One strata consists of three types and one of them is a hotel with multiple units occupying a whole floor. The Developer signed a restrictive covenant with the City. The restrictive covenant provides restriction, including that (1) the Hotel must be owned by one owner; (2) the hotel is an extended stay of no more than 183 days.

The hotel owner insists that the strata should apply to the City to remove the restrictive covenant. The reason for this is that the owners will get benefits from this as the hotel is running Air BNB, which may create an issue of the building security.

  1. Key Points:
  • A restrictive covenant runs with the land, not with the strata corporation.
  • The covenant binds the registered owner of the affected strata lots, regardless of whether that owner is a developer or a subsequent purchaser.
  • The fact that the developer signed the covenant does not make the strata responsible for administering, enforcing, or removing it.
  • The strata corporation did not create the covenant, does not benefit uniquely from its removal, and does not own the hotel strata lots.

2.            Who is legally responsible to apply?

The hotel owner(s), not the strata corporation.

Why:

  • A restrictive covenant is registered on title to the hotel strata lots.
  • It runs with the land, meaning it binds the owner of those lots, even though it was originally signed by the developer.
  • The party seeking relief from the restriction must be the registered owner(s) of the affected lots.

In this case:

  • The covenant restricts how the hotel units are used (extended-stay limits).
  • The benefit of removal goes only to the hotel component, not the residential or commercial strata types.
  • Therefore, the hotel owner is the proper applicant.
  • The strata is not a part of the restrictive covenant.

3.            What is the strata corporation’s role?

The strata corporation does not submit the application, but it may still be involved indirectly.

Possible strata roles:

  • Providing consent or a resolution, if the covenant references strata bylaws, common property use, or shared services.
  • Being notified as an interested party by the City.
  • Participating in consultation if removal could affect parking, amenities, building operations, or other strata types.

However:

  • The strata has no obligation to initiate or fund the application unless:
    • The covenant explicitly names the strata as a party, or
    • The strata itself benefits from or is burdened by the covenant (which is uncommon for hotel-use covenants).

4.            Who must approve the removal?

Even if the hotel owner applies, removal typically requires:

  1. City approval (through a covenant discharge or amendment)
  1. Consent of all parties with an interest, which may include:
    • The City
    • The hotel owner
  2. Registration of the discharge in the Land Title Office

5.            Important practical point

If the hotel is owned by one owner holding all units, that owner acts as:

  • The applicant
  • The funding party
  • The party responsible for legal, planning, and application costs

The strata should be cautious not to:

  • Pay costs
  • Lead the process
  • Represent the hotel’s interests

Doing so could expose the strata to liability or claims from other strata types (Sections).

6.            Bottom line

Responsibility to apply:
Hotel owner / hotel strata lot owner(s)

Strata responsibility:
None by default, except possible consent or consultation if required

Therefore:

  • The hotel owner (developer) is the only proper party to:
    • Initiate discussions with the City
    • Submit the application to amend or discharge the covenant
    • Pay all legal, planning, and application costs
  • The strata corporation’s role is limited to:
    • Being notified, if required
    • Providing consent only if the City or covenant wording requires it

The strata should not apply on the hotel’s behalf. Doing so could:

  • Improperly shift private commercial costs onto all owners
  • Expose the strata to liability from other strata types
  • Create a precedent that the strata manages individual-use entitlements

Summary:

As the covenant is registered against the hotel strata lots and names the Developer as the covenanting party—and as the current owner of all affected hotel units—the Strata Council confirms that responsibility for any application to amend or remove the restrictive covenant rests with the hotel owner.

The restrictive covenant runs with the land and governs the permitted use of the hotel strata lots. It does not form part of the Strata Corporation’s bylaws, nor does it impose an obligation on the Strata Corporation to initiate, manage, or fund an application to the City for its amendment or discharge.

Accordingly, should the hotel wish to pursue removal or modification of the restrictive covenant, this process must be initiated and carried out by the hotel, as owner of the hotel strata lots, including all associated legal, planning, and municipal costs.

The Strata Corporation remains available to review and consider any request for consent or acknowledgement if such consent is formally required by the City or under the terms of the covenant. Any such request should be provided in writing with sufficient detail for Council’s consideration.