There was a time in Ontario when property owners were at liberty to subdivide their property without municipal consent. An owner in the nineteenth century to whom the Crown granted a 200-acre parcel could divide the parcel into smaller pieces and convey them to new owners by depositing deeds in the Land Registry. 200-acre parcels became 100-acre parcels, 100-acre parcels became 50-acre parcels, and so on. The creation of land parcels was largely a matter of the personal circumstances and preferences of individual landowners.
Early in the twentieth century, Ontario began to enact planning legislation intended to impose some governmental control over land use. In 1946, Ontario passed the first version of the Planning Act, which gave municipalities the power to create and impose formal Official Plans. Later, municipalities were given the ability to pass subdivision control by-laws that would make municipal consent a condition of severances of land. Eventually, municipal consent was made mandatory for nearly all severances, with or without a by-law in place.
Section 50 of the Planning Act governs subdivision control today. Section 50(3) states that, without municipal consent, and unless a special exception applies,
No person shall convey land by way of a deed or transfer, or grant, assign or exercise a power of appointment with respect to land, or mortgage or charge land, or enter into an agreement of sale and purchase of land or enter into any agreement that has the effect of granting the use of or right in land directly or by entitlement to renewal for a period of twenty-one years or more…
Section 50(21) of the Act provides the legislative hammer with which subdivision control is enforced:
An agreement, conveyance, mortgage or charge made, or a power of appointment granted, assigned or exercised in contravention of this section or a predecessor thereof does not create or convey any interest in land …
A transaction that contravenes the Planning Act is ineffective; no interest in land is created or conveyed despite the intentions of the parties.
The transactions that require municipal consent involve the conveyance of an interest in one piece of land when the party making the conveyance retains an abutting piece of land (note that parcels that touch only at a point like squares of the same colour on a checkerboard are not considered abutting parcels). Without municipal consent, the owner of a 100-acre parcel generally cannot sell off a 50-acre portion of the land and retain the other 50 acres. The owner also cannot split the 100-acre parcel into two 50-acre parts and transfer those simultaneously to two different purchasers (a procedure that was once considered a loophole in the Act). Without a severance consent, the owner is generally limited to dealing with the whole 100-acre parcel.
And it usually doesn’t matter that the 100-acre parcel, or whatever the area is, was formed from what were previously smaller parcels. If Owner A owns a 50-acre parcel and purchases the 50 acres next door (taking title in the same name), the two 50-acre parcels merge and cannot be re-split without a severance consent. It doesn’t matter that the two 50-acre parcels may continue to have distinct tax assessment roll numbers or may even somehow appear as separate PINs (parcel identifier numbers) in the Land Registry; for purposes of the Planning Act, they have merged unless they were previously divided with municipal consent.
The Local Planning Appeal Tribunal (the “LPAT”, formerly the Ontario Municipal Board) recently reversed an amendment to the Official Plan of the County of Bruce (the “OPA”) intended to sever a 60-hectare farm parcel into two parts. The owners of the property had applied to the County for the amendment on the basis that it was a “correction of title” to restore the two separate parcels that had previously existed. The owners believed that the Land Registry Office had combined the parcels by placing both within the same PIN during the administrative conversion from the former Registry system of land registration to the current Land Titles system. For that reason, the owners believed that the County could re-separate the lands even though the Provincial Policy Statement (the “PPS”, the over-arching provincial planning policy in Ontario) would prohibit the creation of a new lot within a prime agricultural area.
The LPAT disagreed with the owners, writing:
The Tribunal is sympathetic to the Applicants’ frustrations arising from their discovery that they cannot sell the Severed Lands without the Retained Lands, as a separate parcel, notwithstanding the fact that the two parcels were once purchased separately from the Crown. However, such circumstances are not unusual and the Act governs, and has governed, such aspects of the ownership of Lands in Ontario for decades. So too have the fundamental planning considerations which the Tribunal must have regard to been in place for applications such as this, and which now require that the Tribunal ensure that [the OPA] is consistent with the PPS, and also is consistent with, and conforms, to the other goals, objectives and policies of the County OP, and represents good planning in the public interest. The issue is not merely a correction of title as the Applicants submit.
Compliance with the Planning Act is essential to any property transaction in Ontario. Given the drastic consequences of contravening the Act, legal advice is not optional
Read the LPAT decision at: 2021 CanLII 6240
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