Better with Age: Purchasing A Property with A Legal Non-Conforming Use

Properties with legal non‑conforming (“grandfathered”) uses often come with unique considerations, particularly when municipal zoning shifts. 

Imagine someone just purchased a charming bed & breakfast (“B&B”) that has been in business for many years. They close the B&B for two weeks to complete renovations, such as changing the signage, and then, suddenly, the municipal Council amends the zoning by-law to prohibit all short‑term accommodation on the street. Does that mean they can’t reopen the B&B? Let’s discuss.  

Establishing When a Property Has Legal Non-Conforming Use Status 

Subsection 34(9) of the Ontario Planning Act provides that provisions in a zoning by-law do not apply to the use of land, a building, or a structure that was lawfully commenced on the date the by-law was passed. Meaning, if the building was legally used as a B&B before the by-law amendment, then the property can continue to be used as a B&B. The use has become legally non-conforming, and there are “grandfathered” property rights. 

The catch is that once established, the exemption only applies so long as the use continues. Typically, temporary interruptions will not constitute legal non-conformity as long as there is an intention to resume use and no change in use. For example, if the B&B stops operating and the property is used only as a family residence, the legal non-conformity status will lapse, and all future uses of the property will have to comply with the in-force zoning by-law. 

Does a Legal Non-Conforming Use Apply to the Entire Property? 

The next important thing to keep in mind is that the Ontario Planning Act exemption of a legal non-conforming use applies to the “land, building, or structure”. In the example provided, the use is in a house, and therefore the protection attaches to the building. This has two primary implications.  

First, legal non-conforming rights are tied to the property and not to the owner. This means that when the owner sells their property, the purchaser can continue operating a B&B, either under the same name or a new one, so long as it remains a B&B.    

Second, the Supreme Court of Canada’s decision in Central Jewish Institute v Toronto (City) establishes that because the exemption attaches to a building, the legal non-conforming use of only a part of a building can later be expanded throughout the entire building. For example, if the owner of the B&B does well and wants to expand from using just the main-floor rooms to using the entire house for the B&B, they can do so. That being said, the use cannot be expanded beyond the confines of the existing building as-of-right. In other words, if the owner wanted to build an addition to the house to expand the B&B, they would need to seek a “permission.” Subsection 45(2)(a)(i) of the Ontario Planning Act empowers the Committee of Adjustment for a municipality to permit the enlargement or expansion of a “building or structure” that houses a legal non-conforming use. 

On the other hand, for open-air uses that are not inherently tied to a building or structure (such as a park or a farm), legal non-conforming rights attach to the “land” itself.  Whether that means the lands used on the date of the prohibiting by-law or the entire lot containing the use appears to be a question of circumstance, interpretation, and intent. For example, the Divisional Court confirmed that the purchaser of a 15-acre lot was entitled to expand a three-to-four-acre wrecking yard throughout the entire property, because the previous owner had a bona fide intent to eventually expand the established operation. 

How Much Change Is Too Much? 

This raises the question of how much legally non-conforming use can change without lapsing. The following parameters were set out by the Supreme Court in Saint-Romuald (Ville) v Olivier: 

• The use is characterized by the purpose of the activities carried out prior to the prohibiting by-law; 

• Intensification of the pre-existing activity is generally permitted; however, protection can be lost if the increased activity renders it a use of a different kind in terms of community impact; 

• Expansion of activities beyond the pre-existing use are not protected; 

• Where the use is modified within the original purpose – i.e. where closely related or accessory uses are added – the court will weigh the owner’s interest against the community interest; 

• Neighbourhood effects must be established by evidence 

• Acquired rights should be flexible enough to allow for reasonable change of use, so long as the change is connected to the original pre-existing use; 

• The characterization of the acquired right should be grounded as much as possible to objective fact and should be free from any value judgment.

Conclusion  

Grandfathered rights can be a lifeline when zoning suddenly shifts, but they’re only as strong as your ability to show the use was lawful then and has continued since. Keep a clear paper trail, avoid long lapses in operation, and remember that protection generally extends through the existing building, not beyond it, without permission from the Municipality.