Dry Cleaner Environmental Due Diligence in Ontario: Perc, Records of Site Condition and Buying the Building

By Jatin Dua · Broker of Record, RE/MAX Quantum Realty · Updated 29 September 2026 · 11 min read — how a current or former dry cleaner affects a plaza or storefront, the record of site condition rules, Building Code occupancy, zoning, the federal equipment rules and the lease.

Why a dry cleaner is different from other storefronts

Most storefront uses leave nothing behind when they move out. Dry cleaning plants that used chlorinated solvents such as tetrachloroethylene (perc) can. Ontario’s Record of Site Condition regulation, O. Reg. 153/04, lists “Operation of Dry Cleaning Equipment (where chemicals are used)” among potentially contaminating activities, alongside gas stations and industrial uses.

The important words are “has ever been used.” The rule looks at the property’s whole history, not just the current tenant. A plaza whose end unit ran a plant in the 1980s is caught just as surely as one with a plant operating today. If you are buying the business rather than the building, start with buying a dry cleaner in Ontario.

The record of site condition rules

Three provisions do the work:

• Phase two required. Section 32 of O. Reg. 153/04 requires a phase two environmental site assessment before a record of site condition can be filed where the property is used or has ever been used for the operation of dry cleaning equipment, as it does for garages and fuel outlets.
• Change of use. Section 168.3.1 of the Environmental Protection Act says no one may change the use of a property from industrial or commercial use to residential or parkland use unless a record of site condition has been filed. The regulation adds other prescribed changes, such as commercial to institutional use.
• No mixed-use shortcut. Section 15 of the regulation exempts some changes in buildings that already mix residential and commercial uses, but not where the property is used or has ever been used for the operation of dry cleaning equipment.

For a buyer, the consequence is value. A plaza with redevelopment potential, perhaps for housing above retail, carries a cost and delay that a clean plaza does not. Your lender may insist on an assessment anyway; your lawyer and a qualified environmental consultant should decide the scope, not the seller.

What the federal equipment rules tell you about risk

Since 2003 the federal Tetrachloroethylene Regulations have required perc machines to have integral refrigerated condensers and perc-water separators, closed containers, and perc-impermeable secondary containment under each machine and tank holding at least 110 percent of the largest container, with perc-resistant plugs for floor drains. Waste water and residue must go to a waste management facility at least every 12 months, and each facility reports by April 30.

Those rules reduce new spills; they do nothing about what happened before them. When I walk a plant with a buyer, the consultant is looking at floor drains, cracks in the slab, where the machine sat before the current one, and where waste was stored. Five years of federal reports and waste shipping records tell you how the current operator behaves. The older history needs the phase one review of past uses.

Building Code occupancy and zoning

The Ontario Association of Architects’ guide to Building Code occupancies lists dry cleaning plants among industrial occupancies, and places only self-service dry cleaning that does not use flammable or explosive solvents, and self-service laundries, in the commercial group with shops and stores. Section 10 of the Building Code Act requires a permit for a change of use that increases hazard, and Toronto requires a permit for any change of use even without construction. Turning a retail unit into a cleaning plant, or a plant back into a café, is a question for an architect before you sign.

Toronto’s Zoning By-law 569-2013 defines a personal service shop as premises used to provide personal grooming services “or for the cleaning or care of apparel,” which plainly covers a depot. The by-law does not separately define a dry cleaning plant, so whether a plant fits the same category in your zone is a question for the zoning examiner.

If you are buying the building

• Phase one first. A phase one assessment reviews past uses, records and a site visit. With any dry cleaning history, expect it to recommend a phase two.
• Make it a condition. The agreement should give you time and access for both phases, and the right to walk away or renegotiate on the results.
• Ask for everything the seller has. Past assessments, any record of site condition already filed, correspondence with the provincial environment ministry, and tenant files.
• Think about the exit. A buyer who plans to add residential units later needs the record of site condition; one who will keep the plaza commercial may accept a known condition at the right price.
• Insurance and financing. Talk to your lender early; some will not finance until the environmental report is in hand.

The process mirrors fuel sites, which I cover in gas station environmental due diligence, and repair garages in auto repair shop premises.

If you are a landlord or a tenant

Landlords leasing to a new plant should require proof of compliant equipment and containment, copies of the federal reports and hazardous waste manifests, insurance, an environmental indemnity and a baseline assessment at the start of the lease so you can tell later what changed.

Tenants taking over a plant should insist on the same baseline, from the other side. Without it, a clause making the tenant responsible for contamination “whenever caused” can make you pay for a predecessor’s spill. Also read the restoration clause: removing a plant at the end of the term, including machines, containment and any contaminated flooring, is not cheap.

A depot tenant has far less at stake, but the landlord may still ask, since the use looks similar on paper. That is a good moment to show that no solvent is used on site. For a comparison with a different storefront, see bakery premises requirements.

Where I fit

I help buyers and landlords across the GTA weigh the price of a plaza or storefront with a dry cleaning history against what the environmental reports say. The AI retail store value estimator below gives a first range for a storefront. For an investment building, the cap rate calculator shows how a price discount changes your return. Then book a call or phone 833-330-1925.

Frequently asked questions

Sources

• O. Reg. 153/04, Records of Site Condition — e-Laws — phase two ESA where dry cleaning equipment was ever operated
• Environmental Protection Act — e-Laws — s. 168.3.1 change of use and records of site condition
• Tetrachloroethylene (Use in Dry Cleaning and Reporting Requirements) Regulations, SOR/2003-79 — machine, containment, waste and reporting rules
• Ontario Association of Architects — Guide to Occupancies — Building Code occupancy examples
• Building Code Act, 1992 — e-Laws — s. 10 permit for a change of use that increases hazard
• City of Toronto — When do I need a building permit? — change of use needs a permit even with no construction
• City of Toronto — Zoning By-law 569-2013, Chapter 800 definitions — use definitions
• Environmental Registry of Ontario — Notice 019-0716 — O. Reg. 323/94 (Dry Cleaners) revoked, January 2020
• Government of Ontario — Hazardous waste management: business and industry — RPRA Hazardous Waste Program Registry

Related reading

• Buying a dry cleaner in Ontario
• Gas station environmental due diligence
• Auto repair shop premises in Ontario
• Bakery premises requirements in Ontario
• How much is my development land worth?
• AI retail store value estimator
• Cap rate calculator