Some Considerations in Converting Apartments to Condominium

Post by: Craig Robson

Ontario developers who wish to complete condominium conversions should note:

  1. There is no Tarion warranty coverage for existing buildings that are converted to residential condominium.  This may concern buyers.  To the developer, it means that the project does not have to be registered with Tarion.  No security needs to be provided to Tarion.
  2. Because there is no Tarion coverage there are no Tarion deposit receipts and hence all monies received from buyers on agreements signed before registration of the condominium must be kept in trust by the developer’s lawyer unless bonding or insurance that complies with the Condominium Act regulations is provided.
  3. Many municipalities wrongly assume a request to convert to condominium is a license to request fees and payments that are not warranted or in accordance with legislation or case law.  For example, requiring a park dedication or cash in lieu as a condition of converting an existing residential building to condominium is simply not warranted by the Ontario Planning Act, the Ontario Condominium Act, nor applicable case law.  Such a conversion does not give rise to any increased need for parks.  Hence there should be no payment of cash in lieu of parkland dedication or parkland dedication.
  4. Many communities have restrictive Official Plan policies discouraging conversions.  While this is misguided in most places other than Toronto, it’s a fact.  Municipality policies on conversion should be reviewed before taking too many steps towards a conversion.  It’s too bad that many municipalities do not realize that converted older existing rental stock is the only housing that many people can afford to buy.  Why municipalities stand in the way of such entry into the home ownership market by lower income people is a mystery and disappointing.

http://www.rcllp.ca

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