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...problem solvers An Intro to Condo Conversions in Ontario “Diamonds in the Rough” Mark R. McMackin • • • • Partner at Ricketts Harris LLP practicing in the Commercial Real Estate and Corporate Law. His experience spans many aspects of commercial real estate law including financings and refinancings, condominium, design build and subdivision development, co-ownerships, co-operative, life lease developments, acquisitions and dispositions as well as industrial, office and retail leasing. Has acted for financial institutions, real estate developers and builders as well as landlords and tenants of both commercial and residential properties. In addition since 1998 Mark’s range of legal interest has included the conversion of co-operatives, co-ownerships, industrial and residential apartment properties throughout Ontario. Mark on occasion has acted as a consultant for condominium matters and conversions in other Canadian Provinces and the Middle East. LL.B., Dalhousie Law School, LL.B University of Southhampton Queens University BA (Hons) Called to the Ontario Bar, 1997 Mark R. McMackin Ricketts Harris LLP Barristers and Solicitors ING Tower 181 University Avenue (at Adelaide) 8th Floor Toronto, Ontario M5H 2X7 Business:416-364-6211ext 214 Direct::647-288-3359 Fax: 416-364-1697 Email:mmcmackin@rickettsharri s.com Condoconversions.ca Key Points to Remember • Do your Homework • Build a team of experienced professionals around you • Keep the Tenants in the Loop • Don’t Take the City Planner’s Word or Recommendations as the Gospel REIN Condominium Conversion Checklist • Stage 1 – Identification of Property for Conversion – Obtain information regarding possible candidate properties a. Age and state of repair b. Composition of the property “unit count and unit mix” c. Rent information “range of rents by unit type and detailed review of Rent Roll Assessed by MRM d. Number of vacancies and review current CMHC local statistics Assessed by MRM e. Whether there are any unique architectural features f. Determine status of title Assessed by MRM g. Determine whether “as built” architectural and structural plans exist or the cost of obtaining them h. Parking spaces REIN Condominium Conversion Checklist • Stage 2 – Approval of Condominium Conversion 1. Preliminary meeting with Planning staff to discuss municipal conversion policy 2. Prepare and submit applications 3. Tenant Meeting to discuss Section 51 of the Residential Tenancies Act regarding sitting tenants security of tenure 4. Prepare sales and marketing program if this is not a long term hold 5. Review reports prepared by municipal departments following circulation, including proposed conditions of draft plan approval 6. Issuance of draft plan approval and retention of consultants for Reserve Fund Study 7. Registration of Condominium Plan, Declaration, By-laws and Rules 8. Turnover Meeting Additional Information • Recent Contributing Articles – – – – • John Jaffey, “Dubai: the new frontier for Canadian business lawyers,” The Lawyers Weekly, March 31, 2006. Robert Todd, “Real estate fraud not diminishing,” Toronto Star, April 7, 2008. Gail Swainson, “Co-ownership offers suite deals,” Toronto Star, August 23, 2008. Co-Ownerships “Real Estate Broker is Working Outside the Box,” Now Magazine, September 2008. Publications – Mark R. McMackin, “Welcome to Your Brand New 70 Year Old Condominium: Overcoming the Challenges of Condominium Conversions” The Canadian Institute’s Condominium Conference, March 30, 2007. • Useful Links – www.condoconversions.ca – www.rickettsharris.com