Rental properties may be registered as condominium corporations when they are
built or converted to condominium corporations at a later date. While these
properties are registered as condominiums, they are operated as rental
properties and all units are owned by one single entity. In these cases, the legal
status of the property as a “condo” has little operational impact on the landlord. In
fact, the tenants in these properties would likely never know that the building they
are living in is a registered condominium.
Lately, the Condominium Authority of Ontario (“CAO”) has been contacting
registered condominium corporations who have not registered with the CAO.
This includes properties that are registered as condominiums, but that are the
kind of non-operational condominiums that are described above.
How does the CAO know that the property is registered as a condo? The answer
is quite simple. The Land Registry office is required to keep an index of
condominiums registered in its jurisdiction. Since the properties are registered
as condominiums and are listed on the index, the ability of the landlord to “fly
under the radar” is limited. It is relatively easy for the CAO to check to see if the
condominium has been registered, filed the necessary reports, and, most
importantly, paid the applicable fees ($1/unit/per month).
There is risk in not registering and filing the returns with the CAO as required
under Section 9.2 of Part II.1 (and paying the fees). While we are not aware of
any enforcement steps taken against non-operational condos at this time, I would
expect the CAO to escalate attempts to obtain voluntary compliance before
issuing charges but there is a risk that the property(ies) could be charged with an
offence under the Condominium Act, 1998.
As for the operations of the properties, all registered condominium corporations
are governed by the Act. The non-operational condominium is subject to all of the
same requirements as any other condominium corporation pursuant to the
legislation and the CAO’s Registrar has the authority to bring a compliance order
pursuant to the new Section 134.1. This authority is only with respect to specific
provisions, including: paying fees owing to the CAO, filing condominium returns
to the CAO and compliance with an arbitration order pursuant to Section 132(9).
Unless the industry seeks and obtains and exemption for these non-operational
condominium corporations, it is likely that the owner will be required to take the
steps necessary to register the condominium buildings with the CAO, file the
returns and pay the associated fees.