By Lorne Shuman
Many people believe that a condominium is a tall building with many units and some common amenities. While this is true, there are a number of other different types of condominiums in Ontario. One unique form of condominium ownership is called a Common Elements Condominium (“CEC”). With a CEC, there is an entity called a Parcel of Tied Land or POTL. A POTL is a freehold parcel of land or a standard condominium unit which is tied to a share in a CEC. The POTL is “tied” to the share in the CEC which means that the owner of the POTL cannot sell the POTL without also selling its share in the CEC. The two interests cannot be severed.
With a POTL, each home or townhome owner typically owns a piece of land and the building on it and also has a part ownership in the common elements of the CEC. The common elements include things like parking areas, access roads, sidewalks, and parks. As an owner of a POTL, and part owner of the common elements, you will have the right to use the common elements facilities. This type of ownership is often found where there is shared ownership to a waterfront or beaches and docks.
As a part owner of the common elements, you will have rights and obligations. You will be responsible for paying your share of the expenses related to the operation and maintenance of the condominium’s common elements. Like a highrise condominium, there will be monthly common expenses or maintenance payments which will be collected by a property management company which is responsible for the day to day operation and administration of the condominium corporation.
As a real estate professional, it is important to note that when making an offer to purchase a POTL, it is prudent to make the offer conditional on a lawyer’s review of the status certificate and related condominium documentation. The status certificate and condominium documents will provide valuable information about the condominium corporation such as the monthly common expenses, the by-laws and any rules that are part of the condominium. By making the offer to purchase conditional, the Buyer will have an opportunity to review the documents with its lawyer to determine if there are any issues with the condominium corporation’s finances, if there are any special assessments or other issues that might influence one’s decision to purchase the unit. Finally, realtors should be aware that there is a OREA/TREB form specifically for a POTL that should be used when your client is purchasing a POTL.
Article Courtesy of:
Isenberg & Shuman Professional Corporation
5075 Yonge Street, Suite 804
Toronto, ON M2N 6C6
Tel: 416-225-5136 x216