Cutting the Red Tape: New Condo Regulations coming to Alberta January 1, 2020
December 20, 2019
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:
- 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).
- 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.
- 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.
- 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.
- 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.
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
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.
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
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.
Our Condo Corp is 2 duplexes, 4 units total.
Can we not perform our own Reserve Study?
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:
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?
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.
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?
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.
Can the board change the bylaws or what percentage of the unit owners are required to change bylaws?
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.
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?
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.
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.
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).
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
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 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.
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.
When an 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.
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.
If a condo owner rents out his property should they not provide the tenant and/or property manager with the list of “condo bylaws”? What happens in the case of a tenant who rents a condo without being informed/provided with the list of “condo bylaws” until several months after moving in?
If a condo owner rents out his property should they not provide the tenant and/or property manager with the list of “condo bylaws”? What happens in the case of a tenant who rents a condo without being informed/provided with the list of “condo bylaws” until several months after moving in?
Providing a copy of the bylaws to tenants is the unit owner’s responsibility. All owners and anyone in possession of a condominium unit in Alberts, whether tenants or otherwise, are deemed to be bound by the bylaws for the corporation. It is also an implied term of any residential lease agreement for a condominium unit that the tenant will not cause damage to common property or contravene the bylaws. In general, when a tenant violates a bylaw, the corporation is obliged to send a warning notice before taking any enforcement action such as levying fines, however this may not prevent the corporation from passing on any costs associated with remedying the tenant’s violation to the unit owner. Owners need to ensure that they are properly informing their tenants prior to the commencement of the tenancy and that they provide their tenants with copies of the current bylaws and rules for the corporation. Each corporation may also have additional requirements for tenancies in their bylaws. When in doubt, check the Act and bylaws specific to that condo corporation.
Our building is 4 floors, bottom two being family friendly, top two being Adult (senior mostly) only. No children on the top two floors except visitors. Is this still ok with the current changes? Our board managed to stay in for 3 years due to COVID-19 tells us at the AGM that it is law to revise the bylaws (and pay the lawyers fees) every 5 years? I have never heard of that and cannot find it anywhere. Please advise.
With changes to the Human Rights Act in Alberta, condominiums are no longer able to maintain age restrictions except where the restriction is specified as 55+ or older. Condos with existing age restrictions in their bylaws were grandfathered for 15 years, and this grace period expires January 1, 2033. After that, existing bylaws with other age restrictions, such as 18+ only, will no longer be enforceable.
While it is not mandatory for condominiums to update their bylaws every five years, it is a good idea for Boards to conduct periodic reviews every so often and update/revise the bylaws to reflect changing legislative requirements, recent judicial decisions, and current concerns (for example short-term rentals).
I bought in a condominium property in Edmonton Alberta that is 18+ restricted. The board is aware of the changes in age restriction and the Jan 1, 2033 deadline for transition. The confusion that seems to have divided the board (and property management for that matter) is when the building transitions, does it have to become all age or could the ownership vote (special resolution rules) to become a +55 building. Do we have a choice? or is there no choice and the building becomes all ages.
Condominium corporations with existing age restrictions have the option of letting those restrictions become unenforceable as of January 1, 2033, amending their bylaws to remove the age restriction, or amending the bylaws to modify the existing restriction to become a 55+ restriction. The Board should consult with owners to determine their preference, in consideration of the current owner demographics, before making any changes.
Hi, Me and my husband bought a condominium years ago that had an age restriction of 18+. Once we had a child we moved out but are renting out the unit as we couldn’t sell it for the price we bought it for. Now the Board is proposing to update the bylaws to have the condo converted to 55+ effective 2032. It feels like a few older owners in the condominium that are trying to push for it. Neither me or my husband will be 55+ at that time, and as we are currently renting it out, most of the time our tenants are not 55+ either. We are very concerned with this situation as we feel it will impact the value of our property and it is discriminatory to those owners who are younger and those who are renting out their unit. We are not the only one in this situation. How can we oppose to it, what can we do? Can the other owners force this?
A change like this requires support from at least 75% of all persons eligible to vote, representing no less than 7,500 unit factors out of the total 10,000 unit factors for the corporation. If you have concerns about this proposed change, you should speak with your neighbours and approach the board on ways to address your concerns. Perhaps there is insufficient support from owners to amend the bylaws to make this change. The board also has the option of including a grandfathering provision in the proposed bylaw amendment that would protect existing owners who live in their units, and it might be willing to do so if owners express disagreement with the proposal. Your situation is somewhat complicated by the fact you do not live in your unit, so I recommend you seek legal advice insofar as how this change may impact your tenants.
I am trying to track the change from Special Assessment to Special Levy. I have the 2020 Condo Act’s definition of Special Levy and I have a 2016 copy of the Condo Act and Regs but there is nothing that defines Special Assessment. My purpose of tracking the two Act definitions is to resolve a question of what to do with the funds from a lawsuit that started with a 2015 Special Assessment. And whether the funds of the lawsuit are now governed by the 2020 definition of Special Levy – OR – are the funds of the lawsuit governed by and reverted back to when they were required under a 2015 Special Assessment?
“Special assessment” was never a defined term in the Alberta legislation until January 2020, when the term “special levy” was introduced in section 39.1. A new provision that came into force at this time provides that if the funds collected in a special levy exceed the amount required or are not fully used for whatever reason, the excess or unused funds must be deposited to the reserve. Once funds are deposited to the reserve, they become an asset of the corporation and cannot be distributed or repaid to owners except where the corporation ceases to be governed by the Act (that is, it is dissolved or terminated). The answer to your question likely depends on where the collected funds have been held since 2015. If they were deposited to the reserve, they cannot be removed other than for purposes related to permitted reserve fund spending.
Thank you for providing a wealth of information, your responses to the questions are very helpful. My condo corporation of 62 units is in need of a full envelope project. Work has been done to source out engineers, contractors, cost, job scope, etc. Owners have been subjected to the start of several special assessments (one paid last May, one due this coming November, along with the same schedule next year) as well as a loan to cover 50% of the project costs. Less than a month after collecting everyone’s first assessment payment the Board sent a notice that they were putting things on hold till the following year due to a cost increase from the contractor which will require the Board to source out the project yet again. Some owners are frustrated and wondering if they are still liable to make their next assessment payment, if the project is on hold?
Thank you for your help, Nicole
Your question may call for providing legal advice and/or opinions and unfortunately we are not able to provide this without being retained. Generally however, unless the board has provided notice to terminate the remaining special levy payments, owners are still obligated to make these payments on or before the due date. If the money collected exceeds the amount required or is not fully used for the purpose that it was collected, then it must be deposited to the reserve fund. It cannot be refunded to owners.