Real Estate

Have you ever seen builder set minimum allowable rental rates condo owners must charge during occupancy?

  • Last Updated:
  • Aug 12th, 2021 10:38 am
[OP]
Sr. Member
Sep 11, 2017
524 posts
380 upvotes

Have you ever seen builder set minimum allowable rental rates condo owners must charge during occupancy?

Just about to take interim occupancy possession of a condo unit and the builder sends out a communication stating per the PSA all owners who wish to exercise their right to lease during occupancy must have the tenant agreed to buy the builder and also must charge a minimum rental rate as set out by the builder.The ‘junior 1 bedroom suites’ under 500 sqft start at $2400 month as their minimum monthly lease rate! Seems like this will be tough for investors to achieve given current market rental rates in DT Toronto. Has anyone ever seen this tactic by builders before? The builder’s messaging is they are doing this to maintain a certain standard of tenant in their building. Yeah right.
4 replies
Deal Addict
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Apr 12, 2013
2924 posts
1907 upvotes
Moon
1. Read your APS.
2. Lawyer.
Koodo, Public Mobile, Lucky Mobile Customer
Deal Fanatic
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Dec 27, 2009
7763 posts
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Victoria, BC
Sounds weird to me. Not sure if they can legally do this. And charging high rents doesn't guarantee any "standard" of tenant. Drug dealers and pimps have loads of money lol.
Deal Fanatic
Jul 3, 2011
6517 posts
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Thornhill
FedExpress wrote: Just about to take interim occupancy possession of a condo unit and the builder sends out a communication stating per the PSA all owners who wish to exercise their right to lease during occupancy must have the tenant agreed to buy the builder and also must charge a minimum rental rate as set out by the builder.
What does the underlined mean? Can you post a screenshot of that clause and the regarding the minimum rent?

Thanks
Deal Fanatic
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Jan 6, 2002
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Toronto
I've seen this before, don't know if it's common.

I've seen it discussed, where the BUilder (or an associated partner co) will hold a number of the units themselves for rent after the condo registers, and wants/needs to enforce a floor market rate for the building for rental prices.
Si Tacuisses, Philosophus Mansisses

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