By Raz Toor, Lawyer and Founder of Falcon Law PC
Property severance can be an effective way to create value from land, but in Ontario it is not simply a matter of drawing a new boundary and registering a deed.
A severance is a land-use planning process. The owner generally needs municipal or other consent authority approval before a portion of a property can become a separately transferable parcel.
The planning side and the legal side are closely connected. A planner may assess whether the proposed lots comply with municipal planning policies and zoning requirements. A surveyor may prepare the reference plan and legal descriptions. The lawyer’s role is usually to deal with title, financing, conditions of consent, easements, Planning Act compliance and the actual registration or sale of the resulting parcel.
I’m Raz Toor, the founder of Falcon Law PC. We assist Ontario property owners, investors and businesses with real estate transactions, title matters, property transfers and the legal implementation of severances and related land restructurings.
What Is a Property Severance?
A severance, also referred to as a consent, is the authorized separation of part of a property so that it can be dealt with separately.
The most familiar example is an owner with a large lot who wants to create a second buildable lot and sell it.
But the consent process is broader than that. Ontario’s Planning Act can also require consent where an owner wants to sell, mortgage or otherwise deal with only part of a parcel, and consent can be relevant to certain easements, rights-of-way and boundary adjustments.
If the proposal involves creating several new lots, the municipality may determine that a plan of subdivision is more appropriate than proceeding through a series of severance applications.
Can Any Ontario Property Be Severed?
No.
Whether a severance is feasible depends heavily on the particular property and municipality.
The consent authority will consider the municipality’s official plan, zoning by-law and applicable provincial planning policies. Practical matters such as lot size, frontage, road access, servicing, drainage, surrounding land uses and environmental constraints can also affect the application.
A property may appear physically large enough to divide while still failing to satisfy planning requirements.
That is why an owner considering a severance should normally speak with municipal planning staff or an appropriate planning professional before spending significant money on legal and surveying work.
The First Step Should Usually Be Pre-Consultation
Ontario’s own land-use planning guidance recommends consulting the municipality or consent-granting authority before submitting the application.
That early discussion can identify whether the municipality is generally receptive to the proposal and what supporting information will be required.
Depending on the property, the application may ultimately require a sketch or survey information, planning justification, servicing information, environmental work or other technical material.
The exact requirements vary from municipality to municipality.
What Happens After the Severance Application Is Filed?
Once a complete application has been submitted, the consent authority circulates the application and considers the planning merits of the proposal.
A public process is often involved, and municipal departments or outside agencies may also comment on the application.
The authority may refuse the application or grant what is commonly called provisional consent.
Provisional consent is not the same thing as having two fully separate, transferable properties.
It usually means the municipality is prepared to approve the severance if specified conditions are satisfied.
The Conditions of Consent Are Often Where the Real Work Begins
A severance approval can come with conditions that need to be completed before the municipality issues the final consent certificate.
For example, the owner may need to provide a reference plan, create or confirm an easement, address servicing or drainage, transfer land for road-widening purposes, satisfy municipal financial requirements or deal with another issue identified during the planning review.
The particular conditions can significantly affect the cost and timing of the project.
This is one reason I recommend reviewing the decision carefully rather than treating the approval itself as the end of the process.
There Is a Deadline to Satisfy the Conditions
Under the current Planning Act, where conditions are imposed on a provisional consent, the applicant generally has two years from the applicable notice date to satisfy them.
If the conditions are not fulfilled within the statutory period, the consent application can be deemed refused.
That deadline matters because some conditions require coordination among the municipality, surveyor, lawyer, lender and other professionals.
A severance file should therefore be managed with the expiry date in mind rather than revisited shortly before the deadline.
Why a Reference Plan Is Usually Important
Once the severance has been approved, a surveyor will commonly prepare a reference plan showing the newly defined parts of the property.
The reference plan provides the legal description needed to identify the severed and retained lands in the land-registration system.
The surveyor’s work is particularly important where the new boundary, access or easement rights need to be described precisely.
The lawyer and surveyor often need to coordinate because the legal documents registered on title must use the correct legal descriptions.
An Existing Mortgage Can Complicate a Severance
This is one of the most practical issues that can arise.
If the original property is subject to a mortgage, the lender’s charge generally remains registered against the land unless the lender agrees otherwise.
Creating a severed parcel does not automatically free that parcel from the mortgage.
If the owner intends to sell the severed lot while keeping the retained lands, the existing lender may need to provide a partial discharge or otherwise restructure the security.
The lender may require an appraisal, updated loan documentation or repayment of part of the mortgage before agreeing to release the severed parcel.
This issue should be investigated early, particularly where the owner’s plan depends on selling the new lot immediately after severance.
Access and Easements Can Be Just as Important as the New Boundary
A new lot needs to function independently.
Sometimes that is straightforward because both parcels have direct frontage on a public road and separate servicing.
Other properties require easements or rights-of-way for access, utilities, drainage or shared infrastructure.
Those rights should be properly documented and registered. A parcel that technically exists but does not have adequate legal access or servicing rights can create serious problems when it is sold, mortgaged or developed.
A Severance Does Not Automatically Mean the New Lot Is Buildable
This distinction is important.
Obtaining consent to create a parcel does not necessarily mean every proposed building or development is automatically permitted.
The new parcel still needs to comply with applicable zoning and building requirements.
If a zoning amendment, minor variance, site plan approval or other development approval is required, that process may need to be coordinated with the severance.
An owner whose goal is ultimately to build and sell a new home should therefore assess the full development path, not merely whether the land can technically be severed.
What Happens Once the Conditions Are Satisfied?
After the consent authority is satisfied that the conditions have been fulfilled, the required certificate can be issued.
The severance can then be implemented through the land-registration system.
At that stage, the lawyer may be dealing with the transfer creating the new ownership arrangement, easements, releases or partial discharges of mortgages, and any sale of the severed lands.
Ontario’s land-registration system generally requires a reference plan to describe the severed parcel accurately.
Do Not Let the Final Consent Sit Indefinitely
There is a second timing issue after the certificate is issued.
Under the Planning Act, a consent generally lapses two years after the date of the certificate if the transaction for which the consent was given is not carried out, although an earlier lapsing date can be imposed.
In practical terms, once the approval process has been completed, the resulting transaction should still be implemented in a timely manner.
Can You Sell the Severed Lot Immediately?
Potentially, but the sale should be coordinated with the severance process rather than assuming the new lot already exists.
An agreement of purchase and sale can sometimes be made conditional on the severance being completed and the seller being able to convey the intended parcel.
The wording matters.
The seller should not unconditionally promise to convey a separately transferable parcel before knowing that all municipal conditions, survey requirements, title issues and lender requirements can actually be satisfied.
The buyer will similarly want certainty about exactly which land, access rights and services will be received at closing.
What if the Severance Is Between Family Members?
The Planning Act analysis does not disappear simply because the parties are related.
For example, a parent who owns a large parcel and wants to transfer the rear portion to an adult child may still require municipal consent before the portion can be transferred separately.
Family transactions can also raise land transfer tax, mortgage, estate-planning and tax questions depending on how the transfer is structured.
The planning approval and the eventual conveyance should therefore be considered separately.
Boundary Adjustments Can Also Require Consent
Not every consent application is designed to create an additional building lot.
Sometimes one neighbour wants to transfer a strip of land to another neighbour to correct or improve an existing boundary.
Those transactions can look simple but still engage the Planning Act.
The lawyer should understand what is being transferred, what happens to the resulting parcels and whether the consent conditions have been structured so that the land is ultimately held as intended.
What Does the Real Estate Lawyer Actually Do?
The lawyer’s role depends on the stage of the severance.
Where a planner is handling the municipal application, the lawyer may become involved once title or legal issues emerge or after provisional consent has been granted.
We may review the existing title and mortgages, examine the conditions of consent, coordinate legal descriptions with the surveyor, prepare easements or transfers, deal with the lender and register the documents necessary to implement the approved severance.
If the severed parcel is being sold, we can also handle the real estate closing.
The important point is that planning approval and land registration are different parts of the same project. A consent on paper does not by itself create a clean closing.
When Should You Speak With a Lawyer?
For a straightforward planning application, the first call may properly be to the municipality or a planner.
A lawyer should become involved earlier where the property has an existing mortgage, complicated title, easement issues, co-owners, an intended sale, a family transfer or another transaction that depends on the severance.
Early legal review can identify whether the proposed transaction will actually work once the planning approval is obtained.
How Falcon Law PC Can Help
Falcon Law PC assists Ontario property owners with the legal side of property severances and related real estate transactions.
Our work can include reviewing title and existing financing, reviewing conditions of consent, coordinating with planners and surveyors, preparing easements and transfers, dealing with lender requirements and completing the registration or sale of severed lands.
You can learn more about our Ontario real estate legal services.
If the planning work has already been completed and you are ready to transfer or sell the resulting property, you can also QuickStart your real estate closing.
Before Starting a Severance
A severance can be a useful way to unlock value from land, create a new building lot or reorganize property ownership, but it should be approached as a coordinated planning and real estate project.
The most important questions are usually whether the municipality will permit the proposed parcel, what conditions will be imposed and whether the resulting titles can actually be financed, accessed, transferred and used in the way the owner intends.
Answering those questions early is usually more valuable than trying to repair a title or financing problem after the severance has already been approved.
This article is intended for general informational purposes only and does not constitute legal, planning, tax or development advice. Severance requirements vary by municipality and property, and owners should obtain advice based on the specific lands and proposed transaction.