Restrictive Covenants And Real Estate: Can They Survive Recent Case?

In a recent decision rendered in late November of 2018 by the Quebec Superior Court (under appeal), restraint of trade principles normally applicable in employment and sale of a business contexts were applied to restrictive use covenants in real estate (Complexe Commerciale de l'Ile inc . V . Provigo Distribution).

While it is generally understood that such covenants could not form the basis of real or for the most part personal servitudes (easements), the consensus view was the covenant itself was valid, could be secured by a hypothec or mortgage and could form the object of an obligation to have subsequent purchasers assume the covenant (often contained in the deed of sale and thus providing notice to third parties).