Received a Licence to Construct Letter in BC? What to Do Before You Sign

What Is a Licence to Construct in BC?

A Licence to Construct is a written agreement in which a property owner grants a developer temporary permission to use the owner’s property or airspace in connection with a neighbouring construction project. Unlike an easement, a Licence to Construct creates a personal contractual right between the parties and does not automatically bind a future purchaser of the property.

Developers use “Licence to Construct,” “Licence to Enter,” “Temporary Access Licence,” and “Construction Access Agreement” interchangeably in BC practice. The title of the document matters less than its contents. The scope of access requested, the obligations imposed on the developer, the compensation offered, and the protections provided to the property owner determine whether the agreement adequately protects the owner’s interests.

Licence to Construct letters arrive at a predictable point in the development timeline: after the developer has secured a building permit from the City of Vancouver, City of Burnaby, City of Surrey, or the relevant municipal authority, and before construction mobilization. Developers send these letters to multiple neighbouring owners simultaneously. The pace of project scheduling creates pressure on property owners to respond quickly, often before independent legal advice has been obtained.

How Does a Licence to Construct Differ from an Easement in BC?

A Licence to Construct creates a temporary personal right between the contracting parties only. An easement creates a property right that attaches to the land and binds future owners. The distinction matters for registration, enforceability, and what happens if either property is sold during the construction period.

An easement granted over a property and registered at the Land Title Office binds any purchaser of the burdened land for the registered term. A licence granted by the current owner is a personal contract: if the property owner sells during the construction period, the new owner is not automatically bound by a licence the previous owner signed unless the licence was registered or the purchase contract specifically addressed the licence.

Developers sometimes prefer unregistered licences over registered easements because licences are faster to execute and do not appear on title searches. Property owners sometimes prefer registered easements because they create a clear, searchable record of the terms agreed and the compensation paid. Whether a licence or a registered easement better serves the property owner’s interests depends on project duration, the owner’s plans to sell or refinance, and the specific access rights being granted.

The practical difference in negotiation is also significant. Registered easements require consent from any registered mortgage lender, adding time and legal formality to the process. Licences typically do not require lender consent.

The legal framework governing real property licences in BC is grounded in common law contract principles. Unlike interests in land, licences are not subject to the formal requirements of the Land Title Act, RSBC 1996, c. 250, which governs registration of interests at the Land Title Office.

What Does a Developer’s Licence to Construct Letter Actually Request?

A typical Licence to Construct letter in BC requests one or more of the following: the right to swing a construction crane boom through the property’s airspace, the right to install shoring or tiebacks in the property’s soil, the right to underpin the property’s foundations, or the right to access the property for inspection, monitoring, or minor works during construction.

Many developers combine multiple access requests into a single document. A property owner might receive a single letter requesting crane swing rights, tieback installation rights, and periodic access for monitoring. Each type of access carries different risks, different compensation benchmarks, and different insurance and indemnity requirements.

Crane swing rights cover airspace only and carry no physical impact on the property or its structures. Tieback rights require drilling horizontal soil anchors through the property’s subsoil. Shoring and underpinning rights involve physical work on or under the property’s foundations. Signing a combined Licence to Construct document without distinguishing the rights granted for each work type creates ambiguity over scope and liability.

Every provision in a Licence to Construct letter is subject to negotiation before the property owner signs.

What Rights Does a BC Property Owner Hold When Approached for a Licence to Construct?

A BC property owner holds the right to refuse a Licence to Construct request, to negotiate all terms before signing, and to require independent legal review at the developer’s cost. No BC statute obligates a private property owner to grant construction access to an adjacent developer.

Property rights in BC are protected under common law and the Land Title Act. A developer who uses a neighbouring property for construction access without a signed agreement commits trespass and may be restrained by a BC Supreme Court injunction.

Strata corporations face additional considerations. A strata corporation granting a Licence to Construct over common property must comply with voting and approval requirements under the Strata Property Act, SBC 1998. The Strata Property Act, SBC 1998, c. 43 specifies the threshold for strata council and owner approval of agreements that affect common property. Executing a Licence to Construct without proper strata authorization exposes the strata council to liability and may render the agreement unenforceable.

What Must Be in a Licence to Construct Before a BC Property Owner Signs?

A properly structured Licence to Construct in BC must specify the exact scope of access requested, the compensation payable to the property owner, the developer’s insurance and indemnity obligations, a defined expiry mechanism, a holdover compensation clause, and the developer’s obligation to restore the property to its original condition after construction.

Scope definition is the most important provision. The licence must specify precisely which activities are permitted: crane airspace sweeps above a defined elevation, tieback drilling to a defined depth and horizontal distance, or foundation monitoring visits at defined intervals.

Compensation terms must specify the amount, the payment structure (lump sum or periodic), the timing of payment, and the mechanism for additional compensation if the project extends beyond the agreed term. A detailed analysis of compensation benchmarks and negotiation strategies for construction access agreements is covered in ATAC LAW’s guide to crane swing easement compensation in BC.

Insurance requirements must specify minimum commercial general liability coverage of at least $5,000,000 per occurrence, name the property owner as an additional insured, and require the developer to maintain the policy in force throughout the construction period. The developer must provide a current certificate of insurance before accessing the property.

Indemnity provisions must obligate the developer to cover all losses, damages, claims, and costs arising from the licensed activities, including claims by third parties and costs of legal defence. A restoration clause must require the developer to return the property to its pre-construction condition at the developer’s cost, within a defined period after construction completes.

Can You Negotiate a Licence to Construct Letter Received from a Developer in BC?

Every term in a developer’s Licence to Construct letter in BC is negotiable before the property owner signs. Developers send standard-form letters as a starting position, not a final offer. The gap between the developer’s initial draft and a properly negotiated agreement is consistently significant in terms of compensation, insurance coverage, and liability protections.

Common negotiation outcomes obtained by BC property owners include: increased compensation above the developer’s initial offer, developer payment of the owner’s legal review costs, higher insurance coverage limits, strengthened indemnity clauses, clearer scope limitations, earlier expiry triggers tied to construction milestones, and holdover compensation clauses for project extensions. Compensation benchmarks and the payment structures available to owners, including lump sum, monthly, and hybrid arrangements, are set out in ATAC LAW’s guide to crane swing easement compensation in BC.

Developers routinely accept these terms when negotiating with property owners. Property owners who understand the developer’s project economics hold more leverage than they typically realize at the time of first contact.

The City of Vancouver and other Metro Vancouver municipalities publish development permit information for active projects. Reviewing the City of Vancouver Development Permit Board records for a neighbouring project provides useful context about the project timeline, scale, and permit conditions before negotiations begin.

What Happens to a Sale or Refinancing If a Licence to Construct Is in Place?

An unregistered Licence to Construct does not appear on the property’s title and does not automatically bind a purchaser. However, the existence of an active construction licence must be disclosed to a prospective buyer as a material fact affecting the property, and lenders may require specific representations before advancing mortgage financing on a property subject to an active licence.

Property disclosure obligations in BC require sellers to disclose facts materially affecting the value or use of the property. An active Licence to Construct that grants a developer the right to swing a crane over the property or install tiebacks in the soil is a material fact. Sellers who fail to disclose an active Licence to Construct to a purchaser risk claims for misrepresentation after closing.

Refinancing a property subject to an active Licence to Construct requires the lender’s mortgage instructions to be reviewed for any restrictions on granting third-party access rights. Some institutional lenders require advance consent before a borrower signs a construction access licence. Others require notification only. Property owners planning to refinance should review their mortgage terms before executing any Licence to Construct agreement.

Property owners who signed a Licence to Construct and are now experiencing issues with developer compliance, scope creep, compensation disputes, or construction damage to their property benefit from legal review of the agreement’s enforcement provisions. Contact ATAC LAW to speak with a BC construction lawyer about a Licence to Construct dispute or to review a new agreement before signing.