It must tell something about the age we live in, but TV shows and movies dealing with zombies have been all over the place for a couple of years now. However, as a real estate lawyer representing large industrial corporations, there is something I fear more than an invasion of undead people on the lookout for fresh brains: the urban sprawl!  And more specifically, the residential invasion of industrial areas caused by the urban sprawl.

This is no secret; municipalities are always trying to open up new part of their territories to development. And this will typically follow a well-balanced equation: developers and constructors will be able to monetize their lands and investments, while homebuyers – often first time buyers – will get to purchase affordable housing where they can raise their families.  Everybody is happy, including the municipalities as these new developments will help grow their taxation basis and contribute in bringing-in additional money in tax revenues.

However, one unfortunate possible consequence of urban sprawl is the implementation of new residential developments way too close to existing industrial operations, with the obvious problems this will create. And one would think that proper land planning from the part of the municipalities would help avoid this kind of situations.  Unfortunately, underestimation of nuisances resulting from industrial operations – mostly noises, odors and traffic – and the need for additional tax revenues will sometimes impair the municipalities’ ability to foresee such obvious challenges.

And this is very unfortunate because once the new development has been implemented, both parties will strongly suffer from this problem:

  • the new residents will soon realize that they must endure the various nuisances caused by the industrial operations on a daily basis, especially during the summer period when the residents want to enjoy their backyards and terraces and when windows are open;
  • the industrial owner who used to be able to run its operations without being disturbed by neighbours now has to manage disenchantment, dissatisfaction and resentment from the new residents and deal with complaints they may file with the municipal or even provincial authorities.

For an industrial owner, this may rapidly become a nightmare, both from a public-relations and from a regulatory compliance standpoint. And this may even get worse if the municipal or provincial authorities start issuing statements of infraction for something which the industrial owner had been doing for years without any problem, but which is now considered to be a nuisance or inconvenience prohibited by municipal by-laws or provincial legislation (e.g. emission of noise above a certain threshold given nearby residential zones).

In addition to this, in Quebec, the industrial owner will also be worried about the no-fault liability regime which is provided for under the Civil Code of Quebec (and which was confirmed by the Supreme Court of Canada in a landmark case decided in 2008), according to which the industrial owner could be held liable for damages if the neighbourhood disturbances are ruled by a court to be “beyond the limit of tolerance” given the context of the situation.

So, what to do or where to hide if an industrial owner starts hearing the screeching noise of an incoming residential invasion?

On the one hand, when setting up industrial sites, corporations should seriously consider buying surplus lands in order to constitute their own buffer zones over which they will always have control. This is the best way to ensure that no undesired neighbours will settle too close. Corporations can also discuss these issues firsthand with the municipal authorities when considering various locations for their implementation, and ask them to set up proper contiguous zoning or buffer zones. However, one should bear in mind that a municipality cannot bind itself in terms of zoning regulation, which means that any future council would always have the discretion to modify the zoning as it sees fit, despite what could have been discussed at the time of the implementation. Hence our recommendation about owning and controlling the buffer areas.

On the second hand, corporations should always stay on the lookout for any new residential development projects in the area where they are located: management teams should look at the billboards while driving around, read the local newspapers, discuss with their employees who live in the area and ask around if they see construction equipment on neighbouring properties. When the potential residential projects are spotted in due time, this will allow the corporations to reach out to the municipal authorities to voice their concerns, discuss anticipated issues and explore possible solutions, including location of buffer zones or parks, or adjustments to nuisance regulation.

This really is a matter of cohabitation and everyone should be involved in the solution.