CANADA Law and Practice Contributed by: Rachel V Hutton, Michael L Dyck, Mario Paura and Patrick Morin, Stikeman Elliott LLP
of the secured asset could be reduced if that liability arises during the term of the loan. Upon realising on the security and taking possession or control of the subject lands, a lender (or its receiver) could be exposed to environmental liability. 3.9 Effects of a Borrower Becoming Insolvent If security interests are granted by a borrower on a legitimate bona fide basis, for good considera - tion, the subsequent insolvency of the borrower will not generally affect the enforceability of the security interest. However, the secured party’s enforcement proceedings may then be sub - ject to court oversight and associated delays. If security was granted for little or no consid - eration, or on any basis where the intent of the grant of security was to prefer certain debts over others, federal legislation imposes “claw-back” rules that could impair or invalidate the security. 3.10 Taxes on Loans As discussed in 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security , nominal registration fees apply to the registra - tion of a mortgage, an assignment of rents, a hypothec or any other registered real property security. 4. Planning and Zoning 4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning Provincial governments are responsible for land- use planning (other than on federal lands), but delegate most planning and zoning functions to municipalities. Much of the regulation of real property is in the form of zoning by-laws and building by-laws (informed by provincial poli -
cies and plans, municipal official plans and plans d’urbanisme ). 4.2 Legislative and Governmental Controls Applicable to Design, Appearance and Method of Construction Municipal by-laws regulate nearly all aspects of land use, the nature of buildings thereon, and the size and intensity of development of land. Building permits are required for construction and for additions/alterations to buildings. Build - ing-permit fees are typically calculated based on the floor area of the proposed building or the value of the proposed construction, and the type and use of the building. Building by-laws, building-permit requirements and building-code standards govern the building materials, heat - ing and ventilation systems, electrical systems, sewerage and water systems, fire safety, access and inspection. The National Building Code of Canada has largely been adopted by the munici - palities of most provinces, resulting in a trend towards building regulation uniformity. Regula - tions may restrict redevelopment of a building having heritage value. For developments in spe - cialised urban areas, additional design approvals may also be required. 4.3 Regulatory Authorities Most provincial planning and zoning functions have been delegated to municipalities. Zon - ing and building by-laws designate geographic zones within the municipality and prescribe the uses allowed in each zone, limit density, dictate height and parcel size, and impose minimum building setbacks and parking requirements. 4.4 Obtaining Entitlements to Develop a New Project Development projects typically require applica - tions for subdivision, re-zoning and development permits. Each municipality has differing eligibil -
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