Securities Law & Instruments

Headnote

Trades by applicant or licensed real estate agents in residential condominium units included in a rental pool program are not subject to section 25 or 53 provided that purchasers receive certain disclosure prior to entering into an agreement of purchase and sale.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25, 53, 74(1).
Condominium Act, R.S.O. 1990, as am.
Real Estate and Business Brokers Act, R.S.O. 1990, as am.
Securities Act, R.S.B.C. 1996, as am.

Rules Cited

Ontario Securities Commission Rule 14-501 Definitions.
National Instrument 51-102 Continuous Disclosure Obligations.
British Columbia Instrument 45-512 Real Estate Securities.
B.C. Form 45-906F Offering Memorandum - Real Estate Securities.

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, CHAPTER S.5, AS AMENDED

(the Act)

AND

IN THE MATTER OF

SIXTY-FOUR MAIN STREET EAST LTD.

RULING

(Subsection 74(1))

UPON the application of Sixty-Four Main Street East Ltd. (the Applicant) to the Ontario Securities Commission (the Commission) for a ruling pursuant to subsection 74(1) of the Act that the sale by the Applicant of residential condominium units within a certain condominium project to be built by the Applicant, on a site located at 64 Main Street East, Hamilton, Ontario, will not be subject to sections 25 and 53 of the Act;

AND UPON considering the application and the recommendation of the staff of the Commission;

AND UPON the Applicant having represented to the Commission as follows:

1. The Applicant is a corporation existing under the Business Corporations Act (Ontario).

2. The Applicant is in the business of, among other things, developing a 15 floor mixed-use condominium project (the Project) on the lands municipally known as 64 Main Street East, Hamilton, Ontario.

3. The registered office of the Applicant is located at 6 Dartnall Road, Hamilton, Ontario L8W 3N1.

4. The Applicant is not a reporting issuer in Ontario (as that term is defined under the Act) or in any other jurisdiction in Canada and the Applicant has no present intention of becoming a reporting issuer under the Act or under the securities legislation of any other jurisdiction in Canada.

5. The Project was subject to a prior ruling (the Prior Ruling) made by the Commission dated July 10, 2009, pursuant to an application made by DHLP Management Inc. Pursuant to the Prior Ruling, the Commission ruled that the sale by DHLP Management Inc. (or certain agents appointed by it) of residential condominium units, the owners of such condominium units being entitled to participate in a voluntary rental pool program, not be subject to section 25 or section 53 of the Act (subject to the terms and conditions specified in the Prior Ruling). Certain aspects of the Project have changed since the time of the Prior Ruling; therefore, the Applicant (being, for greater certainty, a different applicant than under the Prior Ruling) is seeking the relief requested in this decision.

6. The lands on which the Project will be constructed are currently zoned to permit the Project. The Applicant is in the process of obtaining the required building permits and other approvals for the Project. Due to the number of permits and approvals required, the receipt of such permits and approvals will be an ongoing process throughout the course of the Project. No delay to the commencement of construction is anticipated as a result of any permit or approval requirement.

7. It is currently expected that the Project will consist of three distinct condominium corporations within one building, as more particularly described below:

a) Floors 1 to 4 inclusive will be a hotel condominium (the Hotel Condominium) consisting of overnight rental rooms, as well as retail space, a restaurant, a concierge area, a hotel desk, a spa and property management areas.

b) Floors 5 to 13 inclusive will be a commercial condominium (the Commercial Condominium) consisting of 62 office units (the Office Units) and 161 residential dwelling units (the Rental Units). The owners of the Rental Units will be required to enter into a Rental Pool Agreement (as defined in paragraph 16 below) pursuant to which they will become part of the Rental Program (as defined in paragraph 16 below). Pursuant to the Rental Program, the Rental Units will be leased by the Rental Manager (as defined in paragraph 16 below), for and on behalf of the owners of the Rental Units, on the terms and conditions set out in the Rental Pool Agreements.

c) Floors 14 and 15 inclusive will be a residential condominium (the Residential Condominium) consisting of residential dwelling units (the Residential Units). The Residential Units will be owner occupied and will not participate in the Rental Program.

In addition, the Project will include 106 parking units (the Parking Units) located on three underground parking levels. The Parking Units will form part of the Commercial Condominium. It is anticipated that some or all of the Parking Units may form part of the Rental Program.

8. Certain variations to the Project as described in paragraph 7 above may occur as the Project is further developed, including, for example, with respect to number of floors comprising the building, the usage of the floors within the building and the number of Rental Units and Parking Units; however, the division of the building into separate condominiums is anticipated to be a consistent and important feature of the Project.

9. The owners of the Rental Units will not hold any interest in the Hotel Condominium or Residential Condominium. The relationship between the Commercial Condominium, Hotel Condominium and Residential Condominium, including with respect to shared building services and facilities, will be governed by the Commercial Condominium declaration and by a shared cost agreement to be entered into between the Hotel Condominium, Commercial Condominium and Residential Condominium. The shared cost agreement will be an agreement pursuant to which any costs or expenses that are incurred for the benefit of the entire building (and not any particular condominium corporation) will be shared amongst the three condominium corporations based on a fixed ratio (reflecting the comparative square footage of the three condominium corporations within the building). Such shared costs would include, for example: elevators; window washing; mechanical systems, structural repairs and maintenance; building insurance; security and snow clearing. Each condominium corporation will pay its own utilities, operating staff and other direct or unique costs.

10. Lessees of the Rental Units will have access for a fee to certain of the amenities of the Hotel Condominium.

11. It is anticipated that three types of Rental Units will comprise the Commercial Condominium and will be offered for sale to the public, specifically: (a) studio units; (b) one bedroom units; and (c) two bedrooms units. The Rental Units will be sold fully furnished and equipped with standard conveniences, such that all Rental Units will provide substantially uniform accommodation. Parking Units may also be sold to the public and such Parking Units may form part of the Rental Program (on substantially the same basis as the Rental Units).

12. The Commercial Condominium will be created pursuant to the Condominium Act (Ontario) (the Condominium Act).

13. Each owner of a Rental Unit will be entitled to a proportionate share of the common elements and all other assets of the Commercial Condominium (as specified in the Commercial Condominium declaration).

14. In accordance with the Condominium Act, each owner of a Rental Unit will be responsible for expenses related to the ownership of the Rental Unit, including real property taxes directly attributable to the Rental Unit. Each owner of a Rental Unit will also be responsible for a proportionate share of certain utilities and other expenses related to the common elements of the Commercial Condominium (as specified in the Commercial Condominium declaration).

15. The Applicant will cause the Commercial Condominium to enter into a property management agreement (the Property Management Agreement) with Stinson Hospitality Corp. (in such capacity, the Property Manager), or its successor or any permitted assignee. Pursuant to the Property Management Agreement, the Property Manager will manage and administer the common elements comprising part of the Commercial Condominium, the Parking Units and the Office Units and will be paid a management fee for its services. The Property Management Agreement will be terminable on sixty (60) days prior notice by the board of directors of the Commercial Condominium, which will be elected by the owners of the Rental Units and the Office Units.

16. Each purchaser of a Rental Unit will be required to enter into a rental pool agreement (a Rental Pool Agreement) with Stinson Hospitality Corp. (in such capacity, the Rental Manager), or its successor or any permitted assignee. Pursuant to the Rental Pool Agreement, each owner of a Rental Unit will participate in, and be subject to, a rental pool program (the Rental Program) through which the Rental Units will be leased by the Rental Manager, for and on behalf of the owners of the Rental Units, on a medium to long term basis (for periods of not less than 30 days), as more particularly described below.

17. Stinson Hospitality Corp. is a corporation existing under the Business Corporations Act (Ontario) that is controlled by Harry Stinson. Mr. Stinson has over 30 years experience in the food service, hospitality and entertainment industries, as well as hotel management experience.

18. Each Rental Pool Agreement will have an initial term of 10 years and will be automatically renewed, on the same terms and conditions, for four subsequent terms of 10 years each, in accordance with the terms and conditions set out therein. The Rental Pool Agreement may be terminated by the owner of a Rental Unit in certain circumstances, including if: (a) the Rental Manager fails to observe or perform any material covenant, agreement, term or provision of the Rental Pool Agreement (subject to a cure period); (b) the Rental Manager enters into bankruptcy protection or any arrangement under bankruptcy or insolvency laws or any petition under any such law is filed by a third party against the Rental Manager, that is not dismissed within 360 days; (c) the Rental Manager makes any assignment of its property for the benefit of creditors; or (d) the owners of more than 75% of the Rental Units have voted to terminate the Rental Program at a duly called meeting of the owners of Rental Units held for that purpose (provided, however, that until such time as greater that 50% of the Rental Units are sold, the approval of the Commercial Condominium declarant shall be required in order to terminate the Rental Program).

19. The Rental Manager will, among other things: (a) determine the rental rates for the Rental Units; (b) coordinate and arrange for the rental of Rental Units; (c) collect all rental payments and any other revenue derived from the Rental Units; (d) arrange for housekeeping services, certain insurance coverage and the day-to-day maintenance of the Rental Units; and (e) generally operate, supervise and manage the Rental Program.

20. As currently proposed, the Rental Program is an arrangement whereby all revenue derived from the Rental Units (the Aggregate Revenue) will be pooled together and held for the benefit of all of the owners of Rental Units. Revenue streams anticipated to be derived from the Rental Units include, but are not limited to: (a) revenue from the rental of the Rental Units; (b) revenue from the rental of the Parking Units; (c) revenue from room service and any other similar guest services provided by the Rental Manager to lessees of the Rental Units; and (d) revenue from in-suite entertainment, international telephone calls and any other technology-related amenities provided by the Rental Manager to lessees of the Rental Units.

21. The Aggregate Revenue will be deposited and held in one or more segregated accounts under the exclusive control of the Rental Manager.

22. All operating costs associated with the Rental Program and incurred in connection with the earning of Aggregate Revenue (the Operating Expenses) shall be borne by the owners of the Rental Units. Further to the administration of the Rental Program, the Rental Manager will pay the Operating Expenses, for and on behalf of the owners of the Rental Units, from Aggregate Revenue. If Operating Expenses are greater than Aggregate Revenue, the Rental Manager will be responsible for that portion of Operating Expenses that exceeds Aggregate Revenue; provided, however, the Rental Manager shall be entitled to recover any such shortfall from any future Net Revenue (as defined in paragraph 24 below).

23. Pursuant to the Rental Program, the Rental Manager will establish a capital expense reserve fund (the Capital Expense Reserve Fund) equal to 5% of Aggregate Revenue, which fund will be used to, among other things, make repairs to the Rental Units and refurbish and/or upgrade the Rental Units and also to cover back-of-house costs associated with the operation of the Rental Program. Funds contributed to the Capital Expense Reserve Fund will be deposited and held in one or more segregated accounts for the benefit of the owners of Rental Units. The Rental Manager shall have general discretion with respect to the use and application of the funds comprising the Capital Expense Reserve Fund in accordance with the Rental Pool Agreement.

24. Following deduction of the Operating Expenses and the Capital Expense Reserve Fund from Aggregate Revenue, the remaining balance (the Adjusted Revenue) will be allocated as between the Rental Manager and the owners of the Rental Units as follows:

a) 10% of the Adjusted Revenue shall be paid to the Rental Manager as a management fee (the Management Fee), for its services in connection with the administration and operation of the Rental Program; and

b) the remaining 90% of the Adjusted Revenue (the Net Revenue) will be distributed to the owners of the Rental Units, on a pro rata basis. Each owner's pro rata entitlement to Net Revenue shall be determined according to the type of the Rental Unit(s) owned by it (i.e. an owner of a Rental Unit having a two bedroom layout will receive a greater relative percentage of Net Revenue than an owner of a Rental Unit having a one bedroom layout and an owner of a Rental Unit having a one bedroom layout will receive a greater relative percentage of Net Revenue than an owner of a studio layout).

25. Aggregate Revenue, Adjusted Revenue and Net Revenue shall be calculated, and Net Revenue will be distributed, on a monthly basis; provided, however the Rental Manager shall be entitled to make certain adjustments as may reasonably be required to properly match Operating Expenses to Aggregate Revenue during any relevant period and to stabilize monthly distributions of Net Revenue to the owners of Rental Units.

26. Common expenses and all repair reserve funds in respect of the common elements of the Commercial Condominium will be determined by the Commercial Condominium and shall be payable by the owners of the Rental Units, Office Units or Parking Units (as set out in, and in accordance with, the Commercial Condominium declaration). These expenses are unrelated to the Rental Program (as they relate specifically to the ownership interest held in the condominium unit) and are the sole responsibility of the owner of a Rental Unit, Office Unit or Parking Unit, as the case may be. For ease of administration and upon direction from the owner of a Rental Unit, property taxes and the ownership costs and expenses of a Rental Unit unrelated to the Rental Program may be paid for by the Rental Manager, on behalf of the owner of a Rental Unit, from such owner's allocation of Net Revenue.

27. The Rental Pool Agreement will list and describe the fees, charges and expenses payable by the owner of a Rental Unit related to the Rental Program (including, without limitation, the Operating Expenses, Capital Expense Reserve Fund and Management Fee). Pursuant to the Rental Pool Agreement, each owner of a Rental Unit will further permit the Rental Manager to make additional deductions from Aggregate Revenue if, and to the extent that, such deductions are necessary to ensure that the Commercial Condominium continues to operate to the standards set forth in the Rental Pool Agreement.

28. The Leasing Program Disclosure Statement (as defined in paragraph 38 below) will contain a risk factor in substantially the form set out below:

"Each owner of a Rental Unit will be responsible for a number of costs, charges and expenses associated with the ongoing operation of the Rental Program (the "Operating Expenses"). The Operating Expenses will be deducted from the Aggregate Revenue of the Rental Program and there is no guarantee that Aggregate Revenue will be sufficient to cover the Operating Expenses. In the event that the Aggregate Revenue of the Rental Program is insufficient to cover the Operating Expenses, the Rental Manager will be responsible for that portion of Operating Expenses that exceeds Aggregate Revenue; provided, however, the Rental Manager shall be entitled to recover any such shortfall from any future Net Revenue.

In addition to the Operating Expenses associated with the Rental Program, the owner of a Rental Unit shall be responsible for all costs and expenses associated with the ownership of a Rental Unit including, without limitation, property taxes, condominium fees levied by the Commercial Condominium, individually metered utilities and mortgage payments (if any) relating to the financing of the Rental Unit. Such ownership costs and expenses are unrelated to the Rental Program and the owner of a Rental Unit shall be solely responsible for such ownership costs and expenses. In the event that the Rental Manager has agreed to pay any such ownership costs and expenses on behalf of the owner of a Rental Unit from such owner's allocation of Net Revenue, the owner of a Rental Unit shall be liable to the Rental Manager for any shortfall and the Rental Manager shall be entitled to recover any such shortfall from any future allocation of Net Revenue payable to the owner of the Rental Unit.

For complete information on all costs and charges to be levied against owners of Rental Units in connection with the Rental Program, prospective purchasers should carefully read the Rental Pool Agreement."

29. The Rental Units will be offered for sale in Ontario through Harry Stinson Realty Corporation (HSRC), a real estate broker register under Real Estate and Business Brokers Act, 2002 (Ontario). The Applicant, through HSRC, intends to actively market the Rental Units for sale, including by advertisements published in print media as well as on television, radio and on the Internet. HSRC is a corporation existing under the Business Corporations Act (Ontario) that is controlled by Harry Stinson.

30. The advertisements or other marketing materials relating to the sale of the Rental Units may include information disclosing the existence of the Rental Program, including a general overview of the nature, administration and operation of the Rental Program (and its connection to the sale of the Rental Units) and the efficiencies and conveniences to the owner of a Rental Unit that are anticipated to be derived from the Rental Program.

31. The offer and sale of the Rental Units will be conducted in accordance with the Condominium Act.

32. The Applicant shall cause a disclosure statement (the Disclosure Statement) to be delivered to each person who enters into an agreement for the purchase of a Rental Unit (an Agreement of Purchase and Sale). The Disclosure Statement will comply with the requirements of the Condominium Act. No Agreements of Purchase and Sale have been entered into to date.

33. Pursuant to Section 52(3) of the Condominium Act, any purchaser (an Initial Purchaser) who enters into an Agreement of Purchase and Sale with the Applicant for the purchase of a Rental Unit shall be entitled to rescind the Agreement of Purchase and Sale by notice to the Applicant given within 10 days after the Initial Purchaser receives a copy of the Disclosure Statement or any material amendment to the Disclosure Statement. Pursuant to the Condominium Act, such right of rescission may be exercised by giving written notice to the Applicant or the Applicant's solicitors at their respective address for service noted in the Agreement of Purchase and Sale.

34. Prospective purchasers of Rental Units will not be provided with any form of rental or cash flow forecast or guarantee, or any other form of financial commitment or projection, by or on behalf of the Applicant respecting the Rental Program (including, without limitation, in any advertisements or other marketing materials relating to the sale of the Rental Units), other than:

a) examples of financial calculations solely for the purpose of better explaining to prospective purchasers of Rental Units how the Aggregate Revenue, Adjusted Revenue and Net Revenue and an owner's interest therein are calculated, which sample calculations will be included in the Leasing Program Disclosure Statement; and

b) the budget required to be delivered to an Initial Purchaser of a Rental Unit pursuant to the Condominium Act.

35. The purchase price for which the Applicant shall offer the Rental Units for sale to Initial Purchasers is not derived from the existence of the Rental Program. There will not be a premium or discount to the sale price of the Rental Units as a result of the Rental Program (i.e. the pricing structure of the residential condominium units comprising each of the Residential Condominium and the Commercial Condominium is anticipated to be consistent).

36. Although the Rental Program is expected to result in an economic benefit to the owners of the Rental Units, the economic value of the Rental Units will be derived from a number of factors (and will not be derived solely or primarily from the Rental Program). The purchase of a Rental Unit represents an actual investment in real estate. The Rental Units are transferable (subject to the conditions described elsewhere herein) and it is anticipated that the value of the Rental Units will increase (or decrease) over time based on general market conditions. As contemplated in the Rental Pool Agreement, if the Rental Program is terminated by the owners of the Rental Units, each owner will continue to hold an ownership interest in the Rental Unit purchased by it and, further, each owner will thereafter be free to either occupy the Rental Unit or rent it (directly) for the purpose of earning income from the Rental Unit.

37. In addition to the delivery of the Disclosure Statement pursuant to the Condominium Act, the Applicant will deliver to each prospective Initial Purchaser, prior to entering into an Agreement of Purchase and Sale with any such prospective Initial Purchaser, a Leasing Program Disclosure Statement (as defined in paragraph 38 below) certified by the Applicant and the Rental Manager using the form of the certificate required pursuant to item 18 of BC Form 45-906F Offering Memorandum -- Real Estate Securities (Form 45-906F).

38. The leasing program disclosure statement (the Leasing Program Disclosure Statement) will be prepared substantially in accordance with the form and content requirements of the following sections of Form 45-906F:

a) items 1, 3(1), 5, 6, 8(1), 8(2), 8(3), 8(4), 9(b), 10, 15 and 16, modified as necessary to reflect the operations of the Rental Program; and

b) items 11(2), 11(3) and 11(4), with respect to the Applicant and the Rental Manager, as applicable, modified so that the period of disclosure runs from the date of the certificate attached to the date of the Leasing Program Disclosure Statement.

The Leasing Program Disclosure Statement will include, among other things, the following information relating to the Rental Program: (i) a description of the Rental Units and the Rental Program; (ii) a description of Rental Unit resale restrictions; (iii) a summary of the material provisions of the Rental Pool Agreement; (iv) a description of the continuous reporting obligations of the Rental Manager to owners of the Rental Units (as more particularly described in paragraph 41 below); (v) a description of certain material risk factors associated with the purchase of a Rental Unit; and (vi) a description of the contractual right of action available to purchasers of Rental Units (as more particularly described in paragraph 39 below).

39. Each Initial Purchaser of a Rental Unit will be provided with a contractual right of action (as defined in Ontario Securities Commission Rule 14-501 Definitions) with respect to the disclosure contained in the Leasing Program Disclosure Statement, against the Applicant and Rental Manager certifying the disclosure contained in the Leasing Program Disclosure Statement, save and except only that such right of action shall:

a) be for damages and not include a right of action for rescission; and

b) be exercisable on notice against the certifying entities not later than 180 days after the earlier of the date the purchaser closes his, her or its purchase transaction or takes possession of its Rental Unit.

40. The Leasing Program Disclosure Statement delivered to an Initial Purchaser shall describe the contractual right of action, including any defences available to the certifying entities, the limitation periods applicable to the exercise of the contractual right of action, and will indicate that the contractual right of action is in addition to any other right or remedy available to the Initial Purchaser.

41. The Rental Pool Agreement shall impose an irrevocable obligation on the Rental Manager to deliver to each owner of a Rental Unit subject to the Rental Program:

a) audited annual financial statements for the Rental Program prepared in accordance with Canadian generally accepted accounting principles, certified and delivered in accordance with the application provisions of the Act and National Instrument 51-102 Continuous Disclosure Obligations as if the Rental Program was a reporting issuer for the purposes of the Act; and

b) unaudited interim financial statements for the Rental Program prepared in accordance with Canadian generally accepted accounting principles, certified and delivered in accordance with the application provisions of the Act and National Instrument 51-102 Continuous Disclosure Obligations as if the Rental Program was a reporting issuer for the purposes of the Act.

42. The Rental Pool Agreement shall impose an irrevocable obligation on the Rental Manager to deliver to a prospective subsequent purchaser of a Rental Unit (a Subsequent Purchaser), upon reasonable notice of an intended sale by the owner of a Rental Unit, and before an Agreement of Purchase and Sale is entered into between a seller and a Subsequent Purchaser:

a) the most recent audited annual financial statements for the Rental Program and, if applicable, the most recent unaudited interim financial statements for the Rental Program (the Financial Information);

b) a Leasing Program Disclosure Statement (prepared in accordance with paragraph 38) certified by the Rental Manager using the form of the certificate required pursuant to item 18 of BC Form 45-906F; and

c) the Disclosure Statement or summary thereof.

43. Each Subsequent Purchaser of a Rental Unit will be provided with a contractual right of action (as defined in Ontario Securities Commission Rule 14-501 Definitions) with respect to the disclosure contained in the Leasing Program Disclosure Statement, against the Rental Manager certifying the disclosure contained in the Leasing Program Disclosure Statement, save and except only that such right of action shall:

a) be for damages and not include a right of action for rescission; and

b) be exercisable on notice against the certifying entities not later than 180 days after the earlier of the date the purchaser closes his, her or its purchase transaction or takes possession of its Rental Unit.

44. The Leasing Program Disclosure Statement delivered to a Subsequent Purchaser shall describe the contractual right of action, including any defences available to the certifying entity, the limitation periods applicable to the exercise of the contractual right of action, and will indicate that the contractual right of action is in addition to any other right or remedy available to the Subsequent Purchaser.

45. The Rental Pool Agreement shall impose an irrevocable obligation on each owner of a Rental Unit participating in the Rental Program to provide:

a) the Rental Manager with reasonable notice of a proposed sale of a Rental Unit; and

b) a prospective Subsequent Purchaser of a Rental Unit with notice of his, her or its right to obtain from the Rental Manager, copies of the Financial Information and the Leasing Program Disclosure Statement.

46. A person may own both a Rental Unit and Residential Unit. A person that owns a Residential Unit shall be entitled to the same rights and remedies in respect of its purchase and ownership of a Rental Unit as any other owner of a Rental Unit.

47. The Rental Pool Agreement will not require an owner of a Rental Unit to give any person an assignment of any of his, her or its right to vote in accordance with the Condominium Act or the by-laws of the Commercial Condominium, or to waive notice of meetings of the Commercial Condominium.

AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;

IT IS RULED, pursuant to subsection 74(1) of the Act, that:

1. The distribution of a Rental Unit by the Applicant, HSRC or any other agent licensed under the Real Estate and Business Brokers Act (Ontario), is exempt from sections 25 and 53 of the Act, provided that every Initial Purchaser receives:

a) all documents and information referred to in paragraphs 37 and 38 above, including a Leasing Program Disclosure Statement;

b) a copy of this Ruling, prior to entering into an Agreement of Purchase and Sale; and

c) a ten day "cooling off" for recession as set out in paragraph 33 above.

2. Any subsequent trade of a Rental Unit shall be deemed to be a distribution for the purposes of the Act, unless:

a) the seller of a Rental Unit is not a developer or an agent acting on such developer's behalf;

b) the seller of a Rental Unit provides written notice to the Rental Manager of the seller's intention to sell his, her or its Rental Unit;

c) the Rental Manager, upon receipt of notice from the seller of a Rental Unit, provides the prospective purchaser of a Rental Unit, prior to completion of the purchase and sale transaction, all of the documents and information referred to in paragraph 42 above, including a Leasing Program Disclosure Statement; and

d) the seller of a Rental Unit, or an agent acting on the seller's behalf, does not advertise, market, promise or otherwise represent any projected economic benefits of the Rental Program to any prospective purchaser, other than activities of the nature contemplated in paragraph 34 above.

DATED at Toronto, this 17th day of December 2010

"Carol S. Perry"
Commissioner
Ontario Securities Commission
 
"James Turner"
Vice-Chair
Ontario Securities Commission