Lawson Lundell's Real Estate Law Blog

New Property Tax for Foreign Buyers

Posted in Tax
Comment

The provincial government announced earlier today, July 25, 2016, that foreign buyers of residential real estate in the Greater Vancouver Regional District (excluding Tsawwassen First Nation lands) will be subject to an additional property transfer tax (The “Additional PTT”) of 15% of the fair market value of a foreign entity’s proportionate share of property. For a more detailed overview of this new tax, please refer to the Ministry of Finance Tax Information Sheet.

In summary, the Additional PTT:

  1. Is effective on August 2, 2016, regardless of when the applicable contract of purchase and sale was entered into.
  2. Is in addition to the general property transfer tax payable on applicable real estate transfers registered with the Land Title Office.
  3. Applies to “residential property” which includes, but is not limited to, single family residences, duplexes, multifamily residences, apartments, condominiums and nursing homes.
  4. Applies to “foreign entities”, being:
    1. foreign nationals who are not Canadian citizens or permanent residents;
    2. foreign corporations that were either not incorporated in Canada or incorporated in Canada but controlled in whole or in part by a foreign national or other foreign corporation (unless the shares of the corporation are listed on a Canadian stock exchange); and
    3. taxable trusts, being foreign national or foreign corporations or a beneficiary of a trust that is a foreign national or foreign corporation.
  5. Applies to any applicable residential property transfer, even if the transaction would normally be exempt from property transfer tax, for example a transaction between related individuals or a transfer resulting from an amalgamation.
  6. Does not apply to non-residential property.
  7. Requires that foreign entities registering a transfer arrange to have an Additional Property Transfer Tax Return form filed at the time the property transfer is filed with the Land Title Office.

The Additional PTT is being introduced through Bill 28-2016 Miscellaneous Statutes (Housing Priority Initiatives) Amendment Act, 2016, which passed first reading at the provincial legislature today. This legislation is aimed at creating new measures to help make home ownership in the Lower Mainland more affordable. In addition to amendments to the Property Transfer Tax Act, Bill 28-2016 also includes proposed changes to the Real Estate Services Act to end self-regulation of the real estate industry and to the Vancouver Charter to grant the City of Vancouver the power to implement and administer a tax on vacant houses.

The Report of the Independent Advisory Group on the Real Estate Industry in BC

Posted in Uncategorized
Comment

On June 28, 2016, the Independent Advisory Group (“IAG”) issued its Report on the conduct and practices in the Real Estate Industry in BC. The IAG investigated the real estate industry and the existing regulatory regime, in the context of the current extra-ordinary real estate market and reports of inappropriate practices.

The Province announced that it will end the industry self-regulation in the real estate industry and overhaul governance, oversight, transparency and accountability of the sector. The Province accepted the recommendations of the IAG and announced it will:

  • Establish a dedicated superintendent of real estate, who will take over the Real Estate Council’s regulation and rule-making authority to carry out the changes required to restore public confidence.
  • Reconstitute the Real Estate Council with a majority of public-interest, non-industry members.
  • Implement the recommended penalties, as well as increased fines for unlicensed activity and other offences.
  • Allow for commissions from licensees engaging in misconduct to be taken back to the council.
  • Make the managing broker responsible for ensuring the owner of the brokerage does not engage in the business of the brokerage if the owner is not a licensee.
  • No longer permit licensees to offer dual agency representation.

The IAG Report made 28 recommendations with right to regulatory changes, which have been accepted by the Provincial Government.  These 28 recommendations are:

Transparency and Ethics

1. The Real Estate Council create a comprehensive Code of Ethics and Professional Conduct and require licensees to affirm, in writing, their compliance with the Code as part of regular licensing requirements.

2. The Real Estate Council amend its Rules to no longer permit licensees engaged in trading services to offer dual agency.

3. The Real Estate Council require licensees to fully disclose and explain their financial and non-financial incentive structures, prior to and on entering into a client relationship.

4. The Real Estate Council require licensees to provide information to consumers which clearly explains the duties owed to consumers by licensees, and how consumers can protect their own interests, before, during, and after they enter a relationship with a licensee.

5. The Real Estate Council focus more attention on the forms and contracts used by licensees, to ensure they reflect an appropriate emphasis on consumer protection and the public interest.

6. Government implement the changes it made to contracts used by licensees, requiring seller consent to contract assignments by the buyer, to all forms of contract for trades in real estate whether or not the contracts are prepared by licensees.

7. The Real Estate Council require all licensee disclosures of interests in trade be reviewed and approved by a licensee’s managing broker and subsequently filed at regular intervals with the Real Estate Council.

8. The Real Estate Council amend its Rules to prohibit a licensee from acquiring a direct or indirect interest in their own listing.

9. The Real Estate Council require that all offers received by a seller’s agent in relation to a trade in real estate be promptly filed with that agent’s managing broker and be retained at the brokerage for review by the Real Estate Council on demand.

Compliances and Consequences

10. The Real Estate Council apply more stringent suitability assessment criteria to prospective licensees.

11. The Real Estate Council impose an explicit duty on managing brokers to report licensee misconduct to the Council, and explicit duty on licensees to report misconduct to their managing broker when that misconduct places the public at risk.

12. The Real Estate Council implement confidential reporting channels (for example, reporting hotlines or whistle-blower programs) for industry and the public, to facilitate reporting of licensee misconduct.

13. The Real Estate Council use existing regulatory powers to encourage licensee compliance with all rules that govern their conduct, including those of other legal and regulatory regimes.

14. The Real Estate Council increase its proactive detection and deterrence efforts for licensees who engage in, aid, or abet aggressive marketing and sales practices that target vulnerable members of the public.

15. The Real Estate Council increase the focus on licensee conduct examinations in its brokerage auditing program.

16. Government increase maximum disciplinary penalties available to the Real Estate Council to $250,000 for individual licensee misconduct and $500,000 for brokerage misconduct, and increase administrative penalties to a maximum of $50,000.

17. Government amend the Real Estate Services Act to enable the Real Estate Council to disgorge the proceeds of misconduct from licensees and brokerages.

18. The Real Estate Council improve the transparency of its complaints and disciplinary process, and the resulting outcomes.

Governance and Structure

19. Government amend the Real Estate Services Act to require that 50% of Council members be non-industry members.

20. Government amend the Real Estate Services Act to make the regulation of both licensed and unlicensed real estate services the responsibility of a single regulator, the Real Estate Council.

21. Government increase the Superintendent of Real Estate’s oversight of the Real Estate Council including periodic independent assessments of Council’s performance against its mandate.

22. The Real Estate Council strengthen the requirements for managing brokers to have active and direct oversight over licensees.

23. Government implement a “fit and proper” standard for brokerage ownership.

24. The Real Estate Council require record keeping and reporting that would assist it to identify industry practices that may be placing consumers at risk.

Licensee and Public Education

25. The Real Estate Council undertake a comprehensive review of licensing education and testing requirements to raise entry standards.

26. The Real Estate Council implement mandatory continuing education with content and testing that reinforces a licensee’s ethical obligations, conduct requirements, and duties to consumers.

27. The Real Estate Council make its complaints process more publicly accessible and easier to navigate.

28. The Real Estate Council significantly increase and improve its public education and awareness efforts.

New Restrictions on Assignments of Contracts of Purchase and Sale

Posted in Contracts
Comment

The Province has announced new regulations pursuant to the Real Estate Services Act (“RESA”) that impose new duties on licensed B.C. real estate agents effective May 16, 2016, that will restrict the assignment of contracts of purchase and sale of real estate.  The Regulations are intended to cool the overheated real estate market and reduce the number of contracts being assigned or flipped.

The Regulations require that real estate agents include a term in any contract of purchase and sale, unless otherwise instructed by their client, that provides that:

(a) the contract of purchase and sale may not be assigned without the written consent of the vendor; and

(b) that the vendor is entitled to any profit resulting from an assignment of the contract by the purchaser or any subsequent assignee (the “Assignment Restriction”).

If a contract is presented that does not contain the Assignment Restriction, the purchaser’s real estate agent must provide a written notice (the “Notice”) advising the vendor that the contract does not contain the Assignment Restriction.  The form of the Notice must be approved by the Real Estate Council of BC. The Real Estate Council of BC has prepared a form of Notice and it will be providing the Notice to real estate agents over the next few days.

If the vendor is represented by a real estate agent, the Notice is to be provided to the vendor’s real estate agent by the purchaser’s real estate agent. If the vendor is not represented by a real estate agent, the Notice is to be provided directly to the vendor by the purchaser’s agent.

The Regulations do not distinguish as to the type of property impacted or the parties involved, with the exception that the Regulations do not apply to the sale of “development units” as defined in the Real Estate Development Marketing ActAs a result, the Assignment Restrictions do not have to be inserted in a contract for the sale of a new condominium unit nor does the Notice have to be provided to the developer by a purchaser’s agent. This exception is based on the assumption that the developer can look after its own interest and insert a restriction in the developer’s form of contract if the developer wishes.

However, the Regulations will apply to contracts for the purchase and sale of non-residential property. So if the Assignment Restriction is not in a contract for a commercial property, the purchaser’s real estate agent must provide the Notice to the vendor’s agent or to the vendor.

The Assignment Restriction provided for in the Regulations does not:

(a) prevent a purchaser (the “Original Purchaser”) from entering into contract with the owner, transferring title to the Original Purchaser by filing a transfer in the Land Title Office and immediately transferring title to a new purchaser.  In such a case however, property transfer tax will be paid twice, once on the transfer to the Original Purchaser and again with respect to the transfer to the new purchaser;

(b) restrict or prevent a change in control of the  shareholders of a corporate purchaser; or

(c) define what a profit is or how or when that profit is to be paid to the vendor or how the vendor enforces such payment.

The Regulations do not:

(d) prevent the insertion of more detailed or complicated assignment provisions that restricts assignment generally but allows for assignments to affiliated entities or to specified parties. The Assignment Restriction can be amended in any manner the parties agree to, so for example to allow for assignment to a company controlled by an original purchaser;

(e) apply to contracts of purchase and sale made without the involvement of licensed real estate agents; or

(f) apply to contracts of purchase and sale made before the effective date of the Regulations.

The Regulations do apply to contracts of purchase and sale:

(a) used in land assemblies;

(b) used for non-residential properties (commercial, industrial, bare land, multi-family etc.); or

(c) accepted after the effective date of the Regulations.

With the adoption of the Regulations, the BC Real Estate Association/Canadian Bar Association standard form contracts of purchase and sale (for commercial and residential properties) will be amended to include the Assignment Restrictions. The parties to such contracts can choose to keep the new provisions, change them or strike them out completely but certainly a discussion regarding assignment will now likely take place during the negotiation of the contract.

Penalty/Relief – Two Sides of the Same Mortgage Interest Coin When it Comes to Offending S. 8 of the Interest Act?

Posted in Uncategorized
Comment

The Supreme Court of Canada issued its reasons today in Krayzel Corp. v. Equitable Trust Co., 2016 SCC 18, adding some clarification to a mortgage lender’s right to protect itself from the increased commercial risk associated with a defaulting mortgagor through the use of interest rates, given s. 8 of the Interest Act which reads as follows:

No fine, etc., allowed on payments in arrears

8 (1) No fine, penalty or rate of interest shall be stipulated for, taken, reserved or exacted on any arrears of principal or interest secured by mortgage on real property or hypothec on immovables that has the effect of increasing the charge on the arrears beyond the rate of interest payable on principal money not in arrears.

At issue before the Supreme Court of Canada was the various terms of renewal of a mortgage granted in favour of Equitable Trust. The initial interest rate was prime plus 2.875% per annum. The mortgage matured on June 30, 2008, at which time Equitable Trust agreed to extend the mortgage by seven months, with the interest rate increasing to prime plus 3.125% for the first six months and then 25% for the seventh month. When that matured, and the borrower Lougheed was still unable to pay out the mortgage, a second renewal term was granted, this time retroactive to one month prior to expiry of the first renewal agreement, and stipulating interest at 25%. Monthly interest payments were stated to be at the “pay rate” of either 7.5% or at the prime interest rate plus 5.25% (whichever was greater).  Complicating matters, however, was that the difference between the amount payable at the stated interest rate of 25% and the amount payable by Lougheed at the lower “pay rate” would accrue to the loan; and if there was no default by Lougheed, the accrued interest would only then be forgiven.

The majority of the Court found that these terms were contrary to s. 8 of the Interest Act, noting that

…a rate increase triggered by the passage of time alone does not infringe s. 8. That said, a rate increase triggered by default does infringe s. 8, irrespective of whether the impugned term is cast as imposing a higher rate penalizing default, or as allowing a lower rate by way of a reward for the absence of default. I would therefore allow the appeal.

The result of the case was that the 25% interest rate set by the second renewal agreement was held to be void, with Equitable Trust only entitled to interest under the second renewal agreement at the higher of 7.5% and the prime interest rate plus 5.25%.

Of significance is, firstly, the first sentence of the above statement by the Court, and subsequent statement that an interest rate increase “triggered by the mere passage of time (and not by default) such as that imposed under the First Renewal Agreement, clearly does not offend s. 8.”

Many lenders’ current practice to ensure that they are not offending the Interest Act is to provide for an initial interest rate to a certain date, with the interest rate increasing at a specific and identifiable date some time prior to maturity, specifically not linked with default. The comment by the SCC suggests that such a practice is likely still permissible.

Secondly, the SCC distinguished Krayzel from the British Columbia Court of Appeal’s decision North West Life Assur Co. of Can v. Kings Mount Hldg Ltd. (1987), 15 BCLR (2d) 365 (CA), where a term providing for relief on interest when the loan was repaid when due, was upheld. The difference being that in Northwest Life Assur Co. of Canada, the reduction was given as a term of one renewal – the original mortgage was 19%, the renewal provided for interest at the same rate of 19%, but if the loan was repaid on time, the interest for the renewal would be reduced to 13%. In Krayzel, each renewal resulted in an increased interest rate, with a significant overall increase from the originally agreed upon rate of prime plus 2.875% to 25% (with retroactive effect).

What this means is that there is still an available avenue to protect a mortgage lender’s ability to use interest rates to compensate it for the very real commercial risk associated with lending to high risk borrowers, whether by way of an interest rate increase prior to maturity (and not tied to default) or by way of interest rate relief if the mortgage is repaid on time. However, mortgages must be carefully drafted to ensure that their interest rate provisions fall within what the British Columbia Court of Appeal in Northwest Life Assur Co. of Canada, and subsequent case authority, has indicated is acceptable, and outside of what the Supreme Court of Canada in Krayzel has indicated is not.

Lawson Lundell’s Strata Wind up Group

Posted in Condominium (strata) law, Strata wind up
Comment

On November 16, 2015 proposed changes to the British Columbia Strata Property Act in Bill 40-2015 were approved by the provincial legislature. These changes will come into effect after related regulatory changes are made, which is expected to occur in early 2016. This amendment, among other things, will make it easier for strata corporations to terminate their strata by lowering the voting threshold required to terminate a strata corporation from a unanimous vote of all strata lot owners to an 80% vote of strata lot owners. For more information regarding this amendment please see “Proposed Amendment to the Strata Property Act: Terminating a Strata Corporation.

Effecting a strata wind up can be beneficial for many reasons. As many older strata buildings in Vancouver and across the province reach the end of their life cycle, these buildings and related common property may require costly capital repairs which many owners would rather not pay. Additionally, as developers search for new development opportunities across the Lower Mainland, aging strata buildings (and more specifically the land beneath them) are becoming appealing assets as many of these older strata developments were built using lower density levels than are currently achievable.

However, winding up a strata corporation is a technical, complicated process, and legal advice should be sought early on in the process to help ensure a successful windup. Lawson Lundell’s Strata Wind up Group has valuable experience dealing with strata wind ups, including the first court approved wind up in British Columbia, and can assist strata corporations, developers and real estate agents in navigating this process. For more information, please contact a member of the strata wind up group:

The 2016/17 British Columbia Budget’s impact on Commercial Real Estate Transactions

Posted in Tax
Comment

The BC 2016/17 Budget, released on February 16, 2016, implemented changes to the Property Transfer Tax Act and to the Land Title Act in the form of increased tax rates, citizenship disclosure requirements and a new PTT exemption.  The Budget did not change the current PTT treatment of unregistered beneficial conveyances, but it did create a new disclosure requirement for bare trusts, as well as any person registering any charge on land (other than a mortgage or a money judgment).

Increase in PTT

Effective February 17, 2016, the PTT payable on registered transfers with a fair market value in excess of $2 million will be taxed at 3% for the portion in excess of $2 million, representing a 1% increase in the tax rate after the $2 million threshold is met.  PTT payable on amounts less than $2 million remains unchanged (1% on the first $200,000, and 2% on amounts between $200,001 and $2 million).  This increased tax rate will now have to be factored into a purchaser’s closing costs.

Required Disclosure of Citizenship Information

Certain new disclosure requirements have also been introduced in order to allow Government to track the citizenship of real estate purchasers. The forms required to implement the new required disclosures are not yet available, and are expected to be introduced by regulation in Spring, 2016. Once the forms are introduced, corporations submitting a PTT return will have to disclose the citizenship of their directors, as well as the names and addresses of any non-Canadian directors.  Individual purchasers will similarly have to disclose their citizenship.  If title is being registered in the name of a bare trustee, the names, addresses and citizenship of the beneficial owner must be disclosed. The citizenship disclosure will not only apply to fee simple transfers, as any person registering any charge on land (other than a mortgage or a money judgment) is required to disclose, at the time of registration, whether they are a Canadian citizen, a permanent resident, or a citizen of a foreign state.

New Housing Exemption

Government also created a new PTT exemption called the “New Housing Exemption”.  Under this exemption, there is no PTT payable by Canadian citizens and permanent residents purchasing newly constructed homes with a purchase price of up to $750,000, provided that they live in the home as a principal residence for at least one year after the date of purchase. A partial, graduated exemption for purchases between $750,001 and $800,000 is also now available.  As a result, we should expect to see developers target this exemption with strategic new home pricing for appropriate product. Note that a purchaser claiming under the New Housing Exemption is required to include their SIN number on the PTT form.

 

BCCA Confirms That “Buyer Beware” Still Rules the Day in Real Estate Transactions – Why Property Disclosure Statements Don’t Tell the Whole Story

Posted in Uncategorized
Comment

In a recent B.C. Court of Appeal decision, the court was asked to revisit the age old question of whether vendors of real property in British Columbia can still rely on the doctrine of caveat emptor or ‘buyer beware’ to avoid certain types of claims made by disgruntled purchasers.  In short, the court ultimately recognized the continuing application of the doctrine with only certain limited exceptions: fraud, non-innocent misrepresentations, an implied warranty of habitability for newly constructed homes, and a duty to disclose latent defects.  Absent one of these exceptions, and despite the existence of a property disclosure statement (“PDS”) in most residential property transactions, a purchaser may be precluded from successfully pursuing a claim against a vendor.  In another important aspect of the case, the court also confirmed that a PDS only requires a vendor to provide its current state of knowledge in response to questions contained therein and therefore there is very limited opportunity for a vendor to be liable based on those responses even if the vendor’s knowledge is factually not correct.

To read more, click here.

Smoking Bylaw in Strata Developments

Posted in Condominium (strata) law
Comment

The B.C. Supreme Court recently issued a ruling in a strata property case involving second-hand smoke. Andrushko v The Owners Strata Plan KAS 1041 McIntosh Grove, 2015 BCSC 2445 will be of interest to strata councils and their advisors, who are increasingly being called upon to manage smoking-related disputes.

The case involved a strata complex located in Salmon Arm. Each strata lot had a balcony designated as limited common property to be used exclusively by the owner or resident. The petitioner lived on the second floor of one of the buildings and had repeatedly complained to the strata council about second-hand smoke from his upstairs neighbor smoking on her balcony. The petitioner was vocal and wasn’t alone in his concerns about second-hand smoke. Over the course of two years, the issue of smoking on balconies became an increasingly divisive issue among the owners.

The strata corporation tried to balance the interests of smoking and non-smoking owners and adopted a bylaw containing a limited prohibition on smoking. The relevant part of this bylaw reads as follows:

3(7) Smoking is not permitted on any common property of the strata corporation. Notwithstanding this smoking prohibition, smoking is allowed on balconies which are designated as limited common property, provided that the smoker maintains strict compliance with the Tobacco Control Act and Regulation, which directs that the smoker must remain a minimum of three (3) meters from the doorway, window or air intake, and the balcony must not be fully or substantially enclosed.

After the adoption of the bylaw, the petitioner repeatedly complained to the strata council about second-hand smoke from his neighbor smoking on her balcony. The strata council repeatedly tried to grapple with the petitioner’s demands that the bylaws be enforced, by holding meetings, conducting investigations, and seeking advice from lawyers, the local health authority, and other advisors. Dissatisfied with the strata council’s efforts to enforce the bylaw, the petitioner ultimately commenced the court proceeding.

The petitioner applied for relief under section 165 of the Strata Property ActThe court dismissed the petition, refusing to grant any of the requested orders.

The court confirmed its general view, articulated in past cases, that it “will limit its intervention in strata disputes to circumstances where the Strata Council or administrator is incapable of remedying the problem.” Although the strata council in this case may have made some missteps, the court found that “the Strata Council has demonstrated that it is willing and able to investigate complaints, and is capable of taking action to enforce its bylaws.” The council’s willingness ultimately to seek legal and other advice contributed to this finding.

The court considered the test for nuisance resulting from second-hand smoke and concluded that “on the evidence adduced on this application, the petitioner has not established that he has suffered any substantial or unreasonable interference with his enjoyment of his property as a result of other owners smoking within the confines of their own units.”

The court was unwilling to order the strata corporation to impose greater limits on smoking than those already found in its bylaws, which “would prohibit smoking by owners within the privacy of their own units where the petitioner has not shown that such smoking constitutes a nuisance.”

Guide and Service Dogs and Strata Corporations

Posted in Strata managers
Comment

British Columbia’s new Guide Dog and Service Dog Act (which we wrote about in an earlier blog post) will come into force on January 18, 2016.

Corresponding changes to the Strata Property Act will also come into force on January 18, 2016.  Strata owners, occupants, tenants and visitors will be able to have their certified guide dog or service dog on strata premises, regardless of the terms of their tenancy agreements or any strata bylaws restricting or banning pets. Owners, occupants and tenants will also be able to keep their certified retired guide dog or service dog with them, including after a new dog has been certified to take over its duties. This acknowledges the bond between a handler and their retired guide dog or service dog.

These changes are intended to protect the rights of individuals who rely on guide dogs or service dogs, while providing clarity to strata corporations.  In order to be certified, a guide dog or service dog will need to demonstrate that it meets a high training standard for public safety. Once the new program is in place, efforts will be made to provide certified handlers and trainers with standard provincial identification.

Not all certified guide dogs and service dogs will necessarily be a specific breed or size – the focus of certification is on the dog’s training to support public safety.  Protections under the Human Rights Code may still apply to uncertified dog and handler teams.

Cancelling Charges under Section 35 of the Property Law Act – Don’t Count On It

Posted in Development, Municipal law
Comment

A recent decision of the BC Supreme Court demonstrates the difficulty of obtaining an order under Section 35 of the Property Law Act. The case will be of particular interest to developers who intend to rely on the Section as part of their development plans. Section 35 grants the Court authority to cancel or modify certain types of charges including easements, statutory rights of way, and restrictive covenants in a variety of circumstances, including when:

  • cancellation would not injure the chargeholder;
  • the charge is invalid or unenforceable; and
  • the chargeholder has expressly or impliedly agreed to the cancellation of the charge.

In Natura Developments Ltd. v Ladysmith (Town), Natura Developments Ltd. (the “Developer”) acquired a parcel that was encumbered by a Section 219 Restrictive Covenant (the “Covenant”) in favour of the Town of Ladysmith. The Covenant prohibited development of the parcel except with approval from Ladysmith and outlined a specific review process for obtaining approval. The Developer’s proposal for a 27 townhouse development was rejected by Ladysmith, which preferred to see a smaller scale project.

The Developer applied to have the Covenant cancelled under Section 35 of the Property Law Act. The Developer argued that cancellation of the Covenant would not injure Ladysmith because, absent the Covenant, Ladysmith had the ability to limit density through the zoning and development permitting process. The Court rejected this argument, holding that “[t]he processes provided under the [C]ovenant differ from those otherwise available to Ladysmith both in function and form. Furthermore, Ladysmith’s zoning and permit powers relate to its ability to regulate land use generally, rather than specifically in relation to the property.”

In rejecting the Developer’s application, the Court reviewed the caselaw considering this provision. In the relatively rare circumstances where courts have cancelled charges, the applicant presented facts that very closely mirror the circumstances contemplated by Section 35. Short of that, courts have shown themselves reluctant to exercise their power under this provision.

The takeaways from this case are two-fold. Firstly, it shows the importance of retaining a lawyer to prepare a title report as part of routine due diligence. This is a critical step in identifying potential roadblocks to development plans. Secondly, the case serves as a cautionary tale for those who intend to rely on Section 35 of the Property Law Act. Developers should view it as a last resort, as the courts have only applied it in very narrow circumstances.