Alberta’s Condominium Act has been updated with changes coming into effect on January 1, 2018 and April 1, 2018. The amendments include many changes that will impact the operations of condominium boards and developers.
HOW THE CHANGES WERE ENACTED
The Condominium Property Amendment Act was passed in Dec, 2014 but not proclaimed in force.
Two Orders in Council were issued on Oct 11, 2017 which proclaimed in force some portions of the Amendment Act and enacted additional regulations.
Non Developer Changes
1 – RETURN OF CORPORATE PROPERTY
Original copies of any records or documents prepared for the corporation by a manager or board member including documents in 12(1) are property of the corporation and
manager shall within 30 days of termination (whether justified or not), at no charge, return all property to the corporation
Board members are also under same duty
2 – BOARD CHANGES
2/3 of members have to be owners (unless it says otherwise in bylaws)
A higher standard of care is put on board members:
i. to act honestly, in good faith and in the best interests of the corporation AND
ii. exercise the care, diligence and skill of a reasonably prudent person
Upon any changes being made in the board, the corporation shall “promptly” file the notice at Land Titles containing board member names and address. Change of address for service has to be filed “promptly”
Expanded provisions about when a board member must be removed:
i. bankrupt,
ii. 60 days in arrears,
iii. represented adult,
iv. indictable offense,
v. resigns or removed by ordinary resolution
*Does not automatically include a board member who commences a lawsuit against the corporation.
3 – NOTICE OF MEETINGS (AGM’S AND SPECIAL)
Must give 14 day notice of meetings
If sending notice by ordinary mail, add an extra 7 days. If email, add 24 hours
4 – SPECIAL MEETINGS
whenever board thinks fit or upon request of 15% of unit factors
must be convened within 30 days of the request
must include the purpose for which the special meeting is convened and wording of any proposed resolution (intended to prevent people from collecting proxies from unsuspecting owners)
5 – ELECTRONIC UPDATES
Board members can attended meetings electronically – “as long as everyone can hear each other”
Notices can be sent by email but need proof that the owner has provided that email to the corporation specifically as an address for service
6 – SERVICE
Personal service, ordinary mail or recorded mail at address on land titles OR alternative address for service provided by owner to corporation (need proof that an alternate address was provided)
Electronic means (email) to address that the owner has specifically provided as an address to which info may be provided (again need proof)
7 – ESTOPPELS MUST INCLUDE:
Amount of contributions payable
Frequency
Amount in arrears
Amount of interest owing
8 – INSURANCE CHANGES – THE CORPORATION/MANAGER MUST NOTIFY OWNERS (BY SENDING BOTH WRITTEN NOTICE AND THE INSURANCE CERTIFICATE) WHEN THERE IS A CHANGE IN:
Amount of deductible
Replacement value of coverage
Addition to permitted exclusions
Any other matter in regulations (not in regulations yet)
9 – IMPROPER CONDUCT
Improper conduct now includes oppressive conduct of owner vis a vis another owner
10 – MANAGEMENT AND OTHER AGREEMENTS AFTER TURNOVER
Developer’s management agreement can only be terminated before 1 year with cause (same as before)
But other agreements that the developer entered into can be terminated by the new board (within 1 year) without cause
Developer Changes EFFECTIVE JAN 1, 2018
1 – FEES – DEVELOPERS HAVE TO PAY CONDOMINIUM FEES ON UNITS IN A BUILDING AT THE SAME RATE AS EVERYONE ELSE
2 – INTERIM BOARD
Developer has to appoint an interim board within 30 days after registration of condominium plan
All resolutions have to be recorded
Must pursue their own warranty claims
Have to act honestly and in good faith AND with a view to THE BEST INTERESTS OF THE CORPORATION (before just duty of fair dealing)
Resolutions and minutes have to be recorded
Specific duty to pursue their own warranty and insurance claims (including home warranty claims)
3 – ALL PURCHASE DEPOSITS MUST BE HELD IN TRUST BY A LAWYER
4 – TURN OVER MEETING
After plan registered and CCTs representing 50% of unit factors are issued to purchasers, developer has 90 days to hold meeting; or
12 months after plan registered (unless plan was registered before May 1, 2017)
5 – LONGER LIST OF DOCUMENTS DEVELOPER HAS TO PROVIDE TO THE BOARD AT THAT MEETING (INCLUDING RESOLUTIONS AND MINUTES OF THE INTERIM BOARD)
If turn over meeting is held before April 1, 2018 then the developer has more time to give board new documents.
6 – DEVELOPER HAS TO TURN OVER ALL VISITOR AND HANDICAP PARKING SPACES TO THE CORPORATION
7 – MORE DISCLOSURE DOCUMENTS AND MATERIAL CHANGES
A developer has to provide floor plans and interior specs for residential units
A developer has to give purchaser’s notice of a “material change” and if there is a material change, a purchaser can apply to court for relief including damages or rescission
8 – OCCUPANCY DATES
Developer must provide either a fixed occupancy date or a range of dates
If developer misses occupancy date by 30 days, buyer can terminate agreement
9 – BUDGET
Developer has to provide a proposed budget to the purchaser with specified categories and the budget must allocate a reasonable amount for the condominum reserve fund
If the proposed budget underestimates the actual budget by over 15% compared to the new budget, then the developer has to refund difference to condominium corporation
10 – LONGER LIST OF DOCUMENTS THAT THE DEVELOPER HAS TO GIVE THE BOARD
11 – NEW SECTION ON DIRECTOR, INSPECTORS AND INVESTIGATIONS
A Director (to be appointed) has power to appoint investigators with broad powers of investigation
“Any document required to be maintained under this act must be available for inspection” and inspector can at any time drop in on developer and inspect operation of business and records to determine if this being complied with
Inspector can enter any premises to determine if offence being carried out
An inspector can:
Question anyone, under oath
Demand production of records
Remove records
Make copies
Liability of Directors and Officers – every principal, director, officer, manager, employee or agent of the developer who authorized the act or omission or who assented, acquiesced in or participate in the act is guilty of the office
Corporate Offences – up to $100,000
Individual Offences – $2500
For further information, please contact: John McDougall, Dionne Levesque or Kate Kozowyk