Five Common Issues in Mixed-use Condominiums

Mixed-use condominiums, which include both a commercial and a residential component, provide commercial owners with potential on-site clientele and condominium owners with the convenience of having a restaurant, grocery store, or a variety of other businesses available in their own building.

Depending on the nature of the development, mixed-use condominiums can work well and have benefits for all owners. In addition to having their benefits, though, mixed-use condominiums are also prone to certain issues, including:

  1. Allocation of common expenses – The developer determines the allocation of proportionate shares for common expenses when preparing a condominium declaration. In many cases, the allocation does not reflect the actual contemplated usage of the common elements, or expenses for services. This can lead to some resentment, or ill will, between residential and commercial owners.
  2. Representation on the board of directors – In a situation where a condominium has significantly more residential owners than commercial owners, it is not difficult to see how there can be inequities with respect to representation on the board. In some cases, mixed-use condominiums will have a bylaw, which requires that a certain number of positions on the board be reserved for commercial owners. However, the bylaw must be carefully crafted to ensure that the best interests of the corporation are granted first priority.
  3. Safety and security – One of the central concerns in a mixed-use setting is to ensure that the development is built in such a way as to provide for the security of all residents of the complex. In other words, the development must take into account how each of the users, owners, occupants, or tenants, or their agents or guests, will access their portion of the development, without creating security risks for others.
  4. Complaints – Given the nature of communal living, every condominium corporation must deal with complaints from owners from time to time. However, the type of complaints that arise in a mixed-use setting can be a little trickier to manage, given that the expectations of the occupants are not necessarily common. Condominium corporations should consider implementing a policy for addressing complaints in a consistent manner.
  5. Human rights considerations – The upcoming implementation of the new standards pursuant to the Accessibility for Ontarians with Disabilities Act (AODA) may result in some interesting issues for mixed-use condominiums, due to differing obligations for certain commercial owners versus residential owners.

At the end of the day, a mixed-use development is what each member of the condominium community makes of it. Owners need to be aware of the potential for these types of issues and develop a proactive strategy for resolving them if they arise. Both residential owners and commercial owners need to work together to ensure the success of this type of condominium.

For more information, read the full article, Co-existing in mixed-use condominiums, by Nancy Houle and Cheryll Houle, as published in Condo Business on the Real Estate Management Industry (REMI) News Network.