Mixed use developments are steadily increasing. The main challenge remains ensuring enhanced residential occupants' experience, with a good tenant mix, while allowing developer's overall project. Lawyers working in multi-use development will need to foresee and take into account all different interests at play, and provide for flexibility for the long-term development vision of their clients, yet ensuring stability and balanced rights for commercial tenants and residential co-owners.
From a lifestyle point of view, residential occupants will want to be close to the action, with readily accessible amenities and interesting retail offers while maintaining a quality of life, with reduced noise, adequate safety and limited nuisance: how to strike the right balance? Both the legal and physical components of the project will be paramount in the balancing act required from the developer and its lawyer. Not only will care and long-term focus will be required in drafting the co-ownership agreement and related regulations, but also in the physical and structural planning of the project, such as sharing of infrastructure and common areas. Residential owners will have issues if their access to parking spaces are blocked by incoming delivery trucks, if loading docks for truck deliveries and commercial garbage disposal sites are located adjacent to exclusive residential areas, or if residential lobbies and entrances are not segregated from the commercial component...and not to mention odours coming from restaurants using common ventilation shafts.
On the other hand, to ensure interesting experience to residential occupants, developer will need to attract a good tenant mix, with commercial tenants allowed to operate their business without undue restrictions on use of their premises (hours of operation, noise, waste etc.) so that commercial tenants' operations would not be unduly impacted. The developer (and its lawyer!) will need to keep focus on the long-term and life of the project, especially where a tenant will negotiate to include clauses where the residential component could not impose restrictions on noise and odours resulting from the tenants' business in the commercial component, in accordance with intended use and as would normally be expected.
Striking the right balance between the uses of the commercial condo and the expectations of residential condo owners will be the true balancing act, and for durable co-existence, chose experienced developers, and call your lawyer to assist!
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