This is a guest blog post written by Michelle Kelly, lawyer at Sutherland Kelly LLP. Michelle’s practice consists almost entirely of condominium law. She also has a blog on condominium law: www.ontcondolaw.com. She can be reached at firstname.lastname@example.org. Thanks for sharing your knowledge, Michelle!
Everyone has heard of the “condo boom” in urban centres like Toronto, but the truth is that condominiums are going up all over Ontario, including in rural settings. The creation of a new condominium includes a number of professionals, including planners, surveyors, lawyers, architects, and engineers, and is governed by the Condominium Act, 1998, its regulations, and a number of other pieces of legislation, like the Planning Act. The purpose of this article is to outline the basic steps involved in creating a condominium in Ontario.
The first phase in developing a condominium is creating a design concept for it. What kind of condominium will it be: standard, phased, common element, vacant land, or leasehold? High-rise, low-rise, townhouse, single detached, or a combination? Once the developer has a concept in mind, the concept should be discussed with the municipality. The first phase may take several meetings before a concept is created that the municipality will support. The first phase is when many reports (i.e. environmental study) are created, a boundary survey of the property is completed by the surveyor, and drawings are prepared by the architect. Depending upon the current use of the property, various land use applications (i.e. an application to amend the zoning by-law) may be required. It is also when the site plan is prepared, and often the application to convert the lands to Land Titles Absolute is started.
The second phase, marketing and sales, is when the condominium’s governing documents (i.e. declaration, description plans, by-laws and rules) and the disclosure package (i.e. budget statement) are prepared. It is critical that these documents comply with the various legal requirements imposed upon developers or the agreements of purchase and sale may not be binding upon the purchasers.
The third phase is when the draft plan of condominium and application are submitted. The municipality circulates the application internally to various departments (i.e. building, planning) and to other entities (i.e. Canada Post, utility providers) for comments on the proposed condominium. The comments will help the municipality generate draft conditions of approval.
Once the building permit is issued the fourth phase, construction, can begin. Various inspections should be conducted during the construction to ensure that it complies with the approved plans, municipal by-laws, the Building Code, and other legal requirements. The developer may allow people to occupy the units, which is called interim occupancy, if it can obtain an occupancy permit from the municipality while construction is completed and before the condominium is registered.
The next phase is to seek final approval of the condominium plan from the municipality. The developer must ensure that the draft plan of condominium conditions are satisfied before asking for final clearance from the municipality. It is also wise to ask the land registry office to review the documents and pre-approve them to avoid delays once the developer is ready to ask for final approval.
Once the draft conditions of condominium are satisfied the documents are sent to the land registry office for registration. The land registry office will register the documents and assign the condominium number (i.e. Wellington Standard Condominium Corporation No. 300) to the project. At this point the condominium becomes a separate legal entity from the developer.
Once the condominium is created the developer will normally transfer the units within a month or two of registration. The land registry office must create new legal property identification numbers (PINs) for each unit before the developer can transfer them. Once a majority of the units are transferred the developer must call an owners’ meeting to give control of the condominium over to the owners. There are a number of legal requirements that must be satisfied within the first year after registration, such as ensuring a reserve fund study, turnover audit, and performance audit are completed. Most often these tasks are completed by the board controlled by the unit owners, but occasionally the developer will have control still and must ensure that the tasks are completed by the deadlines required in the Condominium Act, 1998.