©Author: Bestland Consulting
In Ontario, the development and sale of condominiums are subject to specific regulations and requirements set forth by the Home Construction Regulatory Authority (HCRA), as well as Tarion and other governing bodies. One important role in condominium construction is that of the declarant. Understanding the role and responsibilities of a declarant is critical for anyone involved in the condominium development process, from builders and contractors to real estate professionals and investors.
In this article, we will explore what a declarant is, their legal obligations in condominium construction, and how they are involved in the process of registering and selling new condominium units in Ontario. Whether you’re new to the industry or have experience in construction, this guide will help clarify the declarant’s role and the implications for your business.
What is a Declarant in Condominium Construction?
A declarant is the individual or entity responsible for establishing and registering a condominium in Ontario. They are typically the developer or builder behind the condominium project, and their primary role is to declare the condominium corporation by filing a Declaration of Condominium with the Land Registry Office.
Key Responsibilities of a Declarant
The declarant plays a vital role throughout the condominium construction process, starting from project conception to the final sale of individual units. Their duties include:
- Declaring the Condominium: By filing the declaration, the declarant legally creates the condominium corporation, which is necessary for the condominium to exist as a legal entity.
- Organizing the Condominium’s Legal and Physical Structure: The declarant defines the property boundaries, common elements, and the division of ownership between common areas and individual units.
- Completing Construction: The declarant oversees the completion of the construction project, ensuring it meets the requirements set out in the declaration and complies with local building codes.
- Ensuring Warranty Compliance: The declarant is responsible for enrolling the condominium project in the Tarion Warranty Program, which provides consumer protection for new homebuyers in Ontario.
- Transfer of Control: Once construction is complete and the project is fully sold, the declarant typically transfers control of the condominium corporation to the homeowners or board of directors.
Why is the Role of Declarant Important?
The role of a declarant is integral to the smooth functioning of the condominium development process. Not only do they legally establish the condominium corporation, but they are also responsible for meeting several regulatory, legal, and financial obligations during the development and sale of the condominium units.
1. Establishing the Condominium Corporation
A declarant is responsible for creating the legal structure of the condominium corporation. This is done through the filing of the declaration, which must comply with the requirements outlined in the Condominium Act, 1998, and other applicable laws. This declaration will outline the property boundaries, the specific unit ownership arrangements, and the governance structure of the condominium corporation.
2. Protecting Consumers Through Tarion Warranty
By acting as the declarant, the developer is also responsible for ensuring the project is registered with Tarion Warranty Corporation, which protects homebuyers from certain defects in new homes. This coverage is a critical aspect of the condominium development process, ensuring that consumers have recourse in the event of structural defects, workmanship issues, or non-compliance with the Ontario Building Code.
The Legal Process of Being a Declarant in Condominium Construction
Step 1: Declaration and Registration
To officially create a condominium, the declarant must submit a Declaration of Condominium to the Land Registry Office. This legal document outlines the key details of the condominium project, such as:
- Property Description: The legal description of the land and the boundaries of the condominium.
- Units and Common Elements: A breakdown of individual units, common areas, and shared facilities.
- Ownership Division: The division of ownership between the units and common elements, including the percentage of ownership each unit holds in the common elements.
- Bylaws and Rules: The governing documents that set the operational rules for the condominium, including policies on maintenance, repairs, and the management of common elements.
This declaration is the official creation of the condominium corporation, and it must be registered for the project to be considered legally viable.
Step 2: Construction and Completion
Once the declaration is registered, the declarant oversees the completion of the construction project. This includes ensuring that all building and safety codes are met, the units are finished to the agreed specifications, and all common elements (such as hallways, parking lots, or recreational areas) are properly constructed and functional.
The declarant also ensures that:
- The condominium is properly enrolled in the Tarion Warranty Program.
- The project complies with any specific agreements made with buyers or investors.
- Any issues during the construction phase are addressed promptly.
Step 3: Sale of Units
After the condominium is constructed, the declarant begins the process of selling individual units to buyers. This involves working with real estate agents, marketing the units, and finalizing sales contracts. During this stage, the declarant is still responsible for ensuring that all legal and regulatory requirements are met, including providing potential buyers with information on the condominium corporation and its bylaws.
Step 4: Turnover of Control to Homeowners
Once the condominium project is complete and the majority of units have been sold, the declarant’s responsibilities begin to shift. The control of the condominium corporation is transferred to the homeowners, typically through the election of a board of directors. The declarant will no longer be involved in the day-to-day management of the condominium, and the homeowners will assume control over the governance of the corporation.
This process is known as turnover, and it is often a significant milestone for both the declarant and the homeowners. However, the declarant is still responsible for certain aspects of the transition, such as:
- Ensuring the smooth transfer of control to the new board.
- Providing necessary documentation to the new board members.
- Addressing any final maintenance or defect issues that may arise during the transition.
Key Responsibilities of the Declarant Under the Condominium Act
The Condominium Act, 1998 outlines specific responsibilities and obligations for declarants involved in the development of condominiums in Ontario. Some of the key duties include:
1. Registration and Declaration
As mentioned earlier, the declarant must file the Declaration of Condominium, which is essential for the establishment of the condominium corporation. This document outlines the legal framework for the project and defines the rights and obligations of the owners, the corporation, and the declarant.
2. Provision of Information
The declarant must provide essential information to buyers, including:
- A copy of the declaration and bylaws.
- Details about common element ownership.
- Information about the Tarion Warranty and coverage.
3. Financial Responsibility
The declarant must ensure that the condominium corporation has sufficient funds to operate and maintain the property, even after turnover. This includes managing finances during construction and making necessary provisions for the maintenance of common elements.
4. Defects Liability
The declarant is liable for defects in construction that arise within the warranty period, as outlined by Tarion. This includes making necessary repairs or compensating homeowners for defects that fall under the warranty program.
5. Turnover and Transition
The declarant must ensure that the transition of control to the homeowners is conducted according to the legal requirements, including the election of a new board of directors and the transfer of responsibility for managing the condominium’s affairs.
The Importance of the Declarant in Condominium Development
The role of the declarant is critical for the success of any condominium project. The declarant is not only responsible for the physical construction of the building but also for ensuring that the project complies with legal, financial, and regulatory standards. A well-managed condominium project, led by a responsible declarant, offers a range of benefits to both the buyers and the builder, including:
- Consumer protection through warranty programs.
- Clear governance structures and financial stability.
- Compliance with local building codes and regulations.
Failure to meet the responsibilities outlined in the Condominium Act can lead to significant legal and financial consequences, affecting both the declarant and the homeowners.
Conclusion
In the condominium construction process, the declarant plays a pivotal role in establishing the condominium, managing construction, ensuring legal compliance, and ultimately transferring control to the homeowners. Understanding the responsibilities of the declarant is critical for builders, contractors, and anyone involved in the condominium development process.
By adhering to the requirements of the Condominium Act and Tarion Warranty Program, the declarant helps ensure that the condominium project is completed successfully, that consumers are protected, and that the condominium corporation operates smoothly in the long term.
To get help for your builder license, please contact Bestland Consulting (www.bestlandweb.com).
