By Graydon Ebert, Associate
More and more, owners of multi-unit residential buildings are becoming interested in converting their rental property into condominiums, for a variety of reasons. This conversion raises a whole host of issues for both the owners and the renters of the property.
To convert the property, the owner will need to apply to the municipality for approval of the conversion. As this conversion is considered a subdivision of land, approval of the conversion is subject to the subdivision control provisions found in the Planning Act. These provisions set out the criteria that the municipality shall consider when approving the conversion. They also allow the municipality to impose reasonable conditions on the approval. The Condominium Act also allows the municipality to require that the owner have an inspection of the property carried out by an engineer or architect who must report back to the municipality. The municipality can then impose any conditions it considers reasonable in light of the report. What this all boils down to is that if an owner wishes to convert its property into a condominium, the owner should be prepared to satisfy a laundry list of conditions from the municipality, dealing with such things as building deficiencies, reserve funds and more.
The main question a renter wants to know is whether their rights are affected by the conversion of the property to a condominium. There are restrictions on a landlord’s right to possession of premises converted to a condominium when it is occupied by a tenant. Generally speaking, a purchaser of a newly converted condominium unit does not have a right of possession of a unit over the right of an existing tenant. This means that the purchaser of a newly converted unit must honour the lease of an existing tenant. Additionally, if the landlord is a developer and not a private unit owner, the tenant shall have a right of first refusal over any perspective sale of the premises on the same terms and conditions as the prospective buyer.
The above is intended as a general overview of the condominium conversion process. If you are the owner of a property and wish to convert it into a condominium or a renter of a property which the owner intends to convert to a condominium, and you want more information about the process or you want to know your rights, please do not hesitate to contact one of our real estate lawyers.