Shared Facilities Agreements Will Soon Be Mandatory
Section 21.1 of the Condominium Act is a proposed new section to the legislation. It will require a shared facilities agreement to be prepared and registered for pretty much any property that is shared, or will be shared (with another party), by a condominium or a prospective condominium.
This section is not yet in force, and the related regulations have not yet been prepared. But it could arrive any day (as part of the next phase of the amendments to the Condominium Act).
Section 21.1 will apply where certain parties:
“share or are proposed to share in the provision, use, maintenance, repair, insurance, operation or administration of any land, any part of the property or proposed property, any assets of a corporation or any facilities or services.”
In such situations, a shared facilities agreement between the sharing parties – prepared in accordance with the pending new regulations – will be mandatory.
According to the section, this applies to property that is shared (or is proposed to be shared) by any of the following parties (or any combination of the following parties):
· Two or more condominium corporations.
· A condominium corporation and any other person.
· A condominium corporation and one or more declarants.
· A declarant and one or more condominium corporations.
· Two or more declarants.
· A declarant and any other person.
We’ve seen many situations where a condominium shares property with another party (often another condominium), but there is no shared facilities agreement. A common example is a shared right-of-way or a shared easement, with no agreement dealing with sharing of costs in relation to that shared right-of-way or easement. A shared facilities agreement will soon be mandatory in such cases.
In summary, if your condominium, or proposed condominium, shares or will share any property with another party (as described above), a registered shared facilities agreement will soon be mandatory. So, if you don’t have one, now may be the time to start the negotiation process so that you are in a position to finalize an agreement when the new regulations arrive (and Section 21.1 is proclaimed in force).
Section 21.1 also refers to enforcement matters as well as joint by-laws and rules (between the sharing parties); but much of the detail will be contained in the pending regulations.
Here at Davidson Houle Allen LLP we’ve prepared many such agreements and we’re pleased to assist if needed!
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