Regulatory changes and acquired rights

You buy land near a lake with the intention of having a cottage built there. However, the municipal regulations are changed just before you start building the cottage. This new regulation now prohibits any new construction in the area where your land is located. Will you have the right to build the cottage in question despite the change in regulations?

The answer to this question will depend on whether you have acquired rights or not. An acquired right is a legal concept that will, among other things, allow a person not to have a new rule imposed on him despite the change in the legal framework applicable to his situation. In other words, the new regulations may not apply to a person if the person has an acquired right.

An acquired right may be invoked in certain circumstances provided that the conditions applicable to the given situation are met. Here, we will demystify the acquired right resulting from the “complete and compliant” building permit application filed on time.

The courts have already recognized the existence of this acquired right on a number of occasions. The Supreme Court of Canada summarized the principles by saying that “the application for a permit” substantially complete and compliant to the municipal regulations in force at the time of filing grants a promoter a right Prima Facie upon issuance of the permit.”¹.

The courts then further specified what an application for a permit “substantially complete and compliant” consisted of, including the Court of Appeal in the decision Al-Musawi v. Westmount Who writes:

“To meet this double criterion (complete and compliant request), the courts generally considered that it was necessary to:
• That the fees be paid, the required form completed and the plans filed (more than just sketches); and,
• That the project substantially complies with the applicable normative regulations.”²

Thus, in order to benefit from the acquired right to build, despite the regulatory change, the developer must at least have paid the permit fees and, if required by the conditions for issuing the permit, have completed the form and submitted the plans.

The case law and the doctrine are very clear in indicating that the intention, the fact of having started construction or exchanged with the municipality will not create acquired rights. In a recent decision rendered in the summer of 2021, the Superior Court cites:

“It is not enough to take certain steps or to consult a few municipal officials to claim acquired rights; Intent is not enough. [...] What constitutes acquired rights is an application for a valid permit. [...] an application for a building permit is sufficient to grant the applicant acquired rights against a new regulation that aims to prohibit what the applicant wants to build. It is therefore at the time of applying for a permit that it is necessary to determine the respective rights of the applicant and the municipality”.³

In summary, it is a good idea for real estate developers to take an interest in municipal regulatory ideas and projects in order to anticipate the impacts of future regulatory changes and act accordingly.

TO NOTE!
If you think you are benefiting from an acquired right, consult a law firm, as certain elements may affect the validity or otherwise of the acquired right. One of these elements is the type of authority behind the issuance of the permit. In fact, only a permit arising from a linked power could give rise to an acquired right, if the conditions listed above have been met.⁴

1 City of Ottawa et al. v. Boyd Builders Ltd., 1965 CanLII 1 (CSC), [1965] SCR 408.
2 Al-Musawi v. Westmount (City of) 2013 QCCA 2066, para 101.
3 Gillis v. City of Gaspé 2021 QCCS 2915, paragraph 29.
4 9071-6754 Quebec Inc. v. Quebec City, 2020 QCCA 344, paragraph 30.

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Consult the source publication