Condominium Ownership in Alberta
There are big differences between buying a condominium, a house, or an apartment that many don’t realize. Unlike owning a house, condos provide special legal rights and financial obligations that owners may not be aware of.
The ability to vote on various issues, suing developers or the condo corporation itself, accessing common areas, paying condo fees, and abiding by specific condo bylaws and rules. The experience is unlike anything else.
Regardless of where the condo is, here are some crucial things to know about owning a condo in Alberta.
What Is A Condominium?
These spaces look just like apartments within apartment buildings, duplexes, bungalows, or townhouses. Legally speaking, condos are a form of real property that are broken into two parts:
- A legal title to the condominium unit. This gives responsibility for the upkeep and repairing duties to the owner.
- A joint owner of the condo’s common property with other condo owners, giving the responsibility for costs of the building upkeep.
Because of these distinct parts, it’s important to know before buying a condo unit what falls under the condominium unit and what is a joint responsibility.
Condo owners share the expense of maintaining the common property. These are spaces that are outlined in the condominium plan that aren’t located inside of a unit. Hallways, elevators, laundry rooms, swimming pools, landscaped areas are examples. Everything else inside of the individual unit is responsible to the respective condo owner.
What Is A Condo Corporation?
A developer must register the condo plans with Alberta’s Land Titles Office. At that point, a condo corporation is made that identifies who the owners of those units are.
Condo corporations are legal entities which means that owners are able to sue the condo corporation if there are any damages done in the common areas or for things that the owners are responsible for.
How Do Condo Corporations Govern?
What keeps condo corporations and the residents in check are bylaws. These bylaws are created around the formation of the condo corporation as well. These bylaws can also differ wildly from one condo corporation to another. For example, some condos will have bylaws that ban children under certain ages or pets. Others might stipulate a bylaw where any changes to the inside of a condo unit must be brought up to the board of directors for a vote first.
Regardless, it’s important to know what the rights and responsibilities are outlined in these bylaws. Failure to abide by them will result in fines.
Condo bylaws are also readily available too. They’re included in the condo’s registered plan. If they aren’t located there, and the condo was built after May 16th, 1978, the bylaws in Appendix 1 of the Condominium Property Act apply. If the condo was built before May 16th, 1978, Appendix 2 of the Condominium Property Regulations will apply.
Can These Bylaws Change?
Absolutely! Condo owners can have control over that too as they are allowed to vote for changes at any time. The only catch is that for a change to be made, there must be a 75% approval for the proposed change.
For example, many boards are currently in the works of making important changes to cannabis ownership in condos.
Who Is On The Condo Board Of Directors?
Each condo corporation needs to have this and by extension must have a process for how each director is elected, how often they’re elected and the requirements to be on the board. All directors will then be part of the condominium ownership group.
The board then will have regular meetings – usually monthly – and have the meeting agenda communicated to owners at annual general meetings.
What Purpose Does The Board Have?
Legally, each member of the board is required to act in honesty and good faith. If there is a conflict of interest in a certain matter, they’re not allowed to vote on it. Furthermore, decisions must be made for the best interest of the building regardless of the views of the person.
When buying a condo, it’s important to be asking the previous owners about the condo complex itself as well as the board of directors. Do the members get along? Were there any major issues with the condo in the past? Is the condo well managed? Are there existing problems with the condo that have yet to be addressed?
These questions give potential buyers an idea about the community and environment the condo is creating.
What’s The Deal With Condo Fees?
Because condo corporations are required to look after common properties – like snow removal, lawn care, repairs to common property, and utilities – the condo corporation needs money to cover those costs. On top of insurance and administrative expenses, the only way condo corporations can afford this is through condo fees.
This is the equivalent of rent or mortgage payments tenants and homeowners would pay. These fees are set every single year, so they are very predictable, however condo corporations are able to ask for more in certain circumstances.
For example, if the condo corporation decides to go through a special assessment in the middle of the year that costs $15,000 more than their budget, they may ask for higher fees on a certain month to cover the cost.
Some other key things to note about condo fees are:
- The fees are collected and put into a reserve fund. This reserve fund is fees collected to handle major repairs and replacements of property and common property. Before any money is spent from this fund, the condo corporation must consult with owners too.
- Fees are based on the size of the unit. The bigger the unit, the more fees that owner will pay. That said, fees are largely based on the forecasted budget for that year.
- Be aware of the fees before buying. Not all condo fees go directly to the reserve fund, only a percentage does. It’s important to know how much money is being put into the reserve fund and what is being put towards daily operations. Furthermore, knowing whether the condo corporation is planning a big project soon or not is good to know too. Getting access to the reserve fund study/report will provide a picture of what the condo corporation plans. It also gives owners an idea of generally where their fees are going.
- Review condo financial statements. These provide details of the financial status of the condo corporation, their current budget for repairs, and the annual general meeting minutes (which will outline current issues with the condo). It also helps to ask for evidence of adequate insurance coverage. It’s best to get legal help as well to review condo documents. If a condo corporation is in massive debt, this is a sign that it will be very difficult for owners to sell their condo in the future.
What Happens If Fees Are Paid Late?
There are several things a condo corporation can do to collect the fees. Things like:
- Ask the condo owner’s mortgage company to repay what’s added, which will turn into adding more debt to the total mortgage
- Ask the tenant directly to pay for the condo fees
- File a caveat against the unit owner’s title
- Charge interest on the amount owed (upwards of 18% per year)
- Sue the owner for the amount owed, including interest and legal fees
- Foreclose the owner’s title resulting in possession of the condo
Furthermore, owing money to the condo corporation for over 30 days will result in the loss of voting rights on condo matters.
What To Be Looking For In New Condos
Before signing anything, it’s important to talk to a lawyer. A lawyer will be able to review condo agreements and protect a purchaser’s legal rights and interests.
What Documents Are Required
Legally, the Act requires developers to provide a copy of the mortgage of the condo building. Beyond this, developers can be requested to provide buyers with proposed budgets for development. The purchase agreement must also include the following sections:
- Any major improvements to the common property of the condo
- Maintenance equipment that’s been used for the upkeep of common property
- Recreational facilities in the building
- Calculations of the unit factor
- Determining the condo fees
- Notification on the front page of the purchase agreement that states the owners’ rights surrounding cancelling the purchase agreement
Other Required Documents
Developers must also provide copies of:
- Their bylaws (or the bylaws they plan to have)
- Property management agreement (or proposed one)
- A copy of the lease agreement (required only if the condo is built on leased land)
- Existing mortgage, or future mortgages that could impact the ownership title
- The condo corporation’s financial statements
Also verify if the condo is covered by a purchaser’s protection program too (such as the Alberta New Home Warranty Program). This allows owners to get repairs for free if a new home has a defect during a set period of time.
What To Look For On Pre-Owned Condos
When potential condo purchasers are buying a condo unit from a previous owner and not a developer, here is what to pay attention to.
Under law, developers are not required to disclose any documents to purchasers. Therefore, it the responsibility for potential owners to get the documents and understand them before making any offers. Getting the documents is as simple as writing a request to the seller who is then required to provide the documents within 10 days.
These copies must include:
- Condo plans and any additional sheets such as endorsements and insurance coverages
- The certificate of insurance which outlines insurance coverage for individuals and common property
- The condo unit’s certificate
- The condo’s bylaws
- And any existing restrictive covenants such as legally binding obligations on future buyers and what owners are prohibiting from doing (like renovating a unit)
Another important document to have is the Estoppel Certificate. A lawyer will provide this to potential owners. This states that whoever has this document owns the condo and will not owe any amounts that are due from the previous owner.
New owners can request this certificate from condo corporations, though there may be a fee to get access to it. Regardless of where it’s obtained from, the Estoppel Certificate will:
- Outline how much the condo fees are for each unit
- The condo fee payment schedule
- If the previous owner has paid their condo fees or not
- And any interest that is owed due to unpaid condo fees
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