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    Shared Common Elements in a Condominium – An explanation of POTL and CECC

    Condominium developers may be required by the City to purchase a Parcel of Tied Land (“POTL”), as authorized in the Condominium Act, 1998 (the “Act“), to be tied to their common elements. Conversely, condominium owners currently enjoying an informal arrangement of shared costs for common elements may want to formalize it by exploring a Common Elements Condominium Corporation (“CECC”). What is a POTL and a CECC, how are they linked, and what are the advantages of having them if you are a condominium developer or condominium owner? 

    A CECC consists solely of common elements, not units. The property owned by a CECC is only limited by the declarant’s imagination. It can range from something as simple as a shared parking area to a golf course. In many cases, the CECC includes roadways and sewer/drainage services, which are maintained at the CECC’s expense.

    The owners of a common interest in the CECC are required to own a separate POTL in freehold within the same Land Titles Division to which their common interest is attached. This could be a lot with a detached home, a townhome, or a vacant lot for example. POTL lands do not have to be contiguous with the CECC, but must be in the same Land Titles Division. When owners of freehold POTL properties take title, they also receive a fractional common interest in the CECC. The POTL property owner’s interest in the CECC comes with the right to use (and pay for) CECC facilities. A POTL property owner’s interest in the CECC cannot be severed from the owner’s property.

    Various terms can be contained in the condominium declaration that creates the CECC, including maintenance fees for a storm water retention pond for example. Rights and obligations to financially contribute to the upkeep of the facilities will run with the owner’s freehold POTL property. In the event that an owner refuses to pay common elements fees to the CECC, a condominium lien can be registered on the owner’s freehold POTL property.

    Section 142 of the Act confirms that a transfer of an interest in a CECC is not a subdivision and therefore does not require approval of the municipality or local planning authority under Section 50 of the Planning Act. In the event that an owner of a freehold POTL property attempted to sever their own respective piece of land into smaller parcels with consent, Subsection 139(4) of the Act provides that the owners of the new smaller parcels will be joint owners of the common interest that attached to the original parcel. The common interest in the CECC is not severable from the owner’s separate parcel of tied land to which it is attached.

    Typically, the Common Elements Condominium Corporation concept is used where the owners of existing properties wish to create and share the use of and responsibility for a shared facility or service. A CECC is an attractive solution to resolving ongoing maintenance costs of shared real estate assets or services.

    If you are a condominium owner or developer and have questions regarding shared common elements, please contact our Real Estate Group, or Michael Brown at 613-563-6676.

    This article is not intended to provide legal advice.

     

    The content on this website is for information purposes only and is not legal advice, which cannot be given without knowing the facts of a specific situation. You should never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. The use of the website does not establish a solicitor and client relationship. If you would like to discuss your specific legal needs with us, please contact our office at 613-563-7544 and one of our lawyers will be happy to assist you.

    Posted By: Michael Brown of Merovitz Potechin LLP

    Associate

    A graduate of the University of Ottawa, Faculty of Law, Michael was admitted to the Ontario Bar in 2010. Michael’s practice focuses primarily on representing and providing advice to clients on real estate development, purchase, financing and sale transactions. He also assists clients with business law matters such as lease review and drafting, planning and development proposals.

    In 2003, Michael was elected as one of Eastern Ontario’s youngest municipal councilors for the Township of Elizabethtown-Kitley. As a councilor, Michael reviewed, debated and voted on by-laws, budgets, proclamations, resolutions, and staff and committee recommendations. Michael continues to serve on various municipal boards and committees for the City of Ottawa. Michael brings to the firm a rare depth of experience arising from his unique background in municipal politics and environmental affairs. These, in addition to Michael’s other aptitudes, have proven invaluable to his clients. His in-depth understanding of such matters provides clarity and direction to clients in the fog of bureaucratic restrictions, typical in any real estate transaction.

    When Michael is not in the office, he enjoys seeing the latest popcorn action movie, travelling around the Ottawa Valley area on thrifting, local farmer’s market and antiquing excursions and visiting his extended family in Brockville.

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