How Does a Condominium Corporation Lease Roof Top Space?
Leasing a condominium’s roof top space, normally to a telecommunications provider, can provide some revenue which can serve to reduce overall common expenses. Once the condominium board has made the decision to lease roof top space to a telecommunications provider, the condominium must then consider the procedural requirements under the Condominium Act.
The roof top typically forms part of the common elements of the condominium. Section 21 of the Condominium Act states that the Corporation may lease a part of the common elements, provided this is authorized by by-law. Accordingly, a by-law authorizing the lease of the roof top will be required prior to entering into the lease.
If a telecommunications provider wishes to lease roof top space from the condominium corporation, it will be because the roof is well situated for their purposes. As a result, the condominium corporation may be approached by other telecommunications providers who wish to enter into additional leases.
We therefore recommend that the by-law not be specific to the particular telecommunications provider. The by-law should contain more general wording allowing the condominium corporation to lease portions of the common element roof, identifying the location of the potential leased areas and all potential purposes for such lease(s). This provides the condominium corporation with the latitude to enter into other telecommunications leases as it wishes.
The by-law authorizing the leasing of the roof top space must be passed by a resolution of the board, confirmed by the majority of all owners at a meeting held for that purpose, and registered prior to it coming into effect.
The proposed roof-top lease should also be carefully reviewed for required revisions. [In our experience, the draft lease from the prospective tenant can often be “slanted” in favour of the tenant.]
The corporation may wish to obtain the assistance of legal counsel, and may also wish to have the corporation’s engineer review and approve the proposed roof-top installations. In most cases, we feel that the tenant should agree to cover the related legal and engineering costs.
One other note: In most cases, the corporation’s non-profit status should not be jeopardized by this sort of lease; but this is something that should be verified in each case with the corporation’s legal counsel and/or auditor.
Our experienced team of condominium lawyers can assist your condominium with any of the required steps to lease your roof top space.