November 5, 2021 | Christianah
Our previous post on special assessments highlighted various benefits buyers enjoy when they purchase condominium units. These benefits include flexibility, affordability, a sense of community and access to on-site amenities. In today’s post, we will examine condominium declarations and their importance to prospective buyers.
What is a Condominium Declaration?
A Condominium Declaration is the constitution of the condominium corporation (“condo”). It provides details of the condominium to which it relates, and it is usually drafted by the builder or developer’s firm. The Declaration specifies information on that condominium, such as the type of units and their boundaries, amenities available, common elements of the condominium that unit owners would share, and elements exclusive to units. It is important to note that Declarations vary with each condo, so common and exclusive elements would differ from one condominium building to the other.
As stated earlier, the Declaration determines types of units and how unit owners can use them. In the 2017 case of TSCC No 1556 and No 1600 v Owners of TSCC No 1556, 2017 ONSC 6542, the Court refused to amend the condo’s Declaration that expressly allowed short-term rentals in the condo building. The Declaration was not inconsistent with the Condominium Act, municipal zoning by-laws or restrictive covenants. However, in another case, Ottawa-Carleton Condo Corp 961 v. Menzies, the Court held that short-term rentals are not permissible because they breached the condo’s Declaration. Since a Declaration is an important document that establishes a condo corporation, it is sometimes difficult to change the content. Where it needs to be changed, there must be written consent of 80% or 90% of unit owners in the building. This is provided for under Condominium Act, 1998, SO 1998, c 19, s 107.
Declarations also contain restrictions that every unit owner must comply with. This could include pet restrictions, smoking restrictions and other limits. Owners are usually given the Declaration and disclosure statement to sign before occupying their condo and are bound to obey the limits stated in the Declaration.
In the 2021 case of Urmila Holding Inc. v Anand Holdings Inc., 2021 ONSC 2707, the Court had to determine whether a tenant’s use of his unit as a dental clinic was allowed under the exclusive usage provisions stated under the Declaration. Dr. Anand was granted a 10-year use of the unit as a dental clinic. He tried to renew for another 10-year term when the term expired but was granted only five years. He then discreetly purchased the adjacent Unit 21 and moved his clinic from Unit 20 into the new unit. Urmila contested this because it violated the exclusivity right to use Unit 20 as a dental clinic and was against the Declaration. However, Dr.Anand argued that he could transfer the exclusive usage granted to him under the Declaration as long as he gave written consent to the tenant in Unit 20: himself. The Court held that the Declaration allowed Dr. Anand to transfer the exclusive dental usage to Unit 21 but only for his remaining term as a tenant in Unit 20.
Declarations are critical documents for prospective buyers and may contain technical terms that Buyers may not understand. It is therefore essential to speak to a legal professional to discuss these details before signing any documents.
At Northview Law, we would love to discuss any questions about how Declarations might affect you, and any other real estate concerns you may have. You can book a free consultation with Northview Law by following this link, or contact us at 416-639-7639. We look forward to hearing from you soon.