Beyond the high rise: Non-standard condominiums for developer advisors

The four types of non-standard condominiums are:

1. Phased condominiums

One corporation governs all phases of development. In Ontario, subsequent phases must be added within a 10-year statutory window from initial registration of the condominium. Phase 1 closings can fund Phase 2 construction without waiting for full-site completion, and a single governance structure eliminates reciprocal cost-sharing agreements. However, each amendment demands experienced condominium counsel, and if phasing stalls, infrastructure sized for the full build is funded by a fraction of anticipated units. Mandatory disclosure of future phases means material deviations trigger purchaser rescission rights.

2. Common element condominiums (CEC)

Rather than conveying unit ownership, a CEC comprises only shared infrastructure – private roads, parks, amenity facilities – tied to freehold parcels (referred to in Ontario as Parcels of Tied Land, or POTLs). Individual homes remain freehold while the condominium manages and recovers shared costs, making this structure effective where municipalities decline to assume internal roads or services. The primary risk is planning resistance. Some authorities view CECs as circumventing public road standards, resulting in protracted site plan negotiations. Early pre-application consultation and reference to approved comparable projects is essential.

3. Vacant land condominiums (VLC)

A VLC registers units as parcels of land before construction begins – analogous to a subdivision plan but with condominium-level architectural control via unit construction schedules. Lot sales can commence before home completion, and architectural controls protect the value of remaining developer inventory. Critically, draft plan approval under the combined operation of the Planning Act and the Condominium Act, 1998 must be obtained before agreements of purchase and sale are executed, adding 6–18+ months to project schedules that advisors must account for from inception. Developer-to-board transition may also occur while construction remains active, creating liability exposure over common element damage.

4. Leasehold condominiums

Units convey leasehold interests on land the developer leases rather than owns. The Condominium Act, 1998 mandates a minimum unexpired term of 40 years from registration of the condominium; market terms typically extend to 99 years. Eliminating land acquisition cost reduces unit pricing substantially in high-cost urban markets, and landowners (often public institutions) retain underlying title after lease expiry. Advisors should note that institutional lenders grow increasingly cautious as the remaining term shortens, and reversion risk requires proactive purchaser disclosure and a targeted marketing strategy.

Conclusion

Ontario's non-standard condominium structures offer a sophisticated and flexible suite of options that go well beyond the standard condominium model. For clients looking to invest in, develop, or otherwise participate in Ontario's real estate market, these structures can unlock meaningful advantages. There are reduced upfront capital requirements through phased development, shared infrastructure costs without sacrificing freehold ownership, lower barriers to entry through leasehold arrangements, and significant opportunities for creative tax and estate planning. As cross-border advisors, understanding these mechanisms positions you to provide clients with strategies that are both legally sound and commercially compelling.

The author would like to thank Abigail Smith, Student-at-Law, for her assistance with this article. 

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Head of Commercial Real Estate at Pallett Valo, Steven Pordage works with developers and other clients on real estate matters. He regularly advises developer clients on condominium projects, and prepares disclosure materials, agreements of purchase and sale, and organisational documents.