An important condo conversation.
Bill 13 was introduced in the Alberta Legislature, earlier this year, . This bill addresses amendments to the current Condominium Property Act. As with other provinces that have undertaken the same initiative, these amendments have become necessary to further protect consumers (current and future) and clarify issues that have arisen in the condominium market over the years.
Last spring, Service Alberta invited the public and stakeholders to become involved by way of a questionnaire available online and interested parties such as condo owners/corporations, business/industry, property managers, development/construction, government, insurance and legal entities responded en masse.
A look at some of the serious problems in condominiums and the rising number of court cases validates the need for fair, equitable, clear and transparent guidance and legislation. Some of these proposals discuss tribunals, mediation and arbitration as a way to keep costs down while solving issues before an expensive court case become necessary.
One of the most important issues presented to Service Alberta by respondents includes ‘fair dealing’. Sounds easy enough, but this is truly a very ambiguous term. Fair dealing is asked by all industry stakeholders to apply to not only developers and property managers, but to boards of directors and unit owners as well.
Disclosure to buyers, right to cancel and developer’s obligations regarding the turnover of the corporation to its owner elected board are also high on the list. Other concerns that received very high support include condominium contributions (fees), parking, authority and method of recalling a board member, owner initiated ‘extraordinary’ meetings, voting rights, corporation oversight of unit repairs, the return of corporate documents from property managers in a timely fashion, fees for documents held by the manager and provisions allowing for early termination of the management contract.
If you live in a condo or know people who do, chances are you’ve had to attempt to deal with one or more of these issues. High support/positive responses to proposals are also clear in the areas of disclosure to buyers, disclosure and reports on ‘converted’ condominiums, video/teleconferencing of board meetings, competence and standards of practice and maximum term limits for all condominium managers, protection of buyer’s deposits, developer document disclosure and reasonable time frames for completion of projects.
As documents are integral and evidence of good faith and good corporate practice, concerns arose regarding charges (fees) for documents and the cost structure of such. Should corporations be able to borrow money without a special resolution requiring 75% of owners/unit factors in agreement?
Should corporations ensure fixed improvements in units and should owners be able to opt-in/opt-out of this insurance? In CondoQuest’s experience and according to the CPA Review and Consultation Analysis, owners want more clarity and perhaps maximum limits set on insurance deductible chargebacks and rules for the levying of special assessments. Should a condominium unit owner’s insurance package have mandatory deductible insurance?
Issues of a general nature were also presented in the areas of effective communication, new condo developer obligations, sound financial management, meetings and proxies, bylaws, documents, reserve funds and fair taxation.
Bill 13 is undergoing it’s first reading only, so stay tuned. It is clear that some problems in the condo market can be solved, providing greater confidence for new and current owners. Call me… let’s talk condos!