Search Results for: Condominium Documents

A condo board can impose a special levy in certain situations, for example to:

• Pay for unexpected and urgent maintenance, repair or replacement of the corporation’s real and personal property, common property or managed property
• Cover unexpected shortfalls in the operating account
• Increase the balance of the reserve fund to meet the requirements in a reserve fund plan
• Pay for capital improvements (a special resolution is needed)
• Satisfy a judgment against the corporation or
• For any other purpose under the Condominium Property Regulation

To approve a special levy, the condominium board passes a resolution, which must set out the following information:

• the purpose of the levy
• the total amount to be levied
• the method for calculating the special levy
• the date by which the levy or installments are to be paid

As soon as possible after passing the resolution, the board must inform owners of the following information:

• the purpose of the levy
• the total amount of the levy
• the method for calculating each unit’s share of the levy
• the amount of the owner’s unit’s share of the levy
• the date by which the levy or installments are to be paid

If the amount collected exceeds the amount required or is not fully used for the purpose in the resolution, then the corporation must pay the money into the reserve fund.

Each owner’s portion of a special levy is calculated based on unit factor unless the Condominium Property Regulation or bylaws say otherwise. The unit factor is also used to assign condominium contributions (fees). If you’re unsure of how unit factors are assigned in your condominium, check the schedule attached to your condominium plan.

Sellers must disclose if there is a pending special levy that is not included in the condominium documentation. The requirement to pay the special levy remains with the unit and becomes the responsibility of the new owner. Carefully consider whether you want to purchase a condominium unit with a pending special levy, as it will increase your costs significantly.

You should also consider why a special levy was levied. For example, was it levied to repair a leaky roof? Are there ongoing issues with the structural integrity of the building? Review the condo’s reserve fund documents and ask questions of the condo board, property manager, and other unit owners.

It is also important to consider if the condominium has a history of imposing special levies. Ask your lawyer and document review company to help you review the condo corporation’s documents to determine if there will be ongoing issues due to financial mismanagement.

A condominium corporation’s operating budget and reserve fund are separate and distinct accounts with their own rules. For example, money from a reserve fund can only be used to cover the cost of repairing and replacing the corporation’s real/personal property, common property and managed property; it cannot be used to cover operating expenses. However, a special levy may be levied against condo owners to cover operating expenses.

As an owner, it is your responsibility to pay your portion of the special levy when it is due, even if you disagree with it. If you don’t pay the special levy, the condo board could take any of the following actions:

• charge interest on the unpaid amount (up to 18% per year)
• sue you for the unpaid amount, plus any interest and legal costs
• if you have a mortgage, ask your mortgage company to pay the outstanding amount
• if you have a tenant in your unit, require the rent to be paid to the condominium corporation to cover the unpaid amount
• file a caveat against your property title
• foreclose on the title to your unit

If you want more information about why the special levy was imposed, talk to your condo board and ask questions. It is your responsibility as an owner to keep yourself informed about the finances of the corporation. Consider becoming a member of the condo board if you want to have greater input on the financial direction of the condominium corporation.

As a seller, you must disclose any material latent defects. This means defects you are aware of that the buyer could not identify through a visual inspection of the property. These defects may be related to the common property or the condominium unit. You must also disclose any upcoming special levies.

Standard purchase agreements in Alberta also require sellers to confirm the unit complies with municipal bylaws and that the appliances are in working order.

Failing to disclose any of the information above could result in the purchaser suing you in the future.

Check your purchase agreement on what documents you need to provide when selling. Certain purchase agreements require sellers to provide documents to buyers, placing a legal obligation on sellers. In this case, it is extremely important to have all of the documents ready before you list the unit for sale. This way, you know exactly what you are selling and what buyers will see. Providing buyers with documents will also likely help you sell your unit faster if you’re able to provide key documents to buyers in a timely manner.

Important documents include:

• The most recent reserve fund report and plan. A well-funded reserve fund can be an important selling feature that shows buyers the condominium corporation is in good financial health.
• The corporation’s operating budget. This shows buyers what the corporation is spending owners’ condominium contributions (fees) on – amenities, property management, contractors, etc.
• Recent meeting minutes from condo board meetings. These will give buyers insight into whether there are upcoming major repairs or budget deficits as this could mean increasing condominium contributions (fees).
• The corporation’s bylaws and rules. Buyers will definitely want to see what the rules are in the complex regarding pets, parking, and amenity use.
• A real property report if the unit is a bare land unit with a structure. This is a physical survey of the land and its structures.

Collecting documents can be time consuming. So start early to make sure you have all documents ready before listing the unit for sale.

For a list of additional documents that may be requested by a buyer, visit Collecting and Reviewing Documents – Resale Properties.

Thank you to the Alberta Real Estate Association for allowing portions of their Condominium A to Z course manual to be adapted for use in this section.

In order for a real estate sign to be visible, real estate professionals often want to place it on the condominium’s common property. However, some condominiums prohibit real estate signs (for example, for sale signs, for rent signs). Other condominiums allow you to post signs with permission, while others specify exactly where you may post such signs. Check your condo bylaws or rules. You can also ask the management company. For self-managed condos, check with your condo board.

In order for a key box to be visible and easy to access, real estate professionals often want to place it on the condominium’s common property. However, some condominiums prohibit key boxes, while others specify exactly where to install them. Check your condo bylaws or rules. You can also ask the management company. For self-managed condos, check with your condo board.

Thank you to the Real Estate Council of Alberta for allowing portions of their Fundamentals of Real Estate course manual to be adapted for use in this section.

When a condo plan is registered, a developer must hold a meeting to elect the first board (also known as a “turnover meeting”). An owner can also call a meeting if the developer does not do so. The developer and interim board must disclose a number of documents to the corporation and elected first board. You can learn more about interim boards and the meeting to elect first board in the Developer Turnover section.

The first AGM must be held within 12 months of the condo plan registration. A condo corporation is then required to hold an AGM every year, within 15 months of the previous AGM. At the AGM, new condo board members are usually elected, the financial status of the corporation is disclosed, and any matters requiring owner input are discussed.

Notice of AGM

At least 14 days before an AGM, the condo corporation must give written notice of the meeting to owners and mortgagees and provide copies of the following documents:

• Financial statements for the previous fiscal year, prepared according to generally accepted accounting principles
• Annual report on the reserve fund
• Annual budget for the fiscal year immediately following the previous fiscal year

Check your condominium’s bylaws for any further information about notice of an AGM. For example, some bylaws may require preliminary notice of an AGM.

Information provided after AGM

Within 60 days after an AGM, the condominium corporation must provide an owner or mortgagee with approved minutes (or draft minutes if no minutes have been approved). The approved minutes or draft minutes must include records of the votes held at the AGM, recording the following information:

• If an ordinary resolution was proposed, the results of the vote
• If a special resolution was proposed:
  • the number of people (entitled to vote) who voted in favour of the resolution and number of unit factors represented by them
  • the number of people (entitled to vote) who did not vote in favour of the resolution and number of unit factors represented by them
• For an election of board members determined by a vote, the number of votes in favour of each candidate

When the condo board asks unit owners or unit owners ask to meet in addition to an AGM, it is known as a special general meeting. Such meetings are called to discuss an urgent matter that requires owner input and a resolution.

A board can convene a special general meeting by giving written notice to owners at least 14 days before the meeting.

When owners with units representing at least 15% of total unit factors provide a written request to hold a special general meeting, then the board must hold one by giving written notice to each owner at least 14 days before the meeting. The owners’ request must include the nature of the business to be discussed at the meeting. The board must hold the meeting within 30 days of receiving the request. Otherwise, the owners may proceed to hold the meeting.

A special general meeting notice must include the meeting purpose, including proposed wording of any resolution.

 As long as a reasonable attempt to give notice of a general meeting was made, failure to give notice does not invalidate anything done at that meeting.

Unless a corporation’s bylaws say otherwise, condominium corporations can hold meetings and votes by electronic means. This includes electronic or telephone conferencing, as well as computer network or internet-based communication platforms.

If you are entitled to attend a corporation or board of director’s meeting, you may attend it by electronic means. You may also vote by any electronic, telephone or other method that the corporation has made available for that purpose.

If you attend a meeting by electronic means, then you are considered to be present in person at the meeting.

Meetings not held by electronic means must be held in the municipality in which the units are located unless an ordinary resolution says otherwise.

A quorum is the minimum number of people required to be present at a meeting so that the decisions made at the meeting are valid.

The number of persons needed to make a quorum should be in the bylaws. For example, some bylaws will specify that at least 25% of all people entitled to receive notice of the meeting or represented by proxy must be present to form a quorum.

Some bylaws will even outline what will happen if there are not enough people to form a quorum at a meeting. For example, if there are not enough people present at the meeting to form a quorum within the first 30 minutes of the meeting, the meeting must be adjourned to the corresponding day in the next week. It must be held at the same place and time. If there are not enough people present at the meeting to form a quorum within the first 30 minutes of the adjourned meeting, then the people entitled to vote or represented by proxy who are present would be the quorum for meeting purposes.

For example, if an AGM was scheduled for 7 p.m. on a Tuesday and there were not enough people at the meeting to form a quorum, then it must be adjourned to the next Tuesday. The adjourned AGM must also be held at the same place and time (7 p.m.). People present at the adjourned AGM will be entitled to vote, regardless of whether a quorum was formed within 30 minutes of that meeting.

Always check your registered bylaws for any further guidance on Quorum.

Owners or mortgagees can give a proxy to any individual, which is a written authorization that the individual can vote on their behalf. A proxy must be in an electronic (for example, e-mail or fax) or hard copy format, containing information such as:

• The owner’s name and unit number or mortgagee
• The individual’s name to whom the proxy is given
• The date the proxy is given
• The signature of the owner or mortgagee giving the proxy

There are also situations where a proxy is invalid, for example, if it is given to:

• A minor
• A person other than an individual
• A manager or employee of the condominium corporation (unless the proxy was given only for forming a meeting quorum)
• A manager or employee of the condominium corporation’s management company (unless the proxy was given only for forming a meeting quorum)

Owners may revoke their proxies. When an owner gives two or more proxies, only the most recent proxy is valid.

A proxy can be restricted by the person who gave the proxy and the corporation’s bylaws and rules. For example, a corporation may adopt rules about their use, including proxy presentation procedures, verification and registration.

Proxies must be certified before or at the beginning of a general meeting unless the condominium’s bylaws say otherwise.

There are also certain rules about proxy expiration. For example, a proxy expires on the earliest of:

• The expiry date set out in the proxy
• 6 months from when the proxy was given and
• When the person giving the proxy is no longer an owner or mortgagee of the unit in which the proxy was given

There are two kinds of resolutions that owners (and mortgagees) will vote on at meetings.

An ordinary resolution is usually related to the day-to-day operations of the condominium. To pass an ordinary resolution, the condo corporation requires a majority vote or a resolution signed by a majority of people (who are entitled to vote)  representing more than 50% of the total unit factors.

A special resolution is needed make a change that will substantially impact all owners, such as the addition, revision, or removal of a bylaw. To pass a special resolution, the condo corporation requires support of at least 75% of people (who are entitled to vote) representing at least 75% of total unit factors.

Check your registered bylaws for any further guidance on passing resolutions.

The minutes are a formal record of a meeting.  The minutes include a summary of matters reported on, discussions, and decisions made or tabled.  A condo corporation and its board of directors should keep minutes of all meetings and must, by law, make the minutes available to owners, mortgagees, and purchasers of a condo unit in certain situations (for example, after an AGM) and upon request. The Secretary of the board of directors usually takes minutes at meetings. The condominium corporation must provide owners with the approved minutes or draft minutes within 60 days after an AGM.

The Condominium Property Act does not specify  how minutes should be taken at meetings. Experts recommend that condo boards refer to resources like the Robert’s Rules of Order for guidance on minute taking.

Check your registered bylaws for any further guidance on minutes.

The bylaws of the corporation may set out the standard order of business at an annual general meeting or special general meeting. For example, the order may be as follows:

1. Call to order by the chair
2. Calling of the roll and certifying of proxies
3. Proof of notice of meeting
4. Reading and disposal of any unapproved minutes
5. Vote on agenda items
6. Reports of officers
7. Reports of committees
8. Election of board members
9. Unfinished business
10. New business
11. Adjournment

Tip for condo boards: General meetings are to be conducted according to the rules of conduct adopted by the board. You may wish to see if your board has established any rules of conduct.

Check your registered bylaws for any further guidance on order of business and conduct for meetings. For example, your bylaws may have information on when a general meeting can be called.

After signing a purchase agreement for a new or conversion condominium unit, you must give the developer a deposit. Within 3 days (excluding holidays and Saturdays) of receiving your money, the developer must deposit the money into a trust account. The trust account must be at a financial institution in Alberta. The deposit is held in a trust account maintained by a lawyer (a “prescribed trustee”) until your unit and the common property is substantially complete. Within 10 days of receiving your money, the lawyer must notify you that the deposit is held on deposit in their trust account. You must receive the title to your property before the deposit money is taken out of the trust fund.

Part 1.4 of the Condominium Property Regulation addresses trust accounts in further detail, including notification requirements, restrictions on the release of trust money and trust account records.

You have the right to cancel (or “rescind”) the agreement within 10 days of signing the purchase agreement. If you do not receive all the required documents and information from the developer when signing the purchase agreement, you have 10 more days within receiving the documents to cancel your agreement. For example, you sign the purchase agreement on March 1^st . But you receive all required documents and information on March 15^th . You will then have until March 25^th to cancel your agreement.  The developer must give you a full refund within 15 days of receiving your written cancellation notice.

A developer must notify you of any material changes in the information and documents that it provides to you. The developer must provide you with a written notice within a reasonable time after the change occurs and before you take possession of the unit.

A material change is a change in the developer’s information or documents that would have a negative effect on the value/use of your unit or the corporation’s common or real property.

 Seek legal advice if you have a dispute with your developer over any changes that arise during construction.

Before you can move into your unit, the developer must provide an occupancy permit that proves the unit has passed all safety checks and complies with local bylaws. You may receive the occupancy permit and be able to move in before you receive the certificate of title for the unit. This time period is known as interim occupancy and the developer may require you to pay occupancy fees during this time.

Talk to your lawyer or real estate agent about how the purchase agreement deals with occupancy fees. Sometimes developers will apply occupancy fees towards the final purchase price of the unit.

 Occupancy fees cannot exceed the amount the developer disclosed to you when you signed the purchase agreement.

When you purchase a condo, the developer must provide you with an occupancy date statement. An occupancy date statement is a statement that contains a single fixed date or range of dates in which a unit is available for move-in. The developer must ensure that you initial the occupancy date statement when you sign the purchase agreement. When a developer provides a range of dates in an occupancy date statement and has decided on a specific date for move in, they must give you at least 30 days’ written notice.

If your unit is not ready within 30 days of the final occupancy date on the occupancy date statement, then you have the right to cancel your purchase agreement with a written notice.

If a developer sends a notice of a revised final occupancy date, you can within 10 days of receiving it:

• give written acceptance of the revised final occupancy date or
• cancel the purchase agreement

Otherwise, the revised final occupancy date is binding.

When you cancel your purchase agreement, the developer or the developer’s lawyer must give you a full refund. They must do so within 15 days of receiving the notice.

There are some situations where a developer can delay occupancy beyond the final occupancy date. For example, you will not be able to cancel your purchase agreement in the following events:

• Fire
• Explosion
• Flood
• Events leading to a declaration of an emergency or a public emergency or disaster
• Impact by aircraft, spacecraft, watercraft or land vehicles;
• Riot, vandalism or malicious acts;
• Delays in issuing a development permit
• An outstanding appeal

When renting out your condominium unit, you must provide the condominium corporation with certain written information. The condominium corporation cannot prevent you from renting your unit but they are legally entitled to the following information:

• Your intention to rent your unit, including:
  • an address where you can be personally served with documents
  • how much rent you will be charging the tenant
• The name of the tenant renting the unit. This notice must be provided within 20 days of the tenancy starting.
• When you decide to stop renting your unit. This notice must be provided within 20 days of the tenancy ending.

The condominium corporation can ask you for a rental deposit if you are renting out your unit. The rental deposit is intended to cover:

• Repair and replacement of the corporation’s real/personal property or common property and
• Maintenance or repair of any common property

Under the Condominium Property Regulation, the rental deposit cannot be more than $1000 or one months’ rent, whichever is greater. The rental deposit must be held and repaid along with interest earned (if any).

If you owe the corporation a rental deposit, the corporation has legal rights to recover the deposit from you (for example, by suing you). The corporation may also recover the amount from you as if it were a contribution. For more information on what happens when a contribution is not paid, go to our page on Condominium Contributions.

When you give the condominium corporation notice that you are no longer renting the unit to a tenant, the corporation must then deliver to you a statement of account and any unused portion of your rental deposit, along with interest earned (if any) within 20 days. If the corporation deducted from the rental deposit, then it must provide a statement of account with the following information:

• The amount used and any interest earned, if any
• The balance of the deposit not used and any interest earned, if any
• An itemized list of deductions from the rental deposit and why the deductions were made.

In some cases, a condominium corporation may need additional time to determine the amount to be deducted from the deposit (e.g., a contractor needs to provide an estimate of costs). If this is the case, the corporation must provide an estimated statement of account to the owner within 20 days of receiving notice from the owner. Within 60 days of delivering to the owner the estimated statement of account, the corporation must also deliver to the owner:

• A final statement of account showing the amount used and any interest earned, if any and
• The balance of the deposit not used and any interest earned, if any

Rental deposits are separate from security deposits. You can ask the tenant for a security deposit on your unit but you cannot use this money to pay the condominium corporation’s rental deposit. Within two banking days of receiving the tenant’s security deposit, you must put the money into a trust account. You may also be required to pay interest on the tenant’s security deposit. For more information about security deposits, visit Laws for Landlords and Tenants in Alberta.

Under the Residential Tenancies Act (RTA), you must do written unit move-in and move-out inspection reports with your tenant and ensure both you and the tenant each have a copy of each. You cannot make any deductions from a tenant’s security deposit to pay for damage they have done to your unit if you have not completed written move-in and move-out inspection reports. For more information about inspection reports, visit these resources:

• Laws for Landlords and Tenants in Alberta website
• Service Alberta RTA Handbook for Landlords & Tenants
  

Any rental deposit that a condo corporation collected from an owner before the coming into force of the Condominium Property Regulation changes (January 1, 2020) may be retained during the tenancy of the owner’s unit. For example, if an owner rented out a condominium on July 1, 2019 and the corporation collected a $1500 rental deposit, then the corporation can still retain that deposit during the remaining tenancy of the unit.

Tenants are required to follow the condominium’s bylaws during their tenancy and they should have access to a copy of the bylaws. As a responsible landlord, you should familiarize yourself with the bylaws so that you can properly advise the tenant about the condominium’s rules and ensure the lease agreement accurately reflects the bylaws.

For example, if the bylaws do not allow pets in the building, you should ensure the lease agreement has a no pets clause. If your lease agreement states that pets are allowed, that provision is not valid because it violates the bylaws. You could be held responsible if the tenant was a pet owner and was evicted due to your negligence.

The Condominium Property Act gives the condominium board the power to evict a tenant who has:

• caused damage, other than normal wear and tear, to the common property or any other property of the condominium corporation; or
• violated one of the condominium’s bylaws.

After the tenant has committed one of the above acts, the condominium board has to give the tenant written notice to give up possession of the unit. The notice must also be served on the owner of the unit.  The owner cannot prevent the condominium board from evicting the tenant.

The tenant must move out by the last day of the month immediately following the month the notice is served. For example, if the notice was served on May 14, the tenant would need to leave by June 30.

If a tenant has received a notice to give up possession but does not move out, the condominium board has the right to make an application in the Court of King’s Bench for an order requiring the tenant to leave.

There are certain cases where a condominium board can go straight to court and request an immediate eviction order.

A condominium board can make an application for immediate eviction if a tenant:

• has caused or is causing excessive damage to the common property or any other property of the condominium corporation; or
• is a danger to or is intimidating the owners or tenants in the complex.

If such an application is made, the corporation must notify the tenant and owner of the unit. A court hearing will be held where a judge will decide whether to grant an order for the tenant to immediately give up possession of the unit.

Tip for condo boards: If a corporation makes an application for immediate eviction, it must notify the tenant and owner of the unit at least 5 days in advance (not including holidays and Saturdays).

The owner of the condominium unit also has the power to evict if the tenant commits a substantial breach under the Residential Tenancies Act. More information about evictions can be found by visiting Laws for Landlords and Tenants in Alberta: Eviction Notices.

If you are planning to rent your condominium unit, the lease should clearly state whether or not the tenant is responsible for paying the condominium contributions. Keep in mind that serious consequences can result if the condominium contributions are not paid..

If you are renting your unit and condominium contributions go unpaid, the condominium corporation can require the tenant to pay the rent to the corporation instead of you to cover the unpaid contributions. If you are at fault for not paying the contributions, you cannot take any actions against the tenant.

Renting Out Your Condo: Six Things You Need to Know (PDF)

Laws for Landlords and Tenant in Alberta: Everything you need to know about renting in Alberta for landlords and tenants.

Renting a Condominium: A guide for tenants interested in renting a condominium.

RTA Handbook: A comprehensive guide on residential tenancies in Alberta, prepared by Service Alberta.

A condominium corporation’s budget shows its revenue sources and how much it expects to spend in the coming fiscal year and over the long term. A corporation’s budget will consist of two key documents:

1. The operating budget
2. The reserve fund plan

The operating budget outlines where the corporation will get its money and its estimated expenses to maintain and operate the condominium for the next fiscal year. Expenses may include the costs for insurance, utilities, property management, landscaping, cleaning supplies, and professional services of accountants or lawyers. As with all budgets, unexpected costs may arise during the year resulting in changes to the estimated expenses.

The reserve fund plan details how much money needs to be contributed to the reserve fund every year to cover the costs of repairing and replacing the corporation’s:

• real and personal property
• common property and
• managed property (for example, heating systems, entrance doors, building’s roof, etc.)

Owners’  condominium contributions (also known as condo fees) go towards both the operating budget and reserve fund.

Tip for condo boards: it is prudent for a condo board to budget for unexpected costs.

What are financial statements?

A corporation’s financial statements show how money was spent over the previous fiscal year. Financial statements usually include the following documents:

• Balance sheet: a statement of the corporation’s assets and liabilities
• Income statement: a statement showing the money coming into and leaving the corporation
• Cash flow statement: a statement showing the flow of cash into and out of the corporation’s accounts broken down by operating, investing, and financing activities

Ideally, the financial statements will show the corporation didn’t spend more than it received. If a corporation regularly goes over budget, this could be cause for concern about the financial health of the corporation.

One of the benefits of purchasing a resale condominium unit is that you can request and review the condominium corporation’s budget and financial statements. Generally, the larger the operating budget, the higher the condominium contributions (fees).

Look for the following information in the financial statements and budget:

• Who prepared the budget? An accounting firm, the property manager, or a board member?
• What is the corporation spending money on?
• What services does the budget cover? Are you planning to use all of the services? Generally, if more services are available, it also means higher condo fees.
• Is the corporation regularly spending more than it takes in? This could be a sign of future financial problems that may lead to special levies or steep increases in owners’ contributions.
• Are the owners’ condominium contributions covering day-to-day expenses and ensuring the reserve fund is adequately topped up?

You should also review the annual report, meeting minutes, and newsletters to see how financial issues have been dealt with by the condominium board in the past.

You should get help from an expert to help you review the corporation’s financial documents.

If you are purchasing a new development, the developer must provide you with the most recent budget or proposed budget. Be aware that proposed budgets can change drastically once the condominium is fully occupied and operating. This means that owners’ condominium contributions (fees) could increase significantly after determining actual operating costs.

Further Resources

For a complete overview of what you need to know about condo finances before you buy, download our free publication: Before You Buy: Understanding Condo Finances.

As a condominium owner, it is important to review the budget, financial statements, and annual report before the corporation’s annual general meeting.

Review the financial statements to see if the corporation spent more money than it took in. If it did, was there any communication about why this happened and how the corporation plans to prevent it from occurring again?

Review the operating budget to see if there are any increasing (or decreasing) expenses. If there is a significant change, was there any communication about it? How to pay for expenditure increases? Will there be an increase in contributions? A special levy?

Condominium corporations cannot use their reserve funds to make capital improvements, except under certain circumstances.  For example, if a special resolution allows for it. Or there are health, building/maintenance and occupancy standards to follow under the law. In such situations, there must also be sufficient funds remaining in the reserve fund.

Reserve funds must be in separate accounts, and cannot mix with the corporation’s operating funds. Money from a corporation’s reserve fund also cannot mix with any other corporation’s reserve fund or with any other money.

Money collected for the reserve fund cannot be returned to owners. Any surplus collected stays in the reserve fund. For example, a condominium corporation repairs the roof but it takes less money from the reserve funds than anticipated. In such a situation, the corporation cannot return the surplus funds to the owners. When a condo corporation terminates (ends), different rules about the return of reserve funds may apply. You should always seek legal advice when dealing with this type of situation.

A reserve fund study is a physical inspection of the condominium’s depreciating property (for example, roof, heating system, entrance doors, etc.) done every 5 years.

A reserve fund report is a written document outlining all of the findings from the reserve fund study.

When a condominium plan is first registered, the condominium corporation has 2 years following the registration to complete a reserve fund study and report.

When conducting a reserve fund study, the reserve fund study provider must:

• Determine the current amount of funds in the corporation’s reserve fund.
• Conduct an on-site visual inspection of depreciating property
• Interview board members, managers for the corporation, employees or any other person
• Review relevant documents such as the condominium plan, construction documents and maintenance records

Tip for condo boards: It is a good idea for boards to keep a schedule of when they will need to do a reserve fund study and plan well in advance to find a suitable reserve fund study provider to complete the study.

Condo corporations must hire a reserve fund study provider to complete the study. A reserve fund study provider is someone who is permitted to act as a reserve fund provider under the Condominium Property Regulation. They must be knowledgeable about depreciating (declining) property, including its operation, maintenance, and the costs of replacing or repairing it. For example, only the following people are qualified as a reserve fund study provider under the Condominium Property Regulation:

• A professional engineer
• A professional technologist
• A certified technologist under the ASET Regulation who holds a certificate of registration as a certified engineering technologist or applied science technologist
• A registered engineering technologist under the ASET Regulation
• A registered architect
• A person who is a member of the Appraisal Institute of Canada and has an Accredited Appraiser Canadian Institute designation
• A person who is a member of the Canadian National Association of Real Estate Appraisers and has a Designated Reserve Planner or Designated Appraiser Commercial designation
• A person who is a member of the Canadian Institute of Quantity Surveyors and has a Professional Quantity Surveyor designation
• A certified reserve planner who is accredited by the Real Estate Institute of Canada
• A person who has a certificate from the Reserve Fund Planning Program at the University of British Columbia
• An individual who has successfully completed training or who has qualifications recognized by the Director (under the Condominium Property Act)

A qualified reserve fund study provider can have staff working on the reserve fund study – even if the staff do not meet the qualification under the Regulation.

Tip for condo boards: Do your due diligence and research before retaining a reserve fund study provider or entering into a contract with them. For example, experts recommend that boards do reference checks. You can also ask for samples of reserve fund plans the provider has recently completed.

Certain individuals are not allowed to act as a reserve fund study provider, for example:

• A director, officer or employee of the corporation
• A manager under a management agreement with the corporation
• A partner, employer or employee of a director, officer, employee or manager with the corporation
• A spouse or common-law partner of a director or officer of the corporation
• A child of a director or officer of the corporation
• A child of the spouse or common-law partner of a director or officer of the corporation
• An owner of a unit
• An occupant of a unit

Contracts for a reserve fund study entered into before January 1, 2020 (the date that the new reserve fund study provider qualifications come into force) are still valid.

If a condominium has 12 units or less, the condo corporation can carry out the study itself. A special resolution must allow the corporation to conduct the study. However, experts highly recommend that, whenever possible, a reserve fund study provider should conduct the study and prepare the report.

Under the Condominium Property Regulation, a corporation is exempt from retaining a reserve fund study provider to prepare a reserve fund study and from establishing or maintaining a reserve fund if:

• The certificate of title to each unit is registered in the name of:
  • the same owner or
  • the same group of owners and
• The units are rented or offered for rent to persons as tenants who are not purchasers/not intended to be purchasers.

The reserve fund report outlines the findings of the reserve fund study. The following information must include:

• The qualifications of whoever did the reserve fund study and prepared the report
• A signed statement that the person completing the reserve fund study is a reserve fund study provider and is not disqualified under the Condominium Property Regulation
• Findings of the reserve fund study relating to the following matters:
  • An inventory of all depreciating property that may need repair or replacement within the next 30 years (or a time period longer than 30 years). For example:
    • roof
    • siding
    • heating and cooling systems
    • plumbing and
    • electrical systems
  • For each piece of listed depreciating property:
    • a description of its current condition
    • an estimate of when it will need repair or replacement
    • an estimate of the cost of repairs or replacement
    • the estimated life expectancy after repair or replacement
  • The amount currently in the reserve fund
  • On site visual inspection of visible components of the depreciating property
  • Interviews with board members
  • Interviews with board members, managers for the corporation, employees or any other person
  • Review of relevant documents such as the condominium plan, converted property study or building assessment report (if applicable), construction documents and maintenance records)
  • A recommendation for how much should be added to the reserve fund to meet future costs of repairing and replacing the corporation’s real/personal property, common property and managed property
  • How the current amount in the reserve fund and recommended amount to add to the reserve fund is determined
  • Any other relevant matters (for example, determining the potential damage to an item if it is not repaired or replaced)

After receiving the reserve fund report, a condominium board must approve a reserve fund plan describing how much money is needed to top up and maintain the reserve fund based on the report. The plan will also set out how the condominium board plans to raise any extra funds  to meet the report’s recommendations. For example, through a special levy and/or increased condominium contributions.

If you’re a unit owner, you must be given a copy of the reserve fund plan before the board can begin collecting any extra money to top up the reserve fund.

For resale units, potential purchasers should make a written request for a copy of the reserve fund report and plan from the condominium corporation before you buy.

Look for the following information in the report and plan:

• Who conducted the reserve fund study and prepared the reserve fund report? You may want to do some research to assess the qualifications of the provider.
• How much is currently in the reserve fund?
• What needs repair or replacement over the next 30 years or a time period longer than 30 years?
• Is there enough money in the reserve fund to cover the repair and replacement of the corporation’s real/personal property, common property and managed property?
• Will the condominium have to collect more money from owners?
• If there is a shortfall, how does the condominium board plan to make it up? Special levies? Increased condominium contributions (fees)?

Tips for buyers:

• When reviewing the reserve fund report and plan, you want to see a healthy reserve fund that will enable the corporation to adequately cover repair and replacement costs. The reserve fund plan should reflect the recommendations made in the report and include a realistic plan to cover long-term costs.
• You should also review other related documents such as meeting minutes, annual reports, and financial statements to see if and how the corporation has dealt with any prior reserve fund issues.  For example, do the documents reveal that the corporation has a history of imposing special levies to deal with reserve fund shortfalls?
• You should have a lawyer, real estate professional, and/or document review service review the reserve fund report and plan.

A conversion condominium development usually consists of units and common areas in an existing structure. The structure may have been used as rental accommodation or commercial leased space with some degree of renovation as part of the conversion process.

With conversion condominiums, the developer must complete a reserve fund study, report, and plan before offering units for sale. The developer must give you a copy of the reserve fund report and plan.

Review the reserve fund report. Consider what work is already complete by the developer, as well as future work. The report also explains what needs repairs or replacement over the next 30 years (or a time period longer than 30 years) and how much it will cost.

Since conversions often involve older and/or non-residential buildings, the future costs of repairs and replacements of the corporation’s real/personal property, common property and managed property could happen sooner and cost more than a new development. There is no requirement for a developer to put money into the reserve fund. Consequently, owners may pay higher contributions (fees) or special levies so that the reserve fund has enough money to cover future repairs.

You should have a lawyer, real estate professional, and/or document review service review the reserve fund report and plan.

When purchasing a unit in a new development, there likely will not be any reserve fund information available for you to review. A condominium corporation has 2 years from the registration date of the condominium plan to complete a reserve fund study, report, and plan.

For a complete overview of what you need to know about condo finances before you buy, download our free publication: Before You Buy: Understanding Condo Finances.

If a condominium is self-managed, the condominium board is responsible for managing all aspects of the property. This means the board looks after accounting, repairs, and maintenance tasks (for example,  landscaping and snow removal).

The benefit of a self-managed property is that the owners do not have to pay a professional property manager. That said, some tasks may be contracted out (for example, landscaping).

The downside is that self-management can be time consuming for board members. Without a dedicated condo board, the management of the property could suffer. This could negatively impact the quality of life in the complex as well as property values.

Many condominium corporations hire a condo manager or condo management company to look after the day-to-day affairs of the condominium corporation. The range of tasks will depend on what the condominium corporation and condo manager agreed to in the management agreement.

The condo board should review the management agreement and do its research on the condo manager. The same applies if you want to buy a condominium unit or if you’re living in a condo and want to hire a new condo manager. Consider the following questions:

• What tasks is the condo manager responsible for completing?
• How long has the condo manager been with the corporation?
• Do the condo board’s meeting minutes indicate that there have been issues with the condo manager?

If you want to learn more about what to look for in a condo management company, read Ask Maria: The Right Fit – Choosing the right condo management company.

 A condo corporation can end management agreements made by the developer (also known as a “developer’s management agreement”). For more information, see our Termination of Agreements page.

  All brokerages, companies and individuals providing condo management services must be licensed. For more information, refer to the Real Estate Council of Alberta’s website.

If you are buying a new condominium, the developer may have hired a management company to look after the development until the condo board made up of the unit owners is in place. If there is a management agreement in place, developers must disclose it to potential buyers.

The owners’ condo corporation can end any management agreement entered into by the developer as long as:

• one year has passed from the date the agreement was entered into and
• the management company has 60-days written notice