Mutual Use Agreements

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Shared Facilities / Mutual Use Agreements

Short Answer

Two or more condominium corporations (or a condominium corporation and another person) may share the use of land, buildings, structures or facilities, and enter into agreements governing their respective rights and obligations in relation thereto.

Definition

A mutual use or shared facility agreement is an agreement that provides for the mutual use, provision or maintenance of certain lands or facilities between or amongst condominium corporations, or between the condominium corporation and any person (e.g., the declarant). Such agreements generally include easements or other rights of access and/or particulars as to the sharing of costs amongst the parties.

The Protecting Condominium Owners Act, 2015, when it comes into force, will require that any and all shared facilities arrangements - apparently including those already in existence - will be required to be made subject to agreements that meet particular requirements to be set out in the regulations made under that Act. This article will be updated once the regulations are drafted and made available for review.

The new Act also provides that all easements or covenants included in such agreements will run with title to any lands subject to them. This last point is an important and beneficial change to the law that should help protect some condominiums where the current situation is that some or all provisions in an existing shared facilities agreement might be rendered unenforceable when ownership of the non-condominium property changes hands.

What you need to know…

...as a Unit Owner

Owners should be familiar with the rights and obligations arising under any Mutual Use (Shared Facility) Agreement to which the corporation is a party, and should not seek to interfere with or abuse the same as this could constitute a default under the agreement and have a costly or otherwise damaging impact upon the corporation.

…as a Board Member or Manager

Mutual Use or Shared Facility Agreements may be registered on title to the condominium lands. The board is responsible to ensure the obligations of the corporation are properly carried out and to avoid any defaults or penalties that are not in the best interest of the corporation. The board is also responsible to protect and seek enforcement of the corporation’s (or unit owners’) rights under such agreements.

The existence of a Mutual Use or Shared Facility Agreement, or even just an easement agreement, may implicitly impose cost-sharing obligations on the corporation even if specific cost-sharing provisions are not included in the written agreement.

Section 113 of the Condominium Act, 1998, (the "Act") provides that where a Mutual Use or Shared Facility Agreementhas been entered into by the corporation prior to the Turnover Meeting, within 12 months following the election of a board of directors at such Turnover Meeting any party to the agreement is entitled to apply to the Superior Court of Justice for an order terminating or amending the agreement. The court may terminate or amend the agreement only if it is satisfied that the disclosure statement did not clearly and adequately disclose the provisions of the agreement or the agreement or any of its provisions produces a result that is oppressive or unconscionably prejudicial to the corporation or any unit owner.

…as a Declarant

If making a Mutual Use or Shared Facility Agreement with or for a condominium development, the declarant should ensure that the agreement sets out fair and reasonable rights and responsibilities of the parties to the agreement, and that such provisions are clearly and adequately set out in the disclosure statement. This may help avoid litigation and the early termination or amendment of the agreement by the court pursuant to section 113 of the Act.