Condominium Amalgamation – A Few Considerations Regarding the Approval Process
Recently our office has been working on condominium amalgamations as well as proposals for amalgamations for various clients in southwestern Ontario. We have previously blogged about the considerations for amalgamation [https://ontcondolaw.com/2017/09/21/is-it-time-to-amalgamate/#more-8070] and the process [https://ontcondolaw.com/2016/06/27/considering-amalgamation/#more-1947]. Here are a few lessons regarding the amalgamation approval process if the condominiums have already decided to pursue amalgamation and collected the necessary consents required by section 120 of the Condominium Act, 1998 (the “Act”). Coordinating the amalgamation application with your professionals – once the condominiums have collected the necessary consents it is important to have the condominium’s lawyer and the surveyor drafting the proposed condominium plan to get started on the application as soon as possible. Confirming municipal amalgamation application requirements – somewhat surprisingly many municipalities do not have a formalized approval process for condominium amalgamations. This should be confirmed as soon as possible as we have seen amalgamation projects delayed due to discussions with municipal authorities to confirm the application requirements and costs. Tip: amalgamation application via an exemption – if a municipality does not have a formal application process it is worth asking the municipal authority if the amalgamation can proceed via an exemption. If permitted, this option typically involves significantly reduced application fees and an abridged timeline for municipal approval. In our opinion, it should be strongly recommended to the municipal authority that an amalgamation application be permitted to proceed via an exemption as the planning considerations are significantly reduced from a traditional plan of condominium or subdivision application. Municipal authorities should also be reminded that the purpose of amalgamation under the Act is often to reduce duplicated costs: reserve fund studies, audits, cost sharing obligations, landscaping contracts, etc. and as phasing standard condominiums was not permitted until the 1998 version of the Act, so many older condominiums may have been registered as a number of small separate condominium plans on abutting lands. Timing: the condominiums need to remember that while collecting the necessary 90% of owners written consent within the prescribed timeline set out by the Act is the first serious hurdle in amalgamation. The second hurdle as noted above, is the actual process of receiving municipal approval for amalgamation. Depending on a host of variables unique to each municipality, we have often seen amalgamations take over a year to complete the approval process. Owners need to be aware collecting sufficient consents is only half the battle. Food for Thought: interestingly the Act does not specifically require that only condominiums on abutting lands can amalgamate (while Part V of O. Reg. 48/01 does limit amalgamation to standard condominium plans within the same land registry office along with other restrictions). Practically speaking, it seems sensible that condominiums on abutting lands would seek to amalgamate into one condominium plan, however, our office remains intrigued by the possibility of two or more condominiums perhaps blocks away from each other deciding to pursue amalgamation….that would certainly make for an interesting discussion with municipal authorities.