A developer, Grandview Developments Ltd., plans to build a new condominium project in Kelowna. They register a restrictive covenant on the title of the undeveloped land, stipulating that no building on the property can exceed three storeys once construction begins. Two years later, they sell a portion of the land to a different developer, Skyline Holdings Inc. What is the effect of this registered restrictive covenant on Skyline Holdings Inc.?

Question: A developer, Grandview Developments Ltd., plans to build a new condominium project in Kelowna. They register a restrictive covenant on the title of the undeveloped land, stipulating that no building on the property can exceed three storeys once construction begins. Two years later, they sell a portion of the land to a different developer, Skyline Holdings Inc. What is the effect of this registered restrictive covenant on Skyline Holdings Inc.?

Answer options:

• The covenant is automatically dissolved upon the sale of the land, as it was registered by the original developer. ✅ Skyline Holdings Inc. is bound by the three-storey height restriction, despite not being the original party to the covenant.
• The covenant only becomes binding if Skyline Holdings Inc. explicitly agrees to it in their purchase agreement.
• Restrictive covenants are not enforceable on undeveloped land; they only apply to completed structures.

Correct answer: Skyline Holdings Inc. is bound by the three-storey height restriction, despite not being the original party to the covenant.

Explanation: A registered restrictive covenant 'runs with the land' under the Land Title Act, meaning it binds subsequent owners of the charged land even if they were not original parties to the agreement, provided it is properly registered on title.