June 2020
Within a condo community may be a superintendent suite made available to the superintendent of a building. This is property of the condominium corporation.
Alternative ways to utilize a superintendent suite may be more beneficial to residents. Before making changes consider any potential impact on the corporation’s tax-exempt status.
Sale of suite to superintendent at fair market value
Proceeds from the sale is income to the corporation and can reduce condo fees paid by owners. Should the superintendent no longer be employed by the corporation the suite remains owned by the former superintendent. Profits from the sale could be material and impact on the corporation’s tax-exempt status. This can be avoided if proceeds are placed in the corporation’s reserve fund.
Rental of superintendent suite at fair market value
Rental payments are income to the corporation and can reduce condo fees paid by owners. Terms of the lease may require relinquishing the unit on termination of employment. Income may impact on the corporation’s tax-exempt status if material.
Conversion of superintendent suite to a guest suite
This creates amenity space for residents and provides an opportunity to generate rental income. Income is unlikely to be material and impactful on the corporation’s tax-exempt status.
Use of superintendent suite for other purposes
Space may be better utilized for recreation or fitness purposes thus providing new or expanded amenities. No income is generated so there should be no impact on the corporation’s tax-exempt status.
