Restrictive Covenants on Commercial Title in Ontario: Old Use Restrictions, and Whether They Still Bind You

Your title search turns up a decades-old restriction — “no automotive use,” “single-family only.” Half the panic is misplaced: in Ontario many of these covenants have quietly already expired, and the ones that haven’t often lift by agreement.

I’m Arthur Zhao. Over the years doing commercial deals, I’ve watched more than one buyer hit the title search during due diligence, find a restriction registered decades ago — no auto repair on these lands, single-family dwelling only — and assume the whole purchase just fell apart.

It usually hasn’t. A line in an old deed is neither proof that it still governs the land nor proof that it can’t be lifted. My frame for it is two questions in sequence — is it still alive, and if so, can it actually be enforced — and below I work through them, then the ladder of ways to clear one. One caveat up front: this is educational, not legal advice — whether any specific covenant is enforceable against your parcel is a call for your lawyer.

First question: is the covenant even still alive?

Before you renegotiate price or walk away, ask the question that most often saves the deal: is the covenant even in force? Ontario’s Land Titles Act s.119(9) says a condition, restriction or covenant registered as running with the land that states no period or date for its expiry is deemed to have expired 40 years after registration — and the land registrar may delete it.

Ontario’s Superior Court put this bluntly in Andrews v. Rago: a covenant written to last “forever” does not state a fixed expiry date, so it still falls under the 40-year rule. A covenant registered in 1966 was held to have expired in 2006 and was deleted from the register in 2018 (per BLG’s commentary on the decision).

There is a parallel path: where a covenant sets a fixed term that has run out, the registrar may remove the entry 10 years after that expiry (s.119(8)). Run the dates first — a surprising share of old commercial covenants are already spent, just never cleaned off title.

Second question: even if it’s alive, does it bind you — and can it be enforced?

Say the dates don’t rescue you and the covenant is still live. Now the questions are why it binds you at all, and whether it can actually be enforced.

It binds you through an old common-law principle: certain negative (restrictive) covenants can run with the land in equity and bind later takers — the doctrine traces to the 1848 English case Tulk v. Moxhay, followed by Canadian courts ever since (running with the land). Ontario’s Land Titles Act s.119(10) makes it concrete: a condition or restriction registered as annexed to the land binds anyone who later becomes the registered owner, as if that owner had signed it. Buy the parcel and you inherit the covenant.

But being on the register is not the same as being enforceable. Whether both the burden and the benefit actually run, and who can assert it, is a fact-specific legal judgment — get your lawyer’s opinion on your parcel.

Title covenant vs. zoning restriction — completely different removal paths

A quick sort: three “restrictions” people mix up

One more thing worth sorting, because getting it wrong sends people down the wrong path: “use restriction” gets used for three very different instruments. Tell them apart by which document they sit in and whom they bind.

1. A restrictive covenant on title — registered against the land, runs with the land, binds every successive owner. That’s the one this article is about.

2. An exclusivity clause in a commercial lease — a contract term binding landlord and tenant under that lease (the mall won’t lease to a second bubble-tea shop). It lives and dies with the lease and never touches your title.

3. A non-compete in a business sale — a purchase-agreement term binding the seller personally. It targets a person, not the land.

Only the first is cleared by the paths below; the other two are contract problems with the counterparty, not title problems.

So how do you actually clear one?

If the covenant is still alive and it genuinely is a title covenant, here is the ladder — cheapest first.

The two live-covenant paths: release first, court if you must

When a covenant is still in force, you have two real paths.

Negotiate a release or discharge. Find the benefiting owner — whoever the covenant was set up to protect — and get them to sign a release or discharge that you then register. Cost and feasibility turn on who the beneficiary is, whether they still exist, and whether they’ll cooperate; there is no standard price, so it’s case by case.

Apply to court. If that fails, you can apply to the Superior Court of Justice to modify or discharge the covenant under Conveyancing and Law of Property Act s.61(1). Courts don’t grant this lightly — on the standard from Icona Hospitality, you generally must show the covenant is spent, or so unsuitable as to be of no value, such that insisting on it would be clearly vexatious. An order can be appealed to the Divisional Court (s.61(2)). And note the hard boundary: building restrictions from a zoning by-law cannot be lifted this way (s.61(3)) — those go through the zoning process.

When to stop and call a lawyer

Whether a covenant can still be asserted, which path is most cost-effective, and which registration system governs your land are all conclusions that require reading the original registered instruments. This article is principle and process, not legal advice — before you act, have your real estate lawyer give a written opinion on your parcel.

Arthur Zhao

Real Estate Broker · FRI · ABR · SRS · PSA · MCNE · E-PRO · CLHMS & GUILD Elite · REAIS

VP & Branch Manager, Bay Street Group Inc.

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