Land Development Lawyer Explains Ontario Planning Act Amendments
February 3, 2022
Some long overdue changes have recently been paid to Ontario’s Planning Act. These
changes should reduce red tape, expedite land division processes for the benefit of the
public, and clarify certain processes to ensure consistency across Ontario. The province
estimates that the amendments could result in a combined annual saving of over $6.8
million for landowners, leaseholders, consent applicants, purchasers of land, insurance
providers, real estate law practitioners, and municipalities.
The changes can be found in two pieces of legislation: Bill 123, Better for People,
Smarter for Business Act, 2020 – Schedule 20 and Bill 276, Supporting Recovery and
Competitiveness Act, 2021 – Schedule 24.
The key Planning Act amendments include:
Abutting properties no longer merge on the death of a joint tenant
The whole of a parcel of land that was previously owned, or abutted land previously
owned by joint tenants, no longer results in an automatic merger of the adjoining lands
as a result of the death of one of the joint tenants.
As the ability to hold title as joint tenants is often used by many people as an estate
planning tool, the former provision often created an unforeseen hardship for the owners
of real property. The surviving joint tenant was subjected to a lengthy and costly
consent process that would not be required if their spouse/child/partner was still alive.
Consent applications
An application for consent can now, subject to terms, be amended prior to a provisional
consent being granted by a municipal body. This provides clarity for property owners as
consenting authorities across the province have different requirements for amending a
consent application. It will also save costs as some authorities required an applicant to
restart the entire process if they discovered the need to amend the application after it
was submitted.
Purchasers can now make consent applications
The Planning Act now permits a consent application from a prospective purchaser of a
property, provided that the agreement of purchase and sale (APS) gives such authority.
The prior regulation only permitted property owners and mortgagees to make an
application.
One note of caution to consider here is the risk that the deal may not close if either the
purchaser or seller defaults on the APS. A consent application requires a significant
financial investment. As a result, it is possible that a severance can be granted to a
prospective purchaser, the conditions fulfilled, but the APS is later voided.
Cancellation of a consent certificate
The addition of s.53(45) to the Planning Act allows for an application to ‘cancel’ a
previously received consent. This cancellation, or decision to not cancel, is not
appealable. This eliminates the common law principle of ‘once a consent, always a
consent’, which enables an applicant to effectively merge properties that were
previously severed.
This change will allow property owners to cancel a prior consent certificate, meaning
owners are not forced to embark on a lengthy and costly consent process to cancel a
prior consent.
Time limit to fulfill consent conditions has been extended to 2 years
This change will provide a standard two-year period for fulfilling the conditions of
approval for a consent.
There can often be difficulties in fulfilling conditions. For example, as a result of
challenging site servicing requirements or slow responses from a municipality. The
extension from one year to two years will save many property owners from the cost of
having to reapply for their consent application if the conditions could not be fulfilled
within a year.
In addition, the time to satisfy conditions will be suspended during any appeal; the two
years will run from the date of the order of the Ontario Land Tribunal.
Validations
The amendment provides for the legalization of title for lands where requirements of
subdivision control were not followed, such as through fraudulent activity, technical
error, or naivety of persons selling/buying. In certain situations, this can be used as a
cure or remedy to address a problem with property title as a simpler alternative to
obtaining a consent. Validations are approved by consent granting authorities.
The basis on which to determine if a validation certificate can be obtained has been
clarified to be the same test as to obtain a consent.
Commercial leases
Previously, the Planning Act prohibited leases in Ontario from having a term of longer
than 21 years, unless the lease fell within one of the prescribed exceptions. If a lease
had a term of 21 years or more, including extensions and renewals, and did not fall
within the stated exceptions, then the lease may have been in contravention of s.50 of
the Act and void unless the tenant and landlord incurred additional costs by obtaining a
consent under section 53 of the Act.
The new revision removes the requirement to obtain a consent for the exterior space,
when that area’s “use or right is ancillary to the use of or right in the part of the building
or structure, for any period of years.” For example, a lease for a restaurant in part of a
building can now also convey an exclusive use to allow the restaurant to set up an
outdoor patio.
“Ancillary” is not a defined term in the Act. One possible concern with this new provision
is the question of what happens when a tenant’s use of the exterior space becomes its
source of primary operations. Will a consent be required under those conditions?
Conclusion
These amendments will allow some transactions involving the Planning Act to operate
in a more streamlined manner and should result in client cost savings.
Please contact Michael Paiva, Partner and head of Unified LLP’s Property and
Commerce group at 416-800-1733 or 519-729-5038 for more information, or if you
require assistance with a municipal law matter.
