The exact boundaries of each condominium unit are identified in a condominium plan. When you buy a unit you acquire title to a space that is usually bound by walls, floors, and ceilings. You are responsible for the maintenance, repair and remodelling of your unit. However, you may need the board’s permission to remodel your unit if the changes impact the common property
A condominium corporation is created when the developer registers the condominium plan with Alberta’s Land Titles Office. The condominium corporation consists of the owners of all the units identified in the condominium plan. As a legal entity it can sue for damages to the common property and it can be sued regarding any matter for which the owners are jointly liable. An agent or employee of the corporation can act on behalf of the corporation. Bylaws regulate the corporation. They provide for the control, management and administration of the units, the common property and any other real and personal property owned by the corporation. A Board of Directors is elected by the unit owners to carry out the condominium corporation’s responsibilities Condominium bylaws vary greatly. Keep a copy of any correspondence you have with the Board. Make sure you know what bylaws govern the condominium you own and your rights and responsibilities.
The common property in a condominium complex is everything that is not within a unit identified in the Condominium plan. It usually includes the space and facilities outside the condominium units, such as hallways, elevators, heating and electrical systems, laundry rooms, recreation rooms, and landscaped areas. Your share of the costs for the maintenance and repair of the common property is determined by your unit factor.
The unit factor identifies your portion of the joint ownership of the common property. The developer assigns a unit factor to every condominium unit when registering the condominium plan. The sum total of the unit factors for all the units in a condominium plan is 10,000. Developers must disclose how they set the unit factor. It is important to know the unit factor assigned to your unit because it will affect your condominium contributions and your voting rights.
EXCLUSIVE-USE COMMON PROPERTY
You may also lease or have the right to use defined areas of the common property called exclusive-use areas with private access and use of, (i.e. the carport, parking stall or balcony next to the unit). These areas may be identified on the condominium plan or defined in the corporation’s bylaws. The corporation retains the control of these areas.
DOORS AND WINDOWS
All doors and windows of a condominium unit that are located on the exterior walls of the unit are part of the common property unless the condominium plan says otherwise. However, in the case of the Windtower, the Board voted to change the condominium plan so doors and windows became the unit owners’ responsibilities, Bylaw 3(c).
Every condominium has a set of bylaws. When a condominium plan is registered, it may include theinitial set of bylaws that govern the corporation. If not, the bylaws found in Appendix 1 of the Condominium Property Act apply until they are replaced. Owners can change the bylaws to suit their particular complex by passing a motion to adopt the changes. A special resolution, requiring the approval of 75% of the owners named on the unit titles and representing not less than 7,500 unit factors is required to make any changes to the bylaws. Changes are effective after the board registers the changes at a Land Titles Office. Owners, and everyone occupying a unit, are bound by the bylaws of the corporation. If there is a conflict between the bylaws and the Condominium Property Act, the Act applies. The Act and specific bylaws give the corporation the right to impose sanctions, like fines, on owners who fail to comply with the bylaws.
BOARD OF DIRECTORS
Every condominium corporation has a Board of Directors elected by the owners to carry out the corporation’s responsibilities. The bylaws outline how many directors sit on the board, how often they are elected, and if there are any eligibility requirements. Directors are volunteers who agree to take on the responsibility of running the condominium for at least one term. Two thirds of the members of the board must be unit owners or mortgagees, unless otherwise stated in the bylaws. The Board conducts its business by holding regular meetings, usually monthly. The Board must report to the owners at annual general meetings or extraordinary general meetings. Each Director has the responsibility to act honestly and in good faith in exercising the power and in discharging the duties of the board. Every director must declare any conflict of interest and not vote on matters that may involve a conflict. It is important to remember that the Board of Directors must make decisions in the best interests of the entire corporation and all the owners, which will sometimes conflict with what individual owners might want to do
THE BOARD’S RESPONSIBILITIES
The Board is responsible for:-
• abiding by and enforcing the Act, regulation and corporation’s bylaws
• managing, administrating and maintaining the common property
• setting and collecting condominium contributions and dealing with the financial administration of the corporation (financial statements must be prepared according to generally accepted accounting practices)
• preparing and approving an annual operating budget and reserve fund budget and providing those budgets to the owners before the annual general meeting
• placing and maintaining insurance on the property for perils covered by standard insurance policies or any other perils identified in the bylaws and the regulation
• placing and maintaining liability insurance for the board or corporation with respect to carrying out their duties and responsibilities
• establishing, maintaining, and administering the capital reserve fund and preparing and distributing an annual report on the reserve fund to the owners
• conducting a reserve fund study every five years and preparing a reserve fund plan
• hiring and supervising employees, contractors, and a condominium manager or management company
• reviewing and updating the bylaws and, with proper notice, presenting the changes to the owners for approval
• holding an annual general meeting and reporting on their stewardship of the corporation
• responding, within 10 days, to a written request from an owner, purchaser, or a mortgagee of a unit, for information on contributions due and payable, copies of agreements, bylaws, minutes of the board or general meetings, budget, recent financial statements, insurance, and the reserve fund study report or plan or annual update (if available), as required under the Act and the regulation.
The Board may charge a reasonable fee for these documents.
CONDOMINIUM CONTRIBUTIONS (FEES)
The condominium corporation needs money to meet its financial obligations – paying for insurance premiums, snow removal, grass cutting, repairs to common property, reserve fund, etc. The main source of income for the corporation is the money paid by the owners in their condominium contributions (often referred to as a condominium fee). Contributions are normally set annually and paid monthly, however the Board can levy special assessments (one or more lump sums) if the corporation needs to raise extra funds to meet its obligations. The board sets contributions by taking into consideration the budgeted needs of the corporation and the unit factors (for each unit). Corporations can change the formula for allocating condominium contributions, if the owners pass a special resolution to amend the bylaws. Make sure you know how your condominium contributions are calculated. Be aware that condominium contributions can and do go up! A condominium corporation has the right to collect unpaid condominium contributions. The corporation can
• ask the owner’s mortgage company to pay the outstanding amounts and add it to the owner’s mortgage
• require an owner’s tenant to pay the monthly rent to the corporation to cover the unpaid condominium contributions
• file a caveat against the title to the unit at the owner’s expense
• charge interest (up to 18% per year on outstanding amounts)
• sue the owner for all outstanding contributions, interest and its full legal fees; and
• foreclose on the title to the unit.
The Board of Directors, elected by the owners, makes most of the decisions on the running of the corporation. As an owner of a unit you have the right and obligation to vote. Your voting rights are determined by the Condominium Property Act, the bylaws of your condominium corporation and by the unit factor for your condominium unit. At most general meetings, votes are conducted by a show of hands. The bylaws clarify who has the right to vote if more than one person owns the unit. Bylaws permit owners to ask for poll votes at meetings. In a poll vote the person’s share of the unit factor assigned to the unit determines the weight of that owner’s vote. You may exercise your right to vote personally or by proxy. If you have a mortgage, the first mortgagee may have the right to vote in your place if it gives the corporation written notice of the mortgage. If you owe money to the corporation for 30 days or more on the day before a vote, you lose your right to vote. Owners can vote on matters presented at any general meeting and on bylaw changes, changes to the common property and other matters permitted under the Act, regulation and the bylaws. It is important that owners vote to elect the board of directors and to change the bylaws.
The Condominium Property Act requires that condominium corporations establish and maintain a capital replacement reserve fund to provide for major repairs and replacement of property and common property owned by the corporation. As buildings age they need to be repaired and maintained e.g. the roof of the complex needs to be replaced. The same is true of other parts of the common property such as the asphalt in the parking lot, underground utilities, or services and landscaping. Condominium owners must pay for the repair or replacement costs of the property owned by the corporation. The reserve fund is not used for repairs or replacements that are done annually. Reserve fund studies must be conducted every five years. The Act gives the board the responsibility and power to make decisions around the reserve fund. Although a responsible board will provide information to and obtain input from the owners, it need not consult the owners before making decisions on the reserve fund. The board must:-
• engage a qualified person to conduct and prepare a reserve fund study
• receive a reserve fund report from the qualified person
• prepare and adopt a reserve fund plan
• provide a copy of the approved reserve fund plan to the owners before implementing the plan
• maintain the reserve fund at an appropriate level so that the corporation can meet the statutory requirements
• maintain the reserve fund in a separate trust bank account and not combine the funds with other corporation funds except when bills are paid under the reserve fund plan, and ensure all managers or other persons handling the corporation money do the same
• prepare and provide to the owners, before or at the time of giving notice of every annual general meeting, an annual report on the reserve fund; including the opening balance, money in and out, where the income came from, what money was spent during the year, and the list of property repaired or replaced and the costs incurred for the repair or replacement; and
• not use the reserve fund for “improvements” unless the owners vote by special resolution to allow it. Improvements are normally changes, enhancements, alterations or additions to the common property or property owned by the Corporation which are not listed in the reserve fund study report.
BUYING A PREVIOUSLY OWNED CONDOMINIUM APARTMENT
When you buy a previously-owned condominium, you are not protected by the disclosure and trust provisions of the Condominium Property Act. It is your responsibility to obtain the necessary documents and information. It is best to consult with your lawyer. When you buy your condominium from the owner of the unit, you should obtain and examine the following documents before you make your offer to purchase:-
• the condominium plan plus any additional sheets attached to the plan (endorsement, registration etc.) that may be made on the plan
• the certificate of title for the unit
• information about any restrictive covenants (agreements)
• the condominium bylaws; and
The condominium corporation must provide you with the following information within 10 days of your written request:-
• an estoppel certificate
• any governing policies of the condominium
• the particulars of any legal action or claim against the corporation
• details of any written demand made upon the corporation for $5,000 or more
• a copy of the corporation’s current budget
• a copy of the most recent financial statement and year-end statement
• a copy of the latest minutes of general meetings of the corporation and of the board
• details of any management, recreational and lease agreements
• a copy of the approved capital reserve fund plan and annual report, including a statement identifying the amount of the capital reserve fund
• a statement setting forth the unit factors and the criteria used to determine the unit factor
• the particulars of any post tensioned cables that are located on the property
• information on any structural deficiencies that the corporation has knowledge of at the time of the request in any of the buildings on the condominium plan
• a copy of the corporation’s certificate of insurance, showing the amount of insurance on the complex; and
• a copy of any lease agreement or exclusive use agreement with respect to the possession of a documents.
An estoppel certificate is a signed statement from the condominium corporation that certifies the information provided is correct. The estoppel certificate tells you:-
• the current condominium contribution assessed to the unit
• the schedule for paying the condominium contribution (e.g. monthly, yearly)
• whether the previous owner has paid his/her share of the contributions and what remains unpaid; and
• the amount of any interest owing on any unpaid condominium contributions.
The corporation may charge a fee for the certificate. Your lawyer can deduct any unpaid contributions from the purchase price. As with the purchase of any building, it would be wise to have a building-inspection report on the unit, if available, or you can make your offer to purchase conditional on obtaining a satisfactory report. Make sure you also ask for the corporation’s most recent newsletter, as well as the names of the corporation’s current board of directors and manager, if any, along with contact numbers
LIVING THERE - YOUR RIGHTS AND RESPONSIBILITIES
When you own a condominium unit you have the right to:-
• vote in matters presented to the owners for a vote
• access common areas, subject to the bylaws
• obtain information on the management or administration of the corporation
• use mediation, arbitration or court action to resolve disputes with the corporation, the board or other owners; and
• legally challenge improper conduct of a developer, condominium corporation, employee of a corporation, director, or other owner. Along with having specific rights as a condominium owner, you also have the following responsibilities:
• to inform yourself about the Act, the regulation, the bylaws, the policies and the governance of the condominium corporation
• to abide by the Act, the regulation, the bylaws, the policies, and to have your family, tenants and guests do so
• to participate in governing the condominium corporation (i.e. attend general meetings, information sessions, and serve on the board or on a committee, vote)
• to read the minutes of the general meetings and board meetings, the budget and financial statements, the corporation’s newsletter
• to express your views, provide feedback to the board when requested to do so, put any complaints or concerns in writing to the board for follow up
• to keep the board aware of circumstances in the condominium complex which might affect funding or other decisions
• to maintain your own unit and any exclusive use common property
• to obtain insurance on your unit and your own belongings
• to pay all condominium contributions and assessments on time.
Every owner should have a copy of the condominium plan, the bylaws, the Act and regulation. Owners can get a copy of the condominium plan and bylaws from a registry agent. You will need to know the condominium plan number (letters and/or numbers) to obtain these documents.
Be aware that the government cannot become involved in disputes between condominium owners, boards, or developers. If you have a dispute with the developer or anyone in the complex, speak directly with the person involved to try and resolve the problem. If the conflict involves the bylaws, the Act, the regulation or the corporation, put your complaint in writing to the board of directors. If the matter is not resolved, get legal advice. As an alternative to court action, condominium disputes can be resolved using mediation and/or arbitration. These processes involve using an objective third party. A mediator helps the parties negotiate their own resolution to the problem. An arbitrator makes a decision after all the parties present their cases. All those involved need to agree on the process and on a mediator or arbitrator. If they cannot agree on a mediator or arbitrator, the Alberta Arbitration and Mediation Society can appoint one for them. The parties involved pay the costs of the dispute resolution. If an owner or any person who has a registered interest in a unit believes there has been improper conduct by the developer, a corporation, an employee of a corporation, director, or owner, they can apply to the court to resolve the problem. An example of improper conduct includes non-compliance with the Act, regulation or the bylaws.
ENTERING THE UNIT
No one may enter your unit without your consent or without giving you proper notice unless there is an emergency. An emergency would include the provision of water, power, and heat, or any other service that would affect other owners. If there is no emergency, you must be given at least 24-hours notice before someone can enter your unit to repair the problem. The notice must be in writing, state the reason for entry, and set a date and time for entry. The hours for entry are between 8 a.m. and 8 p.m.
RENTING THE UNIT
If you want to rent your unit to someone else, you must inform the corporation in writing of your intent, your future address, and the amount of the monthly rent. You must name your tenant in writing to the corporation within 20 days after the tenancy starts. The corporation may require that you pay a deposit that could be used to repair or replace common property damaged by your tenant. The amount of the deposit cannot be more than one month’s rent. If you do not pay your condominium contributions,
the corporation can direct the tenant to pay all or part of the rent to the corporation to cover your unpaid condominium contributions. The tenant is bound by the bylaws of the corporation. If your tenant contravenes the bylaws or damages the common property or the corporation’s property, the corporation can ask you to evict the tenant. It can also give the tenant and you the notice directly. The Residential Tenancies Act may affect you and your tenant if you are renting a residential unit (see the If there is a conflict between the Residential Tenancies Act and the Condominium Property Act, the Condominium Property Act applies.