Debbie Bellinger would like to acknowledge Bev Prokopowich, Real Estate Law Clerk as co-author of this article.
There’s a new word being used in the development industry that has some people asking – what’s a JUMA?
JUMA is an acronym for Joint Use and Maintenance Agreement. JUMAs are the new Reciprocal Agreements and Easement and Cost Sharing Agreements. Whatever name we choose to give to them, their essence is the same – they are agreements to deal with the operation, management and joint use of shared property, shared facilities and shared services, and the related easements and cost-sharing arrangements.
Why are we hearing about JUMAs more often these days?
The simple answer is that more developments include shared property either by necessity (i.e. increased density, less surplus land available for standalone services and/or amenities) or by choice (i.e. shared property = cost savings = better marketability). In addition, the City of Ottawa is now requiring that phased condominiums enter into JUMAs between the lands comprising Phase I and the lands to comprise subsequent phases, in order to protect the arrangements for operation, management and joint use of shared property in case the subsequent phases are not constructed.
When do you need a JUMA?
A JUMA is necessary any time a development includes property, facilities or services that are to be shared by parcels of land with different ownership, and where the property, facilities and/or services require the sharing of management, maintenance or costs.
Issues to consider
In addition to the standard provisions of a JUMA, there are also other questions to think about: What is being shared? Who will own it? Who will operate it? Who will pay for it?
The following issues should be considered when drafting a JUMA:
- Maintaining flexibility for changes in future development of unimproved lands. This includes amendments to site plan approval when the lands governed by the JUMA are subject to a common site plan, and amendments to zoning when the lands are considered one lot for zoning purposes.
- Future shared property and related easements once development of all of the lands has been completed.
- Restrictions on use of shared property during construction or prior to construction on all or part of the lands. Also, temporary relocation of shared property elements during construction.
- Start date for contributions to shared property expenses (i.e. occupancy dates, etc.).
- Insurance coverage for shared property.
- The possible need to define shared property as “parts” on a reference plan.
- Estimated completion dates for shared amenities or facilities.
As shared property in development becomes more prevalent, changes will occur. Some changes have already happened – the requirement for a JUMA is now a standard condition to development approval. Some changes are in the works – the insurance industry is reviewing shared property claims, and separate insurance policies may be recommended for shared property, in part to ensure that the effect of damage claims for the shared property on the premiums and coverage is treated as a shared-property expense.
Further changes are inevitable – more purchasers want to see draft JUMAs and shared property budgets as part of developers’ sales packages and disclosure statements. Pending changes to the Condominium Act are expected to deal with this requirement.