As noted in some of our previous blog postings, many condominium corporations share facilities with other condominium corporations or other properties.
While in most cases there are shared facilities agreements that govern the operation, maintenance and costs related to these shared facilities, this is not always the case. Where the facilities are shared between a residential condominium and a commercial property, this often results in the residential unit owners paying more than their fair share of the costs related to the shared facilities.
Where there is only one electricity, water or gas meter that services both the residential condominium and the commercial property, if there is no shared facilities agreement then the residential unit owners end up subsidizing the commercial enterprises. This is particularly problematic where the commercial businesses consume an inordinate amount of utilities, such as a restaurant or laundry for example.
Bill 106 will require that there be a shared facilities agreement in place that meets the prescribed requirements set out in the regulations. While the regulations have not yet been drafted and circulated, the regulations could require that separate meters be installed or could require that the shared facilities agreements set out a method for the equitable allocation of shared costs to eliminate any subsidization.
Bill 106 also provides that unless the regulations provide otherwise, any easement or covenant, whether positive or negative in nature in a shared facilities agreement will run with the land and will be binding on both the real property that has the burden of the covenant, as well as the property that receives the benefit of the shared facilities. This is a significant change to the long-standing legal tenet that only negative covenants run with the land and can be enforced against subsequent landowners. This provision will prevent parties from trying to avoid paying for a portion of shared facilities costs on the basis that they had never committed in writing to contribute to these costs. Our previous blog posting reviewed the case of Middlesex Condominium Corporation 229 v.WMJO Ltd. where some of the parties receiving the benefit of shared facilities had taken this position.
Readers should note that the provisions of Bill 106 could change before the legislation is enacted.