Converting lands to “Land Titles Absolute” before condominium registration

Post by: Craig Robson

In Ontario, before a condominium can register, the lands must be registered in “Land Titles Absolute” or “Land Titles Plus”.  These are the highest categories of title available under the Land Titles Act.  Most Ontario lands continue to be “Land Titles Conversion Qualified”.  The “Conversion Qualified” category has qualifiers that do not apply to the “Absolute” and “Plus” categories, including the qualifier that “Conversion Qualified” lands are subject to “any title or lien that, by possession or improvements, the owner or person interested in any adjoining land has acquired to or in respect of the land”.

The application to convert requires a title search by the project lawyer and a boundary survey by the project surveyor.  The boundary survey is circulated to the neighbouring land owners with a warning that if they do nothing the boundary shown on the survey will be certified as the true boundary of their property.  If a neighbour does not agree with the boundary, then the neighbour can object to the application.

In greenfield developments there are usually far fewer boundary issues than exist in built up areas. In built up areas, very often fences are constructed “off boundary”, sheds encroach and significant use has been made of the proposed condominium property by neighbours.  If the property has been vacant for some time, this use can be significant and long standing.

It is important to respond to neighbour’s objections in a principled fashion to minimize potential for delays in the conversion process, which if lengthy can also delay condominium registration.

For more on options for responding to objections to your LTA conversion application, check out our earlier blog article here: “Responding to Objections to an Application to Convert to LTA”.

Responding to Objections to an Application to Convert Lands to “Land Titles Absolute”

Post by: Craig Robson

What are your options if an objection is made to your application to convert lands to Land Titles Absolute?

As a starting point, you should always conduct a careful review of the materials that support the objection.  They may on their face show insufficient time has passed to give the encroachment the status it needs to defeat your title.  If this is brought to the attention of the neighbour, they may withdraw their objection.

If a review of the materials is inconclusive, then as a second step you may decide to conduct a sub-search of title of the neighbouring land and seek any other evidence you can find through discussions with other neighbours, building permit records, Google Earth searches and the like to try to prove the encroachment has not been in place for the requisite 10 years before the lands went into Land Titles Qualified.

You might also choose to acknowledge the claim if it does not affect the integrity of your development and convey the encroached lands to the neighbor.  Depending on the circumstances, you may need a severance consent from the Committee of Adjustment and it should be kept in mind that this can be both time consuming and expensive.

Another option is to attempt to negotiate a settlement of the objection with the neighbour.  This approach has the benefit of allowing for all manner of compromise resolutions to be found, but typically only works if both sides are prepared to act reasonably.

You can also try to “go around” the neighbour.  That is, if you don’t need the land in question to be in the condominium, then the survey boundary can be adjusted to exclude the area in dispute.

If all else fails, then the Land Registrar can be asked to convene a hearing to rule on the claim or you can apply for a Court order that the claim is without merit.

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.

Case Comment: Demetriou v. Carleton Condominium Corp. No. 59

Post by: Craig Robson

The reasons and result in the recent case of Demetriou v. Carleton Condominium Corp. No. 59 [2012] O.J. No. 465 (Small Claims Court) appear to us be in error, but it is doubtful there will be any appeal taken to correct the error (given the rarity of appeals from Small Claims Court decisions).

The Court in this matter concluded:

“52     The plain meaning of section 89 dictates that a Condominium Corporation has a clear duty to its unit owners to repair a damaged unit to its standard unit type when first built. It excludes an obligation to repair improvements to the unit done by an owner.”

Despite the fact the decision refers to section 89 of the Condominium Act, it appears the provisions of that section were misunderstood by the Court.

The operative part of section 89 states:

89.  (1)  Subject to sections 91 and 123, the corporation shall repair the units and common elements after damage. 1998, c. 19, s. 89 (1).

The Court appears to have completely overlooked the opening qualifier – “Subject to sections 91 and 123…”.  Section 91 of the Condominium Act clearly states:

91.  The declaration may alter the obligation to maintain or to repair after damage as set out in this Act by providing that,

(a) subject to section 123, each owner shall repair the owner’s unit after damage;

(b) the owners shall maintain the common elements or any part of them;

(c) each owner shall maintain and repair after damage those parts of the common elements of which the owner has the exclusive use; and

(d) the corporation shall maintain the units or any part of them. 1998, c. 19, s. 91.

In this case, the declaration of Carleton Condominium Corp. No. 59 clearly provides that the unit owners are to repair their units after damage.

It is hard to understand how the Court could come to the conclusion noted above given the clear wording of section 91 and the Declaration.

The Court’s conclusions on what constitutes a standard unit for the purposes of repair and insurance obligations under the Condominium Act are likewise suspect.

It is to be hoped that this decision does not become recognized authority by any higher Court, given the apparent error in reasons and the result.

Ontario’s New Form 24 Requirement: Further cost for condominium developers and little benefit to lien claimants

Post by: David Sunday

A new provision has been added to Ontario’s Construction Lien Act (section 33.1) to require a Form 24 – Notice of Intention to Register A Condominium to now be published shortly before a condominium description is submitted for approval.

The legislative intent behind section 33.1 appears to be an effort to provide potential lien claimants with notice that a condominium registration is about to occur – the theory being that they will then have the opportunity to register a lien before registration happens.

In the Form 24 notice, the developer is to list the name and address of each contractor that supplied services or materials to the condominium development during the 90-day period leading up to submission of the plans for approval.

While the requirement seems innocuous enough at first glance, the practical reality is that Form 24 is proving to be quite costly.  It also appears as though it will only benefit lien claimants who subscribe to and read the Daily Commercial News, where Form 24 notices are required to be published.

For any project where the condominium developer is contracting directly with trades, the list of contractors, combined with their contact information, tends to be quite long.

Last time we checked, the Daily Commercial News was charging $4.32 per 1/14 of an inch of a 1.625 inch wide column.  In our experience, Form 24 will often run to 40 inches or more of column, which translates into a publication cost of roughly $2,400.00 before taxes.

Depending on the number of contractors, the cost can be higher or lower, but our experience to date suggests $2,000 – $3,000 is a fairly typical cost where the developer has been contracting with trades directly.

The Form 24 requirement is mandatory and there is the potential for civil liability if the requirement is not complied with. Thus, condominium developers can be held liable to any person who suffers damage as a result of their failure to give a proper Form 24 notice.

Condominium developers now need to factor in the Form 24 cost into their development plans or make a business decision as to whether the high publication costs outweigh the risks of increased civil liability if the requirement is not complied with.

It appears that the legislature did not appreciate the significant added cost that this requirement would add to condominium projects and has not balanced that cost against the limited, if any, benefit this new requirement provides to lien claimants.