As the hunt for housing density increases in municipalities across Canada, construction cranes—a mainstay of mid and high-rise projects—are now becoming common even outside urban centres.
This proliferation means stratas, as well as single-family dwelling owners, will be increasingly faced with negotiating easements and rights-of-way for their overhead airspace.
While this can seem daunting to the uninitiated, there are benefits to these agreements.
Determined on a case-by-case basis between developers and a project’s neighbouring properties, there’s no standard easement or development agreement. Rather, the project requirements, the potential risks to adjacent buildings and the impact to residents’ quality of life need to be considered.
As these considerations are clarified between parties, a contract is drawn up, and in the case of stratas, the contract will have to be voted on by owners. Once the contract is finalized, the specific easement parameters are then registered with the applicable land title office and the development moves forward.
Depending on the particulars of the project, compensation from the developer to neighbouring properties is common, with amounts determined through negotiations.
While this compensation can offer a financial boost to a strata or individual owner, easements will often have implications beyond the financials. Stipulations around work hours, duration of the agreement, and frameworks for dispute resolution are often outlined in an easement. In fact, these non-financial topics can be the most important aspects of an easement once construction is underway.
Easements Tested in Court
A recent case in Vancouver has highlighting the importance of robust easement agreement between a developer and neighboring buildings; OSED Howe Street Vancouver Leaseholds Inc. v FS Property Inc., 2020 BCSC 106.
In OSED, an easement agreement was reached between the developer (FS Property Inc., “FPS”) and the adjacent occupied building (OSED Howe Street Vancouver Leaseholds, “OSED”), allowing a construction crane jib to pass over OSED’s terrace with operation limited to an eight-hour period each weekday and one day on weekends.
Once construction began, FSP concluded the agreement was too restrictive, impacting the economic viability of the project, and began operating the crane outside the agreed upon hours. OSED sought and was granted a court injunction, with the judge in the case ruling that crane operation outside the agreed upon hours constituted trespassing.
The question of whether use of the crane was a trespass or nuisance was a significant issue in the matter. The reason being that where a trespass is present, an injunction is warranted without proof of damage. In answering the question, Justice Branch concluded that where a construction crane enters into the air space of another property, it is trespassing upon that air space.
The judge ruled the original agreement was a reasonable balance between the property interests of OSED and the construction completion interests of FSP and that OSED was not obligated to renegotiate its terms because of economic impact on the project. FSP was subsequently ordered to abide by the original easement moving forward.
This case demonstrates the importance of easement agreements and how they can protect the rights of existing buildings, even in the face of densification. The message being that it is in the best interests of parties to search for a reasonable balance between their interests – and an obligation to consider the interests of both parties after the agreement is signed.
The Importance of Legal Support
Many development projects span months or even years, continually adjusting to manage the realities of complex construction.
To help mitigate the impacts of these adjustments to a strata or individual owner, a comprehensive easement agreement drafted by an experienced lawyer is vital.
Considerations around compliance with the Strata Property Act, breach of contract remedies, as well as indemnities should all be reflected in the agreement. In particular, drafting the indemnities portion of the agreement—which protects the strata or owner against loss or financial burden—is where a seasoned legal partner can help mitigate any potential issues in the future.
While some stratas or owners may be reticent to incur costs associated with engaging legal support for an easement, those costs are often covered by the developer—a fact that some developers may omit during negotiations.
Strong legal support can also ensure a strata or individual owner’s compensation is in keeping with other comparable agreements from their market and suits their particular needs. For instance, an easement could include financial compensation plus a specific scope of services to completed in by the developer—such as repainting the existing building or post-construction cleaning.
Regardless of the size of the construction project or the scope of the easement required, engaging experienced legal advice to help navigate the process can ensure a strata or owner is not unduly impacted by neighboring development. As the old adage goes, good fences make good neighbors.
For more information, please contact Connor G.W. Watt or J. Ewen D. Cameron of our commercial real estate group for assistance.