Municipalities Can Make Mistakes Significantly Impacting Land Developers

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This summer the Alberta Court of Appeal in the case of 1694192 Alberta Ltd. v. Lac La Biche County (Subdivision and Development Appeal Board), was asked to grant 1694192 Alberta Ltd. leave to challenge a decision made by the Lac La Biche Subdivision Appeal Board in which it revoked a development permit granted by the Municipality after the appeal period had expired. The application to grant the right to challenge the revocation was refused by the Court of Appeal without much discussion despite the fact that the landowner was substantially prejudiced by this decision.

The controversial part of the facts surrounding this decision is that all the confusion and hardship to the owner stemmed directly from an error by the Municipality when the permit was issued. In certain circumstances the Municipal Government Act (Alberta) requires the Municipality to provide a minimum number of days’ notice to surrounding landowners within which they may appeal the issuance of a development permit. In this situation, it was brought to the attention of the Municipality, after the expiry of the initial appeal period, that it did not provide this minimum notice. In order to rectify the problem the Municipality issued a second notice to appeal the decision. An adjacent landowner took advantage of this second appeal period and was successful at the Subdivision Appeal Board in getting the development permit revoked.

The extent of the hardship to 1694192 Alberta Ltd. comes to light once it is realized that the corporation relied upon the expiry of the first appeal period to waive its conditions contained in the contract to purchase the subject lands. 1694192 Alberta Ltd. bought the lands with a development permit in place allowing them to set up a campground but was told after the money changed hands that this was no longer an option once the second appeal was successful. In summary, the lands were now useless for its intended purpose notwithstanding the best efforts of 1694192 Alberta and the original vendor to ensure this was not the case.

For companies involved in the land development business this is a cautionary tale about relying on the Municipality when making costly decisions such as purchasing land. This is not to say that the Municipalities are not competent and trustworthy in most situations, but there is always the element of human error involved which has to be observed when a third party to a transaction is being relied on to waive conditions. The simple fix in this situation is due diligence and knowing how the development approval process works so that deficiencies can be spotted before a mistake becomes costly.