What is a restrictive covenant on a property in Ontario?

A restrictive covenant is a binding promise registered on title that limits how you can use or develop a property. For example, a covenant might prohibit building a second dwelling unit, restrict a property to single-family residential use, or require that any new structure meet certain design standards. Developers sometimes register covenants across an entire subdivision to maintain a uniform look and feel in a planned community.

In Ontario, restrictive covenants registered on title are generally enforceable against future buyers unless a court has found them unenforceable — for example, because they violate the Ontario Human Rights Code (restrictions based on race or religion are void) or because they have become obsolete. Courts can also modify or discharge covenants that no longer serve any legitimate purpose.

When your lawyer does the title search, any restrictive covenants will be noted and the actual language will be reviewed. It is important to read them carefully. Violating a covenant can expose you to an injunction or damages from a neighbouring owner with the benefit of the covenant. If you plan to build an addition, add a garden suite, or operate a home business, check whether any registered covenant restricts those uses before you buy.