General Building Scheme / Flatt Agreement
Cedar Springs Community is located on the Niagara Escarpment and consists of approximately 354 acres of common lands owned by Cedar Springs Community Club and approximately 59 acres for individual cottage lots owned by 83 members of the Club. Cedar Springs was founded by one William Delos Flatt (“Flatt”) who was the original owner of the lands. In 1924, Flatt first purchased the lands with a view to creating summer community within a natural wooded area. He subdivided the lands by registering Plan 224 on October 21, 1926 and Plan 225 on May 6, 1927 and then began to sell the individual lots. On July 9, 1932, he entered into a General Building Scheme Agreement (Registered on Title as Instrument #15681 Nelson A2, as of June 29, 1933) with all of the then owners of the individual lots and with the Cedar Springs Community Club. The Club is a not-for-profit corporation (under the Ontario Corporations Act) without share capital formed in 1932 for the purpose carrying out terms of the General Building Scheme Agreement and holding the common elements of the community. On June 29, 1933, a deed was registered for the 1932 transfer of the common lands of Cedar Springs from Flatt to the Cedar Springs Community Club. The Club purchased (in 1939, 1951, 1980 and 2010) and consolidated additional lands within the Cedar Spring Community precinct not already owned by the Club or its members. The Cedar Springs Community is one of the first private Conservation Development arrangements in Ontario, being a controlled-growth land use development that has adopted the principle for allowing limited sustainable development while protecting the area’s natural environmental features in perpetuity, including preserving open space landscape and vista, protecting natural habitats for wildlife, and maintaining the character of the rural community. The Club’s 354 acres of land represent its largest and most valuable asset. The golf course is approximately 60 acres of that.
Prior to the Condominium Act (there was no such Act in 1932) the legal concept of a General Building Scheme was widely used to accomplish the purpose of a system of ownership by which which owners have full title to individual properties and an undivided interest in the shared parts of the property (i.e. a small-c condominium). Each of the 83 cottage owners owns his cottage property and jointly owns through the Club all the common elements of the community. Members are responsible for sharing the expenses of the common elements. Only the 83 owners are voting members of the Club. There are no provisions in the Club’s constituting documents allowing the Club to distribute income or assets to members. However, if the Club were to wind up, the owners could share equally in the proceeds of disposition under general provisions of the Corporations Act. The annual expenses of the Club are divided by 83 and shared equally by the owners. For major Club expenditures, allocations are made in and out of a reserve fund and owners are subject to special assessments under the by-laws. If an owner defaults on the common expense fees, the Club has a lien against the cottage lot and the Club can prevent the sale of the cottage lot until fees and interest have been paid in full. An elected board of volunteer directors consisting of 12 owners is responsible for administering the operation, maintenance and repair of the common elements and assets of the Club. The Club is not a commercial venture as the public may not use its facilities and amenities; only owners and their guests may do so.
In the City of Burlington Official Plan Part IV 2.1.3(i) reads:
“Notwithstanding the general policies of the Plan, and subject to all applicable municipal by-laws, policies and site plan requirements and development criteria of the Niagara Escarpment Plan, the following are permitted: ....
i) the operation of a private, self-sustaining development with a maximum of 12 year-round residences and 82 seasonal cottages at the Cedar Springs Community located on Cedar Springs Road. The conversion of seasonal residential dwellings to permanent residences within the Cedar Springs Community shall not be permitted.”
Officially recognized under the Burlington Official Plan as a self-sustaining community, the Club owns and maintains its own roads, bridges, dams, signs, lighting and club facility drinking water and septic systems. The City of Burlington does not provide these services to the community. The Region of Halton does not provide roadside garbage pickup except to a few Club members whose driveways front on the public road, Cedar Springs Road. Under an arrangement with the City, the Club has passed by-laws to implement the provisions of the City’s Official Plan policy quoted above. Other common elements maintained by the Club include conservation lands, a golf course, a clubhouse, two dwellings, equipment barn, garbage/recycling area, water supply, woodland trails, sandy beach, tennis court and other facilities and amenities.
An individual cottage property, owned by a member, is one of a number of cabin/cottage lots comprising “Cedar Springs” (also known as “the Springs”), which, together with the Common Lands owned by the Club (being a non-share Corporation, the Members of which are the owners of the various cabin/cottage lots at the Springs), are subject to a General Building Scheme. This General Building Scheme is sometimes referred to as the “Flatt Agreement”. A full copy is available in the Downloads area.
The Flatt Agreement is a true General Building Scheme and not just a number of restrictive covenants. The Flatt Agreement runs with and binds the lands and the owners use of the lands.
The General Building Scheme imposes positive obligations upon the property owners.
When the original cabin owners agreed to be bound by the terms of the General Building Scheme and in consideration of W. D. Flatt transferring to the Club ownership of several hundred acres of land, each of the individual cabin owners gave up, for the most part, his/her and his/her successors in title rights to deal with their property as they saw fit. Their agreement was not only in exchange for the land that the Club received and enjoys today, but was also in consideration of each of their fellow members agreeing to also abide by an agreed set of terms which included provisions, the aim of which was to ensure that the Springs would remain a pristine and natural Summer retreat with each of the cottages and the cottage lots being of a rustic nature in keeping with the “primaeval nature of the Springs”. While some individuals may think that it might be repugnant to give up individual property rights, it is, in fact, something that property owners have done in one form or another whenever they have joined a community. We are all aware that residency in a village, town or city brings with it local ordinances, taxes, building restrictions, occupancy restrictions and other like matters. What sets the Springs apart from other communities is that there was, in 1932, a consensus of 100% of the members of the community as to what the local ordinances, building restrictions, etc. were to be that would regulate the community’s lands over time.
It is first important to understand that membership in the Club was the pre-requisite to owning a cabin or cottage lot and not the other way around. Ownership of land did not provide a right to belong to this community. This was not a case of people settling on the land and forming a community but rather individuals with common and like principles coming together as a community and settling together in a planned community. Many of the new Members of the Club view Membership in the Club as an ancillary benefit to owning land in the Springs. It is this misconception that leads those Club Members to feel that their individual property rights are being negatively affected by the actions of the Club. In fact, it may well be that it is the actions of these individuals that negatively affects the other Club Members’ recreational enjoyment of the Springs and robs them of some of the benefits of belonging to the Club.
General Building Scheme
By way of summary, the execution of the General Building Scheme, by the then 78 cabin owners in the Springs and W. D. Flatt (the original developer of the Springs) coincided with the establishment of the Club, being a Private Club made up of the cabin owners of the Springs. Based on the relevant documents, the purpose of entering into the General Building Scheme was to ensure that:
1. Further development of cabin lots at the Springs was curtailed.
2. The Springs was to remain, to the extent possible, in its natural or wild state, with any cabins/cottages being and remaining in a rustic state.
3. That ownership of the Cabin Lots and the use of the Common Lands remained for Club Members only.
4. That Club Membership would be limited to individuals who were not only acceptable to the other Members, but those who would appreciate and respect the health and recreational benefits to be derived from having a “Summer Recreational Home” in a pristine, undeveloped, wilderness retreat.
Obligations, Restrictions and Provisions
The General Building Scheme included a number of obligations, restrictions and provisions which were intended to insure that the above goals were met. These included:
1. The requirement that membership in the Club was a pre-requisite for acquiring Title orOwnership to a cabin at the Springs.
2. That no Deed, Mortgage, Lease or any other conveyance of a Cabin Lot was to be affective unless and until the document (Deed, Mortgage, Lease or Rental Agreement) had been consented to by the Cedar Springs Community Club (“Consent to Conveyance”). A failure to obtain the Club’s signature to any such document rendered the document null and void and of no force or effect.
3. On any sale of a Cabin Lot, the purchaser was required to sign his name under seal to a Deed incorporating the stipulations and restrictions set out in the General Building Scheme (contained in the Consent to Conveyance to be executed by the Purchaser(s)).
4. Each owner was obligated and had to agree to become, (providing that he or she was acceptable to the Club) a Member of the Cedar Springs Community Club and had to agree to observe and comply with the “Rules, Resolutions and By-laws regularly passed and adopted from time to time by the Corporation” (these obligations are contained in the Membership Application Form and the Consent to Conveyance).
5. Requiring that a minimum 75% of the Members of the Club must agree in writing before it was or is possible to release, waive or modify, either wholly or in part, all or any of the stipulations, provisions, obligations or restrictions imposed on Title to the Cabin Lots.
6. Specifically indicating that no buildings could be erected on the Cabin Lots except in accordance with plans and elevations which had been first approved in writing by the Club.
7. Prohibiting any trade or business being carried on, on the Lands, without the consent of the Club.
8. Limiting the number of dwelling units to one per Cabin Lot.
9. Requiring a minimum value to any dwelling being built.
10. Requiring that any building constructed on any Cabin Lot be of a “rustic nature” in keeping with those already constructed on other portions of the Springs Property.
11. Requiring that all trees and shrubs be preserved as far as possible.
12. Allowing the Club to levy dues and fees and requiring the Cabin Owners to pay all dues and fees so levied or to have a lien placed against their Property.
13. Granting a lien, against the cabin lot(s), in favour of the Club with respect to any dues or fees levied by the Club.
14. Granting a first Charge/Mortgage against the cabin lot(s) as security for the payment of all dues and fees levied by the Club.
In addition to providing the Club with the power to approve Members and to impose wide ranging conditions and restrictions on the approval of new Members (and upon the Club’s execution of any Transfer of Title) the authors of the General Building Scheme provided that all of the stipulations and restrictions set out in the Schedule to the General Building Scheme (approval of plans, no carrying on of business, one dwelling per lot, maintenance of the rustic nature, prohibition on cutting down trees and shrubs, etc.) were mutual covenants of each and every party to the General Building Scheme and their respective heirs, executors, administrators, successors and assigns, with each party having the ability and the right to enforce compliance with those stipulations and restrictions as a general building scheme. This was an important additional power, given to all Members of the Club, to ensure that even if the Club and/or its Board of Directors failed to take steps to maintain the safeguards that had been put in place to keep the Springs in its original condition, as a rustic and natural Summer camp retreat, any of the individual owners was empowered to take steps to ensure that their fellow Members complied with the original principles upon which the Springs was founded (as is evidenced by the conditions and restrictions set out in the 3rd Schedule to the General Building Scheme).
It is important to note that the original establishment of the Springs community flows from the General Building Scheme (the Flatt Agreement) and that the Club’s By-laws, rules and regulations are a result of and flow from the General Building Scheme. The Flatt Agreement was very specific in indicating that the original stipulations and restrictions set out in the 3rd Schedule to that Agreement could not be modified, save and except by a document signed by a minimum of 3/4 of all Members of the Club. In a sense, the Flatt Agreement was the original constitution and the Club’s By-laws, rules and regulations are akin to laws and regulations that are passed by government. As with governments and individual citizens, Members are entitled to challenge By-laws, Rules and Regulations which are not in keeping with the original constitution.
Practically speaking, this means that if the Board of Directors neglects its duties or oversteps its bounds, each Member has the right to take steps to ensure that each Lot at the Springs continues to be bound by the stipulations and restrictions contained in the 3rd Schedule “for the benefit and protection of the owner or occupier from time to time of every other of the said Lots” in the Springs. By way of example, the General Building Scheme in the 3rd. Schedule requires that “all trees and shrubs on any of the lands . . . shall be preserved as far as possible”. Rule and Regulation #11 of the Club indicates that “anyone planning to remove a tree(s) including Christmas-type trees from his/her private property or the community property must obtain the written approval of the General Manager on behalf of the Club”. In our hypothetical example, if an individual Member sought approval from the Club or its General Manager to clear-cut all of the trees between that Member’s cottage and the creek and if the Club or General Manager approved the clear-cutting, the Member would not, despite obtaining the approval, be technically entitled to cut down the trees. The removal of the trees would seriously impact adjoining lot owners privacy, view and enjoyment of their and the surrounding Common Lands. Similarly, individual Club Members walking the creek, would no longer be able to enjoy a private, wilderness-type setting, but would be subjected to an open view of the other Member’s cabin. The wording of the General Building Scheme would enable any or all of the Members to seek an order prohibiting the cutting of the trees and, possibly, an order requiring the re-planting of the trees if they were cut down in breach of the 3rd Schedule.
This example was chosen to highlight the fact that the Flatt Agreement was a General Building Scheme designed to protect the interests of all of the owners and not just to provide the Club with control over the Springs’ development. The governing stipulations and restrictions of the Flatt Agreement (see items 1. through 12. under Building Scheme Obligations, Restrictions and Provisions - paragraph 6. above) were inserted for each Member’s mutual benefit, as well as for the benefit of the Club and the legal successors to the original vendor/developer William Delos Flatt.
As recognized by the Board on July 19, 1959, Paragraph 6 of the 3rd Schedule is null and void and of no legal effect following a decision of the Supreme Court of Canada as being against public policy.
Click for a PDF of the Flatt Agreement without schedules.
Prior to the Condominium Act (there was no such Act in 1932) the legal concept of a General Building Scheme was widely used to accomplish the purpose of a system of ownership by which which owners have full title to individual properties and an undivided interest in the shared parts of the property (i.e. a small-c condominium). Each of the 83 cottage owners owns his cottage property and jointly owns through the Club all the common elements of the community. Members are responsible for sharing the expenses of the common elements. Only the 83 owners are voting members of the Club. There are no provisions in the Club’s constituting documents allowing the Club to distribute income or assets to members. However, if the Club were to wind up, the owners could share equally in the proceeds of disposition under general provisions of the Corporations Act. The annual expenses of the Club are divided by 83 and shared equally by the owners. For major Club expenditures, allocations are made in and out of a reserve fund and owners are subject to special assessments under the by-laws. If an owner defaults on the common expense fees, the Club has a lien against the cottage lot and the Club can prevent the sale of the cottage lot until fees and interest have been paid in full. An elected board of volunteer directors consisting of 12 owners is responsible for administering the operation, maintenance and repair of the common elements and assets of the Club. The Club is not a commercial venture as the public may not use its facilities and amenities; only owners and their guests may do so.
In the City of Burlington Official Plan Part IV 2.1.3(i) reads:
“Notwithstanding the general policies of the Plan, and subject to all applicable municipal by-laws, policies and site plan requirements and development criteria of the Niagara Escarpment Plan, the following are permitted: ....
i) the operation of a private, self-sustaining development with a maximum of 12 year-round residences and 82 seasonal cottages at the Cedar Springs Community located on Cedar Springs Road. The conversion of seasonal residential dwellings to permanent residences within the Cedar Springs Community shall not be permitted.”
Officially recognized under the Burlington Official Plan as a self-sustaining community, the Club owns and maintains its own roads, bridges, dams, signs, lighting and club facility drinking water and septic systems. The City of Burlington does not provide these services to the community. The Region of Halton does not provide roadside garbage pickup except to a few Club members whose driveways front on the public road, Cedar Springs Road. Under an arrangement with the City, the Club has passed by-laws to implement the provisions of the City’s Official Plan policy quoted above. Other common elements maintained by the Club include conservation lands, a golf course, a clubhouse, two dwellings, equipment barn, garbage/recycling area, water supply, woodland trails, sandy beach, tennis court and other facilities and amenities.
An individual cottage property, owned by a member, is one of a number of cabin/cottage lots comprising “Cedar Springs” (also known as “the Springs”), which, together with the Common Lands owned by the Club (being a non-share Corporation, the Members of which are the owners of the various cabin/cottage lots at the Springs), are subject to a General Building Scheme. This General Building Scheme is sometimes referred to as the “Flatt Agreement”. A full copy is available in the Downloads area.
The Flatt Agreement is a true General Building Scheme and not just a number of restrictive covenants. The Flatt Agreement runs with and binds the lands and the owners use of the lands.
The General Building Scheme imposes positive obligations upon the property owners.
When the original cabin owners agreed to be bound by the terms of the General Building Scheme and in consideration of W. D. Flatt transferring to the Club ownership of several hundred acres of land, each of the individual cabin owners gave up, for the most part, his/her and his/her successors in title rights to deal with their property as they saw fit. Their agreement was not only in exchange for the land that the Club received and enjoys today, but was also in consideration of each of their fellow members agreeing to also abide by an agreed set of terms which included provisions, the aim of which was to ensure that the Springs would remain a pristine and natural Summer retreat with each of the cottages and the cottage lots being of a rustic nature in keeping with the “primaeval nature of the Springs”. While some individuals may think that it might be repugnant to give up individual property rights, it is, in fact, something that property owners have done in one form or another whenever they have joined a community. We are all aware that residency in a village, town or city brings with it local ordinances, taxes, building restrictions, occupancy restrictions and other like matters. What sets the Springs apart from other communities is that there was, in 1932, a consensus of 100% of the members of the community as to what the local ordinances, building restrictions, etc. were to be that would regulate the community’s lands over time.
It is first important to understand that membership in the Club was the pre-requisite to owning a cabin or cottage lot and not the other way around. Ownership of land did not provide a right to belong to this community. This was not a case of people settling on the land and forming a community but rather individuals with common and like principles coming together as a community and settling together in a planned community. Many of the new Members of the Club view Membership in the Club as an ancillary benefit to owning land in the Springs. It is this misconception that leads those Club Members to feel that their individual property rights are being negatively affected by the actions of the Club. In fact, it may well be that it is the actions of these individuals that negatively affects the other Club Members’ recreational enjoyment of the Springs and robs them of some of the benefits of belonging to the Club.
General Building Scheme
By way of summary, the execution of the General Building Scheme, by the then 78 cabin owners in the Springs and W. D. Flatt (the original developer of the Springs) coincided with the establishment of the Club, being a Private Club made up of the cabin owners of the Springs. Based on the relevant documents, the purpose of entering into the General Building Scheme was to ensure that:
1. Further development of cabin lots at the Springs was curtailed.
2. The Springs was to remain, to the extent possible, in its natural or wild state, with any cabins/cottages being and remaining in a rustic state.
3. That ownership of the Cabin Lots and the use of the Common Lands remained for Club Members only.
4. That Club Membership would be limited to individuals who were not only acceptable to the other Members, but those who would appreciate and respect the health and recreational benefits to be derived from having a “Summer Recreational Home” in a pristine, undeveloped, wilderness retreat.
Obligations, Restrictions and Provisions
The General Building Scheme included a number of obligations, restrictions and provisions which were intended to insure that the above goals were met. These included:
1. The requirement that membership in the Club was a pre-requisite for acquiring Title orOwnership to a cabin at the Springs.
2. That no Deed, Mortgage, Lease or any other conveyance of a Cabin Lot was to be affective unless and until the document (Deed, Mortgage, Lease or Rental Agreement) had been consented to by the Cedar Springs Community Club (“Consent to Conveyance”). A failure to obtain the Club’s signature to any such document rendered the document null and void and of no force or effect.
3. On any sale of a Cabin Lot, the purchaser was required to sign his name under seal to a Deed incorporating the stipulations and restrictions set out in the General Building Scheme (contained in the Consent to Conveyance to be executed by the Purchaser(s)).
4. Each owner was obligated and had to agree to become, (providing that he or she was acceptable to the Club) a Member of the Cedar Springs Community Club and had to agree to observe and comply with the “Rules, Resolutions and By-laws regularly passed and adopted from time to time by the Corporation” (these obligations are contained in the Membership Application Form and the Consent to Conveyance).
5. Requiring that a minimum 75% of the Members of the Club must agree in writing before it was or is possible to release, waive or modify, either wholly or in part, all or any of the stipulations, provisions, obligations or restrictions imposed on Title to the Cabin Lots.
6. Specifically indicating that no buildings could be erected on the Cabin Lots except in accordance with plans and elevations which had been first approved in writing by the Club.
7. Prohibiting any trade or business being carried on, on the Lands, without the consent of the Club.
8. Limiting the number of dwelling units to one per Cabin Lot.
9. Requiring a minimum value to any dwelling being built.
10. Requiring that any building constructed on any Cabin Lot be of a “rustic nature” in keeping with those already constructed on other portions of the Springs Property.
11. Requiring that all trees and shrubs be preserved as far as possible.
12. Allowing the Club to levy dues and fees and requiring the Cabin Owners to pay all dues and fees so levied or to have a lien placed against their Property.
13. Granting a lien, against the cabin lot(s), in favour of the Club with respect to any dues or fees levied by the Club.
14. Granting a first Charge/Mortgage against the cabin lot(s) as security for the payment of all dues and fees levied by the Club.
In addition to providing the Club with the power to approve Members and to impose wide ranging conditions and restrictions on the approval of new Members (and upon the Club’s execution of any Transfer of Title) the authors of the General Building Scheme provided that all of the stipulations and restrictions set out in the Schedule to the General Building Scheme (approval of plans, no carrying on of business, one dwelling per lot, maintenance of the rustic nature, prohibition on cutting down trees and shrubs, etc.) were mutual covenants of each and every party to the General Building Scheme and their respective heirs, executors, administrators, successors and assigns, with each party having the ability and the right to enforce compliance with those stipulations and restrictions as a general building scheme. This was an important additional power, given to all Members of the Club, to ensure that even if the Club and/or its Board of Directors failed to take steps to maintain the safeguards that had been put in place to keep the Springs in its original condition, as a rustic and natural Summer camp retreat, any of the individual owners was empowered to take steps to ensure that their fellow Members complied with the original principles upon which the Springs was founded (as is evidenced by the conditions and restrictions set out in the 3rd Schedule to the General Building Scheme).
It is important to note that the original establishment of the Springs community flows from the General Building Scheme (the Flatt Agreement) and that the Club’s By-laws, rules and regulations are a result of and flow from the General Building Scheme. The Flatt Agreement was very specific in indicating that the original stipulations and restrictions set out in the 3rd Schedule to that Agreement could not be modified, save and except by a document signed by a minimum of 3/4 of all Members of the Club. In a sense, the Flatt Agreement was the original constitution and the Club’s By-laws, rules and regulations are akin to laws and regulations that are passed by government. As with governments and individual citizens, Members are entitled to challenge By-laws, Rules and Regulations which are not in keeping with the original constitution.
Practically speaking, this means that if the Board of Directors neglects its duties or oversteps its bounds, each Member has the right to take steps to ensure that each Lot at the Springs continues to be bound by the stipulations and restrictions contained in the 3rd Schedule “for the benefit and protection of the owner or occupier from time to time of every other of the said Lots” in the Springs. By way of example, the General Building Scheme in the 3rd. Schedule requires that “all trees and shrubs on any of the lands . . . shall be preserved as far as possible”. Rule and Regulation #11 of the Club indicates that “anyone planning to remove a tree(s) including Christmas-type trees from his/her private property or the community property must obtain the written approval of the General Manager on behalf of the Club”. In our hypothetical example, if an individual Member sought approval from the Club or its General Manager to clear-cut all of the trees between that Member’s cottage and the creek and if the Club or General Manager approved the clear-cutting, the Member would not, despite obtaining the approval, be technically entitled to cut down the trees. The removal of the trees would seriously impact adjoining lot owners privacy, view and enjoyment of their and the surrounding Common Lands. Similarly, individual Club Members walking the creek, would no longer be able to enjoy a private, wilderness-type setting, but would be subjected to an open view of the other Member’s cabin. The wording of the General Building Scheme would enable any or all of the Members to seek an order prohibiting the cutting of the trees and, possibly, an order requiring the re-planting of the trees if they were cut down in breach of the 3rd Schedule.
This example was chosen to highlight the fact that the Flatt Agreement was a General Building Scheme designed to protect the interests of all of the owners and not just to provide the Club with control over the Springs’ development. The governing stipulations and restrictions of the Flatt Agreement (see items 1. through 12. under Building Scheme Obligations, Restrictions and Provisions - paragraph 6. above) were inserted for each Member’s mutual benefit, as well as for the benefit of the Club and the legal successors to the original vendor/developer William Delos Flatt.
As recognized by the Board on July 19, 1959, Paragraph 6 of the 3rd Schedule is null and void and of no legal effect following a decision of the Supreme Court of Canada as being against public policy.
Click for a PDF of the Flatt Agreement without schedules.