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Covenant (Real Estate)

Explore covenants in Canadian real estate — what they are, how they affect property use, and why they’re important for land control.

Covenant (Real Estate)

July 27, 2025


What is a Covenant?

A covenant in real estate is a legally binding promise or restriction placed on a property’s use, typically recorded on title and enforceable by law or contract.

Why a Covenant Matters in Real Estate

In Canadian property law, covenants help regulate land use, protect property value, and maintain community standards.



Types of covenants:
  • Restrictive covenant: limits property use (e.g., no further subdivision)
  • Affirmative covenant: obligates action (e.g., maintain fence)



Covenants run with the land, meaning they bind future owners until removed or modified legally.

Example of a Covenant in Action

The title search revealed a restrictive covenant prohibiting the construction of additional dwellings on the lot.

Key Takeaways

  • Legal promise tied to property use
  • Can restrict or require certain actions
  • Binds current and future owners
  • Recorded on property title
  • May require legal process to change

Related Terms

Additional Terms

Recourse Loan

A recourse loan is a type of loan where the lender can pursue the borrower’s personal assets, beyond the collateral, in the event of default.. more

Pari Passu

A pari passu clause is a contractual provision ensuring that multiple creditors share equally in repayment priority from the borrower’s assets.. more

Non-Recourse Loan

A non-recourse loan is a type of loan where the lender’s only remedy in case of default is to seize the collateral property; the borrower is not. more

Net Operating Income

Net operating income (NOI) is the total income generated by a property after operating expenses are deducted but before taxes and financing costs.. more

Mechanic's Lien

A mechanic’s lien is a legal claim by a contractor, subcontractor, or supplier for unpaid work or materials provided for a property.. more

Lis Pendens

Lis pendens is a legal notice filed in the land registry indicating that a property is subject to ongoing litigation that may affect its title.. more

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