities any favours as it could stymie beneficial develop- ment. He points to one mat- ter he was involved in last year in which the city leveraged s. 34(9) of the Planning Act to impose greater controls on the legal non-conforming use provisions, which limit the type of repairs or renovations a developer can perform on a commercial site. The section creates an ex- emption to zoning bylaws by allowing for lawful violations of current rules for existing uses. On behalf of the develop- er, Polowin appealed the city's decision to the Ontario Mu- nicipal Board and won. The OMB also referenced a similar matter heard by the Divisional Court, which also ruled against the mu- nicipality and declared the constraints unfair. As well, Polowin has noticed municipalities are trying to make it more dif- ficult for fast-food restau- rants to include drive-thru windows in an evidently noble effort to deter car use and reduce carbon emissions. "There's a knee-jerk tendency to say that if it involves cars, it's obviously bad for the environment," he says. "We have been pursu- ing this in Ottawa and have been quite success- ful in reversing the tide of regulation and convincing municipalities that drive-thrus are actually not bad. They use Municipalities are getting more aggressive in regulating development, says Michael Polowin. TitlePlus_LT_Jan19_09 1/12/09 3:11 PM Page 1 less land than restaurants with big parking lots." He adds that as a commer- cial real estate lawyer, he has been successful in most matters representing de- velopers because munici- palities, when they contest a commercial development plan, often don't have the resources to study the topic and provide ample evidence to support their arguments. Another pending change that stands to af- fect real estate practice is the federal Competition Bureau's bid to increase competition in real estate services. Bob Aaron of Aaron & Aaron says the changes will enable lawyers to directly facilitate the sale of proper- ties after handling divorces, wills, and estates. "I think we will see a lot of lawyers involved in the sale of properties and the public will have more of a choice, so I think it's good," Aaron says. He points to the web site propertyshop.ca, which includes a list of lawyers throughout southern Ontario who can assist people with the sale or purchase of real estate. There are problems with some of the new services, how- ever. For example, Aaron notes that in some instances, lawyers haven't included a land survey in the purchase of a home, which he says is imperative. "In my view, a land survey is the most important docu- ment in a real estate transac- tion. But I would also say that in most purchases, more than half the time there's no men- tion of it in an agreement of a purchase and sale. "It's the kind of thing that you can't negotiate and you can't get coverage from some of the title insurers without it." LT PAGE 13 Everything you need Together we have all the tools The TitlePLUS® Program works with you to help protect your clients from title risks.1 assist you, through our legal services coverage2 result of an error or omission in your real estate transactions. To ensure your clients get the most comprehensive coverage in one policy, take a look at the TitlePLUS Program, your Bar-related® real estate partner! 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