The Hidden Costs Of De-Condominiumizing

In a previous blog post, we discussed how a property's condominium status can be terminated. We expect "de-condominiumizing" or terminating/dissolving condominium corporations to become a more common and attractive option for owners as buildings age and maintenance/repair costs increase. Real estate investors might also consider de-condominiumizing investment properties and conversion to rental apartment buildings. However, de-condominiumizing can have unintended tax consequences and owners should seek legal advice so they can fully appreciate all the pros and cons of this option.

Take, for example, the situation in which the owners of College Plaza recently found themselves, in the following decision: Governors of the University of Alberta v Edmonton (City), 2022 ABCA 290.