Effective September 1, 2016, the Disposition of Surplus Real Property Regulation to the Ontario Education Act(the “Disposition of Surplus Property Regulation”) was amended with the intention to reduce barriers to the formation of health and community hubs in Ontario. The changes are in support of recommendations arising from the Community Hubs in Ontario: A Strategic Framework & Action Plan.
The Disposition of Surplus Property Regulation now enables school boards in Ontario to provide an expanded number of organizations an advance opportunity to submit expressions of interest and place offers on surplus school properties intended to be sold, leased or otherwise disposed of before they go on the open market. These organizations now include:
- Lead agencies for child and youth mental health, as listed in Schedule 3 to the Disposition of Surplus Property Regulation, which agencies may refer the proposal to approved corporations and approved agencies under the Child and Family Services Act that operate a children’s mental health centre in the service area in which the property is located;
- Local Health Integration Networks (“LHINs”), provided that the LHINs are located within the geographical area of the property being disposed of, which LHINs are permitted to refer proposals issued to them to health service providers in the LHIN’s catchment area; and
- Boards of health for health units (as defined under the Health Protection and Promotion Act) where the property is located.
The Disposition of Surplus Property Regulation states that offers to buy, lease or otherwise obtain surplus real property must be at fair market value.
Health and social service providers considering surplus property acquisition opportunities are reminded to engage in standard due diligence on the property for a purchase or lease including, where appropriate:
- building and environmental inspections;
- regulation and code compliance;
- title encumbrances;
- municipal official plan and zoning by-law to ensure the intended future use is permitted; and
- any other similar standard commercial due diligence investigations.
Where the intended use is as a health or community hub, consideration should also be given to securing advance commitment from desired third party partners through joint ventures, letters of intent or other legal means. Interested parties should also consider, where appropriate, including such commitments as conditions to expressions of interest/offers to buy or lease.
Miller Thomson is available to support organizations through the real estate leasing or acquisition process and health/community hub development, including submissions of expressions of interest, negotiation of definitive agreements and short-term and long-term risk management strategies.