Cutting the Red Tape: New Condo Regulations coming to Alberta January 1, 2020

December 20, 2019

Cutting the Red Tape: New Condo Regulations coming to Alberta January 1, 2020

On November 26, 2019, the Alberta Government released the long-awaited, newly-revised amendments to the Condominium Property Regulation, and proclaimed that certain sections of the Condominium Property Amendment Act, SA 2014, c. C-10 will also come into force on January 1, 2020. The majority of the revisions in this phase of the amendments addresses governance issues, and will directly affect all condominium boards and unit owners in Alberta.

You can view the announcement here: “Cutting red tape for Alberta condos”.

Service Alberta, under the direction of the honourable Minister Nate Glubish, responded to calls from condominium boards, unit owners and property managers alike to “cut the red tape”, which quickly followed the release of the previous regulatory amendments last December.

According to the announcement, the revised regulations “incorporate feedback from a review with stakeholders held over the summer”. Modifications were made to everything from disclosure of
information, to the process for organizing and convening annual general
meetings (AGMs).

The following are some of the key changes in the revised regulations that will reduce the administrative burden on condominium boards:

  1. Proposed requirements, such as pre-AGM notices and calls for agenda items from unit owners, have been removed from the new Regulations (although this still appears in the revised Appendix Bylaws, and will apply if a condominium corporation does not have their own registered bylaws).
  2. The obligation of boards to provide unit owners with copies of the minutes of all board meetings held during the year along with the AGM notice has also been removed.
  3. Similarly, the confusing specifications regarding voting by co-owners have – thankfully – been eliminated in the new version of the Regulations, while clarifications over the creation and certification of proxies have largely been maintained.
  4. There is also a broader list of “qualified” reserve fund study providers which may make it easier and less costly to obtain these essential documents. The period of time covered by reserve fund studies has been increased, from 25 to 30 years.
  5. The tariff of fees chargeable by condominium corporations and property managers for the production of documents upon request has been increased somewhat to better reflect the actual costs involved with providing various documents.

There is also a new regime addressing monetary sanctions, which sets out the process boards must follow in order to impose fines on unit owners who fail to comply with the bylaws. Some might argue that this process remains too onerous, especially when there is still no effective means to enforce payment of the fines themselves.

Not all the changes were administrative, however. Other notable revisions were made to the damage deposit provisions for rental units. These are now expressly treated as common expenses assessment, meaning that payment can be enforced in the same manner as monthly condominium fees.

One of the most significant amendments, unchanged from the last version of the Regulations, is the requirement for condominium corporations to adopt and file with the Land Titles Office “standard insurable unit descriptions”. These will be used to determine what is, or is not, an improvement to the unit, and may be very helpful in preventing disputes with unit owners and insurers should the corporation suffer an insured loss.

The new Regulations confirm the ability of condominium corporations to charge back the amount of an insurance
deductible to a unit owner where damage originates from that owner’s unit or from any exclusive use area assigned to that owner, if the corporation’s bylaws so provide. Courts have long held that this is permissible if the bylaws allow
for it, but the practice has now been given legislative approval. The amount of the deductible is also recoverable as a contribution for common expenses (up to a maximum of $50,000.00).

Finally, there are some new provisions concerning caveats, although a few of these merely codify what the courts in Alberta have already held (for example, caveats cannot be registered in respect of unproven fines, but only following a judgment in respect of the fines). One unexpected change is that there is now a cap on what constitutes “reasonable” expenses in terms of caveat preparation, registration, enforcement and discharge. These amounts can be collected like a contribution, but the aggregate, maximum amount of the expenses that are collectible may not exceed the original amount owing in respect of the unit.

Condominium corporations will still have one year in which to pass an ordinary resolution (as opposed to a special resolution) to bring their bylaws into compliance with the amendments. This process is limited to bylaw amendments that address actual conflicts, however, and cannot be used to approve other changes to the bylaws. In that case, a special resolution will still be necessary.

For legal advice on how these changes will affect your condominium corporation, and what steps it must take to comply with the new requirements, please contact Erin Berney.

Our team at Field Law is able to provide expertise and assistance with all manner of condominium-related issues, from development, management and governance to dispute resolution and litigation. In particular, please contact Erin Berney or Paul Girgulis in Edmonton, or Gordon Van Vliet, Anthony Burden or John Gilbert in our Calgary office.

Erin Berney

Erin Berney

Erin Berney possesses extensive experience in all manner of residential and commercial condominiums, from traditional, bare land and phased-style development, to “barely blended”, duplex, mixed use, and rural developments. She has been a condo owner in downtown Edmonton since 2005, and has served on the Board of Directors as Treasurer, Secretary and Chair of the Bylaw Review Committee. This gives her unique insight and invaluable knowledge and experience that she brings to her clients.

21 thoughts to “Cutting the Red Tape: New Condo Regulations coming to Alberta January 1, 2020”

  1. After a reserve fund study is completed is there any time limit given to the condo board to complete a study and give notice to owners as to recommendations and proposed costs to keep study moving forward

    1. Once a reserve fund study has been completed and the qualified person has provided the reserve fund report to the corporation, the board must prepare a reserve fund plan. There is no time limit on when a condominium board must provide a copy of the reserve fund plan to the unit owners. However, condominium boards are required to prepare an annual report on the reserve fund, and provide this to owners no less than fourteen (14) days in advance of each Annual General Meeting. I hope that helps answer your question.

      1. Can the property managers and condo board still have a special assessment proposal and to pay an amount of money when the reserve fund is a million dollars

        1. Perhaps, because the condominium board must ensure that the reserve fund level is reasonably sufficient to provide for major repairs and replacement of the corporation’s real and personal property, the common property and any managed property. Each condominium corporation is unique, and will have different long-term capital funding needs. $1 million dollars may be more than sufficient for one corporation, but may also be woefully inadequate for another. Further, a special levy can be done for a variety of purposes, including:

          (a) for the payment of unexpected and urgent maintenance, repair or replacement of the real and personal property of the corporation, common property or managed property,

          (b) to cover unexpected shortfalls in the operating account,

          (c) to increase the balance of the reserve fund to meet the requirements in a reserve fund plan required under the regulations,

          (d) subject to subsection (3), for the payment of a capital improvement,

          (e) to satisfy a judgment against the corporation, or

          (f) for any other purpose provided for in the regulations.

    1. Yes, if your corporation has 12 or fewer units, then the corporation may carry out the functions of a reserve fund study provider, only if authorized to do so by a special resolution of the unit owners. This is found in section 22 of the Regulations:

      22 Notwithstanding section 21(2), if a condominium plan consists of not more than 12 units, the corporation may, in respect of that condominium plan, carry out the functions of a reserve fund study provider if authorized to do so by a special resolution.

  2. My condo board had never communicated a list of fines associated with the bylaws. In fact the bylaws are so vague that the Board appears to be arbitrary in their application of fines and simply impose the fines and shortly after that begin to deny access to the front door and amenities. Are they allowed to do this without adequate warning?

    1. Your Bylaws must specify the actual fine amounts in order for the Board of Directors to validly impose fines for violations. If the Bylaws do not contain these provisions, this could be grounds on which to challenge the validity of any fines that are levied. Nonetheless, if your Bylaws do set out the amounts that can be levied for violations, the Board must still send a preliminary “notice of proposed sanction” in writing, before any fines are imposed. The notice must set out all the details of the alleged violation, and provide at least three (3) days for the recipient to either respond contesting the sanction, or to take corrective action to avoid the sanction.

  3. My Condo Board is refusing to provide the owners with a Reserve Fund Plan following a recently received Reserve Fund Report. The Board claims that the Report itself is the Plan. I disagree and have asked the management company to petition the Board for a funding method and proposed strategy to account for expenditure of the owners’ contributions. Does the Act/Regulation not state that, “…the corporation must provide to the owners for the owners’ information copies of that approved reserve fund plan prior to the collection of any funds for the purposes of those
    matters dealt with in the reserve fund report on which the approved reserve fund plan was based and that are to be carried out pursuant that report”. What does this mean exactly? Can I refuse to contribute to the Reserve Fund until such time I am provided with a copy of the Plan?

    1. There is a difference between the reserve fund study, report and plan. The report is typically prepared following the study, by the approved provider (usually an engineering firm). While the report often sets out various funding scenarios as recommendations that the board may or may not adopt, the board is still required to approve a reserve fund plan that sets forth the method of and amounts needed to fund and maintain the reserve fund. The approved reserve fund plan must be provided to owners prior to the collection of any funds for the matters set out therein.
      However, while the board may be technically offside, the solution is not to withhold payment of condo fees or other assessments, or any portion thereof. The board is still permitted to collect those amounts from unit owners, and deposit and/or make expenditures from a fund similar in nature to a reserve fund, until such time as a reserve fund plan has been approved. What you have described (asking the management company to petition the board for, in essence, a reserve fund plan that accounts for the proposed contribution levels) is the appropriate initial response. If the board continues to refuse to approve a reserve fund plan, then your options are to petition other owners for the removal of the board and the convening of a new board election (once the corporation can again hold meetings safely in person, or can facilitate an electronic meeting for this purpose), or to bring a court application to compel the board to approve a reserve fund plan.

    1. The Board cannot approve new bylaws, a special resolution of the owners is required. This means that 75% of all owners (persons eligible to vote), representing at least 75% of the total unit factors (7,500), must be in favour in order to approve new bylaws for registration at Land Titles.

  4. Question to Eric; Can a HOA comprising 18 duplex units but constituted as a Condo Association choose to Self Insure
    the SIUD portion of their Insurance?

    1. A review of your constituting documents would be required as a starting point, to confirm your status as a condominium. Beyond that, the answer is complicated by what type of condominium you are (traditional or bare land). The requirement to carry insurance is set out in the Condominium Property Act, but the Act does not specify how or through what vehicle this insurance must be provided, only that it must be for full replacement value. Which property must be insured also depends on your condo plan and your bylaws. Unfortunately this is not a quick answer, so I encourage you to obtain legal advice.

  5. If a condo is age restricted to 45+, can a person younger than 45 buy a unit in that condo and rent it out to tenants who meet the age requirement? I only see details to age restrictions in the bylaws that apply to occupancy but not to ownership.

    1. This depends entirely on the specific wording in your bylaws, which would need to be reviewed. Theoretically, if the bylaws are restricted to occupancy, then it’s possible an individual under the minimum age threshold could own but not live in the unit. Be advised however that age restrictions such as this are no longer permissible in Alberta. Condominiums with existing age restrictions have been grandfathered for about a decade, but they cannot pass new bylaws restricting the age of occupants except in the case of seniors (ages 55 and up).

  6. Does anyone have a conclusive directive on electing a condo associations board process in Alberta?
    Can a friend with no interest vote? If you own multiple units can you appoint tenants or friends to the board?
    How do you determine true eligibility to vote? Must you be an owner? Can a majority owner through a poll vote disallow other owners from being on the board? Is the law 1 unit one vote or is it by unit factors? Any help would be appreciated. Thank you

  7. Hi Tom,
    I’m a condo owner, and came here to see if there was any info on what I need answers to. Unfortunately, I almost permanently have to keep the Condo Property Act and Regulations minimized on my task bar. Since I’ve basically been forced to be well schooled, I can answer some of your questions. Your resource for most info is: Service Alberta. https://www.alberta.ca/condominium-rules.aspx Aside from the Act and Regs, there are links to detailed explanations, all of the legislation updates, as well as comprehensive fact sheets on specific areas of practice. Voting in brief: An owner and/or mortgagee can opt to appoint “an individual” (no criteria) to vote on their behalf by proxy, which has to be presented in person, and certified by the a corporation representative – board member or condo manager (typically this would occur for voting at AGM’s). I believe the law says unit factor, but essentially it’s one vote per unit. If someone owns 4 units, they get 4 votes. Board members can, and should be removed for contravening the laws…there is a procedure, but your question reads like you want to prohibit someone from getting on the board? How would you know this person even wants to be on the board? Have you been to an AGM? READ EVERYTHING you can find first, then ask questions.

    1. Tom and Carolyn,
      I echo the direction to Service Alberta, and would add another resource: the Canadian Condominium Institute. I also caution that each condo is unique, and you should review your particular set of bylaws for specific procedures and restrictions on board member eligibility, removal, etc. Unless the bylaws conflict with the Act and Regulations, these are what would govern.

  8. When a Exclusive Use Area, which has been designated by the Condo Corp., is destroyed (trees, shrubs, fish tank and artificial grass) by a contractor for the Corp, is there any recourse? Maintenance was assigned to the Owners and was performed regularly for 13 years. No notice was received or permission given. Apparently a branch was touching a fence.

    1. Much depends on the provisions of your bylaws, and how these areas are identified on the condominium plan. I recommend you obtain a legal opinion with regard to your potential options, involving a review of the relevant condominium documents for your particular corporation. Generally, there may be a chance of recovery from the corporation for damages caused by one of its contractors.

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