foxandrox would like to thank Carissa @ Condolyzers in Red Deer for writing this article to help educate our clients!
Wondering how the new changes to the Condominium Property Act and Regulations Affect Condo Owners?
Over the course of a couple years, the Alberta Government underwent an initiative to update the documents which provide rules and regulations to Condominiums in Alberta. These rules pertain to Condo Associations, Developers, Condo Owners and Board of Directors. Their processes included reviewing the rules of other Canadian provinces and conducted significant public consultation of current Condo Owners, Board of Directors, Property Managers and other industry professionals. After carefully reviewing all the feedback, a committee went to work crafting the changes while attempting to strike a balance between the wants and needs from all the different parties under the Condominium umbrella. Since there are such a large number of changes, it was decided to roll them out in phases. At this time, two phases have been rolled out and there is one more phase to come.
The first phase of changes primarily pertained to developers. What can they do? What can’t they do? And how can buyers be better protected when buying a new-build? The changes mandate things like documents that the developer must disclose to the buyer and most notably rules relating to fees. First of all, Developers are now mandated to pay condo fees on any unsold units. This now protects owners in a new development from having to split the costs of all the operational expenses. In the past, if there were only 5 sold units and the Bylaws had an exclusion which exempted the Developer from paying fees on unsold units, then those 5 Owners had to front the costs of the entire complex. Next, Developers can charge a “maintenance fee” to cover the costs of the expenses while the complex is still under construction. True “Condo Fees” come into effect later on once the complex is closer to completion or turn-over to an Owner-based Board of Directors. In the past, some developers would advertise what future condo fees would look like and, in some cases, they would low-ball the number to work in their favor of making the units more attractive to sell. However, once the complex got turned-over and a proper budget was prepared, the condo fees ended up much higher than the developer promoted. To protect the Owners from such false advertising, Developers are now being held far more accountable for establishing and advertising fees. They could potentially be responsible for paying some or all of the difference in fees from their projected fee to the actual fee. The Alberta Government has assigned an Administrator to oversee the compliance of Developers to ensure they are following all the rules.
The second phase (which is being implemented over a few months – the remaining rules starting July 1, 2019) provide many changes pertaining to the management of Condos. One thing that the government heard from Condo Owners is that some felt bullied by their Boards and did not have any options when decisions were made that were not perceived as favourable by the Owners. Like any negative connotation, not all Condo Boards are Bad. Most have good intentions. A small percentage actually take their position of power a little too far and create an environment that is not harmonious for their Owners, but this can create an overall bad reputation. Board of Directors now have strict requirements to provide better communication via disclosing documents to the owners. For example, the AGM minutes must now be sent to all owners within 30 days of the meeting and several other documents also have requirements to be circulated within set time frames. There are also major changes coming (as of July 1st, 2019) regarding charges/fees for documents. The government has put caps on how much can be charged for certain documents and also mandating that a specific list of documents must be provided free of charge. Another very notable changes in phase 2 provides Owners with more recourse if they are unhappy with a decision the Board has made. For example, Boards will now be required to ask the Owners if they want any items included on the AGM agenda (prior to the meeting taking place). By doing so, this allows for votes to take place at the AGM pertaining to these topics, with the possibility of implementing changes (if enough Owners vote in favour). Additionally, if the Owners feel one or more of the Board members are not serving the needs of their complex to their satisfaction, the Owners now have more feasible means to remove members of the Board (throughout the course of the year and not just at the AGM).
Phase 2 also includes all new rules pertaining to dealing with owners who have infracted the Bylaws. As of July 1, 2019, if there is a noise complaint, pet or parking issue or other, the Board will have to provide the unit Owner with a notice outlining the details and provide 3 days for the Owner to respond or resolve the infraction. Fines or other actions cannot be issued until after the Board considers the response/ resolution action and then provide a follow-up notice. The final phase has not been released yet, as it is still being fine tuned. The Alberta Government has indicated this phase will be rolling out a dispute resolution/tribunal avenue to aid in resolving issues between condominium related parties (mainly for disputes between a Board and an Owner).
Please visit our website at www.condolyzers.com
if you wish to view the Amended Condominium Property Act and Regulations.
Here at Condolyzers, one of our areas of speciality is providing support to Condo buyers. By having professionals (such as ourselves) review the Condominium documents, this information will reveal insight on how the association is run, the financial state, maintenance of the property, legal or insurance matters, plus so much more. All of which can affect the Owners in that complex. A document review, in turn, provides a buyer with the information needed to either comfortably proceed with a purchase or conclude to find another property that is a better fit for their needs/comfort level.
Contact us today if you are purchasing a Condo and wish to have an analysis completed.