December 2003

OnFebruary 19, 2002, the Act and its regulation (MR 28/2002) came into force.  The objective of the Act is to eliminate or suppress certain specified activities in and about properties, including in particular, but not exclusively limited to, residential properties.  These include use of a property for the consumption or sale of alcohol illegally, the consumption and sale of other drugs, and prostitution and related activities.  Provision is made for the making of complaints concerning such uses to a government official (the “Director of Public Safety”), the making of applications to the Court of Queen’s Bench for orders, and the making of such orders.  Orders may require the vacating of a property and a prohibition on any re-entering or re-occupying of the same, the termination of a tenancy and the closing up of a property for a specified period of time.  Lawyers acting for the owner a property which may become subject to the Act, potential purchasers or mortgagees of a property and their respective lawyers should be aware of the Act and its potential impact on the property.  Section 38 imposes obligations of disclosure on an owner whose property become subject to an application for an order under the Act (or whose property becomes subject to such an order) where the owner is selling or leasing the property.

            Unless and until the provincial government establishes an easily accessible and low-cost mechanism to enable lawyers to determine, with respect to a particular property, whether or not a complaint has been made, whether or not an application has been made and whether or not the Court Order has been made, it would be appropriate for a lawyer advising his or her client with respect to a contemplated transaction with respect to the client’s property as to the adverse impact that the Act could have on the property and on the transaction.  At this point in time, the government does not appear ready to establish such a mechanism although it appears likely that when a Court application is made, the name of the property owner will be included therein so that lawyers may obtain some information by searching in the Queen’s Bench Office. 

            However, such a search may not be entirely reliable and it certainly would not indicate whether or not a complaint had been made, or whether or not there was the possibility of a complaint based upon inappropriate activities being conducted in and about the property.  It is our understanding that even when a Court Order is made under the Act, there is no mechanism to have it registered against title.

            Given this situation, it is recommended that:

1. A lawyer acting for a property owner who is consulted with respect to a contemplated real estate transaction make himself or herself sufficiently familiar with the Act so as to be able to advise as to the possible adverse effects of the Act.  This may be particularly critical in the case of a property owner who does not reside on site and has little knowledge of what’s going on at the property.  It might be useful for lawyers acting for owner/vendors to have a standard form letter to hand out to their clients which outlines (with as little “legalese” language as possible) the possible impact of the Act on the owner and any transaction he or she is contemplating.  It is appreciated that with respect to some owners and their lawyers, the lawyer may feel embarrassed to raise the spectre of the Act in relation to the client’s property given the moral opprobrium usually associated with the specified uses stipulated in the Act.  This embarrassment could perhaps be eliminated, or at least minimized by advising the client that providing advice on this matter is required by your firm's policies.
2. Because it is arguable that the usual promise in a purchase and sale contract to the effect that the seller promises the purchaser that the property will be transferred “free and clear”, would not cover the potential adverse effects of the Act, lawyers are encouraged - where they have the opportunity to advise clients as to the contents of purchase and sale agreements before they are signed - to include in their clients’ contracts, representations negativing the application of the Act to their clients’ properties.  This could take the form of a series of representations along the lines of what is suggested below to be included in the owner/vendor’s statutory declaration, or perhaps it could be as simple as a statement to the effect that “No activities are being conducted in and about the property which has resulted, or which would, could or might result in an order being made under the The Safer Communities and Neighbourhoods Act (Manitoba) with respect to the property”.
3. Lawyers acting for a property owner (whether as vendor or mortgagor), lawyers acting for purchasers and lawyers acting for mortgagees require the property owner to include in the usual vendor’s statutory declaration as to possession, or obtain a separate statutory declaration from the owner which includes the following statements:

(a)          That the owner is not aware of and has no reason to believe that the property is being used for any of the "specified uses" as defined in Section 1(1) of the Act (the descriptions of the "specified uses" should be set out, virtually verbatim from the definition in the Act, rather than the statement being merely something like "I am not aware of and have no reason to believe that the property or any portion or portions thereof are being used for any "specified uses" as defined in The Safer Communities and Neighbourhoods Act (Manitoba)”.  The reason for this is because many (if not most) property owners will not be aware of the list or the whole list of “specified uses” in Section 1(1).

(b)          That the owner is not aware of and has no reason to believe that a complaint concerning the property or any portion or portions thereof has been made under the Act alleging that the property's community or neighbourhood is being adversely affected by reason of the property being used for one or more "specified uses" aforementioned.

(c)           That no application has been made to the Courts for a community safety order under the Act pertaining to the property or any portion or portions thereof; and

(d)          That no community safety order has been made under the Act pertaining to the property or any portion or portions thereof.

Needless to say, if the owner advised that he or she could not then make one or more of the above statements because such statements would not be correct, the statements would have to be modified to reflect the reality, or at least the reality as the owner then understood/knew it.

            The statutory declaration should also include a statement by the owner to the effect that its contents - or at least, and in particular, the above proposed statements pertaining to the Act - are to be relied upon (the owner specifically acknowledging the same) by all of the owner's solicitor, the potential purchaser, the potential mortgagee of the purchaser and the respective solicitors of the potential purchaser and the potential mortgagee of the purchaser.  Such a statement, in particular that the owner/vendor’s own solicitor can rely on the statutory declaration, is not usual, but it provides some degree of comfort to the owner’s lawyer that he or she has at least advised the client about the possible impact of the Act.