Can Local Governments Purchase and Sell Land and Improvements Without Restriction?

The general rule with regard to local governments is that they do not have the power to do anything except that which they are authorized to do through legislation. There is a vast array of legislation that apply to local governments but the three primary pieces of legislation are the Community Charter [SBC 2003] Ch. 26 (the “Charter”), the Local Government Act [RSBC 2015] Ch.1 (the “LGA”) and the Vancouver Charter [SBC 1953] Ch. 55 (the “Vancouver Charter”).  A review of these pieces of legislation provides an outline of the ability of local government to acquire and dispose of real property and the process involved.

The discussion below deals generally with the acquisition and disposal of land and improvements but there are also specific powers and restrictions under the legislation with regard to specific types of property such as highways, water systems, sewage systems and other utilities that are not covered in this article.

Municipal powers under the Charter

Prior to the Charter, municipalities had no powers in relation to acquiring and disposing of property unless those powers were expressly given in the legislation. Now, under the Charter, there is a presumption that municipalities have the capacity, rights, powers and privileges of a natural person of full capacity unless those powers are limited by the legislation.  This change now gives broader powers to municipalities to purchase and dispose of municipal assets in ways that best benefit their communities.

Prior to the Charter, if municipalities wished to dispose of land and improvements they, subject to certain exceptions, had to make the lands or improvements available to the public for acquisition. With the coming into force of the Charter, municipalities no longer have to make land or improvements available to the public for acquisition and can sell the land and improvements to individuals directly subject to certain procedural requirements and restrictions.

In particular, prior to a council disposing of land and improvements it must publish notice of the proposed disposition pursuant to S. 94 of the Charter. The notice must be posted and published in the newspaper and in the case of property that is available to the public for acquisition the notice must include:

  1. a description of the land and improvements;
  2. the nature and, if applicable, the term of the proposed disposition; and
  3. the process by which the land or improvements may be acquired.

In the case of property that is not available to the public for acquisition, the notice must include the following:

  1. a description of the land or improvements;
  2. the person or public authority who is to acquire the property under the proposed disposition;
  3. the nature and, if applicable, the term of the proposed disposition; and
  4. the consideration to receive by the municipality for the disposition.

Pursuant to s. 94 of the Charter the notice must be posted in the public notice posting places at the municipal halls and the notice must be published in a newspaper that is distributed at least weekly in the area affected. Unless otherwise provided the notice must be published once each week for two consecutive weeks before the disposition occurred.

Another limitation on the municipal powers to dispose of property is found in s. 25 of the Charter which provides a general prohibition against assistance to business in that the council must not provide a grant, benefit, advantage or other form of assistance to a business. This provision restricts the ability of the municipality to dispose of property to a business for less than market value.

Where land is being offered or sold for less than market value to a person or organization other than a business, then notice must also be given of that intention.

Because of the significance of parks to the community there are special provisions with regard to parkland. Parkland is land that has been dedicated as a park on a subdivision or otherwise dedicated by bylaw or has been provided in place of development cost charges by a developer.  Pursuant to s. 27 of the Charter, council may only dispose of parkland in exchange for money or in exchange for other land.  Council may only dispose of parks by bylaw adopted with the approval of the electors and provided that the proceeds of the disposal are to be credited to a parkland acquisition reserve fund.

Where a land exchange is proposed, council may only dispose of all or part of such parks in exchange for other land suitable for park or public square. When such land is taken in exchange by a municipality it is dedicated for the purpose of a park or public square and the title vests in the municipality.

Regional District powers under the Local Government Act

Much like municipalities, regional districts also have the ability to acquire and dispose of land and improvements. However, for the most part, that ability is set out in the LGA.

A regional district’s ability to deal with land and improvement is set out in section 263 of the LGA which gives a regional district the specific power to “acquire, hold, manage and dispose of land, improvements, personal property or other property, and any interest or right in or with respect to that property.”

Unlike a municipality, section 285 of the LGA requires that a board make land or improvements available to the public if it intends to dispose of them, except for in certain circumstances as set out in that section. The land or improvements do not need to be made available to the public if the disposition is:

  1. to a not-for-profit corporation;
  2. to a public authority;
  3. to a person who, as part of the consideration for the disposition, will exchange land or an improvement with the regional district;
  4. to a person under a partnering agreement that has been the subject of a process involving the solicitation of competitive proposals; or,
  5. a disposition of land to an owner for the purpose of consolidating the lands.

Just as with municipalities, regional districts are required to provide notice of any intended disposition of land or improvements along the lines of what is required by municipalities.

All money received by a regional district from the sale of land or improvements must be place to the credit of a reserve fund which must be put toward the repayment of any debts incurred by the regional district from the purchase or management of the land or improvements as the debt matures together with interest. There is no similar restriction for municipalities.

As with municipalities, if the proceeds are from the sale of park land, a regional park, or a regional trail, the proceeds must be placed in a reserve fund established for the purpose of acquiring park lands.

Vancouver’s ability to deal with land and improvements under the Vancouver Charter

Under section 190 of the Vancouver Charter, council has the power to dispose of any real property owned by the city by way of sale, conveyance, lease or licence when in the opinion of council such property is not required. The city may dispose of the property on such terms and conditions as may be deemed expedient and to accept money or other property in exchange.

This power to dispose of property is limited in that the city cannot sell any parcel of real property that exceed four hundred thousand dollars in value to any person other than a crown agency or the provincial or federal government unless there is an affirmative vote of two-thirds of all the members of council.

It is difficult to challenge any sale of property by the city. Section 150 of the Vancouver Charter states that the determination of council as to the time when, the manner in which, the terms on which, the price for which or the person to whom, any property of the city which the council may lawfully sell shall not be open to question or review by any court if the purchaser is a person who may lawfully buy and the council acted in good faith.

Conclusion

Local governments generally have broad powers to acquire and dispose of real property in British Columbia, subject to the procedures and restrictions on those powers as set out in the legislation.

Author: John A. McLachlan

 

 

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