Published by the B.C. Real Property & Planning Group
McCarthy Tétrault VOL.3,
Real Estate MATTERS

Welcome to Volume 3, Issue 3 of Real Estate MATTERS, a periodic publication of our B.C. Real Property & Planning Group. This publication is intended to give you a summary of recent developments in real estate law in British Columbia and, more importantly, what they mean to you.

We hope you will find Real Estate MATTERS informative and useful. Please let us know if you have any suggestions to make this publication even more helpful, or if there are topics or issues you would like to see covered in future issues.

Scott Smythe and Russ Benson (Editors)

Right of First Refusal to Lease – Get it Right, or Else!
If a tenant in a commercial building holds a right of first refusal (RFR) to lease any other floor in that building, and the landlord subsequently receives an offer to lease multiple floors, is the tenant’s RFR triggered? In the recent judgment of the Alberta Court of Appeal in Equinox Engineering v. Lavalin L.P. Investment Corp., the somewhat surprising answer to this question is "no."

British Columbia Court of Appeal: City Owes no Duty to Consult First Nations
On September 24, 2012, in Neskonlith Indian Band v. Salmon Arm (City), the British Columbia Court of Appeal (BCCA) dismissed the appeal of the Neskonlith Indian Band (Band), confirming that the City of Salmon Arm (City) did not owe a constitutional duty to consult the Band in respect of the issuance of a development permit. In well-developed reasons that fully endorse the actions and approach taken by the City, the developer and the Court below, the BCCA provided significant comfort and clarity for municipalities and developers in this province.

Covenants in Respect of Land: Don’t Be so Negative!
In contract law, a covenant is merely a promise by one party to another. Covenants may be either positive or negative. Negative covenants are often referred to as "restrictive covenants."

In the real estate context, a positive covenant refers to a promise by the owner of a parcel of land to do something (e.g., to pay money) in respect of that land or to use it in a specified way. Positive covenants are personal obligations that are only binding on the parties that agree to them and, at common law, do not "run" with the land owned by the person who made the promise or bind future owners when the land is transferred (unless the transferee expressly assumes the obligation by contract). Common law positive covenants may not be registered as interests in land in the Land Title Office.


Limitation Periods for Demand Promissory Notes: Something Old and Something New
The existing Limitation Act (British Columbia) establishes a six-year limitation period for creditors to bring an action to enforce payment on a promissory note. This limitation period begins to run on the date that the right to sue under the promissory note arises. The date the right to sue arises has often been litigated and differs depending on whether the promissory note is a demand promissory note, which allows a creditor to enforce payment at any time, or a delayed-demand promissory note, which requires that a demand be made and that a specified period of time elapse before payment can be enforced.